Thursday, 16 June 2011

Capping Benefits

A brief exchange in the House caught my eye, on the subject of the proposed cap on State benefits:
Steven Baker (Wycombe, Conservative)
[...]In 2011-12, the pay-as-you-earn tax threshold will be just £7,475 a year. [...] the people paying tax—that is, paying tax to pay the benefits that others are in receipt of—are actually poorly paid and that a year’s pay on the national minimum wage is just £12,300? Will he join me in recognising that it is an issue of social justice that we should introduce the benefits cap?
which prompted the reply:
Iain Duncan Smith (Secretary of State, Work and Pensions, Conservative)
I agree with my hon. Friend. That point is also powerfully made by the fact that nearly half of all those who are working and paying taxes fall below the level of the cap. It is important to achieve a balance of fairness. I recognise that there are issues, and we have looked at ways in which the process of change in housing benefit can be done more carefully, for example. This is not about punishing people; it is about establishing a principle that fairness runs through the whole of the benefit system.
Note that: nearly half of those working fall below the benefits cap.  To put that differently, the benefits cap is set close to the median income for this country.  This means that at present (without the cap), it is probably possible to be on benefits, and be better off than average.  

Remember that when a leftie tells you about evil Tories who punish the poor.

1 comment:

  1. Bear in mind that highlighting the benefits v. earnings figure per individual might be misleading, in that those on benefits have more kids, which distorts where the level of the benefit cap appears to be set in relation to average earnings.

    I agree with you though in the main. Housing benefit needs to be reformed.