John Baron is MP for Basildon and Billericay and a member of the All-Party Group for Compassionate Politics
A heated debate is currently taking place within the Conservative Party about whether we should raise benefits in line with inflation or earnings. I have made my position clear that an inflation-adjusted increase should be announced at once. It is the right thing to do during a cost of living crisis. Failing to do so and holding the line that ‘no decision has yet been taken’ also writes Labour’s attack lines for them, and will ensure the Government gets no credit if and when it makes the decision that it will likely end up making anyway.
A link to inflation is right first and foremost because it is the compassionate thing to do. Millions are facing hardship and those people in the most vulnerable circumstances need our support the most. We need to be a government for everyone. If the Prime Minister goes through with her apparent plan to introduce a real-terms cut in benefits, we will be responsible for pushing nearly half a million individuals into poverty. That is simply not something that we can countenance – and our opponents will have a field day pointing out our error.
It is also the fair thing to do. The pandemic and subsequent inflationary rises have not affected all of us equally. Those on lower incomes spend a significantly higher proportion of their earnings on essentials – food, heating, and housing. They are bearing the greatest burden from our current economic travails and accordingly require the greatest level of support.
I would also urge my colleagues in Government to see this as an intervention aimed at supporting workers just as much as it helps those who are out of work. We know that around 40% of those individuals in receipt of social security payments are in some form of employment. It is not their fault that their earnings have not kept pace with the cost of living. We need to bridge that gap if we are to help workers and non-workers alike through this crisis.
As well as increasing benefits with inflation, we ought to be introducing an emergency increase in the minimum wages. This can be done immediately, would be targeted towards those who most need our support, and would signal the kind of shift we need away from a low-wage economy toward a well-paid, high-skill one.
Combined, these two interventions would have the further universal benefit of kick-starting the economy. Payments targeted towards low-earners tend to have the unique and significant benefit that the money gets spent in the form of purchases, rent, and bills – whereas the scrapped plan to cut the top rate of income tax would have probably led to those with wealth simply saving more of it.
Inevitably with any expenditure, questions will be asked about affordability. To a degree, this question tackles the issue from the wrong end.
For me this is all about values. It’s about whether we want to be a nation that supports, empowers, and cares for everyone. As a One Nation Conservative, I believe that the role of government should be to skilfully identify the means that it has at its disposal to achieve that ambition. Whilst mindful of the cost, a better question to ask should be ‘how does this help?’
If we apply this lens, I think we will be able to utilise the nation’s finances in a way that benefits the greater good. The completion of HS2, for example, would seem like folly in the midst of a financial crisis – neither immediately realisable nor beneficial to those who most need our support. We also need to cut down on tax avoidance (which costs the Exchequer something in the region of £2 billion per year) and we should be looking too at streamlining the many quangos operating in and around government – the Taxpayers’ Alliance believing this could also save billions.
Our new Prime Minister has already faced a mostly self-inflicted baptism of fire since her election. The ill-fated mini-budget cost us a great deal of support and now is the time to start clawing that back.
A very obvious way to do that would be to introduce a change that clearly runs counter to the impression many voters were left with by the proposed cut to the top rate of tax. Great leaders govern in the interests of all. We did this during the pandemic, proving that a Conservative government can make targeted interventions to ensure everyone receives support. We may be moving beyond Covid, but its legacy remains. We need the same spirit of compassion and courage if we are to navigate our way out of this crisis and into brighter days ahead.
John Baron is MP for Basildon and Billericay and a member of the All-Party Group for Compassionate Politics
A heated debate is currently taking place within the Conservative Party about whether we should raise benefits in line with inflation or earnings. I have made my position clear that an inflation-adjusted increase should be announced at once. It is the right thing to do during a cost of living crisis. Failing to do so and holding the line that ‘no decision has yet been taken’ also writes Labour’s attack lines for them, and will ensure the Government gets no credit if and when it makes the decision that it will likely end up making anyway.
A link to inflation is right first and foremost because it is the compassionate thing to do. Millions are facing hardship and those people in the most vulnerable circumstances need our support the most. We need to be a government for everyone. If the Prime Minister goes through with her apparent plan to introduce a real-terms cut in benefits, we will be responsible for pushing nearly half a million individuals into poverty. That is simply not something that we can countenance – and our opponents will have a field day pointing out our error.
It is also the fair thing to do. The pandemic and subsequent inflationary rises have not affected all of us equally. Those on lower incomes spend a significantly higher proportion of their earnings on essentials – food, heating, and housing. They are bearing the greatest burden from our current economic travails and accordingly require the greatest level of support.
I would also urge my colleagues in Government to see this as an intervention aimed at supporting workers just as much as it helps those who are out of work. We know that around 40% of those individuals in receipt of social security payments are in some form of employment. It is not their fault that their earnings have not kept pace with the cost of living. We need to bridge that gap if we are to help workers and non-workers alike through this crisis.
As well as increasing benefits with inflation, we ought to be introducing an emergency increase in the minimum wages. This can be done immediately, would be targeted towards those who most need our support, and would signal the kind of shift we need away from a low-wage economy toward a well-paid, high-skill one.
Combined, these two interventions would have the further universal benefit of kick-starting the economy. Payments targeted towards low-earners tend to have the unique and significant benefit that the money gets spent in the form of purchases, rent, and bills – whereas the scrapped plan to cut the top rate of income tax would have probably led to those with wealth simply saving more of it.
Inevitably with any expenditure, questions will be asked about affordability. To a degree, this question tackles the issue from the wrong end.
For me this is all about values. It’s about whether we want to be a nation that supports, empowers, and cares for everyone. As a One Nation Conservative, I believe that the role of government should be to skilfully identify the means that it has at its disposal to achieve that ambition. Whilst mindful of the cost, a better question to ask should be ‘how does this help?’
If we apply this lens, I think we will be able to utilise the nation’s finances in a way that benefits the greater good. The completion of HS2, for example, would seem like folly in the midst of a financial crisis – neither immediately realisable nor beneficial to those who most need our support. We also need to cut down on tax avoidance (which costs the Exchequer something in the region of £2 billion per year) and we should be looking too at streamlining the many quangos operating in and around government – the Taxpayers’ Alliance believing this could also save billions.
Our new Prime Minister has already faced a mostly self-inflicted baptism of fire since her election. The ill-fated mini-budget cost us a great deal of support and now is the time to start clawing that back.
A very obvious way to do that would be to introduce a change that clearly runs counter to the impression many voters were left with by the proposed cut to the top rate of tax. Great leaders govern in the interests of all. We did this during the pandemic, proving that a Conservative government can make targeted interventions to ensure everyone receives support. We may be moving beyond Covid, but its legacy remains. We need the same spirit of compassion and courage if we are to navigate our way out of this crisis and into brighter days ahead.