Targeted welfare


Our welfare system has lost focus. Originally designed to support those suffering hardship, it has mutated into an unwieldy creature that is increasingly unfit to perform the function it was instituted for. Now that the vast majority of British people are recipients of state benefits, the welfare system diverts valuable resources, both human and financial, to those whom do not need them at the expense of those whom do.

Many of the 51 different benefits and tax credits available, such as Child Benefit, are paid universally; both to those whose incomes are great and to those who struggle to get by on very little. A report published by Reform last year identifies £30.9bn of such benefits that are paid every year to ‘middle-class’ households (where ‘middle class’ households are, conservatively, defined as those whose annual incomes exceed £15,000 per adult and £5,000 per child). Surely it is only a failed system that spends such sums supporting the self-sufficient whilst the number earning less than 40% of the median income is rising?

This lack of priorities becomes even more apparent if we consider what £30.9bn buys us when it is targeted further down the income distribution. Not only can it cover the up-front costs of IDS’ proposed welfare reforms ten times over, it is enough to raise the income of every person in Britain earning less than £12,000 a year by £3,120. Whether it should be put to these exact uses is off the point; these examples only serve to show how poorly welfare expenditure is targeted at present.

Given the dire state of the nation’s finances, it is now as urgent as it is has always been sensible to ensure that our public services perform their intended functions efficiently. Benefits to middle-income earners need to be scaled back so that the welfare system can regain its focus; better helping the unemployed into work and providing support to low-income earners.