Make Work Pay.

I personally do not think Mr Cameron is good at many things, but one thing I believe he is good at, and will give him credit for, is his ability to manipulate and to pit people against each other, namely the ‘young vs the elderly’. But where Cameron has been most successful in doing this is undoubtedly in the way in which he has demonised those in receipt of benefits and pitted the working poor against them. Creating resentment amongst the working poor who feel they work hard for little reward whilst those receiving benefits live comfortably for very little effort. Of course he hasn’t been alone in doing this, Iain Duncan Smith has been at the forefront of this agenda heralding his ‘Make work pay’ rhetoric every chance he gets.

Firstly I do not have a problem with some of the reforms the Coalition Government have suggested and are putting through Parliament as the benefits system in its current state does trap people. It is especially good at trapping those that wish to increase their working hours, but find that by doing so they will be worse off financially as the extra pay does not make up for the benefits they will lose. These people are not lazy, they want to work more, but it is clearly logical, especially financially, for them to work less hours, than struggle to make ends meet. In this sense work does need to pay. These people should be free to make the choice to work more hours without worrying that they will lose vital income. However our benefits system has trapped them, and this simply is not fair. Of course there is the small minority of people that do not want to work and will try their hardest not to, however I would argue this is a very small minority. The majority of, if not all, the examples I have came across regarding this issue is that people are willing to work and want to work but feel that they do not have that choice.

I also agree that there should be a cap on the amount an individual or family can receive in benefits in a single year, and that this cap should be reasonable, but not exceed the amount an individual or family would earn if they were working and receiving an average wage. However in reality the majority of benefits claimants are not living in £3000 pm rented manors, and are not living a life of luxury as so often portrayed by the media and politicians.

So what you may ask is my problem with the rhetoric of ‘make work pay’? Nothing in one sense, as work should pay. My problem is that IDS & co. do not seem to actually want to do this. Their idea of making work pay seems to be to restrict benefit payments and make sure they stay low. But what exactly does this do for the working poor? How does restricting and lowering the amount of benefits an individual/family receives make low income, working poor individuals/families any better off? It doesn’t. If anything it may just makes the working poor who now, thanks to Tory rhetoric resent the non-working poor, feel a little bit better at the prospect that there may be some people worse off than them. But financially I do not see how changing the benefit system to make those on benefits worse off will help the working poor.

Some may argue that the Tories are making work pay by incentivising those on benefits to go and get a job, because after-all benefit claimants are all lazy scroungers. As I have already suggested this simply is not the case, as the majority of people do want to work or want to increase their hours. During a recession when full-time employment opportunities are scarce restricting benefits is only going to serve to punish people for the lack of options they, through possibly no fault of their own, are afforded. So using the ‘lazy scrounger’ rhetoric is just a way of the government distracting attention from the fact that the reason that the working poor are poor is because they do not have a living wage, or the benefits system has trapped them. It is not the fault of those that claim benefits.

In a reply to a tweet which stated that “the Left does not want work to pay”, I responded saying that, although I do not represent all of those on the Left, we of course want work to pay (it is just common sense) and high wages would be a start. They responded saying this would cause inflation, which is a fair point, so I asked what the solution was? The response:

“We could stop throwing money at the work-shy, to start and stop Tax-Credits from paying people to work less hours”

Again this whole work-shy rhetoric and suggestion that money is thrown at unemployed people. When in reality out of the whole of the Work and Pensions department spending just 2.95% (£4.4bn) (2010/11) goes on Jobseekers Allowance payments, 5.12% (£7.8bn) on Incapacity/Employment & Support Allowance and another 5.12% (£7.8bn) on Income Support. This is barely anything compared to the 45.8% (£69.8bn) spent on state pensions, which is what the majority of the DWP spending goes on. It seems unlikely therefore that the majority, of this small number of claimants, are all work shy, lazy scroungers.

The second part of that statement is interesting too, ‘stop tax-credits from paying people to work less hours’. A fair point, but if you are an individual without children, and are over 25 years of age you need to do at least 30 hours of paid work a week to qualify work Working Tax Credits. So this is quite the opposite of paying people to work less hours. A single person, working 25 hours a week on minimum wage will not qualify for any top-up income, but instead is penalised for not working enough hours. It is in this area where the system needs to be changed to ensure that work does pay. I do not see what sense it makes to only have tax-credits for single people working 30 hours or more. The Tax credit system should work so that any working person on minimum wage has access to some tax-credits with which to top up their income. This would ensure that people are better off in work, no matter how many hours they work, and seems to be a genuine solution to ‘making work pay’.

It seems that some people that want to work more hours can’t because they risk being worse off financially, and there are some that cannot work more hours (i.e. because their employer cannot offer more) and are denied the access to the tax credits to top up their income that those working more than them may have.

So to sum up, I do agree with ‘making work pay’, people should be better off in employment. But clearly demonising the unemployed who claim benefits is not the solution. Taking from the already poor will not increase the wealth of the working poor. The only way to make work pay is to either increase wages (which I am told will leave us worse off because of inflation so is not a viable solution), or to change the benefits system to ensure people are not trapped. Also change the tax credits system so those working less than 30 hours (if single) on a low wage have access to some form of top-up income. Oh and perhaps work on actually creating some full time jobs for people.

People need to be able to have a choice. They should be able to choose to increase their hours at work without it having a negative affect on their overall income. People who cannot increase their hours need access to the tax credits people (if single) working 30 hours or more have access too.
The government needs to stop using the unemployed and those claiming benefits as scapegoats and actually come up with some solutions.

All figures were taken from http://www.guardian.co.uk/news/datablog/interactive/2011/oct/26/public-spending-uk-government-department

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