Why Do We Blame It All On
Benefits?
Rachel Yemm
Being angry at the benefit system seems to be the latest bandwagon that everyone is jumping on. Who can blame viewers for feeling somewhat frustrated by television programs such as the highly contentious ‘Benefits street’, which paints a picture of life on benefits as being synonymous with crime, laziness and drug addiction.
These people are real, and of course, represent a genuine issue within society. But could this misrepresentation of those who are reliant on social welfare perhaps be distracting us from far more critical issues?
We are living in an age of hysteria; it seems as though we all want someone to hate, someone to direct our anger towards. But maybe we should be directing this anger elsewhere?
Perhaps we should be channeling our anger towards those who appear to believe that taxation does not apply to them. Take, for example, Sir Philip Green, CEO of the Arcadia group, which includes high street stores such as Topshop and Dorothy Perkins. In 2005, Green was paid around 1.2bn in a single year. Of this 1.2bn, the total amount of tax paid was £0; the entire sum was paid directly to his wife, who lives in Monaco.
Green is not alone; businesses, such as Starbucks, Google, Amazon and Vodafone are all guilty or tax avoidance. The annual cost of this is estimated at around 25bn per year.
To put this figure into perspective, the amount of ‘efficiency savings’ expected to be made to the NHS by 2015 total 20bn. Four out of five doctors agree that these cuts have already had a negative effect on patient care.
One of these private landlords is Lord Charles Gow, the son of Ian Gow, who was housing minister during the peak of the Right To Buy scheme.
Some may argue that this is simply the nature of big business; that the inevitable elements of risk, and hard work involved in starting a business is justification for this inequality. We need to be careful not to confuse wealth and success with greed. One in six (3.5 million) children in this country are living in relative poverty, whilst the world’s richest 85 people own the same amount of money as half of the world’s population combined.
It is hard to see how any amount of hard work or risk can justify such an unimaginably huge level of economic inequality.
This does not mean to say that people are not angry about these injustices, just that they don’t seem to have hit a nerve in quite the same way as television shows such as Channel Four’s ‘Skint’ and ‘Benefits Street’ have. The big question is why? Why do people appear to be less concerned about inequality than they are about the cost of social welfare?
There are many misconceptions and welfare myths. A recent poll by the TUC showed that on average, people believe that the percentage of the welfare budget currently being claimed fraudulently is 27%; in reality this figure is as low as 0.7%.
This figure was estimated at around 1.2bn in 2012. It is interesting to compare this to the 1.3bn that was underpaid to individuals who were entitled to it, or the amount overpaid due to error, which has been estimated at 2.2 bn. It is even more interesting to compare this figure with the 25bn cost of tax avoidance.
Another all too common misconception is that people on benefits are lazy and choose not to work. Of course, this is the case with some, but is this issue as prevalent as many believe?
The TUC have shown that on average, people believe that 41% of the welfare budget goes to individuals who are unemployed. The actual figure is just 3%. Could this suggest that the problem lies in the fact that people aren’t being paid enough to live? Over half of those classed as being in poverty are in low paid employment, while CEOs of large companies such as Tesco, are earning more money in a day than their full time staff earn in a year.
There will always be those who take advantage of the system, but we need to remember that the large majority of those who rely on benefits are people who, despite their efforts, are simply unable to keep up with the cost of living crisis whilst their employers are paying them less than the living wage.
It is unsurprising that the media presents such a misleading impression of those relying on social welfare to us. For example, the Ritz hotel, which paid no corporation tax for seventeen years, happens to be owned by Sir David Barclay and Sir Frederick Barclay, the same brothers who own the Telegraph newspaper. The same newspaper which, in 2011, published an online article titled ‘Tax avoidance isn’t morally wrong. It’s perfectly sensible behavior’.
It will come as no big surprise to anyone to hear that the rich control the media; newspapers print stories that fulfill the agendas of those who own them.
University fees are more expensive than ever and it is becoming increasingly impossible for working class students to afford to do postgraduate study, as research councils have recently withdrawn from supporting taught masters degrees. Unpaid internships are becoming increasingly popular, particularly in fields such as media, meaning that those students who can afford to work for free are automatically ahead of those who can’t. With cuts to education estimated at around 25% in the next four years, this inequality is only going to get worse.
Sir Phillip Green, CEO Arcadia Group
Phillip Clark, CEO Tesco
Barclays Brothers
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