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Thursday, June 14, 2012

Same old Tories?

Inevitably, Iain Duncan Smith's call today, for families to embrace work as the best way out of poverty will be portrayed as yet another insensitive 'on-your-bike' type comment. However, a closer look at what the Secretary of State for Work and Pensions will say, indicates a more sophisticated analysis.

Mr. Duncan Smith believes that Labour’s strategy to spend more than £150 billion in extra benefit payments for poor families failed to stop child poverty. This is underlined by figures which are to be published today and are expected to show that the Government failed to meet its statutory target to halve the problem by 2010:

Mr Duncan Smith will unveil a new analysis which will show that hundreds of thousands of children will be lifted out of poverty if at least one of their parents works 35 hours a week earning the minimum wage.

The introduction of the universal credit, under the Government’s welfare reforms, will mean that people returning to work from benefits will continue to receive some state support. Mr Duncan Smith will also set out plans to change the definition of child poverty so that a more sophisticated analysis is used.

Any child living in a household which earns less than 60 per cent of the typical income is defined as living in poverty. This is likely to be changed so that children living in workless households or those with drug-dependent parents are highlighted. 

The Telegraph says that  Mr Duncan Smith will indicate that Labour wasted large amounts of public funds as it failed to halve child poverty. “The last Government spoke about the need to tackle poverty, and poured vast amounts of money into the pursuit of this ambition — £150 billion was spent on tax credits alone between 2004 and 2010. 

 “Overall, the welfare bill increased by some 40 percent in real terms, even in a decade of rising growth and rising employment.”

In that he is evidentially right. What is worrying is that Labour politicians continue to persist with the misapprehension that if you throw enough money at a problem it will go away. In terms of child poverty all the evidence shows that this is not correct.

Of course the real job of government now is to create the jobs that will enable people to find work.
In Wales, if government trimmed itself down to a quarter of its size you may find business coming into Wales again because of the practical skills on offer and overall employment levels jumping up with lower taxes.
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