OPINION:Be bold Stormont: go for a lower benefits cap than GB

Stormont
Stormont

If Stormont was innovative, it could try leading the way in the important policy area of welfare reform.

Northern Ireland would first have to accept a benefits cap, and could then be bolder.

Ben Lowry News Letter deputy editor

Ben Lowry News Letter deputy editor

The Great Britain cap is £26,000, equivalent to a pre-tax income of £34,000. The Tory government plans to cut it to £23,000 in London and £20,000 in the regions.

We should explore going lower in Northern Ireland, perhaps to £18,000.

This is hardly radical. It is equivalent to about £22,000 a year before tax and is far above the minimum wage.

It is well above the estimated living wage outside London of £7.85 an hour (approximately £14k a year gross).

It is even far above the London living – and coming minimum – wage of £9 an hour (approx £16k a year).

And it is above the private sector median wage in N. Ireland (about £21k gross).

An £18,000 benefits cap is a plausible goal. It would be popular with communities across the Province.

Yet such a proposal is unthinkable, and not merely because nationalist parties at Stormont reject any cap. Unionists are lukewarm on reform. They oppose the bid to end the spare room subsidy (dubbed a bedroom tax). Unionists have declined to argue welfare reform on its merits, but rather as a way to avoid the Treasury penalty.

The case for reform is overwhelming.

More generally, welfare has been a big contributor to the national indebtedness that is transferring wealth from young to old. More specifically, vast sums have been reallocated elsewhere. In the UK budget, this has for example helped make it possible to ring fence foreign aid which can be spent on causes such as helping Syrians.

But even if had only been possible to get political agreement that reform savings stayed within the welfare budget, it would be better to tilt funds from £20,000+ families towards the severely disabled.

Most welfare is pensions but the coalition government showed how much of the rest of the budget could fairly be cut. In terms of Stormont’s budget, the annual savings in NI alone would rapidly fund a motorway to Londonderry (currently traffic on the road between our two main cities gets stuck behind tractors).

More than 6,000 families in Northern Ireland get more in benefits than the GB cap.

No sensible person advocates destroying the Labour Party’s crowning achievements, the NHS and the welfare state. The principle that a nation cares for its most vulnerable citizens is widely accepted in civilised nations. But welfare has long since mushroomed beyond that.

That any families (even if very few proportionately) can get total welfare payments far in excess of average household incomes starkly illustrates the weak controls.

Almost everyone who looks at the data sees a problem (aside from a political hardcore who seem to believe that their opposition to any welfare reform is a reflection of their moral goodness). Even so, the depressing liklihood is that Stormont will fudge the issue and find a way to keep us one of the most welfare addicted parts of the UK.

A benefits cap does not, for example, include Disability Living Allowance, which is also in need of overhaul in NI (it is hard to believe our rates of disability are so much higher than GB as to justify 10 per cent of our population claiming DLA compared to 5 per cent there).

It cannot be stated enough that saving on welfare in NI does not mean merely handing money back to London – our overall funding stays the same.

The debate is over where that money is spent. Sinn Fein played hardball to win that in favour of welfare.

Stormont needs to prioritise every extra penny it can towards key services: NHS, schools, police, infrastructure.

A sorry list of populist measures has given money to groups of people who did not need it, such as free prescriptions and free travel at 60 (the latter particularly idiotic at a time of rapidly rising life expectancy).

Welfare reform is also important because it shifts the culture towards work, which is at the heart of a strong economy. It is good for individuals too, and so pays health dividends.

Our sporting successes show the Northern Irish pluckiness that once made Belfast an industrial giant. Cutting corporation tax is only one (highly uncertain) piece of the jigsaw to recreate that spirit.

Demonstrating that we are not whiny and handout dependent, but put our taxpayer subsidy to careful use, would also help to smooth relations with GB at a time when growing English awareness of the excesses of the Celtic fringe puts the UK in peril.

• Ben Lowry is News Letter deputy editor