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I wonder what the real reason is behind welfare reform?

(138 Posts)

Welfare (pensions, OOW benefits etc) and the NHS are paid for solely by NI contributions. The government is not allowed to touch this money but it may borrow from any surplus; the yearly surplus is around £2bn.

The coalition rhetoric of "taxpayers are sick of seeing blinds closed when they go out to work" and all the other rubbish they spout is either ignorant stupidity or malevolent divisiveness, because tax has nothing to do with it.

NI contributions may not be used for any other purpose than welfare, so why does the government want to cut benefits and introduce private pensions for everybody? Gideon Osborne spoke in 2011 of possibly combining tax and NI. This would give him access to a huge pool of money that is specifically earmarked, by Statute, for healthcare and welfare - he would want to use it for other purposes.

Tax credits, on the other hand, do come out of the tax budget; however this money doesn't subsidise poorly paid workers, it arguably subsidises businesses so they do not have to pay a living wage.

Basically, I don't see how the government can legally include the welfare budget in its programme of cuts. There may be an argument for making the welfare system more efficient but any cuts or changes would not affect the government's budget.

infamouspoo Tue 02-Apr-13 05:58:29

Longfingernails - these reforms are impacting most heavily on disabled people and Carers, the two groups you point out that should be exempted.

As for UKIP with their disablist and racist policies, I'd be terrified if they got in.

Tosca thanks for that brilliant post.

Longfingernails - you are really missing the point that even if welfare is reformed, any money saved will not be able to be used for any other purpose. Conservative ideology does not affect this.

niceguy2 - no, there is a surplus. Auntie Stella's figures are correct, but the money raised by NI is invested to maximise its potential.

Links:
general information about the portfolio www.dmo.gov.uk/index.aspx?page=CRND/CRND_Portfolio/NIFIA
accounting and surplus information www.gad.gov.uk/Documents/Social%20Security/GAD_Report_2012.pdf

There is a lot more information available and I would link to it, but I have to get the baby ready and go to work.

Although in the stats, unemployment is expected to decrease hmm.

Oh, and Gidiot has now raised NI contributions.

skinnywitch Tue 02-Apr-13 07:18:06

90% of the lowest income group smoke.What are people's thoughts on that given fags are £9 a packet? Only 20%of the highest income smoke.

<jumping back on thread before going out>

And your point is?

What other people spend their money on has nothing to do with you, me or anyone else. It also has nothing to do with statutory entitlement to welfare.

If I said 90% of the highest income group buy £20k handbags, what would you say to that? You do realise that people are not accountable to anyone for what they buy don't you?

Please don't use the undeserving poor argument and mind your own business as far as other people's spending is concerned.

(Plus them's some pretty high figures. 90%? Really?)

navada Tue 02-Apr-13 07:48:52

What ever the rights & wrongs, they have got public opinion behind them & they know that.

Tiredandhot Tue 02-Apr-13 07:52:09

Peahentailfeathers have you read the document you link to? If so you would see that the NI fund pays for some (not all) of what are generally considered 'welfare' (eg doesn't cover housing benefit), it certainly doesn't pay for the NHS and is not in surplus. Clearly says receipts last year were £81bn and payments £85bn, and that this is not predicted to move back into in year surplus until around 2016, and the gap will get bigger before then. there is an underlying fund which means that tax receipts are not then drawn on to fund the deficit, this needs to stay above 1/6th of in year payment estimate else tax receipts would be used to top up the fund; ths is not an action predicted to be necessary by the report.

Your opening logic is just wrong: the cuts/benefits caps being introduced will allegedly reduce the overall welfare bill, but largely the elements paid for by tax receipts, eg tax credits and housing benfefits. So that money could be used for any other purpose, initially I suppose the idea is just to reduce the in year overall government spending budget deficit. The idea the the NHS is paid for by NI is nonsense, it costs almost 100bn a year on its own, and was never part of the individual 'insurance' ideology of NI.

For the avoidance of doubt, I do not disagree with most of what ttosca said, am not a coalition supporter nor have any interest in UKIP, and I think most of what they are doing us just ideological, And more to the point I think in making the cuts in the way they have (not just in welfare spending) they are ruining the economy and therefore our collective ability to grow our way out of the deficit, which is ultimately what needs to happen, but I just can't stand it when illogical or wrong information is being touted about as fact.

I agree with the argument that in work benefits just subsidise employers to not pay properly; these should go so that employers are driven to be properly competitive to attract and keep the employees they need. However I would much prefer to see a significant increase in the minimum wage to ensure this, something I doubt this weaselly government would do.

www.guardian.co.uk/news/datablog/2012/dec/04/government-spending-department-2011-12

skinnywitch Tue 02-Apr-13 08:02:21

Of course it's relevant peahen! The whole thrust of this debate is how the poor will suffer under budget cuts. Pointing out that 90% of them are seemingly able to afford to smoke is entirely on topic.

Chipstick10 Tue 02-Apr-13 08:16:35

Well said long fingernails. Lets not forget Blair wanted to tackle welfare but bottled it didn't he! Why is the nhs or welfare untouchable? Labours answer to everything is to just chuck money at the problem and buy a few more votes.

InSearchOfPerfection Tue 02-Apr-13 08:22:21

skinny you are also likely to find that the poorest people are drinking more alcohol or that they use more drugs.

Why do you think it's like this?

Because the poorest people have the hardest life and it's their only way to escape their life and 'relax' a bit.
Smoking is an addiction and the fact more people on low income smoke has little to do with the fact they actually have 'enough money for unncessary things'.

InSearchOfPerfection Tue 02-Apr-13 08:27:44

I have some issue with the fact that the welfare system is put to pieces (which will also NOT be good for the economy as more and more people will NOT have money to spend other than for food. Who will companies be selling their stuff to will be interesting).

But I have even MORE issue with the way budget is then distributed. So with the current plan, some areas like the |North of England who have lower income, poorer health and poorer education outcome will receive LESS money.
It's not just that the poorer will see the 'benefit' cut, it's the fact that actually they will also not receive as much money as the 'more wealthy' people living in the South of Engand.
<Note: I do realize that there are lots of people in the South who are also poor. I am talking about 'big' numbers here>>

EdithWeston Tue 02-Apr-13 08:29:53

Well, posts like OP, which are just plain wrong in terms of the figures will deter the public from opposing the government's plan, for the simple reason that it makes it look as if opposition doesn't add up.

Until there is an alternative programme with accurate figures that add up well enough, then there is no other game in town.

There is no one close to putting forward an alternative. Decrying the current programme isn't enough.

flatpackhamster Tue 02-Apr-13 08:35:59

Peahentailfeathers

What other people spend their money on has nothing to do with you, me or anyone else. It also has nothing to do with statutory entitlement to welfare.

It's not their money. It's been gifted to them by the taxpayer.

If I said 90% of the highest income group buy £20k handbags, what would you say to that? You do realise that people are not accountable to anyone for what they buy don't you?

I'm not paying for that.

Although in the stats, unemployment is expected to decrease hmm.

It has decreased. Bit embarrassing for all the Guardian-reading chicken littles.

InSearchOfPerfection Tue 02-Apr-13 08:45:33

Whether unemployement has decreased or not doesn't matter tbh. What matters is whether there are enough jobs around for all the unemployed people and we all know it's NOT the case.

Even in a time of 'full employement', there will always be a small % of people 'unemployed' as they are between jobs anyway.

And you have to take into account that people leave it until they can't do anything else before they are registered unemployed because the system is treating people so badly AND a lot of them actually WANT to be able to stand on their 2 feet and find a job wo asking for JSA etc.... I know of a lot of people who were unemployed for months before they actually registered for that very reason. How many of them is there all over the country?

As to the fact that 'you don't want pay for that' what can I say? Should people who are unemployed or being so badly paid they are hardly over the breadline being considered a lesser person that have to give a full account on how they spend their money to better people like you --that just happen to earn more money--This is wrong on so many levels......

No, what poor people spend their money on is not relevant. Plus benefits are not paid for by taxes.

Yes, I have read the docuents on the links - I was pushed for time and just linked the first 2 on my browsing history. Wikipedia has an excellent overview though.

Thank you, InSearchOfPerfection, because you've made that point more eloquently than I can. I would also argue that yes, I do pay for what rich people have even if only indirectly by working for them and ensuring that my work results in company gains of several times my salary, from buying goods in their shops or using their services. But I have no say in what the profit is spent on and, unlike the government, I have no vested interest in being divisive. Oh, but that's wrong isn't it, because they're not divisive are they?

Flatpackhamster, I'm not a Guardian reader if that has anything to do with it - I'm a Times woman.

flatpackhamster Tue 02-Apr-13 09:59:35

Peahentailfeathers

No, what poor people spend their money on is not relevant.

If it was their money that they were earning, I'd agree. It's not.

Plus benefits are not paid for by taxes.

NI is a tax. A tax. Tax. TAX.

It's a seperate contribution though and is distinct from income tax.

niceguy2 Tue 02-Apr-13 10:51:03

Once upon a time you could have argued that NI was a separate contribution but given it now doesn't cover even the NHS bill, let alone the welfare bill. I can't see how you can argue it is really separate anymore.

It is separate only in name. In practice it is just another income tax. The sole purpose I can see is to confuse people into thinking that they pay a lower level of tax than they actually do. I honestly think if anyone had to guts to roll it up into a single tax then most people would go mad.

ThePathanKhansAmnesiac Tue 02-Apr-13 10:58:14

Flatpack, you are funny grin.

morethanpotatoprints Tue 02-Apr-13 11:11:15

I think it will be interesting to see who keeps the economy of the high street going. The rich tend to hold on to their money, the workers are paying for childcare and don't have much left after this. I can see far more shops closing, especially those selling none essentials.

Also, it is nobodies business what people spend their money on whether benefit or not.

Of course its their money they are spending, this idea of it being somebody elses is laughable. If you pay tax you are clearly fortunate enough to have a job, when it leaves your salary it is NO LONGER YOURS grin

niceguy2 Tue 02-Apr-13 11:15:38

If you pay tax you are clearly fortunate enough to have a job, when it leaves your salary it is NO LONGER YOURS

It's no longer 'my' money as such. But it doesn't mean I should not be concerned about how much of my money is taken and what it is being spent on. Surely we all want to know what our money is being spent on? I accept we may all have different priorities though.

skinnywitch Tue 02-Apr-13 11:15:59

I absolutely couldn't care less what people spend their cash on.

What I DO care about is them smoking it and then moaning they have to pay a little bit of tax when the rest of us are skinned alive for tax.

skinnywitch Tue 02-Apr-13 11:17:10

Indeed niceguy.

Weren't people most vociferous about the war Tony started , " not in my name" and all that? hmm

flatpackhamster Tue 02-Apr-13 13:23:49

Peahentailfeathers

It's a seperate contribution though and is distinct from income tax.

It's a tax. Tax. Say it with me. Come on. National Insurance is a TAX.

The distinction is irrelevant to people who pay tax. It's just another 12% the government helps itself to. Stop pretending otherwise.

morethanpotatoprints

I think it will be interesting to see who keeps the economy of the high street going. The rich tend to hold on to their money, the workers are paying for childcare and don't have much left after this. I can see far more shops closing, especially those selling none essentials.

I'm afraid you're wrong, both about 'the rich' 'holding on' to their money and which shops are closing down. The upper end are starting to find it tighter but they're still spending. It's the middle area, the people who are just getting by, who are struggling now. Particularly private sector workers who didn't get the pay rises of the public sector during the Labour government. so don't have that cushion to protect them from high inflation.

Of course its their money they are spending, this idea of it being somebody elses is laughable. If you pay tax you are clearly fortunate enough to have a job, when it leaves your salary it is NO LONGER YOURS grin

Well let's work with that for a moment. If that theory is true, then does that apply to my body? Is it mine or the government's? If it's mine, do you think that the government should stop lecturing me on how much I should drink or smoke? Should they scrap Change4Life campaigns and all the other boring bullying that they do about weight, diet and so on? Do you think they should scrap 'sin taxes' on cigarettes and alcohol? Or do you accept that, because I'm consuming scarce public sector resources, that someone other than me has a say over how I treat my body?

Because if you do accept that, then you can't accept that they have no right to limit what people spend their welfare handouts on. The principle is identical.

FucktidiaBollockberry Tue 02-Apr-13 13:27:30

Long term tory vision.

They're not the most successful long-lived political party in the world for nothing.

They stay focused.

Every time they get into power they chip away another little bit of the welfare state.

That's why they don't actually care that all this welfare reform will cost tax payers more - the aim isn't to save money, they're prepared to invest in ensuring that they get rid of what they see as a socialistic-type safety net.

The deficit has just given them the excuse they need to accelerate the destruction of the welfare state and the privatisation of the NHS.

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