Friday, 26 November 2010

Target Practice

I have already blogged in part about my issues with the welfare state (here). I am increasingly tired of hearing how the worse off are "targeted" by the budget cuts. They are not "targeted", but that does not mean they will not be those most affected. That in itself though, does not make it an evil budget. I shall explain.

The budget is the plan of what to do with all the monies taken in taxes. This might come as a surprise to Gordy, Tony, Alastair, the Milibrothers et al. I assume in Labour HQ there is a dictionary that under "budget" reads, "enormous giveaway of cash we don't have to people to make them vote for us". Yes, it is indeed considered slightly dodgy economics to plan (if indeed there was any real economic planning other than the standard "hang onto power until the money runs out then wait a generation until everyone's forgotten" plan) to spend more each year than you are going to get. I blogged a little about this here.

Now those taxes come from the people; generally the more you earn the more tax you pay, and vice versa. On the other side of the budget come the public services, benefits etc paid for by these taxes. With the exception of the old rules for child benefit (which was universal and non means-tested), income vs benefits pretty much worked on an inverse sliding scale: the more money you earned, the fewer benefits you were entitled to, and the reverse.

So, if you earn very little, you are likely to be dependent on public services (NHS, welfare, state schooling etc). If you earn lots you probably aren't (BUPA, no need or entitlement to welfare, private schooling etc). Clearly these are broad brushstrokes. So, cuts to these services affects those dependent on them, and doesn't affect those not on them. Not exactly rocket science, or should I say rocketry?

Somehow, people are enraged that cutting these public services and benefits doesn't hurt these "better off fat cats". Yes, the shocking truth is that if you don't really use something, if someone reduces (or indeed increases) spending on it, it doesn't really affect them. At the same time, there is uproar at "the merciless targeting of the dependent classes".

Be under no illusion; the "better off" are taking home less money as a result of the budget. They are contributing to public services more than before. Their pain comes in many forms. Just because cutting the out-of-control budget of the social services they fund does not hurt them as much as it does the poor does not make those cuts unfair. It is a pernicious society that wishes the benefactors of the welfare state to be punished when its recipients feel pain. The "better off" are not proportionately affected by cuts in public spending because they pay for it but do not use it. If you can find moral injustice in there, good luck to you. Hand. Feed. Bite. Rearrange?

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