Value of benefits falling – TUC
The Trades Union Congress has produced a report which shows the steady decline in the value of state benefits compared to earnings:
“During the 1980s recession, unemployment benefit rates were around 17 per cent of average earnings. The rate fell to around 14 per cent of earnings in the early 90s recession and in 2008 JSA reached a record low of 10 per cent of average earnings.”
It goes onto say that this is one of the lowest benefits compared to wages in any OECD country; certainly something to bear in mind the next time the Daily Mail run’s one of it’s infamous ‘benefits scroungers’ stories. Although it is probably unfashionable to say it I can’t help but agree with Brendan Barber, the TUC General Secretary, when he says;
“The view that we need low benefits to encourage people into work makes no sense in a recession. The vast majority of the unemployed are desperate for jobs, and need no encouragement.”
The TUC uses the data to call for higher Job Seekers Allowance set at least at £75 per week and goes onto to make what I would call a sensible economic case. Although it sounds counter intuitive with Britain’s vast debt mountain it does rightly point to the fact that those on benefits tend to spend rather than save and obviously this money then goes back into the economy. Low benefits are thus not just detrimental to the individuals involved but the wider economy.
It seems to me that this is an area where radical thinking is required. Although an increase would be welcome I for one think it is high time the party revisited the idea of a citizens income. Dismissed as a Utopian fantasy I think it becomes a realistic prospect when we look at the prospect of savings made within the welfare system and also other potential avenues of revenue raising. What, for example, about a ‘social dividend’ levied on our hugely unpopular, and by admission of some of it’s leading lights, ‘bloated’ financial sector? Surely something that would be worth considering as a way of not just curbing the excesses but also actually making sure the money that is levied is reinvested in society where it is needetizend.