Aibu it's not the Government's role to bail people out?

[Katypp]

The UK is massively in debt and money is short.
AIBU to think that families should be expected to manage their own household budgets instead of constant calls for Government subsidies every time prices go up?
It's coming up to summer. Surely it's not unreasonable to expect householders to manage their own bills by cutting back their energy use?
Surely adults could be expected to manage their own grocery bills? Obviouly covid was exceptional, but oil prices rising have happened many times before with no expectation of bailouts.
My question is, given the state of the economy, do we need to wean ourselves off expecting the Government to step in every time prices go up and learn resilience again?

@Ileithyia exactly and that is where IMO government should be putting money.

Renewables aren’t the great ‘free’ source of electricity everyone seems to think they are. The infrastructure costs are huge.

People aren’t earning a living wage due to the astronomical cost of housing in this country. I don’t see the government getting stuck in to building. If HS2 costs had been ploughed into social housing instead it would have made a big difference. At least steps are being taken now to address childcare fees. This is a huge step forward.

I agree that most people should manage the increases themselves. For those of us who can make cutbacks in response to the rising costs, that is obviously the sensible thing to do.

But people who are living on low incomes have no buffer and there is no slack to cut. They don't have savings stashed away that they can dip into, and they don't have non-essential expenditure that they can just cut at will. I don't see that forcing people to get into debt or choose between heating and eating is desirable from an individual point of view or a societal one - ultimately, it will just lead to increased pressure on other services. So personally, I think it does make sense for the government to step in and help those people who really need it, and I think it would actually be a false economy to deny them that help.

I would not be in favour of a blanket support package for everyone, because people like me don't need it. The help should be targeted towards those who need it most.

Putting the word essentials in quotation marks makes those things no less essential for health and wellbeing, does it?
Like it or not, the poorer people are the more likely they are to be unable to afford to stay well and healthy. And when they can't, they cost the tax payer even more.
The government will have already stress tested the impact of even higher living costs on those living on low income and will know the impact if they allow these people to face even greater financial strain.

I presume you also fully advocate for allowing the parasitic water companies to go bust and be taken back into public ownership. Good.

It’s more beneficial to the economy because people will spend the money on essentials which means supermarkets, utility companies and other businesses which will mean less chance of layoffs. Most of the bank bailouts were snuffled up by bankers giving themselves huuuuuge multimillion £ bonuses.

YABU - many people are working extremely hard to just be able to put food on the table.

The government doesn’t step in because they’re being kind - they do it because, otherwise there will be more homeless people which will cause them more problems.

I assume you’re alright Jack?

Also notice how there seems to be a global bottomless pit to fund wars…

Part of the bail out rules were that banks weren’t allowed to give huge bonuses.

They were allowed and even though the Gov levied a 50% super tax on bonuses over £25k, the banks as a company paid that tax for each banker so the bankers then got the bonuses free of individual income tax!
https://www.theguardian.com/business/2009/dec/09/bank-bonus-super-tax

Editing to add more historical fact on the lavish bonuses
“The Royal Bank of Scotland, which was bailed out with government money 12 months ago, has set aside almost £2bn for bonuses and salaries to investment banking staff – a figure that could double by the end of the year.
After a week in which Goldman Sachs admitted it is on track to pay out its biggest ever bonuses, the Edinburgh-based RBS conceded that it too would be likely to offer bonuses to its 20,000 investment bankers this year.
The remuneration bill for the investment bank division at RBS in the first half of 2009 reached £1.8bn – equal to £90,000 a head.
The final total is expected to rise substantially, by the time a decision on bonus payouts is made by the bank at the end of the year.”
https://www.theguardian.com/business/2009/oct/18/rbs-bonuses-banks-bailout

Well essentials are subjective in nature and getting your needs met often extends well beyond money.

We know this with aspects like diet where we know that the majority of people choose to eat unhealthily even when healthy options are available within the price range. We know that you can eat relatively healthily on very little money and yet very few people do this. Throwing money at the problem doesn't mean that people will use it for the 'essentials' you consider vital to their wellbeing. Culture and education is hugely relevant but so often overlooked.

I mix with a wide range of people. I know families that live on benefits that meet the needs of themselves and their children well. They spend their money wisely and can fund a reasonable standard of living. Certainly not luxurious or ideal but adequate. I know other families with a very similar amount of money that fail to do this. The difference isn't money.

Heating oil has more than doubled in price but it appears we just need to suck it up unless we claim benefits whereby help is available. I’m assuming this is because this only affects more
rural communities. If mains gas had more than doubled in price it would be dominating every news item and every newspaper.

1000litres of oil cost me £588 in January.
My latest quote is £1376 for the same amount. Oil Companies minimum order is 500 litres and payment is made in advance.

I agree that we can’t expect the government to subsidise every rise in the cost of living but am always irritated that those who benefit most from a further subsidy are those already claiming benefits.

For many heating and electricity prices were already high and were forcing choices between heating and eating. I live rurally. Rural poverty is a real thing. We heat via oil, the price tripled in days after the war started. In my house this will mean more than an extra £2k cost. I can absorb the cost. Others cannot do this. Targeting support is important and there will always be people at the margins who suffer, but OP what you are suggesting leaves some families living in freezing conditions, it leaves small children and babies in real trouble and it will definitely kill a number of our elderly. So no, a good Government Will act.

However wide a range of people you mix with your limited observations and anecdotes do not have the weight and validity of large scale studies conducted over decades by experts in the field such as the child poverty action group and the Joseph Rowntree Trust.
The link between poverty and ill health and other poor outcomes, including for children is a matter of fact, not opinion. As is that poverty is expensive for the state.
Essentials are not subjective in nature. They are clearly defined in terms of the requirements to meet the needs of a person within that society to prevent them slipping into a crisis of health and wellbeing.

So they paid through the nose to pay out bonuses? So you have an issue with that?

Do you know what happens when a bank pays a big bonus? The bonus is paye’d so full income tax goes to the government on it. And then there’s the levy on top. For every £ banks spend on bonuses, the tax man gets more than the recipient. When you have a multinational bank, the bonus pot is going to go somewhere. So if it isn’t paid to uk bankers it will be spent in another country in business and the ultimate loser is HMRC.

I couldn't disagree more strongly.
Of course the government should spend the proceeds of taxation on supporting people, whether they make payments on a means-tested basis or by using other criteria.
It is called re-distribution of wealth, and is one of the only brakes on rampant society-destroying capitalism. Wealth re-distribution is a GOOD thing.

Not sure what you are getting out. My point is that bank bailouts do not help the economy as much as direct assistance to families in need. Bankers take their bonuses and usually invest or save it or buy property or luxury goods from abroad or go on expensive holidays abroad. It’s been proven over and over by economists that government cash going to the wealthy barely trickles into the economy compared to that £400 per family for cost of living assistance.

Acknowledging you were incorrect when you said the banks weren’t allowed to pay bonuses with bailout money would be nice.

In about 3 years ...

I don't think you understand my point. I am not denying there is a link between poverty and poor outcomes in all kinds of areas. The question is more about what drives these outcomes and is it just monetary. Research actually shows that it is actually far more complex. Look at the two child cap for example. We know that there is a link between poor educational outcomes and poverty so we would expect that the imposition of the two child benefit cap would adversely impact the outcomes of the children impacted, yet we know it didn't. Outcomes stayed static.

Anecdote is indeed not data, but my life experience of growing up in a deprived area and now experiencing different families in different socio economic positions has taught me that there are very deep factors as play here that hugely impact whether a household has 'essentials' or not. Chaotic households and those that simply don't value the essentials as you call them are a huge problem. This is why you suggesting that essentials aren't subjective is wrong. Many people simply don't value a healthy diet etc in the way you imply. They still continue to exist despite this. Throwing money at them won't change their value system.

There's an argument it is actually even if not as part of a crisis response. Since households tend to go out and spend the money rather than save it so there's an argument it stimulates the economy even in a non crisis situation (of course that's only one theory).

That aside, in this particular case the problem is that excessive petrol price rises have a high risk of causing recession. This is because (unlike say rises in the cost of nice food or clothes) it's an inelastic cost - people still have to get places so they pay the higher prices and cut back elsewhere. So the rest of the economy takes a direct hit. Which can cause a spiral into recession.

It depends what your intention is with the money.
The argument "if we give them money they will only go and spend it" is exactly the point if you are trying to avoid recessionary effects. If I get 100 quid and treat myself and my son to a trip to the cinema and a pizza then I have "wasted" that money in the sense that we aren't eating any healthier. I haven't spent it on things that are long term a benefit to me or my son. But the people working in the the cinema, the pizza restaurant etc have their jobs made slightly more secure. The government gets money back in VAT and probably tax on the profits earned by the cinema and pizza shop.
People DO respond to hard circumstances like the petrol crisps by cutting spending elsewhere. This is responsible and good on an individual level. When too many people are forced to do this because of fuel price rises though it's bad for the economy more generally. So saying "if fuel is costing to much people should just spend less elsewhere no problem" is missing the broader economic reasons governments worry about fuel price rises.

I fully understand your point. You are saying that while poverty is challenging, with the right behaviours it's possible to stay well and healthy despite it.
That when people fail to do so, it's not the lack of money that the cause, its their poor choices in how they spend what they have. They prioritise 'wrongly'.
You believe this because you have met people who are well and healthy despite being poor and have met other people who spend their limited funds unwisely, in your opinion.
Its not a complex view I don't understand. Rather a simplistic and generalised one based in too small a sample (your experience) to be valid at a societal level.
I'm not denying that certain people will have non financial advantages that enable them to manage poverty. Good social networks, family support, existing good health, a good education, a stable relationship, living in an area where there is less strain on services etc.
However, people living in poverty are not a homogenous mass of otherwise healthy capable individuals who just happen to be on benefits. They are often dealing with multiple challenges, disability, care commitments, social disadvantage that impact their ability to make do and mend and produce nutritious meals from next to nothing.
And absolutely a long term program aimed at levelling up for people with multiple disadvantaged is important. However that takes time, generations even, to make a difference.
In the meantime we need to deal with what we have in front of us. A society where 31% of children are already living in poverty. Extra costs to these families are not going to be able to be absorbed with better budgeting, because they already don't have enough to make ends meet.

“Obviously covid was exceptional”

Why are you suggesting this, OP?

Bad policy

It's a very new phenomena

How do you think loads of people having no money to spend as they are forking out so much on energy, fuel and any basics affected by these prices affects the economy?