Letter in The Guardian – 8th March 2011.
The welfare reform bill has carried the application of the economic theory of moral hazard to such extremes in its exaggerated claims of welfare dependency that unemployment benefits could be reduced to an amount incapable of keeping body and soul together.
The new universal credit will be made up of a standard allowance (SA), an amount for children, another for housing and one more for particular needs or circumstances. The bill does not attempt to explain how the level of the SA will be decided. There is no link to the escalating prices of food and other essential needs. The Centre for Research in Social Policy has calculated that some time in the next 10 years the weekly cost of a healthy diet will overtake the weekly amount paid in adult unemployment benefits.
The caps on housing benefit and the local housing allowance will create debts that will have to be paid out of the money needed for a healthy diet.
Rev Paul Nicolson
Chairman, Zacchaeus 2000 Trust