Jeff Salway: Benefits cuts fail to tackle our real problems

SOMETIMES you need a helping hand when you’re starting out as an adult and trying to build a future for yourself.

Whether you’re heading to university after this summer and asking your family for a few quid or you’re struggling to find a career path and need state support to boost your income, financial assistance can make all the difference.

Every generation faces its own obstacles, however contrasting. School leavers and those in their early twenties today are no different.

More than a million under-25s are out of work. Students face years of debt to repay soaring tuition fees. Home ownership remains out of reach for the majority until house prices fall further. Young people face working longer for less generous pensions than their parents and grandparents. They will also foot the long-term bill not only for the economic crisis, but for a demographic boom that will require younger generations to fund escalating pensions and care bills.

It’s not enough, though. Enter the Prime Minister, clearly indifferent to the notion of creating a better future for the next generation.

He claims to have 17 big ideas for cutting welfare spending by £10 billion. That’s over-egging it somewhat. It all boils down to one crude idea, if you can call it that: slashing benefits. The focus last week was on removing housing benefit from under-25s.

The proposal has enjoyed ample support, reflecting a swathe of public opinion shaped largely by coverage of benefits that has utterly distorted the debate. It also met with grave warnings of rising homelessness among young people, and more under-25s being frozen out of jobs.

Cameron argued that under-25s could move back home if the removal of housing benefit means they can’t afford to stay in their own place. What planet is he on? Not only are many young people frozen out of their family home, but others have no option but to leave home in search of work that is in increasingly short supply.

Rather than make a genuine effort to invigorate growth, create jobs or tackle tax avoidance, the coalition continues to go after the most vulnerable in society. Only last week, it was revealed that disabled people and their carers have suffered a collective income cut of £500 million in the last two years.

That figure came from think tank Demos, which warned that many disabled people are trapped in a “struggle for survival”.

Look beyond the depiction of benefit claimants as workshy scroungers and you’ll see why the scale of Cameron’s assault is unjustifiable.

Benefit fraud may be unacceptable, but its extent is wildly exaggerated. For example, benefit fraud accounted for just 0.8 per cent of benefit spending last year, the government’s own figures show, with disability living allowance (DLA) fraud estimated at just 0.5 per cent. Yet the government wants to slash the DLA bill by around 20 per cent, with many set to lose their financial support when DLA is replaced next year with personal independence payments.

For every person prevented from dishonestly claiming benefits, dozens more suffering from ill health or some form of mental or physical disability are being subjected to unnecessary stress and hardship.

Likewise, stripping housing benefit from under-25s has inevitably been portrayed in many quarters as preventing feckless youths from exploiting the system.

But just one in eight housing benefit claimants is unemployed. The bulk of the benefit goes to people in low-income jobs needing help to cover their income shortfall.

There are other ways to strip a few billion pounds from the state spending bill. How about slashing benefit payments the right way by doing more to create jobs? The latest borrowing figures show that income tax revenue has plunged 7.3 per cent since last May, with welfare benefits up 11.7 per cent.

Taking tax avoidance and evasion seriously would help too. The government’s general anti-avoidance rule will do little to clamp down on offshore schemes such as that used by comedian Jimmy Carr. Yet tax avoidance alone costs the state £13bn a year, while the tax evasion figure is said to be closer to £70bn.

Cameron’s welfare reform “ideas” may be popular now, but public opinion may prove more fickle than he expects if he can’t tackle the real problems we face.

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