Welfare, the reality that the ...

...  Bishop's of the 21^st century seem to be out of step with.

Placing a cap on benefits is not a repudiation of the founding principles of the
welfare state. The purpose of support is to foster independence

When William Beveridge wrote his famous report of 1942 that set the blueprint for what later became known as the welfare state, his founding idea was helping people back towards independence. The safety that public assistance would provide was a reward for contribution and Beveridge always envisaged welfare payments as a way of smoothing income through difficult times.

Some of the Liberal Beveridge’s modern successors, led in the House of Lords by Lord Ashdown of Norton-sub-hamdon and Lord Avebury, are opposing the proposal by Iain Duncan Smith, the Work and Pensions Secretary, to place an annual cap of £26,000 on the receipt of benefit payments. There were two important principles embedded into the Beveridge settlement: that there should be some link between what you put in and what you get out; and that welfare assistance should be a temporary expedient, actively designed to help people back into work, which ought to pay better than unemployment.

It is surely no part of the original prospectus for welfare that some families should be able to draw a household income that amounts to a salary of £35,000 before tax. To declare a limit at or about this level is an important statement of intent and an important marker about the virtue that this society values, namely work. Mr Duncan Smith has conceded that some families may have to move into smaller houses and that some children may have to share bedrooms as a result. But, at an annual income of £26,000, these families are not among the poor and local authorities will retain the obligation to house those people who struggle to find accommodation in the rental market.

None of which is to say that there are no issues that need to be addressed. A coherent system would punish feckless parents but not their unfortunate children. There will be cases of people who lose their jobs and find that the commitments entered into in more prosperous times suddenly take them over the benefit limit. Effective transition arrangements will be necessary.

There is no doubt that, in the absence of a serious strategy for regional pay, this will be more difficult to implement in London and the South East. The majority of the 67,000 unemployed families who will be affected by the imposition of a cap at £26,000 live in this region, where property prices are high. There is an issue here that is bigger than just the excessive payment of benefits. There will always be a problem with the welfare bill climbing — especially the bill for housing benefit — when the cost of housing is so high.

This structural cause needs to be addressed alongside the consequences. Unless and until the Government finds a coherent strategy to allow all regions of the country to grow — which includes pressing on with the liberalisation of the planning laws to allow the building of more houses — the cost of housing will continue to be visited on taxpayers in the form of higher welfare payments.

If the opponents of the cap were making these arguments about how the failures of the nation turn up in the welfare bill then they might carry more weight. As it is, they are simply a plea to retain a welfare system which has long since slipped clear of the intentions of its founders.

The Church of England bishops, in particular, have managed to avoid both economic reality and popular opinion at the same time. When they call on the Treasury to make a moral call they might reflect that it is also incumbent on them to make a serious economic argument. At a time of severe pressure on the public finances, the country is not engaged in a morality play but, even if it were, the bishops have got the morality call wrong.

A welfare state that works is one that encourages independence. That was Beveridge’s insight and a test that the welfare state now fails.

 The Times 24^th January 2012.