Sunday, July 04, 2010

Welfare is a joint individual and state responsibility

The debate about welfare went up a gear this week following the announcement by Ian Duncan Smith over the future of welfare benefits. Generally I think he is moving in the right direction. Frankly there is not that much to separate it from what Labour was planning when they were in office. That of course won't stop the sanctimonious posturing of Labour MPs who will accuse the Lib Dems of plague, pestilence and eating babies for breakfast. Labour will forgot the more absurd proposals they came up with, such as Caroline Flint's idea of evicting the unemployed from their council houses.

The welfare state is an important cornerstone of our society but it has developed in a way that was never intended. It was meant to be a partnership between the individual and the state to provide for people when they are in need. The problem is that there has grown up a presumption that it is the state's role alone to provide. Too often, individual responsibility to make provision for their own rainy days has been forgotten. Furthermore, the benefits system has created a disincentive to provide for oneself. Look at the penalty those on modest incomes have to endure who save all their lives for retirement and then lose pension credits and benefits because they have a modest private pension or savings. Saving is the right thing to do. Work is good and all help should be provided to help people to get into it. The benefits system too often does the opposite and traps people in poverty, discourages aspiration and leaves people believing that it is always someone else's responsibility to look after them. Welfare should be a joint responsibility of individual and state and should not operate by making people worse off or only marginally better off by being in work. The basic principle of the system should be to help people to help themselves with most help going to those who genuinely can't support themselves as their needs are genuinely far greater than that person's ability to address.

So the recent tax changes are moves I believe are going in the right direction. I believe work is good so we should tax it less. I believe saving is good so we should not take away from those who save for their retirement. Therefore increasing the state pension is the right thing to do. And we need less consumerism and need to move away from an economy based on the sale of consumer goods bought on credit. That was why the decision to raise VAT - ie taxing consumption rather than income - was the right decision.

So I was pleased to see my former boss Mark Littlewood articulating views similar to mine this morning on the BBC. Now I await the string of anonymous comments from local Labour members accusing me of eating babies for breakfast.
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