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Politics

I wonder what the real reason is behind welfare reform?

139 replies

Peahentailfeathers · 01/04/2013 08:15

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.

OP posts:
Peahentailfeathers · 02/04/2013 09:49

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.

OP posts:
InSearchOfPerfection · 02/04/2013 08:45

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 moneyThis is wrong on so many levels......

flatpackhamster · 02/04/2013 08:35

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.

EdithWeston · 02/04/2013 08:29

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.

InSearchOfPerfection · 02/04/2013 08:27

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.

InSearchOfPerfection · 02/04/2013 08:22

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'.

Chipstick10 · 02/04/2013 08:16

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.

skinnywitch · 02/04/2013 08:02

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.

Tiredandhot · 02/04/2013 07:52

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

navada · 02/04/2013 07:48

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

Peahentailfeathers · 02/04/2013 07:39

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?)

OP posts:
skinnywitch · 02/04/2013 07:18

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.

Peahentailfeathers · 02/04/2013 06:49

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

Oh, and Gidiot has now raised NI contributions.

OP posts:
Peahentailfeathers · 02/04/2013 06:47

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.

OP posts:
infamouspoo · 02/04/2013 05:58

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.

pumpkinsweetie · 01/04/2013 23:48

Child benefit per month

pumpkinsweetie · 01/04/2013 23:44

ttsca, brilliant post. All what you have said is the real truth.

The tories are liars and the newspapers & tv have bought into all their shite to spread lies and make money from it.
Like ttsca says their are only 5 people in the whole country that have a mansion paid for by the state, just 5, but because people see this on tv they think it is the norm and assume all people on benefits are spongers.

Same goes for the misnomer that people live cushty lifes on benefits, no they don't, they get by.
But of course because the newspapers highlight one woman with 10 kids, again its leads people to believe all people on benefits are getting hundreds of thousands a year.

Ignore the papers/tv and get real fgs.
Jobseekers is around £53 a wk pp or £110 per couple. Rent is paid but not all, most people pay top-ups, then they have bedroom tax taken from their rent allowance and now council tax payments.
People without child live on the money above disallowing rent allowance on its own, that's it £53 a week to food, clothe and pay many bills.

People with children will be getting tax creds they are worth roughly £50 a wk per child and then child benefit which is around £65.
So in reality its dire, trust me.

happyAvocado · 01/04/2013 22:24

I think al depends how p*d off people who care will become and how soon they organise themselves

skinnywitch · 01/04/2013 21:55

There?s a storm coming?

Unlikely if the turnout for the anti bedroom tax marches are anything to go by! Grin

ttosca · 01/04/2013 21:28

longfingernails-

There is so much bullshit in your post, you should be ashamed of yourself.

I was going to rebut each paragraph point by point, but I just came across this, which will save me the trouble:


?How to wage a war upon the poor.

Probably the most disgusting thing about this coalition has been their propaganda war against the most disadvantaged people in society. By the deliberate spreading of lies, they have facilitated a systematic assault upon the poor, the sick and the disabled. And they have knowingly misled the public for one simple reason, to enable them to totally dismantle the welfare state.

There are lies, damned lies, and then there are lying Tory bastards.

The welfare state has led to a ?something for nothing? culture?

It may be utterly repugnant to hear millionaire politicians who have never worked a day in their life telling us that they are ending the ?something for nothing culture?, but it?s also utter bollocks. Only 2.5% of the total welfare budget of £200 billion actually goes on unemployment, whilst the vast majority of unemployed claimants have worked, and paid taxes, for years and are now on benefits due to redundancy, sickness, disability or having to care for someone. Millions more are receiving benefits due to poverty wages. The Welfare state is actually a massive state subsidy to business which enables it to pay poverty wages and charge exorbitant rents.

Living on benefits is a lifestyle choice?

Only 0.1% of benefit claimants who have claimed for 10 years or more are actually unemployed. Less than 5,000 people, out of over 9 million 16-64 year olds who don?t work, have been on Job Seekers Allowance for more than 5 years. Less than 0.1% of the 20 million working age households have 2 generations that have never had a permanent job. Despite strenuous efforts, researchers have been unable to find any families where three generations have never worked.

People won?t work because benefits are too high?

In 1971, JSA equalled 20.9% of the average wage. Today, it is worth 10.9%. These people are living in poverty. There are 8.5 million people receiving benefits in this country. There are more people IN WORK who get benefits than not working. The majority of all housing benefit claimants are IN WORK. 6.1 million people classed as living in poverty are from households IN WORK.

People on housing benefit live in mansions?

Our newspapers continuously bombard us with these stories. There are around five million claimants of Housing Benefit; of which there were five families who received over £100,000 per year, all living in central London. The average award of Housing Benefit is approximately £85 a week. Only 3% of families received more than £10,000 a year support, and 0.04% received more than £30,000 a year. And no-one ever mentions that housing benefit goes straight to the Landlord and not the claimant.
And those large families screwing the taxpayer? There are around 130 families with 10 children and only 10 families with 12 children IN THE WHOLE COUNTRY who are on benefits.

Benefit cheats are bankrupting the country?

Benefit fraud amounts to about £1.5 billion a year, less than 1% of the entire budget. To put this in perspective, the bank bailout equalled 1,000 years of benefit fraud. Meanwhile, £1.3 billion gets underpaid each year and a further £16 billion goes UNCLAIMED every year.

We can no longer afford the welfare state?

So who is really bankrupting the country? Well, the richest 1,000 people now possess £414 billion between them, a sum more than three times the size of the entire UK budget deficit. The richest 1% of the population are estimated to possess wealth of about £1 trillion. The richest 10% control wealth of about £4 trillion. The Quantitative Easing programme has increased the personal wealth of the UK?s richest 20% by enough to pay for Job Seeker?s Allowance for the next 100 years.

The people of this country are being shafted, but instead of the blame being directed at the real culprits, the rich, it is being aimed at the most vulnerable, the poor, with our own Government shamelessly leading the way.

And every one who believes their bullshit should hang their heads in shame.?

There?s a storm coming?

MoreBeta · 01/04/2013 21:23

longfingernails - you saved me a job there. Very good post.

I too am considering turning to UKIP for exacly the reasons you state.

ttosca · 01/04/2013 21:17

Or at least leaving it in such a godawful, unaffordable mess by 2010 that the incoming government doesn't even know where to start on sorting it out.

So, a bit like Labour left the economy?

No, not like that at all. It was the financial crisis which put us in to this current situation, not govt. spending on schools and hospitals. Try again.

skinnywitch · 01/04/2013 20:33

longfingernails - brilliant post and one with which I agree entirely!

longfingernails · 01/04/2013 20:25

Welfare reform is one of the deepest moral issues of our time.

Apart from the disabled and their carers, the very worst thing you can do for someone out of work is to give them a long-term source of money. The most moral path is:

  1. cut taxes, cut red tape, cut public debt, cut employment legislation, cut public spending, weaken unions, invest in transport, invest in universities and apprenticeships. All this creates a dynamic society full of opportunity, aspiration and innovation;
  2. make the welfare system fully contributory after 3 months out of work (so benefits can continue to be paid to those who have paid into the system their whole life, but not to those who choose a benefits lifestyle).
  3. reduce non-skilled migration to zero

The reason that the Guardian/BBC chatterati are so vexed by this is that they know public opinion is very much behind welfare reform. And it is most popular amongst "Thatcher's Tories" - precisely the swing voters who decide general elections. In general, these voters (of which I am one) may be turning to UKIP in droves because of Cameron's wetness, Osborne's incompetence, and their collective high-handed dismissal of blue collar conservatism - but on this particular issue, the government's stance resonates, and very deeply so.

As usual, the Guardian, the BBC, MN and the rest of the bien-pensant chatterati will caricature the changes as being born of cruel intentions.

Yes, there is an issue of basic fairness for the contributors - nobody on welfare should live a lifestyle that those in work cannot afford - and if people in work are part of the welfare state in the first place, then something has gone wrong. By raising income tax thresholds we reduce the need for complicated take-and-give-back systems.

Yes, there is a political expediency element - reducing the number of people who depend on State largesse reduces Labour's grip. And it's always politically useful when a policy is so popular.

However, the central argument runs far deeper. Reforming welfare is the best thing (over the medium to long term) for the recipients themselves. It is precisely because we believe so deeply in the moral justness of our cause that we small-c conservatives clamour for welfare reform with such fervour.

That said, it is a pity that the reform is so weak. And also, the details are extremely important - and I'm not sure that the details have been gotten completely right.

Nevertheless, Polly is correct when she says that Britain has indeed changed markedly today. Where she is wrong is that she does not understand that today, our country has changed markedly for the better.

flatpackhamster · 01/04/2013 18:45

ItsAllGoingToBeFine

Its idealogical.

The Tories don't believe in a Welfare state, or indeed any state provided services. The Tories are into capitalism and market forces, anything else smacks of socialism.

infamouspoo

the Tories voted against the setting up of the welfare state back in the 40's. They have always been ideologically opposed.

caramelwaffle

Ideological opposition.

What's your stance if not ideological?