Westminster Diary 13 January 2014 - Fair For All

Reform of the welfare system is an essential, yet challenging objective. This Government has won the intellectual argument about what a welfare system is for and how it has been going down the wrong path in recent decades. The average household spends £3000 per year on the welfare state. This figure had been rising inexorably and unaffordably. The Opposition feel the need to revel in the IT difficulties hitting the Universal Credit project (skating over the £26 billion of IT blunders on their watch) but let us not forget, in 1997 Tony Blair made welfare reform a central pillar of his government. Today, by Labour’s own admission, they failed to enact serious reform in 13 years.

By contrast, this Government’s response has been mature and measured. Despite being rolled out slowly it is unsurprising that reforming an already highly complex benefits system is proving... highly complex. Critics would do well to remember that the real danger plaguing the welfare state is the number of people on out of work benefits. In a highly competitive world we must focus on getting people into work and providing welfare for those who really need it. I am always wary of politicians talking about morality but it is surely immoral when a person moving from benefits to work loses 94p in every £1 they gain from earned income. Should any government really stand by and let that happen?

Universal Credit will replace six existing benefits, simplifying payments and ensuring that it always pays to work. Three million families will be better off under the new system by around £168 a month. The abolition of fixed hour thresholds, which traditionally constrained people looking to increase working hours or seeking employment, will be of benefit to single parent families in particular. Far from damaging the welfare state these changes are saving it. What has happened up until now is unaffordable for the hardworking families who pay for it and gives the wrong incentives to many who receive it.