I’m fairly sure that if you are reading this and are unable to work and rely on benefits to pay your bills, you might have felt reasonably happy after last Wednesday’s budget.
It’s right and proper that those who cannot earn a living have enough money to make ends meet; welfare is a safety net that many people don’t realise they needed until suddenly they do.
But it shouldn’t be a choice from a menu of options and as long as there are jobs to go to, it must always pay to go out to work. And everyone who benefits from welfare should also accept there is no such thing as government money and everyone relying on a state income relies on others working to generate the taxes which fund the system.
Labour MPs waved their order papers with glee when the Chancellor Rachel Reeves confirmed the abolition of the two-child benefit cap – which she opposed a year ago, and back then some Labour MPs who supported it were disciplined − but I wonder how many of them understood the implications.
As a result, a family with three children in which one parent claims the average level Universal Credit will now receive £46,000 a year, the same net income as a single person on £71,000. In fact it’s probably more in Scotland because of the higher top rates of income tax.
Here the SNP already pays out higher benefits to cover the cap, so the finance secretary Shona Robison will have more money to spend on welfare if she chooses − and with an election in six months who’d bet against that?
So young working couples beginning to think about growing a family will inevitably start examining their entitlements to make sure they maximise their incomings. And who’d blame them?
At the same time, the higher minimum wage, increased national insurance on salary sacrifice schemes and the new demands on employers in the Employment Rights Bill, will almost certainly make private businesses think twice about hiring more staff, whose owners’ reward for their prudence will be to pay more tax on their dividends.
In fact, there is no element of private economic activity that this supposedly pro-growth Chancellor has knowingly left unfleeced to fund the higher public spending demanded by Labour backbenchers as the price of their continued support.
We now know Rachel Reeves’ insistence that this unprecedented level of private pocket-picking was necessary to bridge a £20 billion black hole was a monumental deception, a smokescreen the size of an Icelandic volcano to cover massive welfare handouts and inflation-busting public sector pay deals to workers enjoying feather-bedded pensions the private sector can only dream about.
Indeed, Ms Reeves has even dug her taxation talons into private pension pots.
She had another purpose, however. She said she needed to create headroom for future budgets to guarantee stability, but in reality I suspect it’s to stash a war chest which can be splurged just ahead of the next election. We are all paying a premium now for Labour’s insurance policy but expected to accept its all for our own benefit.
Ms Reeves triumphantly claimed she was making Labour’s choices. It’s about the only time she’s told the truth for two years, but these were Labour’s choices for Labour, not the rest of us.
