Smart money: Myth of the workshy benefit scrounger a government triumph

But you’ll have to go some way to beat the myths being peddled – and accepted – over benefits. More than half of people believe unemployment benefits are too high, according to a recent Social Attitudes survey. It also revealed that almost two thirds of people think child poverty is due to parents who don’t want to work.

In other words, if you’re on benefits and/or out of work, you’re a workshy scrounger. That the jobseekers allowance is just £67.50 a week is clearly immaterial in the public perception.

This is the triumph of the government’s demonisation of benefits and those who receive them. We now have an environment in which proposals to make people undergoing chemotherapy prove they are not well enough to work somehow haven’t sparked an outraged backlash. Forcing someone undergoing chemo to work, or to take tests to prove they can’t work, is to subject them to the kind of stress that may threaten their recovery.

It’s all part of the new sickness benefit (employment and support allowance), which will be paid only for a year to those unable to work because of illness. After one year claimants will only be eligible for means-tested income support, if they’re still unable to work. If their partner earns more than £149 a week, they’ll get nothing. That includes people who have been through cancer treatment, for whom one year is usually a woefully short recovery time. This is a benefit funded by national insurance contributions that many claimants will have paid over several years.

Yet the benefits debate has reached a stage where this, and reduced support for disabled people, can pass with barely an eyelid batted.

And all while unemployment reaches its highest level in almost two decades. Of course plenty of people successfully exploit the benefits system because the workshy do exist, in big numbers too. Yet it remains the case that only a small minority are unemployed by choice; most people out of work want a job. Why else did the Royal Mail receive more than 110,000 applications for 18,000 temporary Christmas jobs?

In Scotland alone almost a quarter of a million people are out of work, at the latest count, including almost one in four aged 18 to 24.

But still the debate is about benefits. They cost the government £1.1 billion a year, whereas tax avoidance and evasion deprive state coffers of up to £120bn a year. It largely took the efforts of the UK Uncut movement to highlight the £25bn of “unresolved tax bills” that HMRC has failed to collect from firms including Vodafone and Goldman Sachs.

It has long been clear that HMRC – which is targeting individuals from doctors and dentists to private tutors and plumbers in a bid to stamp out tax avoidance – treats large corporates far more favourably than the average individual. Yet the political and public opprobrium is reserved for benefits recipients.

And that’s the product of a climate in which those on state benefits have been dismissed by MPs, no less, as “freeloaders”, “scroungers” and people “who play the system”. Very rich coming from politicians, of all people, and shameful.

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Three years after lenders tightened mortgage criteria by moving away from interest-only and self-certification loans and renewing their focus on affordability, the Financial Services Authority has proposed a stricter mortgage affordability regime, a ban on self-cert and tighter rules on interest-only loans.

Its review of the mortgage market concluded with more reasonable proposals than originally set out. However its report addressed a market that has changed dramatically and arguably made the necessary changes already.

The housing market boom is now depicted as a time in which it was easy for first-time buyers to get on the property ladder. Yet the fact is that the proportion of first-time buyers in the market actually fell over that period, and significantly too.

House prices were shooting through the roof, freezing out more buyers than loose lending was attracting. The beneficiaries were owners taking a big second or third jump, cashing in on higher prices to sell up and move to something previously thought of as out of their reach. Investment landlords cashed in, exploiting house price gains to build their buy-to-let empires.

In that sense the report will prove positive over the long-term. The clampdown should ensure lending remains realistic and discourage speculative buyers, helping keep prices down. And like it or not, lower prices are the key to the housing market recovery.