Sunday, 16 December 2012

# 133 The Benefits Of The System

We have become very used to living in a society where financially if something goes wrong, the State is invariably there to pick up the pieces. But it wasn't always like that.

Before 1908 there were no unemployment benefit, no NHS, no child benefit, no pensions, no National Insurance contributions. If you didn't work, you went without. There was the incentive to work. A job was a job and you were probably grateful for anything you could get. Education was a precious commodity, the key to escaping poverty. Work wasn't always that easy to come by and the levels of illiteracy meant that many jobs were out of reach to working class people. A classless society it was not and if you weren't able to work through illness or infirmity you went without.

Poverty in 1912. And we think we have problems (source)
In December 1942, the Report of the Inter-Departmental Committee on Social Insurance and Allied Services proposed a series of measures to help those in need of help or in poverty. It recommended that the government should find ways of tackling the five 'giants', Want, Disease, Ignorance, Squalor and Idleness. It suggested that in order to tackle these problems the government should provide adequate income, health care, education, housing and employment to its people. The report also suggested that people of working age should pay a weekly National Insurance contribution. In return, benefits would be paid to people who were sick, unemployed, retired or widowed.'

The Universal Child Benefit was devised to give benefits to parents and to encourage married couples to have children. Post war the population needed to be replenished. (Ref Wikipedia).

These systems were great back then. 1942 was post war and the country, still living under rationing, needed something to get it back on its feet. The class divide was huge. The rich were very rich and the poor were dying.  But there were less people, less problems, less immigration, the retired didn't live as long as they do now and practices in medicine meant that if you weren't fit and healthy you stood less of a chance of surviving full stop. 

It's unfortunate that over the decades 'hand-out systems' like ours have been abused, left unchecked and pushed to the limits by an ever escalating population from all over the world. And when your benefits system doesn't give the right incentive to go out and find work something has clearly gone wrong.

Whilst child benefits in 1942 were designed to actively encourage parents to pro-create, this incentive hardly seems necessary today. Unable to support our already burgeoning population thanks to a range of contributory factors from improved living conditions to immigration rules, if anything we should be trying to reduce the population.

Work and Pensions Secretary Iain Duncan-Smith's suggestion that child benefit should be capped at two children seems unlikely to have any effect and probably won't happen anyway, although the incentive behind it - to stop rewarding families for children - makes sense when you consider the origins of the system.

Modern day food banks are becoming a regular sight (source)
Parents often had large families because mortality rates were high and working class families relied on children reaching a working age and contributing to the household income. We don't need any of this now. These days large families are an oddity and often seen as an unnecessary over-indulgence.

Child tax credits have already been capped for higher income families (who are still unable to afford their children despite their higher level incomes) and has caused a storm.

It's no wonder we are in recession. Financially this country is in meltdown. Food banks, soup kitchens and charity support are becoming the norm and the queues each day for this on the spot help are getting longer. Many families are having the make the decision whether to heat their homes or put food on the table.

Have we come full circle? Are we regressing back to a time when many families were in need? Only time will tell how these problems are resolved. But predictions for the end of the recession are bleak and stories of poverty on our own doorsteps seems only set to rise. 

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