I’m from the RIGHT and I think cuts are WRONG!
I am not “one of the usual suspects”. When I went to the BETTER WAY march and rally in Edinburgh last year on my mobility scooter, with my assistance dog, I was still politically opposed to the STUC-organised protest around me. I draped a banner like the one above from the back of my seat. Everyone was still very nice to me and the young chaps from the Communist Party gave the Behinderhund a drink and a fuss. I’m not a lefty. It was my first time. I’m also not trying to bring down the duly elected government, just change their choice of policy.
Someone needs to break it to David Cameron that using financial incentives is not the same as saying “get a job, or else” – for those whose disabilities mean work is not possible that’s just a form of financial terrorism. (I’m certainly scared despite having the support of my GP and Neurologist).
Work doesn’t pay.
In the particular mix of my benefits I am permitted to keep the princely sum of £20 a week from “permitted work” after which £3 of benefits are deducted for every £1 further I earn - an effective marginal tax-rate of 295.5%. Earning more than £27 means I’d actually LOSE money, even if it were only for part-time hours as the DWP has said it now expects of people with disabilities. Are you still buying the argument “If you can work, you SHOULD work!” when it becomes “if you can work, you should PAY to work!”?
“Permitted work” limits have been raised to £95 a week for every group EXCEPT those receiving Income Support for Incapacity. They’re only allowed the old £20 a week. The Universal Credit planned by Iain Duncan Smith doesn’t solve this.
It is also true that work on the minimum wage seldom brings in more than the benefits “the law says you need to live” as the DWP letters say. Low-income or part-time work only pays when you are eligible to reclaim some of your income tax through the Tax Credit system and negotiate the complex bureaucracy every six months. Trying to do this on a varying income of casual or seasonal work means you’re likely to end up being asked to repay thousands of pounds.
The simplest way to make work pay and incentivise those who are economically inactive at present is to implement government policy. Immediately bring in the £10,000 tax-free threshold originally promised by Vince Cable and the LibDems during the election. £10,000 needs to be more than a political ‘aspiration’. This needs to happen for everybody including those on benefits, so that means-testing limit will have to go up from £20 a week to £10,000 a year as well. Because we’re worth it. That’s a cheap change of law, not an expensive reconstruction of the benefit system.
Yes this needs to be funded. But as it would also make the remit and purpose of the Tax Credit infrastructure redundant, you could scrap the entire £23.7 billion bureaucracy (valued by The Guardian) and use that money to fund the tax cut and whatever DWP restructuring our Beveridge-wannabe IDS aspires to. George Osborne has supposedly been convinced of the need to ‘front load’ the costs of welfare reform so which works out cheaper? Making a department of the Treasury redundant or having the Department for Work and Pensions support such large welfare rolls as a proportion of the working-age population? We’re all in this together, Chancellor. Every department needs to find some operational savings.
[The other obvious alternative is raising the minimum wage by the economically unaffordable method of raising the rate or the politically unpalatable method of restricting ALL low-skilled immigration but I’m economically literate enough to restrict myself to the realms of the possible.]
Raising the personal tax allowance to £10,000 a year would make work pay for anyone willing to attempt it, without impoverishing those unable to do so.
Give me £10,000 and I will save you £23.7 billion.
(cross posted on One Month Before Heartbreak)
- Posted by: DeusExMacintosh at 2:09pm on 18 January 2011
- Website: skepticlawyer.com.au/2010/10/04/give-me-10000-pounds/
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