To think half of all households not paying their way is OK

(79 Posts)
FraidyCat Fri 27-Jun-14 11:33:28

and should be a formalised target?

Thought prompted by a Telegraph article.

www.telegraph.co.uk/news/politics/labour/10927902/Labours-costly-legacy-of-dependence-on-the-state.html

Several years ago when I got the figures off the government (ONS) web site I became aware that at that time almost exactly 50% of households received more from the state than they payed in. All the article tells me that i didn't already know is that the recession has caused the figure to rise slightly since, and that in the 1970's the figure was in the region of 40%. (So 25 years after Thatcher, the country is more socialist than it was before, contrary to what many people seem to believe.)

If you'd asked me when I was younger I would have said help should be for people in exceptional circumstances. Exceptional in statistical terms would mean that figure should be 1%, or 5%, or at most 20%. However I can't see any realistic way back to that from where we are.

Given that we have two main political parties, one of which can be caricatured as the party of the poor that wants to maximise resdistribution, and the other as that of the better-off that wants to minimise it, maybe they should agree to meet half-way and formally set 50% as a target/constraint?

I suppose I think it would kill some arguments that are pointless, because the conflicting forces that lead to the status quo aren't going to go away, and leave politicians to focus on optimising the narrower details of redistribution.

deakymom Fri 27-Jun-14 11:40:04

the cost of living has risen so dramatically which is why people rely so much on the state back before my daughter was born there were no tax credits if you had a child you got child benefit nothing more (and your wages of course) i could pay my rent my council tax feed and clothe myself and my child on my maternity wages i had nothing else just my wages and 17. (?) a week paid four weekly which i used for baby milk and wipes it occurred to me yesterday (after calling tax credits) that we now rely on tax credits for paying half the rent the wages wont do it my rent has tripled (more than tripled really) as has my council tax and ive only moved to a three bed terrace and im not even private im housing association so its cheaper here bread is a fortune everything costs so much more if it were cheaper i wouldn't bother claiming because we wouldn't "need" to

FraidyCat Fri 27-Jun-14 11:41:32

To be clear, I'm not saying I like the 50% figure, just that we should stop wasting out time arguing that it should be different (in either direction.)

taxi4ballet Fri 27-Jun-14 11:42:33

The proportion of elderly people in receipt of a pension has risen over the years, and since people are now on average living longer, this has probably skewed the results considerably.

Statistics can be interpreted in many ways and this should probably be taken into account when looking at them.

LadySybilLikesCake Fri 27-Jun-14 11:45:38

Wages just aren't enough to cover all of the bills and buy food for the vast majority of people. Inflation has soared, 20 years ago you could buy a terraced house for 20K. People can't pay their way, it's not that they won't. I'd happily just live off my wages and child benefit but I'd kill myself doing it.

Floppityflop Fri 27-Jun-14 11:47:55

I think this boils down to the fact of Government subsidising corporations who refuse to pay living wages.

Owllady Fri 27-Jun-14 11:49:17

I thought the main 'benefit' was housing benefit? And we all know WHY so many people need hb in order to live
Social housing sold off, not replaced
Social housing that exists, not enough for need
Too many btl pushed up house prices, in turn pushed up mortgages and rental values
Crazy house prices that people can't even afford on good wages
Not enough affordable housing either to buy or rent

Nothing will change though. House prices have rose 11% here in the last few months and according to shelter in the whole of my postcode there are less than 50 affordable houses

Instead of blaming people, maybe it's worth thinking about things a bit deeper

ReallyTired Fri 27-Jun-14 11:52:59

I really can't see the either 52% of households taking more from the state than they put in. In many cases work class families have had no pay rises for decades and bankers have continued to have bonuses inspite of fucking up the country's financial system.

www.theguardian.com/commentisfree/video/2013/oct/08/inequality-how-wealth-distributed-uk-animated-video

The richest 1% in the UK has more wealth than the poorest 20% of people in the UK. Infact the top 10% of people have 60% of the nation's wealth.

Many rich families do well out of the poor by having rental properties or paying them low wages. A lot of people who live in poverty are in employment so they cannot worker harder to get out of povety.

We need to make sure that there are enough jobs for everyone that pay a living wage before insisting that the poor "pay their way."

In fact it could be argued that currently the rich are not paying their way and the whole country is being proped up by middle class Britain.

BitterAndOnlySlightlyTwisted Fri 27-Jun-14 11:54:30

"At the extreme ends of the income scale, the wealthiest still carry an enormous burden while the poorest see 56.4 per cent of their gross income coming from handouts."

The wealthiest don't carry an enormous burden, not with upper tax-band at only 40% FFS. "Handouts" isn't describing benefits properly either. The majority of people receiving benefits are those in work. Work which should be paying better so they don't have to receive stuff like tax-credits, housing-benefit and whatnot.

What makes me angry is not the welfare bill but the ever-widening gap between the richest and the poorest, tax-cuts for the highest earners, and that gap is getting wider by the minute. Go talk to the people receiving "handouts" who haven't seen a wage-increase since about 2009 and ask them how they are managing. Or maybe those working full-time earning NMW of less than seven quid an hour.

LadySybilLikesCake Fri 27-Jun-14 11:57:25

I think this boils down to the fact of Government subsidising corporations who refuse to pay living wages.

Companies who get tax breaks etc. They are earning shit loads of profits because they don't pay their staff a decent wage and they are getting subsidies from the Government. It's a win-win situation for them. The tax payer is supplementing them twice!

Nomama Fri 27-Jun-14 11:58:54

But it makes no difference what % are retired... it is the overall % that matters, and it is rising.

House prices are not really part of it either. I wish people would lose their fixation that you have to buy!

It is about cost of living, the daily grind. And, no matter if you are working, unwaged or retired, the % rise tells a scary story. Some of it is purely financial but some of it is a sociological problem, a consumerism thing. We have some any more 'things' in our lives and such raised expectations. This also adds to the money gap.

20 years ago £20K did not buy me a 1 bedroom flat, 16 years ago I sold mine for £70K, and it topped out at about £95K. And I don't live anywhere near London and our house prices are below the national average.

Oh, and inflation hasn't soared, it is currently at a 4 year low, is half the 1992 rate, about 1/4 of the 1982 rate and nowhere near the scary 24% of 1975.

www.whatsthecost.com/historic.cpi.aspx

Here, next time some newspaper hack throws the inflation thing at you, send them this.

weatherall Fri 27-Jun-14 12:02:27

It's not the government subsidising people, they are subsidising businesses who are not paying a living wage.

ReallyTired Fri 27-Jun-14 12:05:58

There are times in my life I have contributed a lot into the system and times when I have taken resources out the system. I imagine this is true of a lot of households.

As far as inflation goes, the costs of some critical items has gone up. For example the cost of food has increased dramatically at my local tescosover the last 5 years. The cost of energy continues to soar. However inflation is low as the cost of some items like electrical goods has fallen.

We have to remember the people in the third world that we exploit as well. It is not acceptable to use child labour in Pakistan to make your child's school uniform. The topic of fair trade is another thread.

LadySybilLikesCake Fri 27-Jun-14 12:07:04

House prices are not really part of it either. I wish people would lose their fixation that you have to buy!

House prices are a huge issue. People need a roof over their heads and the prices of homes are outrageous, and eat up the majority of people's income. Even renting can be more expensive than a mortgage on the same property. I could buy a terraced house here for 95K. Without the tax credits this is just over 4 times my income, but would be cheaper then renting which is £460-500 a month here. There's naff all chance to find a deposit if you're paying rent at these levels, and a mortgage would be cheaper then renting so you're stuck.

susyot Fri 27-Jun-14 12:09:36

Are you aware that the mid point household income where half the households in the country are above it and the other half below it is about 23k? Quite shocking when the average household is roughly 3k higher.

Do you understand that the income of households fluctuates during their lifetimes? Eg young professional couple get no help. Have a child maybe drop a salary or receive help with childcare. As children get older and parent can work/reduce childcare state aid may drop. Reach retirement age - get pension, pay less tax.

The article struck me as very vague - what are they calling the top band/lower band? Without figures it is very easy to twist the narrative to the badly done to higher earners shouldering the tax burden and ignoring the fact that they are receiving the lion's share of rewards.

A high percentage of households receiving more benefit than paying tax is a sign of inequality. Having seen a similar argument in the US, with the added madness of jobs which are paid by the tax payer are not classed as net contributors it seems to be an argument for cutting taxes rather than inequality. Unless the government of the day try to reach this target by dealing with high rent, poor pay and insecure work conditions then it is a bad idea. In my opinion it will be used to cut benefits and higher rate taxes.

Greenrememberedhills Fri 27-Jun-14 12:10:12

I don't believe the figures.

Last time I looked, 7% of people owned all the wealth created by the labour of 84%.

Even liberals these days agree that we are more than ever a country of haves and ever more have nots.

Owllady Fri 27-Jun-14 12:14:22

Of course house prices and rental values have something to do with it, hence why working households are having to be topped up with housing benefit.

When I was a youngster I got paid 12k pa for secretarial work and you could get a 3 bed terrace for 30k. Now the same houses are 150k, how much have secretarial wages increased?

Nomama Fri 27-Jun-14 12:14:54

LadySybil, you have missed my point.

Rent or mortgage, it is a housing cost - as you pointed out one is not always cheaper than the other.

Susyot can you link to the £23K info. I was wondering what the pivot point was.... and I am just too scared to look in detail at a UK : US comparison. If we continue as we are, there is our future!

Owllady Fri 27-Jun-14 12:18:58

And on my road a 3 bed semi has just come for sale
It's 400k fgs

Nomama Fri 27-Jun-14 12:22:54

400K!

I hope bits of it are gold plated!

Owllady Fri 27-Jun-14 12:25:00

It hasn't even got a drive confused kitchen, lounge, dining room, wc, 3 beds, bathroom garden. That's it. Absolutely bonkers

Nomama Fri 27-Jun-14 12:31:27

Good grief! After about 17 years of renting we were looking to buy a forever home. We were pleasantly surprised at some of the house prices round here, £130K up will still buy an old 3bed terrace in a small market town.

FridgeHalfFull Fri 27-Jun-14 12:32:40

The numbers used include in kind benefits such as health and education. So if you add up the cost per household for schooling, hospital, health, roads, etc this is not as sensational a number

WooWooOwl Fri 27-Jun-14 12:35:52

It's ok if that's what people need it to be, but it can't understand why you'd want it to be a target.

If we have more net contributors than net takers, then services could improve, and surely that is something we all want?

Nomama Fri 27-Jun-14 12:36:32

Just went to look at the article... WHAT THE HELL IS THAT ADVERT DOING? The legs akimbo young man.... blech! It's a pair of knickers for god's sake - OK underpants. But really.... I mean, reallly?

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