Monday, May 16, 2005

A cheap welfare solution

As welfare reform seems a possibility in the Queen's speech tomorrow, the cheapest and best way to reform welfare benefits would be to end the index linking of the payments. Very rapidly, people who currently receive the benefit would find that they are better off working than remaining on benefit. The only downside would be the lack of additional civil service jobs that could be created to support such a 'creative' solution.

2 comments:

dearieme said...

You seem to have implied that receiving benefits and working are mutually exclusive activities. Really?

Snafu said...

That's a good point, there are certain benefits such as working families tax credits that are paid whilst in work. However, I don't think that any welfare reforms will target these benefits but focus on moving people off incapacity benefit and into work. The new reforms will offer additional bribes to get into work rather than cutting the benefits with the same overall result. As a £20 cut in benefits could have a greater impact on the benefit recipient than a £30 increase on finding a job, I still recommend that ending benefit indexation would be a better and cheaper reform.