WILL THE BRITISH GOVERNMENTS WELFARE REFORMS WORK? – Iain Duncan Smith is on a mission; some say mission impossible whilst other think he’s found the formula for widening the gap between wages and benefits so that the unemployed will be far better off having a job.
Welfare, when originally introduced to Britain in 1949, was never designed as a lifestyle choice but rather a way to support the poor in times of need and help them get back to work.
Today’s welfare system is perceived entirely out of context with the original plan; it is now seen as an entitlement and for millions as a way of life.
The truth is that at the current levels of handing out benefits the system will eventually collapse which would have devastating consequences for those who really need welfare support; such as the sick or elderly.
Over the last three decades the abuse to the welfare system has grown to astronomical proportions and therefore the Government has started to take a ‘hard-line’ approach to those looking for state assistance.
Those who oppose welfare reforms are generally those who would rather live off the backs of the taxpayer and these latest measures will work towards ending the abuse of taxpayer’s money.
The idea isn’t that difficult; Iain Duncan Smith plans to persuade millions of people that working is far more lucrative compared to living on state benefits and one of Britain’s leading economic think tanks, the Institute for Fiscal Studies, says he is on the right track.
The new Universal Credit System did come under fire from some quarters; most notably the National Audit Office, in which it condemned the plan as ‘over complicated, badly managed and overly ambitious’.
However, other economists have labeled it a stroke of genius and will give the unemployed a real incentive to get back to work. Furthermore, if managed properly the system will encourage workers to work harder in order to seek higher promotions.
The reforms will ultimately strengthen financial incentives to work and even hit those who live on benefits.
One of the major benefits to the Universal Credit system is that it will reduce the average replacement rate; that is those in work would be 3.4 per cent better off. However economists reported that without welfare reform this figure would have risen by 1.7 points; resulting in taking more from working families whilst those on benefits would have been far better off. Such a situation would not induce people to get back to work.
There are some that oppose the Universal Credit system for varying reasons, however, most economists are now on-board with the plan and despite what some people might say about the new system it is clear that Britain must change its way of thinking regarding benefits and realizes that state benefits are there to help you get back to work, not live a life of freeloading off the rest of the hard working taxpayers.