Monday, 9 March 2009

Benefit Britain by design - Fraser Nelson explains

From The Spectator's Coffee House:
"To understand why Britain has such welfare dependency, look at the incentives. The horrible truth is that a girl leaving a British school with poor qualifications has a choice of career: work or pregnancy. As welfare is split up (council tax relief, tax credits, etc) no one in government has an overview of the real choices facing our school leavers. But I asked Iain Duncan Smith’s Centre for Social Justice to put together the figures for me – before housing costs, so as to compare them to the going rate for jobs. The weekly net income of a benefits-dependent parent is as follows:

Lone parent, one child: £207 a week
Two children: £262 a week
Three children: £324 a week
Four children: £377 a week
Five children: £441 a week.

Now compare this with work. The ONS recently published what women are paid for various occupations. It shows that a woman with two kids (and a £262 net weekly income) does better than a waiter (£113/week) a cashier (£128) shelf filler (£155) library assistant (£170) hairdresser (£188) child-minder (£240) and street trader (£246). These are gross figures, so you’d have to take off a bit for tax (and add about £30 to the waiter and shelf filler – the lower paid get tax credits) but you get the picture.

This is the key to understanding why 5 million have been on benefits throughout the Labour years. We are not a country of feckless, dissolute Little Britain idiots but a country that responds to the incentives set down by the government. If welfare pays more than work, why work? Why is every Pret A Manger filled with immigrant staff? Because the difference between working and not working is far greater for them then for our own people."

But what is the solution?

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