`Social Justice' Plans Almost Pay for Themselves

By Rosie Waterhouse, Social Services Correspondent | The Independent (London, England), October 31, 1994 | Go to article overview
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`Social Justice' Plans Almost Pay for Themselves

Rosie Waterhouse, Social Services Correspondent, The Independent (London, England)

The costs of implementing key proposals made by Labour's Social Justice Commission are almost matched by the savings, according to an independent analysis.

The apparent cost-effectiveness of the sweeping proposals in the commission's 400-page report, published last week, has emerged from estimates prepared for the Independent by Paul Johnson, an economist at the Institute for Fiscal Studies, and Holly Sutherland, director of the Microsimulation Unit in the department of applied economics at the University of Cambridge.

The total cost of the most important measures is up to pounds 6.68bn a year. The savings that would accrue to the Treasury, from extra taxation and fewer benefit payments, could be as much as pounds 6.42bn.

It is not possible to calculate with any accuracy the total cost implications of all measures in the report. In several important areas the report suggests two or more options, and other ideas - especially on tax - cannot be costed as the report does not provide enough detail. However, many of the main ideas can be costed.

If child benefit were raised by pounds 5 a week for every family the total cost would be pounds 3.5bn, but this would be reduced to pounds 2.5bn because of savings from means-tested benefits that would no longer be claimed.

If the Minimum Pension Guarantee were pounds 70 a week for pensioners aged between 60 and 74, pounds 75 for those aged 75 to 79, pounds 80 for those aged 80 and over and 60 per cent more for married couples, the cost would be pounds 1.3bn a year.

If part-time unemployment benefit were paid at pounds 22.72 a week (half the current unemployment benefit) for the 750,000 people that the report estimates now work part-time but would work full-time if jobs were available, it would cost pounds 886m, although there would be small savings from means- tested benefits.

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`Social Justice' Plans Almost Pay for Themselves


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