AIBU to think that people on the lowest wages are imminently set to get financially clobbered in order to foot the bill for keeping the discretionary spending economy up and running ...

[PlebianDreams]

... even though they don't have the means to participate in it?

Tax credits and UC already announced as being cut, council tax up as well, no other tax changes announced as yet. So as of April the only targeted public revenue measures are a) one that reduces the income of already low income households and b) one that is regressive ie not linked to earnings.

We're told that we'll all need to pay for this but so far at least the payment is hitting the lowest paid hardest. This is consistent with "paying" for the financial crisis thirteen years ago when top up benefits were cut and then frozen for twelve years.

Same as then, this is to prop up an economy that people on this level of income have no meaningful way of participating in. As such it's probably a pragmatic move but it feels a bit shitty. What do you think?

@Annabell80 I never said lower earners weren’t hit hard. I said it was bullshit that it was only low earners who had experienced a reduction in income.

There’s also the knock on impact of lost tax revenue when higher earners take such a big reduction in income. So as much as some people might be pleased to see the well off earning less, there is no one who benefits from that.

The impact will be mixed and that is the problem, just as the spending during the pandemic did not benefit people in the same way. In some ways you could argue that those who benefitted most due to government spending during the pandemic should be those who should bear the burden more. The government has spent huge amounts on the furlough scheme which benefitted huge numbers - I am not suggesting those people them pay the money back but governments do need money to operate therefore tax rates are likely to rise

@PinkFondantFancy

We're all going to suffer the fallout of the government's current blank cheque writing spree. I'm afraid I'm going to be totally grim. I've been saying this for a while but it doesn't seem to land anywhere that lockdown is insanely expensive and we're going to be paying the price for decades to come

Yes it is insanely expensive and as much as it's not a palatable suggestion for many, I do think that those companies and individuals who have benefitted as a direct response of the grants and furlough schemes, should be expected to be a greater part of the solution. I understand this will feel unfair and there would be outcry, but many of those who have had to continue working throughout are on very low incomes and shouldn't imo be hit twice, by virtue of having to risk their lives and still work and be worse off financially. Those that received furlough, haven't had to survive on the benefits level of income, so as a result are "lucky" so should be repaying some of this good fortune back.

@PlebianDreams

Ok I get that but can you see how crackers it sounds for people who can't afford to eat in restaurants paying to keep them open. When they're closed.

Kind of feudal, no?

But this has always been the case. Those who have never been on benefits pay for those who are, childless people pay for schools through their taxes etc. Those on very low incomes won’t be paying taxes (apart from VAT) so won’t have to pay for the £25 per main course restaurants to stay open.

The OP is spot on - and the reason is not complicated. Cuts to benefits can be done now by the Treasury. They can see it as money saved, immediately, which is important to "balance the books" - for those people who actually believe that running the country is like running a household ie Tory voters.

The other things mentioned here will require enforcement and changing the law significantly. That takes time. It won't address the deficit and spending problems now.

I suppose part of the problem is cutting a small amount from benefits saves a lot of money.

But pouring a lot of money into benefits only results in a small increase, not enough to make a difference to spending. The money to fund benefits needs to come from somewhere, so you need a functioning disposable income economy

It's exactly what the Tories did in 2008. Whenever times are tough, they pick on the lowest in the society. They will have Murdoch slagging off people on benefits and lazy disabled people again. Completely glossing over just how many more people are on UC now as "working poor" because we don't have a practical living wage.
This covid crisis will look like small fry once Rishi cuts people further, it will mean more death by poverty. And that whole redo of the NHS which hid the fact they want to sell off huge chunks will cause even more.

@Hardbackwriter

I don't think we are all going to suffer, as some have said. I suspect pensioners will be protected as the core Conservative demographic. I'm not necessarily arguing that's wrong - I'd rather see other benefits recipients share in the protection, but I don't want to see pensions reduced - but I do think that we won't 'all' see reduced income

There will be a fair fewer pensioners around though, thanks to Covid.

I think all state benefits should be protected, they've already been massively hit. The benefit cap, inflation and the change in the way LHA rates were calculated has meant a huge drop in disposable income for poor families.

I should perhaps declare an interest, as I'll get my state pension in August. I'll never vote Tory though.

Yes and they must raise tax threshold. It needs to be at least 13 grand no tax, that would make a huge difference to people and allow them to spend a teeny bit more elsewhere.

@Dogdog123

I think it's cost of living increasing is going to impact most on lower incomes as well. We're seeing it with utility bills increasing from April.

People who are middle class have the ability to tighten their belts in austerity but people who don't have the ability to do that are the ones going to suffer.

This! This is the point most people tend to miss when they get on their high horse about this issue.

@AnonymousAuroch

OP, when you mean cuts to universal credit, do you mean ending the £20 weekly top up? Or are they making cuts beyond this?

Stealth cuts, yes. Those subject to the benefit cap won't get a penny more from 1/4/21, because the cap hasn't been increased. And I suspect that inflation is higher than the 0.5% increase that is being applied to benefits, so there may well be a cut in real terms.

The LHA rates to which claimants' housing costs are pegged aren't going up either, and I'm seeing a lot of evidence of rents having increased. This will leave the poorest considerably worse off.

People on legacy benefits didn't get the extra £20 that UC claimants got and for many of those on PIP, switching to UC would have made them worse off because they'd lose the severe disability premium.

@Tiktokersmiracle

It's exactly what the Tories did in 2008. Whenever times are tough, they pick on the lowest in the society. They will have Murdoch slagging off people on benefits and lazy disabled people again. Completely glossing over just how many more people are on UC now as "working poor" because we don't have a practical living wage. This covid crisis will look like small fry once Rishi cuts people further, it will mean more death by poverty. And that whole redo of the NHS which hid the fact they want to sell off huge chunks will cause even more.

Labour were in government until 2010, so I don't think we can blame the Tories for anything that happened prior to that. Much as I'd like to ...

I get the point of the thread, which is that as usual the lowest paid and lowest class groups will suffer the most. Divides are now huge. Our society has been steadily stretching out its hierarchy for the last 40 years while removing the links between, making it harder and harder to climb. The upper reaches have no idea, the middle are becoming more and more distant as they become more based in heredity as well. The lowest become more angry and resentful, the middles become angry and defensive.

What we need is a re-building similar to that occurring after the wars, but that itself has to start with a recognition that flies in the face of all cultural trends that have been built up since the 1970s. It needs a recognition that we are one society, we truly are in it altogether, and we need to live and work together or we will destroy ourselves together. We need to rebuild the very concept of a public domain as opposed to and very clearly distinct from private, and then the content of it in practice.

I do not hold out much hope to be perfectly honest. I think the natural declines in any sort of common identity, finally showing up as Scotland and Ireland's independence movements are pretty much irreversible short of a miracle. This is a step in the right direction, although as a late Gen Xer I resent the typical lack of acknowledgement that this HAS been going on for some time - insightnewsreport.com/2021/02/20/future-generations-bill-sounds-namby-pamby-but-its-start-says-lord-bird/

I do not think bringing party politics into it will help. What we are dealing with are long-term cultural trends and thinking that we urgently need to recognise, first of all. It seems that that alone is one hell of a mountain to climb. Few can see or recognise cultural trends over time.

Funny how there were no threads about how great it was that UC was upped by £20 a week for a year.

Funny how there are never any threads about the significant increase in taxation for landlords in the last three years.

Not saying that the above is wrong but I'm tired of hearing how it's always the poorest who get the worse deal whilst others are left to enjoy their wealth with no impact.

Of course, but that was obvious. Can't expect people on good wages to part with some more of their money now can you? They work so uber hard for that money, while the rest of us on lower wages obviously just sit on our backsides all day doing nothing. So we should pay out more and live in poverty while they complain that they couldn't go to the Maldives twice this year.

So we should pay out more and live in poverty while they complain that they couldn't go to the Maldives twice this year.

But the lack of travel has a massive knock on effect. There will be people in places like the Maldives suffering hugely from lack of tourism, and the state likely has little option to provide support. Not to mention the airlines, that are huge employers (plus the vast supply chains) that are on their knees.

The impact of cuts in personal expenditure are felt far and wide. You can’t just look at the impact on the individual.

I earn under the tax limit, my husband earns over but not by a lot so he's going to take a massive cut, council tax is also rising to a stupid amount. He is due a pay rise in April but don't know if it'll happen and even if it does it'll be wiped out by extra taxes.
We didn't benefit furlough, nor can we won't from home. I'm absolutely sick to death of having next to no money and risking my life because members of the public can't wear a sodding mask properly.
Landlords have a choice they don't have to rent out houses they could put them on the market so everyone could actually have more chance of owning a house.

@Kimye4eva

So we should pay out more and live in poverty while they complain that they couldn't go to the Maldives twice this year.

But the lack of travel has a massive knock on effect. There will be people in places like the Maldives suffering hugely from lack of tourism, and the state likely has little option to provide support. Not to mention the airlines, that are huge employers (plus the vast supply chains) that are on their knees.

The impact of cuts in personal expenditure are felt far and wide. You can’t just look at the impact on the individual.

1. Maldives was an example, take your pick of any far away destination. They are suffering currently yes, but there will be people going on holidays soon, Easter is coming up. Plus I'm meaning more in the future when stuff is back to normal. Things will go back to normal, but they won't cost the same.

1. Prices may have increased for holidays due to this, and covid. So people on lower salaries now have even less chance of going abroad. People on big salaries won't even notice the difference, but they'll still complain about it because 'it wasn't their budget last year'.

Wealthier people will 'feel' this in a way, but only because they don't want to pay extra and will grumble about it, not because they can't afford it. And they certainly won't want to pay more tax. People on lower incomes have it worse. Richer people for example won't have to choose between eating or a warm house. I know who I feel sorry for and it is not the rich ones.

Hmm. Double whammy then, if you work on minimum wage in a public sector job and receive tax credits you are screwed, doubly so if your public sector job is a zero hours contract.

Well the Tory strategy of divide the masses so they point fingers at each other rather than at the top where they belong is working. Basically anyone not in the upper echelons is getting squeezed massively by all this

There is a huge mass of people between those who are struggling on lower hours, and minimum wage, and those who can employ accountants to minimise their tax! Many of us on salaries do not/could not pay private school fees/run a second car/go skiing every season you know, there is a huge chunk of the working population who are just managing, getting on ok, but not rolling in money. I do get rather irritated by the assumptions on here.

I hear a lot about this due to the nature of my job and I think the following are likely:

• income tax and capital gains merged (resulting in higher tax rates on capital gains). This tends to hit the richest.
• income tax & NIC merger (may well include a stealthy rate increase) which could also mean higher earners effectively getting hit with more tax- under the current system NIC rate is v low on income above a certain level, with a merged rate higher earners could get clobbered.
• VAT is an obvious target for quick wins but the government won't touch it as they need people spending.

@ClarkeGriffin where did I ask you to feel sorry for rich people? I’m just saying the effects reach far more than just that one individual. Absolutely no one benefits from the rich spending less. If the rich have to cut back on household spending that can be other people losing their jobs, nannies for example.

The top up was only a temporary rise to begin with and only introduced when unemployment rates shot up and more realised how shit benefits are at the beginning of the pandemic.

THere will be a cut to both NHS and Education because they would have overspent.

Despite rises to council tax, local services will also be cut including social services, refuse collection, playschemes etc.

It's younger generations I feel for especially those under 18. They have been screwed over by the lack of organisation of their education by the government. They are missing out on vital social skills, never mind the lack of exercise which could come back to bite their health in later years. They are also spending way too much time inside, again which could impact their health in later years. All this before we even consider the mental toll this is having on some. For others, the mental load could be an issue in later years.

And the cherry on the cake, they will be paying it back during their lifetime. Even with student loans how many will be able to afford it?