What is the benefit of benefits??

8.18.00am UTC (GMT +0000) Wed 23rd Jul 2008

It looks as though the Government is planning to abolish Incapacity Benefit and Income Support in order to streamline the benefits system. I have long thought that the Benefits (and Tax) system was overly complicated and often penalised those it was designed to help at one end and gave disincentives to work at the other end.

If Government really want to have a benefit system that works it needs to go back to first principles and look at the purpose of benefits. Should the benefits system just be a safety net, should it be a tool to influence society, should it be a mixture or neither.

The benefits system has been used as a political tool for a long time, one of the reasons that 2.6million people are in receipt of Incapacity Benefit is because the Thatcher Government (and subsequent Governments) wanted to hide people and keep those on Unemployment Benefit as low as possible.

Of course, there are added issues. Many people on Incapacity Benefit were not, and are not, able to do manual work but manual work has not been the chief employer in this country for many years now. Under he new plans all existing Incapacity Benefit will be medically assessed and reclassified.

So what should benefits be for. There are two extremes - which are both levellers of some description.

• Have absolutely no benefits a kind of Darwin survival of the fittest approach - I doubt there are any supporters of such a scheme, even those that believe in the smallest state possible accept there needs to be some safety net.

• Introduce a 'Citizens Income' where every citizen receives a basic entitlement from the state, high enough to cover the basics of survival but low enough to encourage people to also take some form of employment. Of course the beauty of a 'Citizens Income' would be a simplification of benefits in the wider sense, not just employment and illness related benefits, but Child Benefit, Pensions, Careers and even Student Grants could be abolished and replaced with one overall 'Citizens Income'. I must confess I do like the concept of a 'Citizens Income' but would need to be convinced of its workability.

If we go for neither extreme we have to look at what benefits there should be and also how they are provided.

In terms of what benefits that really depends on what society should do for other people, some things in live are not controlled by individuals - many illnesses, being young or being old for example, however some things in live are choices, such as going to University, having a child, and in some cases choosing not to work. The question that has to be answered is what should the society be expected to pay for other people's choices? I would be very interested to hear people's opinions on where to draw the line.

In terms of provision some benefits are what are termed Universal Benefits and need no form filled but are given as right - Child Benefit is the most obvious example and has an almost 100% take-up, other benefits take a lot of form filling and of course some of the most needy are those most unable to fill all these forms in. This would certainly suggest the more universal the benefits the more good it will do.

I hope James Purnell the Work and Pensions Secretary starts a national debate on the subject.