Thought for the day: The benefits system

Today, Iain Duncan Smith is announcing plans to make work pay. It may seem strange that he should need to do so, but the hard facts are that the way our current benefits system works, it can sometimes make you worse off if you are on benefits and then take on a job.

Not only do you lose benefits, but you also start to pay income tax and national insurance.

Over the last 10 years or so, the level at which people start to pay tax has fallen progressively in real terms and it was a positive move for the Coalition Government to have adopted the Lib Dem policy of increasing the personal tax allowance progressively to £10,000.

Even so, that is little more than 30 hours a week at the minimum wage.

Today, we will see the Government's plans for allowing claimants to retain benefits when they start work with the amounts tapering off at higher income levels.

There will inevitably be arguments about the cost of this, but it isn't just a financial issue, there are parts of the UK where living on benefits is the norm and anything that can be done to encourage work makes sense.

It all begs the question, of course, as to whether there will be the jobs available. Perhaps I am an optimist, but I have great faith in the entrepreneurial spirit of the nation, particularly here in the South West, and I believe that if the Government sets out a framework with less regulation and a stable economy, wealth creation and jobs will follow.