Recent media reports have suggested that the Government is considering freezing or limiting benefits increases. This move is very welcome – and long overdue.
This year, benefits went up across the board by 5.2% deepening the deficit by an extra £10 billion per year. This is because the inflation figure used for setting the benefit increase was the September 2011 one – the highest monthly inflation figure in recent years.
An increase of this magnitude was simply not fair. Firstly, inflation has averaged about 3.5% over the last year, and is now down to 2.5%. Secondly, public servants such as nurses, police officers, teachers and members of the armed forces had to make do with pay rises of only around 2%. And in the private sector, many people have not had a pay rise at all. Why should benefits go up so much more than the wages of those who actually work?
During Labour’s time in Government, the welfare bill doubled – from £93 billion to £188 billon. Even adjusting for inflation, it went up by 50% during their time in office. Today, at £207 billion per year, it consumes about 30% of all Government spending and is by far the biggest line item in the national budget. If we are going to tackle the deficit, it is vital to get the welfare bill under control.