Cover of MoneyWeek issue no 489

Finding new oil

4 June 2010 / Issue 489

Six places investors could strike it rich

PLUS:

  • Why Indonesia is set to soar
  • When to gamble on BP shares
  • The gangster who's corrupted Jamaican politics

Excerpt

Back to the Seventies

How much do you think it costs us to pay benefits to the non-needy? A new report from think tank Reform offers the answer: £31bn. To put that in perspective, the size of the UK’s deficit (the amount we add to our national debt every year) is somewhere in the order of £165bn. That means that around 20% of our current financial predicament can be laid at the door of payments to cover child benefit, statutory maternity pay, tax credits and the like to the middle classes.

But even that number could be low. What of the free baby massage classes I attended in Paddington when my first child was born? Every attendee I met was a City wife.

The same goes for Sure Start – having the taxpayer finance what Alice Thomson in The Times calls a “subsidized crèche and climbing wall” might make sense if it really helped only small children born into poverty. It makes less sense when the middle classes meet there for coffee before heading to John Lewis.

Thomson also points to a few other odd uses of public money: in Devon, she says, if you live more than two miles from your local school you get free transport to it. So every morning “minicabs and minibuses cross the countryside ferrying more than a quarter of children to lessons” regardless of how many cars their parents own. This is clearly nuts.

Still, the middle classes aren’t the only scroungers about…

• Read the full editor’s letter here:
Back to the Seventies