Mike Brewer
speaker
26 appearances
1 recordings
1 series
first heard Sep 2010
last heard Sep 2010
Mike Brewer’s voice in public audio — every appearance, attributed to the second.
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Appearances
Out-of-work benefits are not very important in the total welfare budget.
The first thing people don't realise is the state pension is the biggest single benefit.
And if you take into account all the money that pensioners receive, it's just over half the total welfare budget.
And from what we can learn from what Osborne has said so far, he's not very interested in cutting benefits paid to pensioners.
In fact, he wants to make the state pension more generous.
So when you've ruled out more than half of the welfare budget, you've only got about £100 billion that you're trying to make cuts in.
And these main out-of-work benefits are just a small fraction of that.
A great deal of what's left goes to people with children or to people with disabilities or to people who rent through housing benefit.
Compared to other European countries, we don't have a very big poverty trap or unemployment trap for the simple reason that our benefits are not that generous.
When most people become unemployed, they're entitled to just £65 a week, and that is going to be far less than the earnings they would get if they were to work.
Other European countries might pay generous unemployment benefits related to your previous earnings.
So for us, poor incentives to work arise for different reasons, and it's often due to the operation of particular benefits.
People who receive housing benefit often find there is no incentive to work because we take away these housing benefits very quickly when you move into work.
And sometimes people who are in work on low earnings and receiving multiple benefits find it's not worth working a bit more because if they were to earn, say, £10 a week more, they might keep only £2 or £3 of that.
If you like, it tried to encourage them off benefits in nice ways rather than nasty ways.
And it did this by increasing the amount of support they would get if they were to work, mostly through tax credits paid to you if you worked, but also by improving the amount of childcare available.
So essentially the idea was to encourage them to work by making work more attractive.
And this method was broadly successful.
The employment rate for lone parents went up by 10 percentage points over the past decade.
And roughly speaking, around half of that can be attributed to the fact that work was more financially appealing.
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