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In an Age of Austerity, Time to Rethink Benefits?

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"They're all scroungers!"
"Really all of them?"
"All of them!"

This was the debate I endured a few weeks ago with an acquaintance of mine on the subject of benefits. I am always happy to debate an important matter with individuals from all political leanings. Just because I tend to lean to the left does not automatically provide me with the best solution. Yet in this case, I could not listen any more to this dross. This would be OK if this opinion was shared only by a few, but a quick straw poll of my peers and of the press (and not just tabloid) makes me think that not only are these views just plain wrong, but misdirected and dangerous.

At no point am I arguing that those committing benefit fraud are left unpunished. If you mistreat a system designed to help those least able to help themselves, and the taxpayer, then you should be held accountable. Yet the taxpayer is generally misinformed. Many do not know how much benefit fraud costs the government according to this excellent article in the New Statesmen. It is much less than the amount of tax avoided by the likes of Amazon, Google and Starbucks. Many may complain about these 'scroungers', yet use these very companies.

Perhaps in this time of austerity public anger may be better and more fruitfully directed at an issue that could bring in many billions more to the exchequer than directing it at those struggling at the bottom of society. Yes questions arise about the issue of capital flight (i.e. that by collecting more tax we encourage these companies to pull out of Britain) but these fears are largely unfounded as Britain remains a profitable investment for these well ingrained firms, and pulling out may be more costly than paying more tax anyway. It would be extremely costly for Starbucks to arrange compensation for over 8,500 staff and for Amazon to shut down nearly a dozen distribution centres.

Let us take a moment to reflect on who these 'scroungers' are. Yes, there are the few that play the system, but there are many who genuinely need a safety net. This could range from the severely disabled to those who have just finished university and are struggling to find an entry level job relevant to their qualifications, only to find most jobs have been replaced by unpaid internships. Many on benefits are simply claiming because they have lost a seemingly secure job they have held for years, only to find themselves with a very specialised set of skills that was invaluable in decades past, but is outdated today.

There is also the issue of how the media perceives those receiving benefits. Apart from the choice of terms used (i.e. scroungers), many articles simply do not ask the right questions, or are simply false and seemingly designed to incite loathing of those on benefits. I staggered in disbelief at this article in the Daily Mail not because of the claims made but that anyone with a basic grasp of mathematics could see the issue that she lives on only £15,480 a year yet can afford to raise two girls and save £2000. This means three people live on £13,480? Doubtful. Also irksome is the mention of the fact that she left school with no qualifications. Rather than crucify her for this, the broader debate should how the British school system fails many by teaching to exams, rather than for learning's sake, and how we can improve the competitiveness of future generations of school leavers in an increasingly competitive and globalised workplace. We should also debate how we get those made redundant back into work and off benefits, whether though colleges or on the job training so they can adapt their skill set to a ever changing workplace. Further, it should help millions of falling into the poverty trap, and on to benefits.

At Christmas, I hope many will think of others less fortunate than themselves and reconsider how they perceive those on benefits. The lack of stability in any position at the moment should make people stop and think that they are a market downturn away from needing this safety net themselves. Pull this net away, you risk trapping many into poverty and placing them in a position where they will find it even more difficult to re-enter the work place than on benefits.

By redirecting this fury and ire more productively towards multinational tax avoiders, we may be able to kick-start, or at least push our economy in the right direction. By reconsidering and re-framing how we debate benefits, we could potentially save many from becoming unemployable after being failed at school, and trapped between benefits and poverty. There is scope to debate how the benefits are delivered, and as the New Statesman article highlights, how we encourage claimants to both think of work as more profitable than benefits, and make it more attractive by supporting claimants needs as they move into the workplace, such as providing child care. By these steps, we can not only get many off benefits and give them a brighter future, but give Britain a brighter future as well.