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I’ve got to share with you some words by Justine Greening,the Transport Secretary. She said them on the BBC’s Question Time, broadcast July 28, 2012: “The first thing to do is bring in a welfare cap, so we put an upper limit on how much people can get in welfare in the first place, that is fair. Let’s make sure we reform it in terms of Universal Credit, so that work does always pay.”
How does capping benefit ensure that being in work will always pay?
Whether in work or not, people are finding it hard to make ends meet because housing costs – either rented or mortgaged – are very high and nothing is being done (for example) to cap the amount of rent being charged by private landlords; utility bills are high and nothing is being done to encourage the gas, water and electricity companies to pass on any savings that come their way; and the price of groceries is outstripping people’s ability to pay for them – inflation has dropped but remains above the percentage rate of annual wage rises (unless you are a fat-cat company boss and have awarded yourself a huge salary increase).
Capping the amount available to honest people on benefits will not be fair on them, as they will have even less to live on than at the moment!
Worse still, it won’t help people who are in work! It’s ridiculous for the Transport Secretary – who previously worked in the Treasury, so she should know what she’s talking about – to suggest this. Benefit payments and wages are completely separate from each other.
In fact, while the British people continue to subsist in a low-wage economy, the government is in danger of repeating the debt crisis that created the huge deficit it is supposedly trying to pay off at the moment – the one for which it continually and inaccurately blames the previous Labour government.
It was imprudent bank lending that created the deficit. The government had to step in to save the banks, after they got into so much debt the entire western financial system was put in danger of collapse. The money to do this had to come from somewhere, and that is why it has to be paid back.
But what happens when a poor working person cannot make ends meet, because their job doesn’t pay enough? They borrow money to make up the difference – even if they know they can’t pay the money back!
What happens when too many people borrow money they can’t pay back? The banking system overbalances and we get a debt crisis. That’s where the Coalition is taking working Britain.
The only action the government can take to make work pay would be to reach not only adequate, but exemplary pay deals with public sector workers, and then take action to compel private companies to reach similar deals.
A living wage for hard-working employees – that’s what’s needed.