To repeat the simple solution to Britain’s benefits bill

Yes, we’re aware that these new numbers are political numbers and so, salt required etc:

More than 600,000 households received more in benefits than the average worker’s salary, a first of its kind analysis has revealed.

The figures show that 625,618 households were handed over £32,200 in welfare payouts last year – the average annual salary of a British worker after tax – despite the introduction of a benefits cap.

The analysis, by the Conservatives, also revealed that 16,000 of those households were in receipt of more than £60,000 in welfare payments – almost twice the average annual take-home pay.

As we’ve said before the 16,000 doesn’t worry us particularly. Looks more than a little high but even so - we’re wholly willing to believe that some households are hard hit by the appallingness of random disaster and therefore require very significant aid from the welfare system. That those few gain it is just fine by us.

The 600,000 on the other hand does worry. That whole percentage points of households do better on welfare than working is, to us at least, clearly an incentives problem. Rome, after all, found it very difficult to manage the expansion of the Cura Anonnae.

As we’ve also pointed out there’s a simple solution to this. We’ve described it elsewhere and also here:

So, instead of defining poverty as under 60%, change that definition - to 40%. Yes, we can indeed do this. In the usual international statistics - World Bank, OECD sort of level of international and official - it is possible to use 40, 50 or 60% of median as that definition of poverty. So, let us exercise that choice available to us about our benchmark.

There are many fewer households on less than 40% of median, making sure all households are up to 40% of median is very much cheaper than the insistence of getting all to 60%. We thereby slash the welfare bill and do indeed free up money to allow us to Beat the Frenchies - that first and only important job of the British state. Further, far from plunging hundreds of thousands into poverty we will be lifting millions from it. For there really are very few on less than 40% of median with or without the welfare system.

So, let’s do that then. Free up the necessary money by being realistic about the poverty promise made by the State and other people’s money. Poverty is less than 40% of median and we’ll make sure you don’t fall below that. We will have massively reduced British poverty by doing so.

We should extend this to any promises about the minimum wage as well - 40% of median rather than the current 66% target.

A simple solution that works. Which is, of course, why politics will never adopt it.

Tim Worstall