Last week George Osborne announced that the UK’s welfare spending was unsustainable.
Job Seeker’s Allowance costs the country about £5bn a year. Housing benefit costs £25bn, tax credits cost about £30bn, but the biggest drain by far is pensions, way out in front at about £95bn.
So, naturally, he’s going to cut pensions. After all, pensioners cost a huge amount of money and most of them think it’s their god given right to receive handouts while making a nuisance of themselves on public transport.
Oh wait, no, he’s not doing anything about pensions; instead he’s going to cut tax credits.
I think some poorer Tory voters who voted Tory to sort out the benefit scroungers are going to be surprised very soon when they find out that they themselves are the benefit scroungers who are about to be sorted out.
It’s a tricky one really because as a tax payer I don’t approve of tax credits; it means that low wages are subsidised by the state while the rewards are taken in privately by cheapskate employers. That’s just silly. On the other hand, if you just stop tax credits then the main impact that has is a lot of people who don’t have enough money suddenly have even less, and that will reduce their spending, and that will damage the economy as a whole. Also, I don’t believe that it will force any noticeable upward pressure on wages, because an income of £12k beats an income of £0.
Unfortunately the Conservatives are ideologically driven rather than results driven, so when they say they want to reduce reliance on benefits, what they really mean is they want low taxes and low spending. If that happens to work to anyone’s advantage but their own then that is a nice coincidence, but it is not their main aim.