The Welfare Reform Bill is the latest controversial bill to have been put before Parliament. Iain Duncan Smith, the Work and Pensions Secretary has been attempting to push through his reform plans that would set a cap of £26,000 on the amount of benefits that any one family could receive in any one year. The amount is based on the average income of a working household, after tax.
Duncan Smith claims that the bill makes things fair for the taxpayer, who regularly see a portion of their income go to fund people who live in houses that they themselves could never afford. The idea behind the bill is stop people receiving more money than they could through actually working and giving those receiving handouts, a reason to look for work. Not only would this mean that the benefit system would be more sustainable but if more people were motivated to search for work they need not be on benefits long term and will then be able to pay tax and put more money back into the economy, something that needs to be done if we are to raise ourselves out of this recession.
Despite this seemingly making good sense the bill has stalled in parliament with many amendments being suggested, meaning that the bill is unlikely to pass in its original form. Many have suggested that child benefits should be excluded from the bill as it would have a detrimental effect on children across the country. Duncan Smith has hit back at this suggestion claiming that it would give people a “let out”. While children should not be used as a means to claiming as much money as possible or raised with those kinds of attitudes, it would not be fair for children to suffer due to the cut in their household income, and so it seems that this issue does need to resolved.
Labour also claim that it would leave many people homeless and deems it more appropriate to have a regionalised cap, something that Duncan Smith believes would lead to a “chaotic mess”. He concedes that it would be hard on those who have to leave their homes but maintained that help would be put in place to find homes and work for those who needed it. Labour’s criticisms are partly to do with their claim that the taxpayer would have to fork out more for those that are entitled to be rehoused and whilst this may be the case in the short term, the same doesn’t necessarily hold for the long term. It is unfortunate that some people will have to leave their homes but the taxpayer has to work hard to afford their own houses and the system has to be fair to them.
Besides this, the taxpayer may be happier to know that their money is not being spent on those who simply do not want to work; the cap is not targeting disabled people, war widows, war pensioners or people who work and are on tax credits.
The cap, being based on average salaries, still pays more than minimum wage jobs, and if help is put in place to assist people negatively affected, then the bill does sound fair. With MPs and Lords debating it left, right and centre, I think it’s time for them to ask the taxpayer, and take into account how they want their hard earned cash spent.