I have worked closely with Iain Duncan Smith since he established the Centre for Social Justice back in 2004. This cross party think tank, aimed at fighting social injustice, initially undertook an in-depth study into the social problems facing Britain in the 21st Century in the document ‘Breakdown Britain’ followed by ‘Break through Britain’ which provided a series of solutions and policies which were adopted by all 3 major parties and have been universally applauded.
Last week the centre reveals its latest research ‘Dynamic Benefits, Towards Welfare That Works’ the most far-reaching review of the welfare system in 60 years, estimating a shake-up that will boost the incomes of the lowest paid by nearly £5 billion. This research also sets to transform the “static” way the welfare system works, by removing barriers that discourage the unemployed from seeking work, described as “financial disincentive to work” – the way in which the newly employed see barely any increase in their income as benefits are cut when they start to work for example a 21-year-old man earning £5.50 an hour takes home just an extra 89p an hour because 84% of his wages are lost in tax and benefit withdrawal.
Such heavy taxation in the current system serves to trap people out of work, producing greater injustice and weaker social mobility with Britain now having greater unemployment of its young people than anywhere else in Europe. Although Iain Duncan Smith predicts an initial cost of £2.7bn to establish, it will reform and save the taxpayer £3.4bn after one to two years – a net saving for the taxpayer of £700m year on year, more importantly it will provide a fairer system into work.
