Tuesday, 24 January 2012

The Welfare Bill

There was uproar in the Commons yesterday when MPs heard the Lords had voted against the Coalition's Welfare Bill to cap benefits at £26,000 per annum. Labour peers said they supported the principle of a cap but along with others they voted to change the legislation to exclude child benefit.

Listening to the debate over the weekend I was surprised to hear Iain Duncan Smith say:

‘The public thinks that homelessness is about not having any reasonable accommodation to go to.
‘That is not the definition. The definition inside government and places like Shelter is that children have to share rooms.
‘For most people who are working, their children share rooms. They would find that a strange definition.’

Shelter insist that is not the definition and it uses the same definition of homelessness as set out in the Housing Act 1996.

Officials later said that a house could be seen as 'overcrowded' if a girl and a boy, both older than ten, were sharing a room.  Overcrowding can be a reason for giving a family a new home.

I support the benefits cap because I know families where the income is below £35,000 and they manage without claiming from the state.  Benefits should be there to ensure those who fall on hard times do not suffer unduly, but work should always be more rewarding. There will always be the vulnerable in our society who require continual help and they must be given every assistance possible, but for those who don't work there has to be a limit to how much the taxpayer can provide.

People are correct when they say that the cap may price benefit recipients out of certain areas, but working people are priced out of those areas too.  The state has a responsibility to ensure that people in need are housed, fed and clothed, but they don't have the right to live wherever they want.

If the Coalition is serious about helping people into work, upping the personal allowance for those at the lower end of the salary scale would help those currently in work and encourage others to enter the workplace.  So often I hear 'there are no jobs' and there are those who think it's the government's responsibility to provide them with a job, but that is unrealistic. If thousands of economic migrants can find work then it is available. The work may be low paid but then it's usually unskilled.

In the UK there are plenty further education institutions that offer skill training and we also have the Open University which provides free courses to those on benefits. There's no reason why many long-term benefit claimants, who are fit for work, cannot upgrade their skills.

My sympathies at the moment are with those hard working families in which a parent has lost their job because of the continuing recession. Family income has been halved, or in one case I know reduced to a third, and because he is highly skilled in a specific area, there is little hope of him gaining similar employment in the near future. However he refuses to be defeated and recently purchased a trailer for his car because he intends to become a jobbing gardener until he can find a position within his own industry. Knowing how the weather can affect this type of work, he has registered for an OU course in order to show future employees he hasn't been idle. This family may well have to move house to a cheaper area but they're not complaining. "We have our health and that's what matters most," I was told.

Because of the unlimited benefits available here for so long, too many people have lost the ability of taking responsibility for themselves.  We have a benefits culture, of that there is no doubt, and there have to be changes. Capping the system at £26,000 - with allowances for those who have complex needs - is a start. Raising the threshold of the personal tax allowance should be next in line.


Gedguy said...


I would like to disagree with you on this subject, which, at this moment in time, is too close for comfort, but I felt myself agreeing with you the more that I read. I have taken advantage of training when the need arose and have had a wealth of experience in various jobs as a result. If work was some place else I would move to follow that work. It didn't do much good for my child but I thought that this was better than having a dad who was a scrounger. I know far too many people like that. They would rather sit on their backsides than go out and try to earn a living.
Having said that, I would like to point out that the tax system is not designed to allow low paid workers the 'right' to keep hold of more of their money because the system refuses to take into account their inability to pay their way because of the job that they have. When you couple that with the big companies and the rich who can hide their money from the taxman, with a nod and a wink from them, then you see how totally unfair the system is.
So, in summing up, I agree, wholeheartedly, with your sentiment as long as you add that the tax system is totally skewed towards the rich and that they should pay their fair share as well. Don't get me wrong, on that last point, a person, or company, that works hard should be able to enjoy the benefits from their labours but not if they attempt to pervert the tax system.

Crinkly & Ragged Arsed Philosophers said...

SR - while I agree with most of your post please don't fall into the trap presented by the figures used by government.

They are highly skewed towards favouring their own devious ideology.

Demetrius said...

According to a very left wing web site on Land Registry figures in two London boroughs alone some £82 billion, yes billion, worth of property has been moved into ownership offshore to avoid UK tax liabilities. A good many of these properties will be amongst those rented out to people drawing very large sums in housing benefit to cover the rent. In turn these monies will also go off shore. This is a racket and it is the ordinary taxpayer who is paying for it. Why are so many so scared to admit it? Is it that too many of our politicians are in the same game?

Brian said...

@Demetrius, re overseas home ownership: Nothing's too good for the workers :)


subrosa said...

Gedguy, I don't mind in the least if you don't agree with me, but I'm going to agree with you.

The tax system is completely unfair and penalises the average earner. On that I agree and there are far more of us than the rich. Politicians know average earners can't afford the privilege of tax accountants so abuse us from that angle. Such a pity tax accountants charge so much because they are very effective and could wipe out chunks of tax from anyone's earnings.

Tax accountants work within the law. The problem is that the law is so complex we all really need an accountant to interpret it - and sometimes even they have trouble.

My point is that there is work out there. I've never been without work because, like you, I've taken anything in order to put food on the table. I do hope you've pride in that and I'm sure your child will understand when they're older.

subrosa said...

I try not to fall into their traps Crinkly, although I don't see how, if they say £26,000, they can shirk from it later.

subrosa said...

Unfortunately Demetrius I don't think these moves are breaking our laws. Gordon Brown said he would block the use of tax havens but never did. Too many of his mates used them.

Indeed. As I said to Gedguy it's the average earner who pays. That's the disgrace.

I suppose I could employ a tax accountant and he would quickly rid me of the tax I pay on my pensions, but his fee would far outweigh my financial benefit so I don't. Most of us are in that situation.

subrosa said...

That's a good link Brian and it shows how many are 'at it'. But it's not illegal I don't think.

Look at the Blairs financial setup. Nobody can crack that one - or at least that's what we're told.

JRB said...

SR – Please don’t be confused or misdirected by the political smokescreen that currently surrounds the capping of benefits.

IDS is happy for this little distraction from his insidious and evil welfare reforms, which are driven purely by right-wing ideology and Tory dogma, totally devoid of any care or compassion for the less fortunate in our society.
Besides, this debate neatly divides society into those malingering good for nothings claiming benefit, and those honest hard working souls who do not.

This current debate on the capping of benefits applies to less than 1% of all benefit claimants. At best the government will save some £190m which pales into insignificance against the billions lost from tax avoidance schemes and off-shore accounts.

subrosa said...

I realise there is much more to this issue than the £26,000 cap because of (I think) 87,000 families earning far more JRB, but I don't see it as dividing society. Isn't society already divided by the 'haves' and 'have nots'?

That is not to say that average earners are outwith the 'have not' bracket.

There is a major problem with tax avoidance schemes and off-shore accounts, but as I said in another post's comments, these are still legal. No politician will touch that area either, because they would lose their funding mates. That's the disgrace.

Crinkly & Ragged Arsed Philosophers said...

SR -the devil as always is in the detail.

The £26k is in the main London centric and due in no small part to the Housing Benefit element.

Perhaps a greater awareness of the need for social housing in order for the Chelsea sets to have their necessary element of service workers close to home may have stopped the problem from surfacing.

But what price social thought when speculators can rack up millions?

Unknown said...

I favour a cap on:

1. benefits

2. the number of children who count towards benefits

3. the incomes of the rich

("£82 billion worth of property moved into ownership offshore to avoid UK tax liabilities. A good many of these properties will be amongst those rented out to people drawing very large sums in housing benefit to cover the rent.")

Tax evasion costs the world US$3.1 trillion a year, reportedly.

I would favour a very high tax on the assets of the super-rich, whether held here or overseas.

No more tax evasion - http://ht.ly/8EcUc

- Aangirfan

subrosa said...

You're right Crinkly and that emphasises JRB's point. However nowadays, with in certain council areas people being able to choose their homes then tell the council to pay for them, it's blown the hole open.

subrosa said...

I'd agree with you Aangirfan, but a fair high tax on the assets of the super-rich. Also it's important the tax threshold here is brought up to around the £10,000 level to allow the lower paid some reward for working.

JRB said...

Please excuse a second post.

On a day when we are discussing capping the benefits of some of the nations most vulnerable, and as the unacceptable face of conservative ideology shows its determination to screw £190m from the most needy, regardless.

I cannot help but be amused as I turn on the news to see that Asil Nadir, once the golden boy of free enterprise, stands accused of single handedly stealing £150m.
And that Harry Redknapp, one of footballs most successful managers just happened to forget that he had a handy little tax free account in Monaco stuffed full of cash.

It makes you think.

subrosa said...

You're welcome to post as often as you like JRB.

Both of these headlines made me think too. The Nadir one is 'old' of course but the Redknapp one surprised me.

Is it a case of stooges? Perhaps. Or a wee warning to some not to open bank accounts in their dog's name.

Gedguy said...


I wanted to disagree with you but I didn't; I think you are absolutely right in your article. Maybe I should have emphasised that.
As to my daughter growing up; it's a bit late. She's 41 this year.

Joe Public said...

Anon @ 16:29

"Tax evasion costs the world US$3.1 trillion a year, reportedly."

Absolute Rubbish. It costs the world zilch.

One person's tax evasion, is that person's spending money.

Tax Evasion might be detrimental to parts of the economies of high-taxing countries, but it keeps the manufacturers & their employees of high-value goods in work.

Gedguy said...


It makes you think all right. It makes me think why they are going after the small criminals when the bankers have 'stolen' far, far more than that.

Dioclese said...

I've looked at the math. Problem seems to be that the Lords want Child Benefit excluded forn the calculaion but then set the cap figure to include it - so they double count it.

By all means exclude child benefit as long as you drop the cap from £26,000 to £15,000 + child benefit. You can't have it both ways unless your math is considerably left of centre!

Dioclese said...
This comment has been removed by a blog administrator.
subrosa said...

But Gedguy, therein lies the problem. What the bankers have done is within the law. Sadly. And no politician is prepared to amend that.

Taking away an ermine robe isn't enough compensation for anything. The matters lie in the hands of shareholders who, as long as they're making money, don't care. For those who don't make money then the wee shareholders are outvoted by the big boys.

subrosa said...

Dioclese, I hope you don't mind that I've deleted your duplicated post.

An excellent point.

Observer said...

Iain Duncan Smith is talking nonsense - nobody counts being overcrowded as being homeless. I have no idea where he gets that from.

The people most affected by this will be in central London. I would argue that having a city centre cleared of all but the better off has social consequences which are not exactly desirable, Boris Johnson agrees.

The runaway cost of the Housing Benefit bill has been caused by two things, unregulated rents, & lack of social housing.

The Housing Benefit bill needs to be reduced, but I would rather find a way of doing that which does not involve making tens of thousands of families homeless (not overcrowded).

This is a smoke & mirrors exercise which is merely going to shift the burden from central government to local government who don't have the resources to cope.

There will be riots.

Observer said...

As far as the families in Scotland who will be affected by this, any family in receipt of more than £26,000 in benefits has very complex needs.

Again, capping their benefits won't reduce that need it will just mean that Social Work or the NHS will need to pick it up.

This is just a money saving exercise, it is not going to bring about any social justice for working families.

Nobody will gain from this apart from the Treasury.

The attacks on the disabled in particular by the Tories are completely disgusting, but they are being camouflaged by Daily Mail stories of asylum seekers living in mansions.

subrosa said...

Thank you for your informed comment Observer. I would appreciate your comments on the Westminster's agenda which affects the vulnerable.

They would help balance the arguments.

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