AIBU to think that Tax Credits and subsequently Universal Credit were the worst thing to happen to the UK?

[BookkeeperBobby]

I can see how it was well intentioned as a mechanism of redistributing money, maybe, in the short term. But 22 years down the line all it means is that employers pay less, productivity drops, UK workers are worth less. Add quantitative easing into the mix which means that anyone with any money buys up assets eg property, while at the same time wages stagnate due to the above, and the country has become a low wage economy with a high cost of living. Which in the face of energy price rises that have to be paid with real money, not just shuffling benefits around, is a disaster.

So, £48 billion subbing people's living costs. These are all people who have been means tested. Nobody is getting what they shouldn't. And a lot of them aren't doing so well even on that. It's good money after bad, it's a gap you can't make up.

@BookkeeperBobby - what are you talking about? You think wages would rise if we cut off welfare? And then people have no other choice but to work for money? Then you think wages would fall? Emm not likely.

I have lived in places without welfare benefits. Wages are not high. It is not some sort of workers utopia. Quite the opposite.

If we cut off all welfare benefits wages would definitely fall. But there is a minimum wage. Do you think the poor should just starve?

@BookkeeperBobby what happens if no welfare top up is that people have to work much longer hours abs live in overcrowded accommodation. It’s not that wages magically rise for the low paid and low skilled. Perhaps for those further up the income scale. But the low paid are really fucked.

I don't think the poor should starve no. I think every worker should earn a living wage. An actual living wage from the employer they give their labour to. But they won't as long as the government subsidises the gap between what their employer is prepared to pay and what they need.

We are also partly responsible though. We want to pay the cheapest prices for something so shop with the cheapest retailer even though this probably means we are paying for it in other ways.

@BookkeeperBobby I have lived in places with no welfare. I can tell you that employers don’t pay more. They pay less. And have much more power. Especially in respect to the low paid.

I very much doubt you are actually low paid or vulnerable. Count yourself lucky abs stop talking about what you don’t understand

I think tax credits were necessary

I think there should be a universal tax rate so it’s equal and fair

Businesses should pay more if it is U.K. money that is going in their pockets

If they leave the country then they don’t get our business without paying the tax

Tax credits as the original idea was planned would have been much better.

They have allowed big companies to get away with very low wages.

YABU. These funds were badly needed by millions. Were you against the introduction of the minimum wage, too? I was earning a little over £2 per hour before that.

They're necessary though.

UC is a shit storm and should have been implemented much, much, much better as the frequent errors and issues hit people who have the least wiggle room in their finances.

But- unless they are forced to- employers will not fill that gap between what they are prepared to pay and what their employees need. They don't give a shit. They will say that their chief responsibility is to create fat dividends for their shareholders, so they must maximise profits (shrug).

How is a cafe for example supposed to pay a decent salary of say 35k a year which was our enable a mother to pay for one ft nursery space and maybe a bit left over for food after bills.

And btw the coffee in that cafe would have to be about £10 a cup to pay those sorts of figures!

Op your solution is not the solution

Well we're completely fucked then. If no business in the UK can afford to pay its employees enough to live on then we may as well shut up shop.

Either way universal credit is not the answer.

In the uk we have so many luxuries. The low paid have a luxury that they can rely on benefits rather than having to work or to work more hours. Some of my relatives in other countries work crazy hours just to survive. There is no option not to work. You have no idea how hard life is for so many people.

We have many millions non working people on benefits in the uk. What do you think would happen to wages if they were forced to work?

YABVVU

You are blaming the wrong thing. Tax credits, UC and other benefits are the government's unsatisfactory answer to their complete failure to give people access to living wages and affordable housing.

The government has the power to increase NMW/living wage and to reduce wage disparities within organisations (some progressive countries actually do this).

The government sold off the social housing stock, and still allows some social tenants to buy their homes. Hence a massive shortage of social housing.

The government has failed to regulate the housing market, failed to adequately disincentivise buy to let, failed to curb the massive increase in house prices, so that investors profit and most people are priced out.

The worst thing to happen to the U.K. was Brexit, the biggest own goal in recent political and economic history.

Plenty of other bad things have happened too, and plenty of governments have got plenty of things wrong.

There are many flaws with the welfare benefit system (I include tax credits, UC and all benefits in this) but it is absolutely essential to plaster the cracks left by the systemic failures of capitalism under centre/right leaning government.

@BookkeeperBobby sorry to go over the basic economic theory here but what is needed by one person to work is not needed by another. So a single person needs much less than a single parent. That’s why on my culture people often live in large family groups.

Ultimately though what happens in economics when wages get too high is that you are replaced by capital (ie machines) or outsourced. That’s still happening all the time.

You need to learn about economics before attacking the welfare state.

The government has failed to regulate the housing market, failed to adequately disincentivise buy to let, failed to curb the massive increase in house prices, so that investors profit and most people are priced out.

What I can't fathom is many voters are happy with this. So many people are thrilled when they read their house has doubled in value, why? It benefits very few.

Why so many people continue to vote Tory is completely beyond me. And why they voted Brexit too. Turkeys voting for Christmas. I will never understand it.

I have my theories as to why, but don't want to start a political bunfight.

Op, ever visited a country where there are no benefits, no NHS, no free education?

You should be proud that a system is in place to help people in society

Perhaps, a little historical reading is required

The National stats clearly show that over the years health, life expectancy, wealth has improved

I'm not saying it's perfect, but you need to look at the past & compare with other places

I remember my dad having 2 jobs (full time and part time), my mum working full time and then some and us being sent to grandparents so they could continue to work. And still things were tight. At least things were better for my children in that respect.

@Villagewaspbyke

In the uk we have so many luxuries. The low paid have a luxury that they can rely on benefits rather than having to work or to work more hours. Some of my relatives in other countries work crazy hours just to survive. There is no option not to work. You have no idea how hard life is for so many people.

We have many millions non working people on benefits in the uk. What do you think would happen to wages if they were forced to work?

How many millions of fit, healthy, working age people are not working and are on benefits in the UK?

Tax credits should be there for small businesses and public services to top up wages not mass profit companies such as supermarkets and companies that tax dodge. That money effectively goes to shareholders. Big companies should not be able to have tax credits to top up wages and pay a higher wage per hour.
Housing benefits should be capped as in rents capped. Landlords could then earn a profit but not an excessive one. We have our gas etc capped so why not rents?
If landlords sell up as a result councils can buy as stock.
More funding to upskill people. Instead of sending people to work for free at poundland in exchange for benefits, actually skill them to perform a public service job which we all pay for out of our taxes and national insurance anyway.

How do you know so many fit, healthy people aren't working? Channel 5 documentaries?

I would guess that benefits, if they have any impact on wages at all, it's by reducing the number of hours people to choose to work, forcing employers to offer higher wages to get the workers they need.

Can you link to any credible source about the effect of benefits on wages?

Why do you think benefits would cause wages to be lower? What's the mechanism/rationale?

@Villagewaspbyke

In the uk we have so many luxuries. The low paid have a luxury that they can rely on benefits rather than having to work or to work more hours. Some of my relatives in other countries work crazy hours just to survive. There is no option not to work. You have no idea how hard life is for so many people.

We have many millions non working people on benefits in the uk. What do you think would happen to wages if they were forced to work?

Having to rely on benefits because your wages are so low is not a LUXURY.