Letter: Blair's project

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The Independent Online
Sir: There is indeed no doubt, as Polly Toynbee says (article, 22 December), that the whole welfare system needs reform. It is far from the platitude that she assumes, however, to say that unemployed people should be "prodded" into work.

Whilst it is true that National Insurance should no longer pay out according to notional contributions made, it is far from obvious that all payments should be made according to need. Assessment of need, otherwise known as means-testing, has, when applied to state benefits, the very undesirable side-effect of creating poverty traps. It is in any case redundant when we have an existing system of assessment in the form of income tax.

What is so degrading, even unethical, about the present system is the withdrawal of benefit from a marginally employable person who starts to earn a little money. This is the equivalent of an income tax rate of at least 70 per cent and sometimes over 100 per cent on the earnings of the very poorest of our people. They don't need "prodding". Removal of the present disincentives would suffice. Benefits can be universal while income tax looks after the inequality.


Washington, Tyne and Wear