Leader: Benefit plan deserves a fair hearing

Published on Monday 23 January 2012 12:18

THE Lords’ revolt against the coalition’s Welfare Reform Bill is expected to continue tonight with an attempt to throw out the key notion of a benefits cap.

The UK government wants to impose a financial limit on the combined welfare payments an individual household can receive, pegged at the median take-home pay for a working family, circa £500 per week.

There are three strong arguments in favour of such a change. First, it is only fair that hard-pressed taxpayers are not asked to subsidise others, no matter how unfortunate, beyond what is in the ordinary family budget. Second, the total welfare bill is unsustainable. Welfare expenditure increased by 45 per cent in real terms in the decade to 2009-10. Third, and perhaps most important, a benefits cap provides a strong incentive to seek work.

On the negative side, the cap will reduce aid for paying rent in expensive areas such as London, possibly – according to a leaked but questionable government source – forcing 100,000 children below the poverty line.

However, this is an argument for reviewing the transitional arrangements, not for abandoning the principle of a benefits cap.

Others credibly argue that the increase in the UK welfare bill is partly the result of a larger and ageing population, and to cut it arbitrarily is to pick on the poor. But it is worth remembering the cap only applies to working-age benefits and excludes others, like Disability Living Allowance. The benefits cap is a sensible idea if implemented sensibly. The Lords’ constitutional duty is to ensure the measure is thought through – not to kill it.

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