The perfect system is no tax. So you get paid for the work you do but everything you need such as health etc is insured.
Or the perfect system is high tax so everyone is subsidised.
Or you fudge it in the middle somewhere.
Which really comes back to the ideals of labour or the conservatives, the conservatives believing in small government and low taxes and labour believing in a larger public sector funded by higher taxes.
The downside in this situation is that people have come to rely on the subsidies through the tax system. Whether in work benefits or child related benefits. Take those benefits away and you leave people who previously got by in a mess. The other view is that any proposal to reduce or remove these benefits brings out the mumsnet crowd who despite their self imposed importance do have an influence on voting intention.
Any government or political party doesn't want to alienate what may be seen as safe votes. You don't get an influence on policy from the opposition benches.