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1% Rise in benefits

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  • The thing that gets to me is the inefficiencies in the system which if tidied up would save a considerable amount of money. For example, if a person claims housing benefits from what I understand they get the money then pays the local council a rent for the property (out of their benefits), they will also get a council tax benefit which again they must then pay to the council. The council then pays £000's a year in chasing this money, and if it isn't paid because the claimant has spent it on booze/drugs/fags then they have no legal ability to kick the claimant out of their house because of the crazy tenant/landlord rules. If the council said to central government that we have X people living in council housing and Y people requireing aid for council tax, then the government could transfer the funds to the local council in one payment, saving thousands in chasing payments.

    There must be more inefficiencies like this as well.
  • The solution is to become a crack head. Then you get 1k a month plus a car, shocking but true.
  • "Either way, the 1% rise isn't really the point, it's what the benefits can buy that's really the issue."

    Getting into a state of hyperbole over the 1% cap is what the politicians want. It's just about vote catching on both sides. Yes it's unnecessary on the grounds of getting more money in the economy, just as increasing tax rates doesn't give government more money to spend. But that's what politicians do - things that get them votes.

    As PIL says it's what it buys that matters. The "cut" is only relative to inflation and the inflation number is derived from a basket of goods and services. Food represents 11.4% of the index which has got to be the most important cost item we must assume for those on benefits. Travel/motoring/housing/leisure account for 50% of the index. For those on benefits I assume inflation on these items will have a much lesser impact if they don't run a car, get housing benefit and can afford limited expenditure on leisure.

    Alcohol and tobacco is 8.5% of the index, so a smallish component.

    So if inflation is 3% and benefits are £200 then instead of a rise of £6 there would be a rise of £2 because of the cap. Spend on food and alcohol and tobacco is assumed to be £39.80 and a 3% increase means an increase of £1.19 on these items more than covered by the £2 benefit increase.

    A working person paying for travel and housing will likely be no better off in net terms because they might get a full 3% increase in salary, and as we all know, few have had any increase at all for years and are relatively worse off. That is the logic that gains support for the Tories.

    I know it's all theoretical, but talk about massive increase in poverty through a 1% cap is just over the top. Not saying you can live high off the hog, but if you can live on what it is now you will survive tomorrow with a 1% cap. Tories want you to think it's a big deal and so do Labour so distracting everyone from the real issue of how to get people back to work.
  • Chrispy51 said:

    The thing that gets to me is the inefficiencies in the system which if tidied up would save a considerable amount of money. For example, if a person claims housing benefits from what I understand they get the money then pays the local council a rent for the property (out of their benefits), they will also get a council tax benefit which again they must then pay to the council. The council then pays £000's a year in chasing this money, and if it isn't paid because the claimant has spent it on booze/drugs/fags then they have no legal ability to kick the claimant out of their house because of the crazy tenant/landlord rules.

    I'm sure there are inefficiencies but this isn't one, yet. Currently, if someone rents from the council or a large housing association, and they get housing benefit, it is paid direct to the landlord. THere will only be significant arrears if they don't get it all paid or have had gaps in claiming housing benefit. It actually works quite well as far as I can see, the people who run up the huge arrears are those who are on and off benefit, and usually have other issues. LIkewise with council tax - if you qualify for full council tax benefit, the council send you a bill saying you don't have to pay any. They don't send you the money and hope you give it back to them, that would be very inefficient, and local councils have been under the cosh for so long they are actually quite efficient at some things.
    However, under Iain Duncan Smith's reforms, all this is going. In future housing benefit will only be paid direct to landlords in exceptional cases. This is part of his drive to get folks on benefit to take responsibility for themselves, but is likely to have the effect you've predicted. This does mean councils and housing associations will have to spend more time chasing rent (and in some cases the benefit cuts for large families mean they know they will not get it, as rent is likely to fall further down the list than food, electric etc.) In addition, I don't know where the govt think any new social housing is going to come from, as this measure will wreck the finances of a lot of Housing Associations. It's not true that they can't evict people either, all councils regularly do evict people for not paying their rent. What they can't do is kick out people who are vulnerable because they are mentally ill, disabled or are children, just for not paying their rent. The courts will insist that they take any reasonable agreement.
    As well as housing benefit, council tax benefit is being "localised", meaning everyone will have to pay something. So, someone one benefits will be expected to chip in a few quid a week out of their £72, and then the council will have to chase it when they don't or forget.
    I'm not sure this new Universal Credit system is meant to be simpler, but I think simpler is just a cover for "less money, more bureaucracy." I work in IT but support some of the systems used by councils. I had a meeting that involved a couple of council bods last year, I think it's fair to say they see Universal Credit as an unannounced cut, and its impact on their finances will be like the Poll tax was.
  • shine166 said:

    The solution is to become a crack head. Then you get 1k a month plus a car, shocking but true.

    dog shit

  • edited January 2013
    This is an interesting debate.

    When I was studying economics in 1970's, economists were straining every sinew to find a solution for the "poverty trap". That was defined then as being people better off on benefits than working but still in relative poverty.

    There were two things New Labour introduced to try to deal with this matter, one was a legal minimum wage, and the other was tax credits to top up low wages, especially for families - thus encouraging people out of the poverty trap, and into work with a basic minimum income level. I broadly supported this.

    I do believe though that there have been unforeseen consequences of this policy. The effect has been for wages, especially in the private sector for unskilled work to remain at a minimum level but as the cost of living has risen, so the cost to provide tax credit "top ups" have become larger and larger so that the effect on the public finances becomes huge and growing. At the same time those on "tax credits" are stuck. If they earn more, they lose their credits.

    One of the things the Government says it is trying to do is to deal with that specific issue so that you will be better off earning money in work than in the tax credit system.

    I have little time for Labour on this issue because they have said on many occasions that they support the Government's principle but they kick up whenever it boils down to detail.

    It seems to me that unless you are a Marxist and the current Labour Party does not claim to be that, in the end we all believe in an economy based around wealth being created in the private sector, fair taxes, essential work that cannot reasonably be undertaken by the private sector done by people paid from the public purse, and a safety net/insurance to protect us all if we fall on hard times or reach retirement age. The political debate is around how this is balanced out.

    Imagine though a country where wealth creation was taxed at a high level, where there was a shrinking financial sector, where there was an ageing population who were not in employment, where the only new jobs created were ones in the Public Sector, the only people with decent pensions (other than the very rich) worked in the Public Sector, the only workers who were not seeing their pay eroded worked in the Public Sector or were those on low incomes who have tax credits to top them up, and the only thing keeping spending going was those whose incomes hadn’t declined continuing to keep spending in the shops, in the main, on goods imported because they aren't made here any more.

    That is maybe too much of a parody for some but sadly I feel it sums up the way our economy went under the last years of Labour. Yes it can be argued that Brown, Darling and Co staved off a massive recession/depression. On the other hand they were storing up problems which have had to be tackled.

    Many of us working in the private sector have seen our incomes eroded over this period. We have had to tighten our belts and also to look elsewhere for additional sources of income. I now have three jobs each of which I do to a lesser or greater degree on a part time basis. I have sold my house, moved to a cheaper one, re-scheduled and paid back some of my personal debt to be able to survive.

    Have the Coalition got it right? Well if you listen to Milliband and Balls, the answer is a resounding no. They argue that in seeking to cut deeper, the Coalition has choked off demand and the economy has stalled. We don’t know of course what the effect of their policies would have been. We are never going to know for sure. My own feeling is that the economy would still have faltered under Labour and the markets would have been spooked, leading to higher bond prices, higher interest rates and we would be going cap in hand to the IMF for bail outs any time soon.

    So back to cutting benefits, sadly some of the pain necessary has to be taken up this way in my view. I hope that as the policy is developed and adjusted before it becomes in force, some tweaking can be done to try to protect those at the bottom end of the income scale.

    None of this though deals with those who never have worked and have depended on the state to provide them with a home and the money to live. We all know that out there, there are families like this. To me, the benefit system was never about people permanently excluded from earning a living, it was always about a short to medium term safety net for those who are unable to find work. (Except for those who cannot for health reasons, work). Something has gone wrong and something does need doing to tackle this group, recession or no recession. It is though a very big ask at a time of austerity to make these changes when, arguably, there are few jobs available for those who have never worked.

    I feel there will never be a “right” time to do this and so some political courage has been taken to try to meet these issues head on. Time will tell whether they will be successful and which way the politics will play out.

    What I find somewhat distasteful is that some in the Tory Party want to sloganize these matters as "Workers v Shirkers" and at the same time Labour wants to be seen to be on the side of "hard pressed families" or such like.

    We are back to the Victorian age of the deserving v undeserving poor and that saddens me greatly.

    As usual the truth lies somewhere in between.
  • Bing - Great post and thanks for the clear view. I'm broadly in agreement with all that you have said, but I'm afraid that this government may fall because of this policy, and that will let Labour back in who IMHO will reverse as much as possible and we will revert to the current Status Quo. I'm trusting that the coalition will show some balls and stick to their guns and I applaud them for attempting to implement this policy despite the risk. Wouldn't it be great if we could have politicians who agree on what "good" looks like (sorry - Corporate speak!) and agree on the way to achieve it?
  • I think the child benefit policy will be the governments downfall as it really hits their core voters, Tories I mean.

    I would say the vast majority of people in this country earning 50-70k a year would vote Tory and this policy could stuff them
  • I was earning £80k and would rather stick pins in my helmet than vote tory and i never would. Its just wrong. In my opinion. I mean look at them - seriously who do they care about?

    People earning over £50k thinking they're billy big bollocks - these shiny faced Eton cunts love you lot. The Bullingdon club would do your wages in one night on Bolly you mugs.

    Not saying the Tory B team are any better mind you. Give me Dennis Skinner any day. Or at least a politician that follows their heart and not what they think people want to hear to get in power.

  • DA1 said:

    I was earning £80k and would rather stick pins in my helmet than vote tory and i never would. Its just wrong. In my opinion. I mean look at them - seriously who do they care about?

    People earning over £50k thinking they're billy big bollocks - these shiny faced Eton cunts love you lot. The Bullingdon club would do your wages in one night on Bolly you mugs.

    Not saying the Tory B team are any better mind you. Give me Dennis Skinner any day. Or at least a politician that follows their heart and not what they think people want to hear to get in power.

    Bit edgy but I find it hard to disagree with any of it.

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  • DA1 said:

    Not saying the Tory B team are any better mind you. Give me Dennis Skinner any day. Or at least a politician that follows their heart and not what they think people want to hear to get in power.

    I think this is the root of the problem. People like Roy Jenkins, Robin Cook or Thatcher generally said and did what they thought was right. You might have violently disagreed with the message but it was based on some belief system, not the views of a committee or poll. Now we have to endure the likes of Cameron and Milly pretending to eat pastries to justify their support or opposition to a policy. Embarrassing.
  • Dont like getting in politics debates as I am not clued up enough nor do I care as I don't like any of them

    However would disagree with da1 on the people on 50k getting all Billy Big, just don't think that is the case most people on that money will be as hacked off with the government as the next man, yet what is the alternative
  • @DA1 - agree with you on that mate.
  • edited January 2013
    DA1 said:

    shine166 said:

    The solution is to become a crack head. Then you get 1k a month plus a car, shocking but true.


    dog shit

    No its not, I know it for a fact. I know someone who smokes so much crack they were diagnosed with a disablility and given said things
  • DA1 said:

    I was earning £80k and would rather stick pins in my helmet than vote tory and i never would. Its just wrong. In my opinion. I mean look at them - seriously who do they care about?

    People earning over £50k thinking they're billy big bollocks - these shiny faced Eton cunts love you lot. The Bullingdon club would do your wages in one night on Bolly you mugs.

    Not saying the Tory B team are any better mind you. Give me Dennis Skinner any day. Or at least a politician that follows their heart and not what they think people want to hear to get in power.

    Turn it in calling us mugs and using the c word. Annoying.


  • edited January 2013
    I have never voted Tory in my life and frankly I can't ever see me doing that.

    Although a Liberal at heart, I was pro New Labour, I liked Blair, supported the Iraq war (and still do by the way) and would say positioning-wise I was centre left in broad outlook. I will find it very hard to forgive the way that Labour has turned itself into a socialist-light party again, and decided to go down the class war route again (carefully saccharined to appeal to the deserving poor).

    They are likely be the largest party after the next election. They will almost certainly not have the arithmetic to form a majority government and will probably need to do a deal with one or more of the other parties including whatever is left of the Lib Dems.

    I find the naked opportunistic painting of Lib Dems as traitors of left may well come back to bite them - I hope it does. Let us not forget that New Labour under Blair was pretty much as far removed from a democratic socialist party as it was possible to get - if anybody betrayed anyone (which I don't accept by the way), they need look no further than the vol-au-vent and prawn cocktail brigade within their own ranks.

    It is going to be hard for Labour to make common cause with other parties in Parliament should they not have a majority. There are sensible voices within the party who know this and are trying to build some bridges back.

    We are in for some interesting times
  • DA1 said:

    I was earning £80k and would rather stick pins in my helmet than vote tory and i never would. Its just wrong. In my opinion. I mean look at them - seriously who do they care about?

    People earning over £50k thinking they're billy big bollocks - these shiny faced Eton cunts love you lot. The Bullingdon club would do your wages in one night on Bolly you mugs.

    Not saying the Tory B team are any better mind you. Give me Dennis Skinner any day. Or at least a politician that follows their heart and not what they think people want to hear to get in power.

    Bloody leftie :-)


  • I think this is the root of the problem. People like Roy Jenkins, Robin Cook or Thatcher generally said and did what they thought was right. You might have violently disagreed with the message but it was based on some belief system, not the views of a committee or poll. Now we have to endure the likes of Cameron and Milly pretending to eat pastries to justify their support or opposition to a policy. Embarrassing.


    Excellent point. Politics used to be 'this is what we believe in. Will you support us?'
    Now its, 'come to our focus group and tell us what our policies are'

    Since when have popularity contests been in the best interests of the country? Sometimes unpopular decisions have to be made and we have now ensured that we don't have any politicians with the principles, or the bollocks, to stand up for any principle and follow it through. This also ensures that only short term decisions will be made in order to curry favour with the masses.

    I think the point was made somewhere recently that we had four Grammar school Prime Ministers in a row, ending with John Major. Now we only have public school educated career politicians who know sod all about the lives real people live, but spend their time trying to pretend they are just like them. It's sickening. Why not just be honest about what you really are and what you believe, rather than trying to pretend that you are always eating pasties and watching moronic shite like the X-Factor? I think most people would actually prefer it. Remember when Gordon Brown tried to pretend to be someone else? The public knew he was taking them for idiots and his political fortunes disappeared down the toilet. Whoever is advising these people wants sacking!
  • edited January 2013
    DA1 said:

    ..... these shiny faced Eton c**** love you lot.

    The Bullingdon club would do your wages in one night on Bolly you mugs.

    The wages of most on here are small change to Cabinet ministers.
    Do people really think they care about you?

    Mugs - that's exactly what they think we are.

  • DA1 said:



    Not saying the Tory B team are any better mind you.

    And that's the other half of the problem.

    You can't trust any of them.
    Who the hell do we vote for at the next election....?

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  • You vote for me Oggy

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    Safe standing

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    Smoking in pubs clubs and footsie grounds
  • shine166 said:

    The solution is to become a crack head. Then you get 1k a month plus a car, shocking but true.

    Really? Where can I apply?

  • shine166 said:

    The solution is to become a crack head. Then you get 1k a month plus a car, shocking but true.

    Really? Where can I apply?

    many apply .. few are chosen
  • Ormiston - It's already here for those who look!

    I've had some time lately and have dipped into a number of areas - I researched courses but I don't have the time to do them full time... so I'm just going to read myself - on the web, a couple of books, been to a couple of seminars etc.

    Turns out The Open University (and others?) are pioneering FREE education in certain courses where content will be freely available as a loss leader to bring cudos, participation and revenue into other courses... I think the idea is that they will only charge for tutoring and possibly marking... So if the badge of qualification enhances job prospects then people will pay but if you just want to get guidance and a reading list then its free.

    The web is here and I just bought a kindle so content is out there ...all that is needed is two things: drive from individuals (your point?) and structure...By structure I mean both academic and incentives - has to come from government, employers, teaching institutions and local society... not everyone can do it as they don't have the time or aptitude but I'm sure the UK has millions who can benefit

    And in (a late) response to the issues raised re children, how about higher child benefits for those who take parenting courses???

    Very true, there are some great adult education courses out there, I took the previous poster to mean lifelong 'free' education where you can dip in and out as often as you please.

    This is something that Tony Benn used to talk about, its a great idea in theory but very expensive in operation.

    As to your last point, the problem would be that everyone would take the course to get the higher benefits but would they actually change their behaviour.

    For my money, in terms of benefits at least, the government needs to draw a line in the sand and say from (let's say) June 30th 2015 we will only pay child benefit for your first two children.

    This will be unpopular with some but if people understand the history of the welfare system in the UK then they will know it was set up as a safety net for WORKING people who had paid into the system, it was never supposed to be a lifelong crutch for people who had never worked at all.
    If there's one point I totally agree with on this thread, it's concerning CB being paybale only for the first 2 children in a family.

  • Chrispy51 said:

    The thing that gets to me is the inefficiencies in the system which if tidied up would save a considerable amount of money. For example, if a person claims housing benefits from what I understand they get the money then pays the local council a rent for the property (out of their benefits), they will also get a council tax benefit which again they must then pay to the council. The council then pays £000's a year in chasing this money, and if it isn't paid because the claimant has spent it on booze/drugs/fags then they have no legal ability to kick the claimant out of their house because of the crazy tenant/landlord rules. If the council said to central government that we have X people living in council housing and Y people requireing aid for council tax, then the government could transfer the funds to the local council in one payment, saving thousands in chasing payments.

    There must be more inefficiencies like this as well.

    Child benefit is another ineffeciency, not much point in that now there are tax credits that can help those with kids who are working with a low income. The only real reason it exists is they would not need a few thousand geordies to administer child benefits and have to close down a whole department so it is really a job creation scheme.
  • actually it is obvious that the £60k earning cap on child benefit is the first step in reigning back the state universal payments of certain benefits, which is only right to be honest. The winter fuel allowance is going to be in line next, I wonder why the brothers in the socialist party never attacked this, scared of the voters? they had plenty of time to do it, at least the present incumbents are starting to tackle this problem.
  • edited January 2013
    It's not 50k ceiling though on family allowance it's 100 k as both can earn upto 50k

    If you earn over that do you really need the family allowance

    If you meant the tax credit I apologise
  • actually it is obvious that the £60k earning cap on child benefit is the first step in reigning back the state universal payments of certain benefits, which is only right to be honest. The winter fuel allowance is going to be in line next, I wonder why the brothers in the socialist party never attacked this, scared of the voters? they had plenty of time to do it, at least the present incumbents are starting to tackle this problem.

    Yes, they are tackling the problem but when it starts to bite amongst their core middle-class voters with their 'entitlement' mentality then we will see if they push through with it.

    It's not just left-leaning governments that create these middle-class welfare schemes, the previous Howard Conservative government here in Oz created a non means-tested baby bonus where the mother gets paid A$5,000 on the birth of a new child. Yes, you read that right.

    The Labor government cut that to $3,000 for every child after the first and the Conservative opposition screamed that they were 'cutting critical payments' to families!

    This is the same opposition that wants to pay mothers earning A$150,000 PA (UK100,000) A$75,000 PA as part of a government-funded maternity leave scheme - financed by a tax on the country's top 100 companies.

    Politicians love dishing out the pork because it gets votes, let's see if Cameron and Clegg are brave enough to follow through on this or whether they will be forced to backtrack.
  • funny, i thought we were talking about the labour party in the UK/
  • funny, i thought we were talking about the labour party in the UK/

    Yes, because the UK is the only country in the developed world facing an employment and welfare benefits crisis, isn't it?
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