Soak the working poor? Better that those with jobs bear the brunt of welfare cuts


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The Independent Online

The perils of political rhetoric, part 294. David Cameron started the week by re-announcing that all his Government’s policies would be assessed for their effect on families. As if the population consisted of some people who have relations and others who were planted in pods from outer space, unable to reproduce, and who are of no interest to the Conservative Party.

Naturally, the Trades Union Congress has turned the Prime Minister’s words against him, by publishing a report today that shows that most of the burden of benefit cuts is borne by people in work, often with children, rather than by the unemployed, who are more likely to be single. Thus, the TUC claims, “austerity” fails the family test. Not only that, it fails the test of political rhetoric part 293, because the burden falls more on “hard-working people” than on those who are out of work.

What is happening is that the Coalition is reining in the great expansion of in-work benefits, chiefly tax credits, that was Gordon Brown’s big idea. In a time of economic growth, there was a lot to be said for Mr Brown’s policy: above all that it increased incentives to work. But in harder times, there is equally a logic to throwing the switch into reverse. We have criticised George Osborne, the Chancellor, for cutting public spending too deeply, but even so a drastic retrenchment is needed. This means hard choices. And it is better that those in work should pay most, rather than the unemployed, for whom the level of state benefits is already testing the lower bounds of decency.

Contrary to common assumptions, the heaviest burden of deficit reduction has been borne by the one-fifth of households on the highest incomes. That is not to say that all of the highest-paid are fulfilling their responsibility for restraint and leading by example. Nor is it to deny that the burden on the poorest fifth of households is too great.

However, sacrifices have to be made, even by those towards the lower end of incomes, and it is better that they be made by those with jobs than those without.