Who Really Benefits from Welfare? – Simon Duffy

Politics and Insights

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The tax-benefit system is unfair to people who are living in poverty. It appears to be generous, but it is not. Most people do not understand how unfair the current system really is.

  • The system make little difference to the incomes of the poorest
  • People in poverty pay the highest rates of tax
  • It is hardest for the poorest to earn, save and be a family
  • Most money actually goes to the better-off

To make things worse the current UK government is targeting the benefit system for cuts (£18 billion annual cut by 2014-15) – this is shown in Figure 1. It has declared that the benefit system is in need of radical reform and it is in the final stages of passing its Welfare Reform Bill. Under the cover of something that could have been good – a redesigned tax-benefit system – we will have something that is…

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