Re: Labour's proposed cap on total benefit spending

Reader's letter from CityAM:

Labour's welfare cap will be meaningless without concrete mechanisms, backed by law, to cut benefits if spending exceeds the limit.

Richard Morris.

Agreed.

The point here is that if you decide what welfare payments to any individual will be depending on their "individual circumstances", total spending is difficult to predict or control:

a) If people lose their jobs, then clearly there'll be more claims for unemployment benefit And then you can have lots of lovely bureaucrats trying to find reasons not to pay it out, or you can allow a higher number of claims and pay a smaller amount per claimant, and it all gets very fraught.

b) Whatever rules you invent, people will circumvent them. If you get more in IB than in JSA, people will overclaim IB. If the hassle involved is less claiming IS than JSA, people will claim IS, and they will either deliberately change their "individual circumstances" to fit the criteria or they will just lie (it's difficult to say which is worse).

c) There is no point introducing a "law" to say that total welfare spending is to be capped at £xyz billions, because any future government can repeal the law, simply lift the cap, indulge in dodgy accounting etc. So you need to have a political mechanism, i.e. make it easy for the general public to understand what total welfare spending is and how changes affect them (favourably or unfavourably).

But assuming that having a fixed and known total welfare budget is A Good Thing (and I believe it is), then as per usual a flat rate Citizen's Income hits the spot.

You get the same whether you are unemployed, stay at home parent, studying or working, you get the same whether you are low paid or high paid, doing irregular, temporary, part time or full time work, you get the same whether you are single, living together or married. The only variable is your age.

Seeing as the total population of the UK who would qualify is a known and stable figure and people's ages can be predicted years in advance, this means that the entire welfare budget can also be decided for years ahead. Once you've decided what this year's total spending and this year's rates are, you can also decide what the increases (or reductions) will be in the next few years.

We can argue and bicker over what that total budget will be and it will be divided up between different age groups ("hard working pensioners" will be pitted against "feckless scroungers" under the usual divide-and-conquer approach etc), but those are political decisions and nothing to do with the general principle.

Cue: Sarton Bander making his usual Faux Lib comments about the "extortion funded sector".