Benefit or a curse?

Benefits are controversial. They provide the most basic example of the social debate between the left and right, with the left advocating that the government should intervene to help people and the right that social issues are the responsibility of the individual. Clearly as different administrations come and go these things will change. However, when you couple ideology with economic issues you have perfect conditions for controversy.

Under the Labour government welfare in the UK was significantly increased, with benefits being given for almost everything from child tax credit, to EMA, to job seeker's allowance. However, the system was costly; not just for the money that it paid out but for the cost of a complex administrative system to run out.

Iain Duncan Smith is proposing a new benefits system where one payment would encompass all the needs of the individual. Although fringe benefits, such as the EMA, would be cut, essential benefits, such as disability allowances, would not be significantly cut. Clearly this would cut down on administrative costs and thus achieve the primary goal of the coalition at this time, which is economic recovery.
However, is this system really that streamlined? If someone needs a new payment is it any less complex to add this into their total payment? Or, more importantly to remove a payment. And as we've seen from the student demonstrations cutting something inessential such as EMA will meet with fierce resistance anyway.

Benefits by definition will always be economically damaging. However, if the key is reducing administrative costs it may be that there is no easy answer to the question curbing the controversy.

No comments:

Post a Comment