Anyone Know Where The £12Bn Of Welfare Cuts Will Come From?

[zugzwang]

Too great a share of UK national income is captured by banksters and landlords. The parasite is killing the host, literally starving the rest of the economy of capital.

[PopGun]

Too great a share of UK national income is captured by banksters and landlords. The parasite is killing the host, literally starving the rest of the economy of capital.

It's a pity this still needs trotting out on here it really does. I'll +1 again regardless.

I'd add coporate parasites to the lists though!

Pay your fecking tax, if you don't like then by all means fook off, and let someone else capture the market share. Hell some could be independent start ups, stranger things happen

[frederico]

The 'economy' can only grow through banks creating credit and people paying back interest.

Unless salaries increase at at least the same rate as credit, personal spending will get lower and lower until eventually credit creation has to slow.

[Oliver Sutton]

Too great a share of UK national income is captured by banksters and landlords. The parasite is killing the host, literally starving the rest of the economy of capital.

You can add the public sector to that.

[iamnumerate]

What he said.

I actually think it should be a right for one person to be able to support a family. That means a readjustment in the amount of money (slavery) that is required to pay landlords and banks.

I agree although I would modify "landlords and banks." to "professional single parents, union officials, Anjem Choudray,landlords and banks."

[byron78]

The tax credits lark isn't all to do with helping companies or (maybe) helping employees. The government is very keen on the idea as in a wrecked economy it keeps the unemployment figures down and they are totally obsessed with that for electioneering purposes.

It doesn't matter if it creates massive imbalances in the real economy as long as the unemployment figures are minimised. Likely it's now got to the stage when so many workers are used to only 16 hours a week that many wouldn't be able to countenance or endure a full working week anymore now

This.

Tax credits slices one 40 hour job between two and a half people.

That's not because folk are lazy.

That's not because if you changed things loads more 40 hour jobs would suddenly pop up.

It quite simply keeps unemployment figures down and hides the fact a lot of the more menial/basic jobs have been replaced by automation or simply don't exist in the UK anymore.

Getting rid of tax credits in this country would not turn the clock back 30 years.

We'd have the same number of jobs, done by fewer people.

And an additional 2.1 million unemployed (and rising).

I don't think they'll cut them.

If anything long term tax credits probably need to be opened up so that more people receive them - a sort of citizens income if you will.

I personally think they're a symptom not a cause.

I know many on here violently disagree.

[EUBanana]

I know many on here violently disagree.

Obviously - because they are monstrously unjust. Not everybody qualifies for them.

A CI has the benefit of being fair at least. But me, as a lazy sort, having to work 40 hour weeks, and then see almost half the result get gobbled up to fund this redistributive state (and a quarter more gobbled by a landlord who enjoys his position thanks to the state as well, though that's a different grievance) - where everything seems to be distributed away from me, and given to people who have better lives than I do - does make a certain bodily fluid of mine boil, it's true.

[mattyboy1973]

I've got to disagree on this point. You're essentially assuming that all workers live by themselves (or are sole-earners in a family unit) and that it's impossible to support yourself on less than £30k; the reality is that a large proportion of the workforce is female/young or otherwise dependent upon other persons for the major costs of living in which case £500 or £1,000 per month of extra spending money makes a big difference to them.

FWIW I'd suggest that tax credits probably make little actual difference to wage levels; there's a sufficient pool of workers/potential workers who don't qualify for tax credits to absorb the effects of any behavioural changes in those that do, even if this means importing more/fewer workers from the EU.

I think it's hard to argue that TC's aren't distorting the market and people's incentives very severely when you look at some of the actual numbers involved.

e.g. my situation: 2 kids under 5, some paid childcare. If myself and my partner put in the requisite 24 hours between us at minimum wage we would earn about 9k a year, untaxed. On top of this we would get just over 22k in benefits - tax credits, HB, council tax, child benefit, giving a net income of 31k - which equates to the net income of a single (benefit free) individual on about £42k a year. And you can bump that up by working (a low paid job) for longer - e.g. we could both work min wage for 35 hours a week and still get some 18k in benefits - this would give a net income of about £45k, which a single earner would need to be on £65k to match. I think its crazy and it actually has the effect of making relatively high earning people thinking seriously about switching to lower paid jobs (I know I have) - the benefits of which would be lower stress/closer to home/not having to give a cr@p at work/whatever.

[mattyboy1973]

Getting rid of tax credits in this country would not turn the clock back 30 years.

We'd have the same number of jobs, done by fewer people.

And an additional 2.1 million unemployed (and rising).

Agreed. It's the dishonesty I don't like. It's covering up a real problem, which is that for many, work does not pay enough to live on. That's a real issue and I think the only way it can start to be resolved is if the props are taken away; if you work, you don't get benefits. This would likely put millions more people on the dole as the lie about working for a living is revealed, but at least the problem would be flushed out into the open. Long term, we are fooked unless work is able to support living costs and pretending otherwise is not solving the problem.

[iamnumerate]

This.

Tax credits slices one 40 hour job between two and a half people.

That's not because folk are lazy.

That's not because if you changed things loads more 40 hour jobs would suddenly pop up.

It quite simply keeps unemployment figures down and hides the fact a lot of the more menial/basic jobs have been replaced by automation or simply don't exist in the UK anymore.

Getting rid of tax credits in this country would not turn the clock back 30 years.

We'd have the same number of jobs, done by fewer people.

And an additional 2.1 million unemployed (and rising).

I don't think they'll cut them.

If anything long term tax credits probably need to be opened up so that more people receive them - a sort of citizens income if you will.

I personally think they're a symptom not a cause.

I know many on here violently disagree.

I disagree because I know people who work part time and don't want to work more hours. However if you are right and tax credits are hiding problems in this country then they are a bad thing.

[iamnumerate]

I wonder why more people don't actually do this? I think it is because a lot of people have been brought up to believe that morally it is right to not take benefits. They also believe that at some point a government is going to switch off the benefits tap. However, if the Tories don't do it (and Labour most certainly wouldn't, in fact they were going to increase tax credits), then it sends out a signal that no party will ever clamp down on benefits and you might as well say "Fucx it. If I can't beat 'em, might as well join them".

I think less and less people will think this over time. I think my biggest mistake was marrying my wife instead of making her a pro single parent.

Although she is far too honest to do that.

[VeryMeanReversion]

we could both work min wage for 35 hours a week and still get some 18k in benefits - this would give a net income of about £45k, which a single earner would need to be on £65k to match. I think its crazy and it actually has the effect of making relatively high earning people thinking seriously about switching to lower paid jobs (I know I have) - the benefits of which would be lower stress/closer to home/not having to give a cr@p at work/whatever.

Thanks for the details, I think you are rationally following all the incentives that have been provided for you.

I've posted several times on HPC about effective marginal tax rate, yours is a good example. High EMTR kills motivation to do anything. Get a low-stress, lower paid, part-time job close to home instead.

I've been offered better paid jobs but it always ends up being pointless once I take taxes and commute costs into account.

I'm that stupid single earner you mention. I found that the best thing I can do is to salary sacrifice the maximum I can afford to avoid extreme marginal tax rates (65% in my case), I'm sacrificing 35+% at the moment, will go to 55% as soon as the mortgage is paid off and/or work part time. At least I (should) get the sacrificed money back one day.

[mattyboy1973]

However, I think the best alternative tactic is to get a basic job with strong security but plenty of time to think and develop stuff on the side.

Not a bad idea. According to the calculator I am using, if my partner and I were to both work 16 hours a week at £15 an hour, which is realistic, we could still get 18k in bens and take home a net > £40k, with 3 days off each a week. Nice!

[mattyboy1973]

Thanks for the details, I think you are rationally following all the incentives that have been provided for you.

Just to be clear - I'm not doing it. I'm also that stupid single income earner that doesn't qualify for anything (including child benefit).

Just mulling the incentives. When you add things like commuting costs (out of net income, natch) and stress, then a local, low paid, part time job really does start to look attractive.

[StainlessSteelCat]

Personally, I see WTC as an early attempt to recognise there's less work required than previously.

The two problems I see is that it is not yet universal, and we have a huge deficit (which I'm actually unclear is a bad thing or not).

As the single earner in our household, I do the same as VeryMeanReversion - put as much into the pension as possible so even if I don't benefit immediately, I will definitely be retiring early.

[winkie]

Not a bad idea. According to the calculator I am using, if my partner and I were to both work 16 hours a week at £15 an hour, which is realistic, we could still get 18k in bens and take home a net > £40k, with 3 days off each a week. Nice!

....you would also have to consider the amount of debt you carry and the type of savings/investments you hold.......less can be worth a lot more, not just monetary worth.

[billybong]

How do you know people could work more hours but don't want to because they are not better off? I know someone on 15 hours a week who doesn't want any more hours I guess that tax credits are partly responsible.

Some would work more if they were better off but they aren't better off and over time they get used to just working the 16 hour week.

Edited May 20, 2015 by billybong

[iamnumerate]

Some would work more if they were better off but they aren't better off and over time they get used to just working the 16 hour week.

That sounds about right.

[EUBanana]

Personally, I see WTC as an early attempt to recognise there's less work required than previously.

How come there's talk of labour and skill shortages then? How come we are told that industries would collapse without migrant labour?

Something's rotten in the state of Britain...

[billybong]

How come there's talk of labour and skill shortages then? How come we are told that industries would collapse without migrant labour?

Something's rotten in the state of Britain...

+1

Both angles could be correct. Labour and skill shortages with the short 16 hour week seeming to create a vacuum requiring more workers almost as if it was planned that way.

[byron78]

I disagree because I know people who work part time and don't want to work more hours. However if you are right and tax credits are hiding problems in this country then they are a bad thing.

Yes, but presumably someone else is working the hours they're not?

Or are you saying "they only work 16 hours and nobody else works the other 24 hours"?

[StainlessSteelCat]

How come there's talk of labour and skill shortages then? How come we are told that industries would collapse without migrant labour?

Something's rotten in the state of Britain...

As an ex-scientist I was always hearing that there was a massive shortage of scientists. And yet salaries and working conditions never seemed to reflect that shortage.

What there is likely a shortage of labour and skills that are willing to work for peanuts. I also suspect there probably are some shortages in a few specific areas but not a generalised one.

The big thing that migrants bring however are increases in GDP.

[LiveinHope]

As an ex-scientist I was always hearing that there was a massive shortage of scientists. And yet salaries and working conditions never seemed to reflect that shortage.

What there is likely a shortage of labour and skills that are willing to work for peanuts. I also suspect there probably are some shortages in a few specific areas but not a generalised one.

The big thing that migrants bring however are increases in GDP.

There is certainly a shortage of innovative / pioneering scientists.

But the public science system is bloated. And it is bloated with 'scientists' (perpetual post-docs) parked on 'holding salaries', in previous times some would have been called technicians and valued highly as such, and felt self-worth, others would have left for other careers. You don't need high salaries to soak up this mass of over-educated people.

Then, there are the lecturer scientists fulfilling teaching.

[EUBanana]

+1

Both angles could be correct. Labour and skill shortages with the short 16 hour week seeming to create a vacuum requiring more workers almost as if it was planned that way.

Migrants don't pay the full cost of living here, at least so goes the argument - that they come here, work a summer, go home. Have to say my own experience with Polish expats here to work don't mirror that, but then I don't know any seasonal workers.

But then, if that is the case, the problem is the cost of living, that has made some jobs pointless to do because they don't pay enough when set against the ridiculous cost of living in the UK. It's probably shielded from view to an extent by the fact that there are a lot of well paid jobs in the UK (median wage of mid 20ks is not bad), but the economy does have to work for everybody, not just professionals of various stripes.

[EUBanana]

As an ex-scientist I was always hearing that there was a massive shortage of scientists. And yet salaries and working conditions never seemed to reflect that shortage.

What do you think, anecdotally? Is there any shortage of work in that field do you think, if you were prepared to take a low salary? Do they have vacancies they can't fill? Are we talking universities or the private sector?