Sunday, 23 September 2012

Why not tackle the real welfare scroungers?

The news that the Save the Children Fund has for the first time in its history set up a fund to deal with poverty in Britain should set alarm bells ringing.

This, along with the reported proliferation in food banks across the country, shows the gravity of the situation for all to see.

Some of those using food banks are on benefits and trying to struggle by, but many in low-paid jobs are enduring similar difficulties.

As benefits are cut and pay reduced, these families are increasingly turning to loan sharks and other unscrupulous lenders to help keep their heads above water.

This is a further example of government short-sightedness.

Forcing people into ever greater debt will have other effects in areas like health and education, which will have far bigger cost implications than the pennies shaved off the welfare budget.

Nineteenth-century notions of the deserving and undeserving poor lie at the centre of government thinking on welfare.

Charity has an important role to play in this construct, replacing the idea of a right to support as enshrined in the welfare state.

Supposed "charity" was doled out to hungry children on Victorian streets. In those days the worthies providing this form of support also wanted to deliver a lesson in moral rectitude, so deliberately burnt porridge was given to poor children so they wouldn't get a liking for it.

Today's welfare debate is so one-sided, it is basically about taking money away from the poor to allegedly to deal with the deficit.

Other forms of welfare recipient, though, are treated differently.

The biggest welfare beneficiaries are the bankers. They have caused this crisis, but the taxpayer is simply expected keep giving when it comes to providing welfare support to these scroungers.

Every few months there is a bit more quantitative easing - printing money - which is handed to the banks who shore up their balance sheets, without passing the money on to businesses to get the country moving again with jobs.

Then there are the companies that ministers fawn over for providing lots of low-paid jobs in Britain.

These companies receive welfare in the form of tax credits to those on low pay.

The state effectively makes up the difference so these companies can pay starvation wages.

This is a subsidy to unscrupulous firms that does not seem to get the same opprobrium from government as, say, the individual on housing benefit struggling to survive.

Other welfare recipients include the utility companies that take care of water, electricity and gas.

They effectively operate private monopolies in these sectors, so are able to put up prices at will in order to make profits for their shareholders.

If there were no shareholders, then these energy sources would be cheaper for people to access.

And when considering welfare scroungers, it would be careless to forget the privatised railways.

Another private monopoly that amounts to a licence to print money for those which hold the different franchises.

These companies seem to operate in their own bubble, insulated from the suffering of everyone else.

Note that while thousands lose their jobs or struggle away under pay freezes, the train operating companies impose 3 per cent above-inflation fare increases.

There are ways that these things could be changed. Among its recommendations the Save the Children Fund suggests the introduction of a living wage.

This in reality would be a higher minimum wage. It would force those employers who at present take state subsidy in the form of tax credits to employees to pay proper wages.

A higher proportion of servicing the deficit should be coming from taxing those best able to pay.

This means taking more tax from wealthy individuals and companies - the banks and private utility companies, as well as individuals with mighty fortunes.

The private monopolies that exist in the utilities and the railways should be broken up.

These changes would really cut welfare costs and make life a lot easier for the mass of working people.

In the name of austerity, those least responsible for the present crisis are being asked to pay for it. This is not for the common good of the country, but the benefit of a rich powerful elite. It has to stop.

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