Our ailing welfare state is in dire need of some radical solutions

is counter-productive. It could lead to people losing their jobs. When the minimum wage is increased, the cost of everything we buy or procure will also go up in price.

Take the social care industry with its high levels of people employed on lower wages. If their wages are increased then the cost of looking after an aged parent in a care home will inevitably rise to as much as £700 a week which means we, as taxpayers, end up paying more.

I do not have a problem with people being paid the going economic rate for the job but there are other, far more effective, measures the Government could introduce to improve the prospects of those on low incomes. For example, by removing the bureaucracy and expense associated with those on minimum wages by not taxing them, we would save our hard-pressed welfare system millions of pounds at a stroke.

Let us look at what happens to someone on minimum pay earning £13,500 a year for a 40-hour week. First, we pay someone to assess and collect tax from them before paying someone else to assess what tax credits and other benefits they are entitled to and then yet someone else to pass these on. And that is before local councils expend time, money and effort to determine eligibility for council tax benefit. This system is expensive and, frankly, bonkers. Why are we taxing a living wage at all, when all it does, in effect, is meet the cost of administration? Perhaps it is the state that is the problem, not employers.

We require a good, hard look at the size of the state and the balance of our welfare system and to subject both to a root-and-branch shake-up. This could take up to 2020 but in the interim there are progressive steps that could be taken to start saving and redirecting money.

However, any fundamental reform will need to address the sacred cow of means-testing. I am at a loss to know why so many people are against this. We already means-test through the taxation system and for some benefits. Why cannot we do it for prescriptions and pensioners’ bus passes?

Furthermore, means-testing is much cheaper than setting up a complicated system to enable the conscientious rich, who do not need the money, to return it or give it to charity. As most people are in the taxation system and are assessed at various levels, it should not be difficult to integrate this with the welfare system so that eligibility for benefits is determined by how much is earned and how much tax is paid.

We need to refocus priorities. I would like a welfare system that gives enough money to those who need it. The focus should be on people in real need, to help them towards the job market or with their requirement to make their lives more comfortable.

Poverty, unemployment or any other of society’s problems will not be eliminated by spending money the state does not have or by failing to target resources. It is time to consider innovative and radical solutions for our ailing welfare state before it expires of its own accord. That would make arguments about the minimum wage largely irrelevant.