Welfare cuts

[Natsku]

Someone on my facebook posted this, thought it was pretty interesting.

https://www.neweconomics.org/blog/entry/why-the-governments-welfare-reform-cant-work

 

[Foogirl]

I think this is a piece of work designed to batter the Tories yet again, when no-one is coming up with any better solutions. Labour want to spend spend spend their way out of recession, to the detriment of future generations. I can't see how that will help the economy. Sure maybe cutting welfare will actually cost more than it saves, but how much would it cost to continue as we were, as well as adding more borrowing to the national debt?

I also think the first section about how people feel affecting their ability to work is a load of psychological clap trap. People may well feel all these things, and may well not feel like going out to get a job, but hell half the time I don't want to get out of my bed in the mornings. I'm fairly certain if there was an option on those days to still get enough money to feel my kids without having to get out of bed then i'd crawl back under the duvet. The problem with today's generation is it is all about self self self.

The issue over making work pay, is not about making sure people are not taking more from the government on benefits than they would be if they were in a job. The situation where taking a job means a family have less money in the bank at the end of a month than they did on benefits was crazy. IDS was very clear, the reforms would mean that in the majority of cases, taking the job would put more money in your pocket. Sure you might still be in "work poverty" but you are working. You are giving something to the economy and to society for the money you receive, just like the majority of the rest of the adult population do.

I have the hugest sympathy for anyone who loses their job. And our welfare system should be there to help them out. What it shouldn't be is a lifestyle choice and nor can it substitute for a lost salary. But I would definitely say the number of people who are out of work and not looking for work is much lower than the tabloids would have us believe.

 

[kit10grl]

I think the whole thing about how people feel affecting their ability to work really isn't a revelation here tbh. Doctors already sign people off sick from work with stress and depression. This is exactly that. These people are depressed and this does affect their ability to work. Mental health problems are a real medical problem and should be treated as such.

Are there people who take the p£$% with that? Absolutely, but that shouldn't mean that those genuinely affected should be tarred with that brush. As the article mentions the stigma of the current situation of being out of work because of how you feel will contribute to making those with genuine depression worse.

The part about in work poverty and zero hour contracts also rings true for me. Husband and I were both recently made redundant. (Mine was more of a choice if I am honest as DD needed to me to be home) Husband however was offered new position during the 'restructure' that meant him dropping from a fulltime job that would have supported us as a one income family to an 8 hour contract. That would be just enough to ensure we didn't qualify for most types of help but also mean that after tax he would be bringing home less each week than a JSA income. So with two children to support we had to choose to take redundancy and pray that he finds a decent job before that money runs out.

Working absolutely should put you financially in a better position than being on benefits. However in our situation that isn't happening. And to go back to the stigma from earlier I absolutely despise that now, at first glance we are two SAH parents living off benefits. People do treat you differently. People react totally differently when you say you've just been made redundant. And then when they look at my income for last year they tend to shut right up. But I'm not giving my p60 to everyone I meet to ensure a bit of basic human rights when we go out.

 

[Natsku]

I'm most interested in the bit about cutting welfare actually costing more than it would save. It seems insane to do it if it'll have that effect.

Working should definitely pay more than benefits but how can that be achieved without hurting the people that need help? I know how they do it here is that if you are earning less in your job than you would get on welfare then your income can be topped up (so that it would be more than you would get on welfare) but I doubt thats incentive enough to truely lazy people but I also doubt there's such a high percentage of truely lazy people that would make it worthwhile considering that.

 

[pinkpolkadot]

I'm most interested in the bit about cutting welfare actually costing more than it would save. It seems insane to do it if it'll have that effect.

Working should definitely pay more than benefits but how can that be achieved without hurting the people that need help? I know how they do it here is that if you are earning less in your job than you would get on welfare then your income can be topped up (so that it would be more than you would get on welfare) but I doubt thats incentive enough to truely lazy people but I also doubt there's such a high percentage of truely lazy people that would make it worthwhile considering that.

Thanks for posting the link, interesting!

I absolutely agree that if the part about it costing more than it would save is correct it does seem crazy! I also found the part about cutting welfare actually depressing the economy interesting vs money spent on welfare generating money for the economy, I am not much of an economist it must be said but would like to look into this further.

It sounds like a good idea what they do where you live, do businesses have a higher tax rate to fund these top ups? I guess another way to tackle that would be to raise the min wage and do away with these crazy zero hour contracts.

I also agree that there are probably far fewer lazy people/ benefit scroungers than the right wing press would have us believe. Have the poor squabbling and blaming one another for the mess we're in and it takes the spotlight away from the real causes.

Cutting welfare is a vote winner in general I guess but they won't be getting my vote!

 

[Natsku]

I'm most interested in the bit about cutting welfare actually costing more than it would save. It seems insane to do it if it'll have that effect.

Working should definitely pay more than benefits but how can that be achieved without hurting the people that need help? I know how they do it here is that if you are earning less in your job than you would get on welfare then your income can be topped up (so that it would be more than you would get on welfare) but I doubt thats incentive enough to truely lazy people but I also doubt there's such a high percentage of truely lazy people that would make it worthwhile considering that.

Thanks for posting the link, interesting!

I absolutely agree that if the part about it costing more than it would save is correct it does seem crazy! I also found the part about cutting welfare actually depressing the economy interesting vs money spent on welfare generating money for the economy, I am not much of an economist it must be said but would like to look into this further.

It sounds like a good idea what they do where you live, do businesses have a higher tax rate to fund these top ups? I guess another way to tackle that would be to raise the min wage and do away with these crazy zero hour contracts.

I also agree that there are probably far fewer lazy people/ benefit scroungers than the right wing press would have us believe. Have the poor squabbling and blaming one another for the mess we're in and it takes the spotlight away from the real causes.

Cutting welfare is a vote winner in general I guess but they won't be getting my vote!

I think corporate tax is around 30% don't know if thats higher than over there or not.

Getting rid of the zero hour contracts would be a start I'd reckon! I doubt the unions would let companies get away with something like that over here, we have very strong unions.

It makes some sense to me that cutting welfare would have a negative effect on the economy. Redistributing money to the poorer people results in that money going straight back into the economy whereas if the money stayed with richer people its less likely to go straight back into the economy as they don't need to spend all their money on living expenses so a lot of it is saved.

 

[Foogirl]

I think it is erroneous to look at the cut v cost figure in isolation. There needs to be a comparator showing how much that 19 billion costs and what those figures actually represent. If the 19 billion is the net figure, the actual amount which goes out then how much is it costing the economy to borrow that money? I would suspect it is more than any additional cost from cutting it. And what is the additional cost to the economy to have the burden of the debt? Until the debt comes down (even if it is just on paper) the economists and business in general will still consider the country to be in a poor state so confidence in spending stays low and growth remains slow.

I's also challenge how accurate the figures for additional spend are. Where is the proof? It seems to be more of conjecture based on anecdotal figures from one or two sources. I seriously don't see any proper reason for this paper, other than to pour scorn on the current government.

And just to be clear, I am no fan of the Tories, or of any political party really, I just don't believe that anyone has any real answers as to how to get out of this mess, which wasn't really caused by Labour either. It was caused by all of us being too greedy and buying more stuff than we can afford and banks facilitating that because it suited their business model. The only thing we can all do is grin and bear it until it gets better and that would be true no matter who was in power.

 

[Natsku]

I'd like to see the actual research on it too but I can see the logic of it.

I agree that borrowing more to pay those costs will hurt the economy but it stands to reason that you shouldn't pay for welfare by borrowing more but by increasing revenue from taxes (increasing taxes/decreasing loopholes) but of course raising taxes is not a vote winner even though it might be the best option for the economy as a whole, now and in the future.

 

[Foogirl]

I'd like to see the actual research on it too but I can see the logic of it.

I agree that borrowing more to pay those costs will hurt the economy but it stands to reason that you shouldn't pay for welfare by borrowing more but by increasing revenue from taxes (increasing taxes/decreasing loopholes) but of course raising taxes is not a vote winner even though it might be the best option for the economy as a whole, now and in the future.

Or you can reduce welfare and save money too. The problem with raising taxes is, we are so badly in debt that tinkering with tax is really just pissing in the wind. Of course it isn't a vote winner but I think there are other good reasons not to raise too many taxes as well.

 

[Natsku]

I'd like to see the actual research on it too but I can see the logic of it.

I agree that borrowing more to pay those costs will hurt the economy but it stands to reason that you shouldn't pay for welfare by borrowing more but by increasing revenue from taxes (increasing taxes/decreasing loopholes) but of course raising taxes is not a vote winner even though it might be the best option for the economy as a whole, now and in the future.

Or you can reduce welfare and save money too. The problem with raising taxes is, we are so badly in debt that tinkering with tax is really just pissing in the wind. Of course it isn't a vote winner but I think there are other good reasons not to raise too many taxes as well.

Well if the research mentioned earlier is correct then reducing welfare won't save money.

Reading at the moment on the welfare reforms over here and how they are trying to get the unemployed back into work and they are taking a different approach (not cutting unemployment/welfare money but better and faster access to training programs and things like that, and bonuses for the long term unemployed who take a job - incentives rather than punishments). Will be interesting to see which approach works better over the next few years.

 

[hayz_baby]

The problem also is people rely more and more (including myself) on benefits to top up low wages. Cost of living is soaring and with the we have wages that not only don't match up to inflation, but wages that are more and more commonly below a living wage we are living in a country that relies on further assistance. Places that demand high rent that are sometimes so unjustifiably high (the only one is location) that how can someone live when all they are on is minimum wage? You can't. The richer/poorer divide is growing and will continue to do so.
I too dot believe that there as many people out there as the media would like you to think (the sun makes profit by making u angry..) that just get by and I know it does happen, I found an interesting article (will see if I can find it) which compares perception vs fact on stuff like this to find we are actually wrong. On all of it. (I think that article is even called we are wrong about everything) if memory serves me right 0.7% of every pound spent by government went to those committing benefit fraud.
I don't think welfare cuts are working as well as Cameron would have hoped they would. I think he cut too much too fast. I think for now he needs to invest in higher wages, invest in childcare for this country, invest in helping those who are working, young and old (I think there is a lot of emphasis on the older generation in regards to savings rates and work force and not enough in the younger generation) more affordable housing, rentals that we can actually feel secure in, so that we don't rely to heavily on council homes. More affordable mortgages as well.
Then look into tougher stances with benefits, limits to find a job, (I know a lot of suggestions Have already been announces etc) instead of trying to get the uk balance sheet to balance very quickly, encourage spending and benefit workers so that naturally the debt will decrease. Bare in mind we will NEVER get rid of national debt. It was there before and it will be there after.

 

[pinkpolkadot]

I'd like to see the actual research on it too but I can see the logic of it.

I agree that borrowing more to pay those costs will hurt the economy but it stands to reason that you shouldn't pay for welfare by borrowing more but by increasing revenue from taxes (increasing taxes/decreasing loopholes) but of course raising taxes is not a vote winner even though it might be the best option for the economy as a whole, now and in the future.

Or you can reduce welfare and save money too. The problem with raising taxes is, we are so badly in debt that tinkering with tax is really just pissing in the wind. Of course it isn't a vote winner but I think there are other good reasons not to raise too many taxes as well.

Well if the research mentioned earlier is correct then reducing welfare won't save money.

Reading at the moment on the welfare reforms over here and how they are trying to get the unemployed back into work and they are taking a different approach (not cutting unemployment/welfare money but better and faster access to training programs and things like that, and bonuses for the long term unemployed who take a job - incentives rather than punishments). Will be interesting to see which approach works better over the next few years.

Sounds like a plan, would be good to see how that pans out, can I move to Finland please I like the idea of taking a positive approach rather than simply forcing people into work because they can't feed their kids etc..., if we help people find something they actually like doing, train them up so they are good at it and pay them a decent wage then they are more likely to want to stay in that job and they will be more productive (I am only talking about folk who can work here BTW).

foogirl re the tax, I saw on the news not long ago that they think uncollected but owed tax alone comes to £20bn per year, about the same as what the welfare cuts are said to be saving, so no doubt in my mind that the money can be recovered elsewhere.

I also feel that spending confidence for everyday folk is more about what they have in their pocket than about the national debt, I bet most people don't pay much attention to the figures but they know how they stand financially. I think if we can get out of the cycle of recession and things pick up then we can worry about paying the debt off when we are in a better position.

As I said I am not much of an economist but from having a small business I know that when business is slow sometimes you have to speculate to accumulate.

I don't think the article is Tory bashing, I think they just feel this is not the way forward and want to express that, it's healthy to have debate and discussion over government policies, that's how we move forward. You can't really have the proof until it has been tried and tested so it is all about predictions at the moment I guess, but that doesn't mean it shouldn't be discussed IMO.

I agree it will take time, but some approaches will be more effective and efficient than others, and we all want this to be over sooner rather than later.

 

[Natsku]

I'd like to see the actual research on it too but I can see the logic of it.

I agree that borrowing more to pay those costs will hurt the economy but it stands to reason that you shouldn't pay for welfare by borrowing more but by increasing revenue from taxes (increasing taxes/decreasing loopholes) but of course raising taxes is not a vote winner even though it might be the best option for the economy as a whole, now and in the future.

Or you can reduce welfare and save money too. The problem with raising taxes is, we are so badly in debt that tinkering with tax is really just pissing in the wind. Of course it isn't a vote winner but I think there are other good reasons not to raise too many taxes as well.

Well if the research mentioned earlier is correct then reducing welfare won't save money.

Reading at the moment on the welfare reforms over here and how they are trying to get the unemployed back into work and they are taking a different approach (not cutting unemployment/welfare money but better and faster access to training programs and things like that, and bonuses for the long term unemployed who take a job - incentives rather than punishments). Will be interesting to see which approach works better over the next few years.

Sounds like a plan, would be good to see how that pans out, can I move to Finland please I like the idea of taking a positive approach rather than simply forcing people into work because they can't feed their kids etc..., if we help people find something they actually like doing, train them up so they are good at it and pay them a decent wage then they are more likely to want to stay in that job and they will be more productive (I am only talking about folk who can work here BTW).

foogirl re the tax, I saw on the news not long ago that they think uncollected but owed tax alone comes to £20bn per year, about the same as what the welfare cuts are said to be saving, so no doubt in my mind that the money can be recovered elsewhere.

I also feel that spending confidence for everyday folk is more about what they have in their pocket than about the national debt, I bet most people don't pay much attention to the figures but they know how they stand financially. I think if we can get out of the cycle of recession and things pick up then we can worry about paying the debt off when we are in a better position.

As I said I am not much of an economist but from having a small business I know that when business is slow sometimes you have to speculate to accumulate.

I don't think the article is Tory bashing, I think they just feel this is not the way forward and want to express that, it's healthy to have debate and discussion over government policies, that's how we move forward. You can't really have the proof until it has been tried and tested so it is all about predictions at the moment I guess, but that doesn't mean it shouldn't be discussed IMO.

I agree it will take time, but some approaches will be more effective and efficient than others, and we all want this to be over sooner rather than later.

I hope the encouragement measures work here. They're bringing out a new guarantee this year for young unemployed (under 25, or recent graduates under 30) that they will be guaranteed a job offer, training scheme, or activation measure (whatever that means) within 3 months of becoming unemployed. That sounds really good. I can't see any cuts in benefits or welfare here (and spending is not being increased, so not sure where they are cutting) and actually a fair number of raises to increase purchasing power for the poorer people.

Thats a lot of uncollected tax!

 

[hayz_baby]

https://www.theguardian.com/politic...een-pregnancy-religion-statistics-perceptions

 

[Natsku]

https://www.theguardian.com/politic...een-pregnancy-religion-statistics-perceptions

Thanks for the link. Think I read something similar before, and judging by what I see on facebook people really do have way off the mark perceptions!

 

[Foogirl]

I don't think welfare cuts are working as well as Cameron would have hoped they would. I think he cut too much too fast. I think for now he needs to invest in higher wages, invest in childcare for this country, invest in helping those who are working, young and old (I think there is a lot of emphasis on the older generation in regards to savings rates and work force and not enough in the younger generation) more affordable housing, rentals that we can actually feel secure in, so that we don't rely to heavily on council homes. More affordable mortgages as well.
Then look into tougher stances with benefits, limits to find a job, (I know a lot of suggestions Have already been announces etc) instead of trying to get the uk balance sheet to balance very quickly, encourage spending and benefit workers so that naturally the debt will decrease. Bare in mind we will NEVER get rid of national debt. It was there before and it will be there after.

The key word there is investment. Childcare supplement to help people back to work is an investment, handing out benefits is not.

 

[pinkpolkadot]

I don't think welfare cuts are working as well as Cameron would have hoped they would. I think he cut too much too fast. I think for now he needs to invest in higher wages, invest in childcare for this country, invest in helping those who are working, young and old (I think there is a lot of emphasis on the older generation in regards to savings rates and work force and not enough in the younger generation) more affordable housing, rentals that we can actually feel secure in, so that we don't rely to heavily on council homes. More affordable mortgages as well.
Then look into tougher stances with benefits, limits to find a job, (I know a lot of suggestions Have already been announces etc) instead of trying to get the uk balance sheet to balance very quickly, encourage spending and benefit workers so that naturally the debt will decrease. Bare in mind we will NEVER get rid of national debt. It was there before and it will be there after.

The key word there is investment. Childcare supplement to help people back to work is an investment, handing out benefits is not.

I would argue that handing out benefits is an investment as the money is going straight back into the economy resulting in the multiplier effect the author speaks of (I have now read up a bit more on it and it makes perfect sense). People have more money in their pockets, they have more to spend, supporting the economy and in turn the jobs market. Take that money away from people and we potentially face the opposite, a downward spiral.

 

[Natsku]

I don't think welfare cuts are working as well as Cameron would have hoped they would. I think he cut too much too fast. I think for now he needs to invest in higher wages, invest in childcare for this country, invest in helping those who are working, young and old (I think there is a lot of emphasis on the older generation in regards to savings rates and work force and not enough in the younger generation) more affordable housing, rentals that we can actually feel secure in, so that we don't rely to heavily on council homes. More affordable mortgages as well.
Then look into tougher stances with benefits, limits to find a job, (I know a lot of suggestions Have already been announces etc) instead of trying to get the uk balance sheet to balance very quickly, encourage spending and benefit workers so that naturally the debt will decrease. Bare in mind we will NEVER get rid of national debt. It was there before and it will be there after.

The key word there is investment. Childcare supplement to help people back to work is an investment, handing out benefits is not.

I would argue that handing out benefits is an investment as the money is going straight back into the economy resulting in the multiplier effect the author speaks of (I have now read up a bit more on it and it makes perfect sense). People have more money in their pockets, they have more to spend, supporting the economy and in turn the jobs market. Take that money away from people and we potentially face the opposite, a downward spiral.

Thats my thinking too and clearly the thinking of the government over here.

 

[hayz_baby]

I don't think welfare cuts are working as well as Cameron would have hoped they would. I think he cut too much too fast. I think for now he needs to invest in higher wages, invest in childcare for this country, invest in helping those who are working, young and old (I think there is a lot of emphasis on the older generation in regards to savings rates and work force and not enough in the younger generation) more affordable housing, rentals that we can actually feel secure in, so that we don't rely to heavily on council homes. More affordable mortgages as well.
Then look into tougher stances with benefits, limits to find a job, (I know a lot of suggestions Have already been announces etc) instead of trying to get the uk balance sheet to balance very quickly, encourage spending and benefit workers so that naturally the debt will decrease. Bare in mind we will NEVER get rid of national debt. It was there before and it will be there after.

The key word there is investment. Childcare supplement to help people back to work is an investment, handing out benefits is not.

I would argue that handing out benefits is an investment as the money is going straight back into the economy resulting in the multiplier effect the author speaks of (I have now read up a bit more on it and it makes perfect sense). People have more money in their pockets, they have more to spend, supporting the economy and in turn the jobs market. Take that money away from people and we potentially face the opposite, a downward spiral.

Thats my thinking too and clearly the thinking of the government over here.

My general thoughts too, it can b a form of benefit or it can be something else but putting that back into the economy will encourage growth. I don't agree with pay freezes especially in the public sector (the nhs is one of te biggest employers in the work) as it has had the opposite desired effect, yes they are not paying out as much but no one will be puttin in as much, then freezing benefits that are already available means less money in our pockets to spend. I honestly think a raise in wages that for one not only meet inflation but 2 match a true living wage, for one will cut down on the receipt of benefits (the more money u earn the less u get in tc and hb) but people will have more to spend, tax is being paid and put back into the governments pocket so in sense that is an investment as they will spend money to make money.
Childcare could be done either way, giving us the money for one or by building public nurseries and after school clubs that are affordable and good. If they are public the profit gets put back into the childcare, if they price fairly then it will encourage other childcare to lower there prices to be more competitive, therefore giving more people an incentive to go back to work as cheaper childcare moves away from the whole "working to pay childcare" right now I get why people stop paying, it makes sense why work for what is effectively nothing?

 

[Natsku]

I don't think welfare cuts are working as well as Cameron would have hoped they would. I think he cut too much too fast. I think for now he needs to invest in higher wages, invest in childcare for this country, invest in helping those who are working, young and old (I think there is a lot of emphasis on the older generation in regards to savings rates and work force and not enough in the younger generation) more affordable housing, rentals that we can actually feel secure in, so that we don't rely to heavily on council homes. More affordable mortgages as well.
Then look into tougher stances with benefits, limits to find a job, (I know a lot of suggestions Have already been announces etc) instead of trying to get the uk balance sheet to balance very quickly, encourage spending and benefit workers so that naturally the debt will decrease. Bare in mind we will NEVER get rid of national debt. It was there before and it will be there after.

The key word there is investment. Childcare supplement to help people back to work is an investment, handing out benefits is not.

I would argue that handing out benefits is an investment as the money is going straight back into the economy resulting in the multiplier effect the author speaks of (I have now read up a bit more on it and it makes perfect sense). People have more money in their pockets, they have more to spend, supporting the economy and in turn the jobs market. Take that money away from people and we potentially face the opposite, a downward spiral.

Thats my thinking too and clearly the thinking of the government over here.

My general thoughts too, it can b a form of benefit or it can be something else but putting that back into the economy will encourage growth. I don't agree with pay freezes especially in the public sector (the nhs is one of te biggest employers in the work) as it has had the opposite desired effect, yes they are not paying out as much but no one will be puttin in as much, then freezing benefits that are already available means less money in our pockets to spend. I honestly think a raise in wages that for one not only meet inflation but 2 match a true living wage, for one will cut down on the receipt of benefits (the more money u earn the less u get in tc and hb) but people will have more to spend, tax is being paid and put back into the governments pocket so in sense that is an investment as they will spend money to make money.
Childcare could be done either way, giving us the money for one or by building public nurseries and after school clubs that are affordable and good. If they are public the profit gets put back into the childcare, if they price fairly then it will encourage other childcare to lower there prices to be more competitive, therefore giving more people an incentive to go back to work as cheaper childcare moves away from the whole "working to pay childcare" right now I get why people stop paying, it makes sense why work for what is effectively nothing?

Completely agree with you, investing in public nurseries would be the best idea, set the prices a good bit lower than private prices and the private nurseries will have to lower their prices to compete.