The Government has an annual decision to make on how much to increase benefit payments by. This year’s decision has attracted more than the usual level of interest because Ministers have allowed speculation to grow that this year’s uprating may be in line with average earnings and not in line with prices. Doing the latter would of course result in a significantly bigger increase in benefit payments because inflation is currently rising substantially faster than wages.
Those who argue for parity with wage increases suggest that this would be fairer because it would ensure there is no disincentive to work, as workers and those on benefits would be receiving similar increases, but I think that argument misunderstands the purpose of the benefits system. Benefits should be payable to those who need them because they are unable to work at all, or unable to earn enough to maintain a decent standard of living. How much is needed to maintain such a standard of living is clearly linked to the cost of essentials like fuel and food, and payments must therefore reflect increases in the cost of those essentials. How well those in work are doing is of far less relevance to the ability of those reliant on benefits to buy what they need, and I believe this rationale applies whether wages are rising slower or faster than inflation.
Of course, we want those who can work to do so, and I share the view that there should be no disincentive to pursue employment, but there are other policy levers to use to achieve that objective. Indeed, successive Conservative Governments have implemented many of them. Seeking to compare benefit payments with wages in this way would in fact suggest that they are alternative options, which is the opposite of the message that benefits are only for those that need them.
I do not therefore believe that it would be appropriate, this year of all years, to link benefit increases to wage rises and refuse to increase then in line with inflation. I hope that the Government decides to uprate benefits in line with inflation and I hope they do so, and say so, soon. The suggestion that they may do otherwise is causing many additional worry at an already worrying time.
