Reasons why Tory family tax-breaks won’t work
12:18 am - January 6th 2010
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(image by Beau Bo D’Or)
The Conservative Party is debating whether marriages should be ‘recognised in the tax system‘ as a means to encourage marriage and give further tax breaks to middle-class parents.
The Financial Times’ economics editor Chris Giles outlines several reasons why these won’t work:
Simplicity. Transferable tax allowance further complicate the income tax system.
Independence. Recognising marriage in the tax system undermines a woman’s (or a man’s) ability to keep her income separate from that of her spouse. Women’s legitimate irritation at being treated by the state as an appendage to their husbands was one of the main reasons the tax system became increasingly blind to marriage under the last Conservative government in the 1980s and 1990s.Misunderstanding history. It wasn’t nutty progressives who got rid of the married man’s allowance and undermined the married couples’ allowance in the tax system. It was a combination of those awful lefties (Nigel Lawson, John Major, Norman Lamont and Kenneth Clarke) who were Conservative chancellors between 1983 and 1997. Gordon Brown took the last bit of the married couples allowance and called it the children’s tax allowance in 2001. It now has a new and horrible name: ‘the family element of the child tax credit’ and it is assessed on joint family income.
Incoherence 1. George Osborne wants to get rid of the family element of the child tax credit – ie the one part of the tax system that is a remnant of the old married man’s allowance. In his 2009 Party Conference speech, he said: “We can no longer justify paying means-tested tax credits to families with incomes over £50,000.” This passage came just six paragraphs after he said: “That is why we are going to support marriage in the tax and benefit system.”
Incoherence 2. The standard argument for a marriage tax break goes like this. Children of married parents have better and more stable lives, therefore marriage is good, therefore the tax system should support marriage. While the correlation is true, there is no evidence that proves the causality runs in this direction. Only the most bone-headed reject the possibility that stable, well-meaning couples are likely both to marry and to raise children well. This wilful confusion of correlation with causation is really worrying in politicians that seek to govern.
Incoherence 3. Is the world really a better place if a couple who would have chosen not to marry decide to tie the knot because they would pay a little less tax? It strikes me as perhaps the most morally dubious reason possible for marriage.
The full blog post with more reasons is here.
[via Paul Sagar]
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Reader comments
I just said that!
Nothing has done more to undermine marriage than Right wing economic policy. Longer hours, less staff, more work, sunday opening. etc etc
But these proposals are all about the rich middleclass. The hubby who goes to work and earns £250,000 and upwards and the little wifey who stays at home.
Another objection is that a tax system which favours married people (with or without children) also effectively penalises single people (ditto).
If single people are on the increase, how is this policy going to be a vote-winner?
The problem is I don’t know how you can objectively determine if this policy is ‘working’ or not.
You could look for an increase in the rate of marriages, or a drop in the rate of divorces.
But I don’t think this even matters to the Tories. They seem to have decided that it is essential that the tax system recognises marriage, therefore implementing the policy would be all the success required. Krazee.
I put this to Nadine Dorries on Twitter earlier. I was astonished that she didn’t reply.
Not to mention that being rich is good for children, so being rich should be rewarded in the tax system. If only wealth could stand as its own reward without needing a derisory top up for it to count for anything.
2. sally – “Nothing has done more to undermine marriage than Right wing economic policy. Longer hours, less staff, more work, sunday opening. etc etc”
Except we are not working longer hours. Average working hours have consistently dropped since Karl Marx first gave up shaving.
By the way, you support the Wee Frees in their opposition to Sunday Trading?
“But these proposals are all about the rich middleclass. The hubby who goes to work and earns £250,000 and upwards and the little wifey who stays at home.”
Why do you think that? They tend to be married after all. It is more likely that this is a flailing, pointless, knee jerk response to a problem that everyone has finally recognised and the Tories finally have the courage to think about doing something to fix – the feral children produced by Britain’s underclass. Of course it won’t work but then almost nothing will and what will work is not politically possible. Yet.
Although I am against the idea of offering tax breaks to married people…
…I am curious about your opening sentence.
When did marriage become a system that is primarily a vehicle for the middle-class?
Do try to come up with political issues that don’t start with your tired old phobia about the middle-classes as it completely undermines the rest of your argument.
I don’t see why married couples WITHOUT children should get the benefit of a tax incentive which is ostensibly determined as being an incentive to better parenting. Now, if it was the married couple with children allowance, or even the pregnant married woman’s allowance, at least there’d be an element of coherence.
Ian Visits: When did marriage become a system that is primarily a vehicle for the middle-class?
I think the following part of the FT article explains it better than I could:
Income distribution. The beneficiaries of transferable tax allowances are single-earner couples who tend to be at the upper end of the income distribution. The policy is therefore a straight-forward redistribution from poor to rich. There is nothing inherently wrong with this – it is a political choice – but anyone proposing such redistribution must be honest about the consequences.
In other words, if Hubby earns enough that Wifey doesn’t have to work, he can claim a tax break (and given some defences of the proposal, encouraging Wifey to stay at home is part of the policy). Oddly enough, Lawrence and Beverley (see photo, top) are a good fictional example of the kind of couple who would benefit, even though Susan (as the divorced mother of two kids) wouldn’t.
You missed the real reason for the Conservative’s interest in marriage tax breaks which is outlined in the article
Income distribution. The beneficiaries of transferable tax allowances are single-earner couples who tend to be at the upper end of the income distribution. The policy is therefore a straight-forward redistribution from poor to rich. There is nothing inherently wrong with this – it is a political choice – but anyone proposing such redistribution must be honest about the consequences
http://www.hm-treasury.gov.uk/d/foi_oppcostings22.pdf
This is typical dog whistle politics from the Tories. What amazes me is few people within the media are willing to call them on this.
This is just a form of words to rather half heartily cover a tax cut for the rich under the guise ‘marriage’. If the Tories really cared about marriage they would build council houses, upgrade the minimum wage, and reverse all the community destroying policies they introduced the last time they were in power.
Here is the thing. People with stable lives, good prospects and live in comfortable areas tend to get married. Marriage has all but disappeared in those areas of the Country where the Tories carried out their wicked ‘scorched Earth’ assault.
Funny how the Tories went on the rampage, smashing these communities, denying the existence of society and now, twelve years after being kicked out of office, they have noticed that ‘society has been destroyed’ and we have ‘broken Britain’. Yeah who fucking broke it, Cameron? Who smashed millions of jobs, who removed whole industries, and then moved millions onto incapacity benefit and now tell us unemployment is a bad thing!
Where the fuck were you Cameron when everybody told you disembowelling whole communities was a bad idea? Even the Church of England announced that the Tories were carrying out ‘wicked policies’. People who are not exactly known for their pragmatism, people whose entire purpose is to pray to imaginary friends, people who have only a tenuous grip of reality were able to see the damage was done.
Anyone who opposed the merciless assault was denounced; ‘there was no alternative’ we were told.
And NOW the Tories think they have spotted what is wrong with this system and can put it right by giving a tax cut to the richest people in society!
Fucking Tory vermin, I wouldn’t piss on any of the bastards if they were on fire!
Jim @ 11
Who smashed millions of jobs, who removed whole industries?
The unions – by running them into the ground so they couldn’t make a profit or attract investment.
and then moved millions onto incapacity benefit ?
Labour – under Blair and Brown – so they could massage the stats to show a false improvement when actually there have never been fewer than 5 million on benefit since they came to power.
As for your argument that Thatcher was responsible for the decline of marriage – that is simply laughable. The trend towards cohabitation rather than marriage in England began in the boom time 1960s and 25% were already cohabiting by that decade’s end. It continued in the 70s under yer darlin’ Harold and Sunny Jim. The trend is replicated all over Europe and in the US and is by no means confined to former steel and pit villages in the North. It’s primarily cultural, not economic.
Clarice @ 3
a tax system which favours married people … also effectively penalises single people
huh?
That’s like saying that a benefits system that favours parents (by paying child benefit) is somehow ‘penalising’ the childless.
Maybe in the envy-addled pates of Lefties that may be so. But to normal people it makes perfect sense.
All the Conservatives want to do is pay due recognition to a valuable social institution that spans pretty well all cultures and has existed since the dawn of time.
Nothing wrong with that.
Phil Hall @ 12
Labour – under Blair and Brown – so they could massage the stats to show a false improvement when actually there have never been fewer than 5 million on benefit since they came to power.
Are you even aware of what you are talkinng about? Have you not even got the decency to tell even believable lies? Why not go and do some actual research on the unemployment/incapacity figures before making comments like the above, hopefully you may even learn enough to prevent you making a further twat of yourself.
@14,
Jim, what are the facts on incapacity numbers then, do you have them please?
@ 13 or like saying that the extra benefits for single parents “penalise” couples, or that social housing “penalises” home owners. The left have created such a pervasive culture of dependancy that some people actually belive that not receiving some form of government handout is discrimination. Some on the left will only be happy when practically everyone is on some form of benefit – which if you include child tax credit – I suppose they already are. It truly is the logic of the madhouse.
The left though do not apparently see a problem with a benfits systems which incentivises single parenthood, whilst simulatnously denying, despite overwhelming evidence, that marriage is good for society and good for children, and that single parenthood is overwhelmingly not.
Whatsnext @ 15
To be honest I don’t know the tags to show this graph, but here is the link:
http://sandbox.opsi.gov.uk/images/chp/image-F07D8A6EF8204C7F4BA36140A40E991B80200BF7.
Three pieces of data are shown on this graph. It goes without sayin that the two peaks in unemployment are 1979 and 1994 as the Tories drive up unemployment. Incapacity benefit rises during the same time; and by the time the Tories are booted from office they have managed to increase the figure from about three quarters of a million to a staggering 2.5 million people! It is pretty clear that the Tories were shunting people from the unemployment figures during that time.
However, the most startling figures are the lone parents (as opposed to ‘co-habiting couple’) Phil hall please take note. The party of the family have managed to add (not by Alan Clarke alone, I hasten to add) add a further one million to that figure.
@ 13
It effectively penalises single people by denying or removing (some) benefits purely because they are single, irrespective of financial need. It differs from child benefit because people with children generally need more money (although not, of course, neccessarily more tax breaks or government aid) than those without, what with children costing money and not providing any. As being married is far more likely to save you money than cost it, comparing the two is a nonsense.
Maybe to brainless right wing knee-jerkers a correlation between financial need and reciept of benefits is a difficult concept to grasp, but to normal people it makes perfect sense.
MM @ 16
The left though do not apparently see a problem with a benfits systems which incentivises single parenthood, whilst simulatnously denying, despite overwhelming evidence, that marriage is good for society and good for children, and that single parenthood is overwhelmingly not.
Er, how exactly? If you want to encourage people to get married, how do you do it?
“While the correlation is true, there is no evidence that proves the causality runs in this direction.”
Nor is there any evidence that it doesn’t. Belive it or not, the exact causation between smoking and lung cancer is still not fully understood, but the correlation is so overwhelming that “only the most bone-headed” would ignore it until/unless cauastion could also be explained. You could I suppose argue that smokers are generally unhealthy people who are simply more likely to die of cancer and the fact that they smoke is incidental (which is basically what you are arguing about marriage and positive social outcomes) but that would just be a sheer bloody minded denial of relity……..
The welfare state is as extensive as it is because the lack of a decent employment base or solid foundation for our economy mean that there will be millions of unemployed for as long as Thatcherism continues, so there would probably be rioting in the streets if the unemployed were not on various benefits.
Destroy Thatcherism and foster true skilled employment and then you’ll soon see what a “work ethic” there is amongst people, once teenagers realise they can make a decent living as they couldn’t in the three decades after 1979. Then we could restore the situation which existed when I was young, when benefits existed buit were only ever actually paid to old people and cripples because everyone else earned enough.
“The left though do not apparently see a problem with a benfits systems which incentivises single parenthood, whilst simulatnously denying, despite overwhelming evidence, that marriage is good for society and good for children, and that single parenthood is overwhelmingly not”
A touch of post hoc, ergo propter hoc there I think. Did you actually read the article?
@19 You don’t have to encourage any one to get married, but you don’t have to encourage them not to either. If the government was neutral on ALL family set ups then most people wouldn’t have a problem with marriage not being recognised, but it’s not, it encorages practically all family forms except marriage. If something is good for society it should be encouraged – I would have thought that was page 1 of default leftist assumptions.
It’s worth bearing in mind that countries which are to the liberal left of the UK (France, Sweden, Denmark, Holland) continue, apparently uncontroversially, to support marriage socially and economically.
12
Living in a former pit village (and working in it when it was a pit village) I can’t remember large numbers of cohabitation, actually I only know of one couple.
The swinging sixties didn’t really make that much impact other than within the Capital, and not untill the late eighties in most rural areas, and even then marriage remained the cultural norm.
Also, do you really believe that the economic does not effect the cultural? I think you’ll find that over most of Europe, single motherhood and pregnancy out-of-wedlock increased considerably with industrialization, this also coincided with the decline of religion
The mass employment created by Thatcher’s economic policies, plus the welfare benefits reform of 1987 (income support for a child would not purchase the average 19th century work-house diet) was not conducive to promoting the nuclear family, especially as it was young men between 16 and 26 years who suffered the highest rate of unemployment.
“If something is good for society it should be encouraged ”
But you don’t support the National health care system which has been very good for most people in this country.
You do talk the most amazing amout of tosh. But then you are a tory troll so I should not be surprised.
Matt @ 23
If the government was neutral on ALL family set ups then most people wouldn’t have a problem with marriage not being recognised, but it’s not, it encorages practically all family forms except marriage
Does it? How? How does Government encourage non marriage?
If something is good for society it should be encouraged
Again, how do you encourage people who would not marry to get married? Or stay married for that matter?
@MattMunro, 20
You think that there is a causal link between marriage and well-raised children? That if feckless parents marry for the sake of a tax-break, the moment they walk down the aisle they will become excllent parents? Really?
Let me repost my comments on a prior article; they’re more apt here and directly relevant to your silly causal argument:
“Their thinking is this: children from married families do better in life. That’s probably true, but it’s not the fact that their parents are married, per se, that is the cause of that statistic. Bribing otherwise feckless parents into marrying won’t suddenly render them wonderful raisers of kids.
It’s magical thinking, and irrational on two counts. The first, as I’ve said, is that they have correlation and causation backwards – I would imagine that parents who are more likely to be married are simply in more stable relationships anyway. The second is that their line of argument relies on believing that a marriage certificate imparts on those whose names it bears some superior moral status. A bad parent wakes up one day, trots down the aisle, and then, what do you know – their parenting improves. That is, as both the LibDems and the labour party pointed out, absurd.
What this plan will do is incentivise people to marry hastier than they would otherwise have done – which can only undermine the institution, such that it is, increase divorce rates, and undermine the very correlations the move is designed, ostensibly, to promote! It will also, as a consequence, fill the coffers of lawyers. Perhaps that’s the ulterior motive?
Why should I, a single man, not engage in a civil partnership with my best friend as a strategic way of saving money? That’s precisely what this policy turns into a rational decision – arbitrarily marrying the first person who comes along, in order to save some cash.
Look at how the numbers stack up:
- Minimum cost to marry in the UK £103.50 http://bit.ly/8TBUMA
- Minimum cost to divorce £340.00 http://bit.ly/8TBUMA
So, if Cameron’s plan saves the couple say £500 each over the course of the marriage, it’s worth doing. We don’t yet know Cameron’s numbers, of course, but if it’s pitched to only save that cost over a long period of time, it wouldn’t work as intended anyway. I think we can safely assume that making hasty marriages of convenience financially sensible must be an inherent feature of the policy.”
Actually, wealthy parents have very little to do in bringing up their children. They employ nannies at the beginning, then they send them off to expensive private schools for their up bringing. Effectively they pay some one else to do it.
And like all Conservatives, when they pay someone else for a service they always think they should get a tax break.
Rachel @ 18
a correlation between financial need and receipt of benefits
The State not taking quite so much of your income is not ‘receipt of benefits’. The money is not the State’s to bestow; it belongs to the tax payer. The question is: what proportion of a married person’s income is it fair to take.
Many women who are not working would find it more dignified to transfer their personal allowance to a spouse. That way they would not feel so totally dependent on someone else’s income and would be making their own contribution.
The alternative would be to allow them to claim benefits.
currently denied to married women.
But the anti-marriage Left denies married women the benefits available to single women, while at the same time swuaking about how recognizing marriage in the tax system penalises singletons.
The penalising is the other way.
Two single people enjoy 2 personal allowances. A married couple only one. Yet the single income has to keep both (plus, of course the children.)
Phil, a tax-break is, by definition “a benefit”. What are you talking about?
Your arguments make no sense at all – why should a married woman who is not in work receive a benefit that is tied to income? I’m sure you’re against paying single people money unless they are looking for work, so why should you be for paying married people in the same circumstances?
If childcare is the issue, let’s see some progressive re-thinking of child benefit. There’s no sane or rational reason to give benefits to someone just because they have made a personal choice about their reationship the governing party happens to arbitrarily find morally superior.
“Two single people enjoy 2 personal allowances. A married couple only one. Yet the single income has to keep both (plus, of course the children.)”
That’s true if both singletons are in work, and it should be true if both married partners are in work too. You might as well say “Five single people enjoy 5 personal allowances. A married couple [where only one couple is working) only one”!
Income tax is related to income. I can see no sensible reason to give someone with no income a benefit based on income. Can you?
Jim
From the Independent, 18 August 2009
The total number of people claiming benefits in the UK has been forecast to rise to more than 6 million when official figures are published later this month….. The latest official figures, published in February, showed that the total was 5.8 million. This included 1.4 million on job seekers’ allowance and 2.6 million on employment support – until recently known as incapacity benefit. People claiming other benefits – as lone parents, carers and because of disability – are also included.
Matt Volatile
Income tax is related to income
Yes… and tax allowances should relate to the number of individuals the income is required to support.
What makes no sense to me is that two single people who share a flat (but are not in a relationship), where one works and the other doesn’t, should enjoy a higher household income from work plus benefits than would a married couple where one works and the other doesn’t. The unfairness is further exacerbated if the married couple have to support children too.
“Yes… and tax allowances should relate to the number of individuals the income is required to support”
Why? If I decide to be generous and support my three flatmates with my substantial income, should I be able to get three people’s relief on my salary? If you want transferrable tax allowances – and I can’t see a good reason for them – why should that be tied to marriage? What’s the rationale?
“What makes no sense to me is that two single people who share a flat (but are not in a relationship), where one works and the other doesn’t, should enjoy a higher household income from work plus benefits than would a married couple where one works and the other doesn’t.”
Why would they get a “higher household income”? The single flatmate and the married out-of-work spouse are both entitled to jobseeker’s benefit if they are, in fact, seeking a job. If the spouse is simply at home and not looking for a job, then on what basis should she receive a benefit? If there are kids involved, let’s have child benefit. Why should the marital status of the parent be of issue? I can’t see how it’s rationally relevant to the discussion.
There is no good case in favour of this. Morally, it’s dubious. Rationally, it can’t possibly work. The goals which it is supposed to acheive rely on an inversion of cause and effect, and its introduction seems to logically create the perfect circumstances to undermine exactly these same goals.
By the way, I’m not “anti-marriage”. I’m just pro-fact, pro-sanity, pro-consistency and pro rationality. This policy fails at every one of those hurdles.
Well, seeing as the MAXIMUM rebate will be £15 per week per adult, do you think that £60 a month will keep the First Minister of Ireland and his wife together?
I say again, if the Tories want to reward married couples WITH CHILDREN U16 above and beyond the existing level of child benefit and the childcare element of working tax credit, then I could at least give a tentative sagely nod, although still with reservations about correlation v cause..
Throwing £60 a month at well-established 50 year old married couples, however, has literally NO financial advantage for the country.
Heck, if they want to social engineer moralistic conditions, why don’t they offer £60 a month attendance allowance at any Christian denominational church?
Transferable tax allowance further complicate the income tax system.
Independence. Recognising marriage in the tax system undermines a woman’s (or a man’s) ability to keep her income separate from that of her spouse
Allowing a woman to transfer her personal allowance onto her husband’s income has no effect on the net income if they both have an income. The only way a family benefits is if one partner has little or no income, in which case it’d be a funny argument to say they want to keep their finances separate when all/practically all the money comes from one partner.
I do agree on the point Incoherence 2 makes though. Being married does not keep families together. Families staying together leads to marriage. There is correlation, and also a causal link, but marriage is the effect, not the cause. What does need to be sorted though is the barmy situation whereby a family can increase their net income by separating. In an effort to support single parents, Labour have created a system that encourages them.
Matt Volatile
By the way, I’m not “anti-marriage”. I’m just pro-fact, pro-sanity, pro-consistency and pro rationality.
So could you please tell me what is remotely sane or rational about my brother’s situation.
He has a wife and two small children under 3 years of age, all of whom are dependent on his wage. Work is not an option for his wife: local day nursery rates are c. £108 per DAY for two children. Child minders cost £14 per hour for 2 kids. She would not find a job that paid enough to meet these costs or make work worthwhile.
If he were to formally separate from his wife tomorrow and move in with me, his wife would receive hosing benefit to cover their rent and council tax, plus other lone parent’s benefits which effectively would more or less double their current net disposable income.
Because she happens to be married, she is entitled to no benefits at all. If she chose to become single, she would qualify for benefits worth c. £12,000 per annum. Any child support payment he may have eventually to make would be far less than the full cost of maintaining the household that falls on him now.
The system as it is now therefore offers a powerful incentive to either pretend to separate or genuinely separate. It offers no incentive to stay together.
You may find this rational. I think it’s crazy.
Phill Haal @ 32
Yes? And? How does this relate to what the Tories did in 1985? It was the Tories that shunted people from unemployment to IB to massage the figures. They now blame Labour for that.
You have stated that the move was a Labour Party tactic, when clearly the huge rise in IB claiments happened during the Tories reign.
Are you willing to retract your initial statement?
The tax system discriminates against and penalizes marriage in many ways.
Take second homes, for instance.
A married couple can nominate only one property as a main residence for tax purposes and any sale of the second property would attract capital gains tax.
With an unmarried couple, each party can nominate a separate property, avoiding capital gains liability on any sale.
This is quite a valuable benefit – I know a couple who have chosen not to marry for this very reason. Between them they have added around £80,000 to their equity by avoiding the CTG that a married couple would have to pay.
Jim 39
rise in IB claimants happened during the Tories reign
There was a rise. But it was not one the Tory government engineered or wanted. They would hardly want to increase their own benefits bill, would they?
The ruse of moving onto ‘invalidity’ was either dreamt up by some canny scallies themselves, or more likely urged on them by claimants unions and other left-wing organizations in order to annoy the Tory government.
Labour, by contrast, didn’t care about raising taxes and paying more out in benefits. What mattered to them was providing a simulacrum of falling unemployment.
…….. and I should add that the total number of individuals dependent on benefit is higher under Labour than it ever was under the Tories. And that’s after 12 years of Labour. So how does that square with your picture of the Tories as heartless beasts who throw people on the scrapheap while Labour are kind and competent and keep them in well paid jobs?
All your ‘Tory vermin’ and ‘eeevil Tory’ rhetoric ignores the fact that the poorest 10% have got even poorer under Labour – indeed, are the only income group to have seen their standard of living decline sharply during Labour’s time in power.
Labour may campaign under the slogan ‘for the many, not the few’, but the worst-off certainly aren’t among the ‘many’ that Labour policies favour.
So could you please tell me what is remotely sane or rational about my brother’s situation.
He has a wife and two small children under 3 years of age, all of whom are dependent on his wage. Work is not an option for his wife: local day nursery rates are c. £108 per DAY for two children. Child minders cost £14 per hour for 2 kids. She would not find a job that paid enough to meet these costs or make work worthwhile.
£54 per day? That’s ludicrous. She needs to shop around. According to the Daycare Trust, the typical cost of a full-time under-two’s nursery place is £152 per WEEK.
Heck, if that’s the market rate, maybe she should open up as a small nursery herself, and undercut the market.
Without knowing your brother’s income, then we can’t really go into specifics about how much he and his wife could get towards income, so let’s just use generalities.
The Childcare element of Working Tax Credit can provide up to £175 per week.
Childcare vouchers provide a much publicised benefit of around £100 per month, so another £20 per week.
When the kids get to age 3, they’ll get 12.5 hours free during term time. This is far from an ideal solution, as few people except for teachers work only during term time, and causes a major headache for our accounts.
The latest official figures, published in February, showed that the total was 5.8 million. This included 1.4 million on job seekers’ allowance and 2.6 million on employment support – until recently known as incapacity benefit. People claiming other benefits – as lone parents, carers and because of disability – are also included.
Yes, damn Labour; deliberately injuring people and forcing others to give up their jobs to look after them.
Phil Hall @ 41
There was a rise. But it was not one the Tory government engineered or wanted. They would hardly want to increase their own benefits bill, would they?
I think you are being rather touchingly naive here. There was not merely a ‘rise’; there was a doubling and more of a jump. People were shunted of the unemployment figures by a number of ways and hiding people on incapacity benefit was perhaps the last desperate move to mask the high unemployment at the time.. The data clearly indicates that people were being moved from unemployment to incapacity benefit as early as 1984 and that tactic continued right up to 1997, 1994 being the time that incapicity unemployment switched sides.
The ruse of moving onto ‘invalidity’ was either dreamt up by some canny scallies themselves, or more likely urged on them by claimants unions and other left-wing organizations in order to annoy the Tory government.
Any lingering hope you had of being taken seriously has now disappeared. The incapacity benefit is not given out merely by filling out a form; there are a series of hoops to jump through. These hoops were quite deliberately made wider (a poor analogy, I know) by the Government to reduce unemployment. The evidence suggests that the assessments were made easier to make incapacity an easier option and DSS staff were told to put forward people for incapacity benefit!
Labour, by contrast, didn’t care about raising taxes and paying more out in benefits. What mattered to them was providing a simulacrum of falling unemployment.
Again you have it wrong, the unemployment fall was pretty real.
@ 42
…….. and I should add that the total number of individuals dependent on benefit is higher under Labour than it ever was under the Tories
That is not true, though is it? The Tories undertook the biggest expansion of the benefits system ever seen in this Country
rhetoric ignores the fact that the poorest 10% have got even poorer under Labour – indeed, are the only income group to have seen their standard of living decline sharply during Labour’s time in power.
If you want to highlight the fallings of Labour, then be my guest, we stand shoulder to shoulder here. I admit that Labour had made strides in the right direction, but they have let down too many people.
Fuck off, Phil Hall. This government is not Labour, they are Tories.
Jim
I don’t think it is I who is being naive.
the unemployment fall was pretty real.
This Labour government has strained every sinew to give a false and misleading impression on levels of unemployment. As well as shovelling the long-term unemployed oto incapacity benefit, it has parked sustantial numbers of the unemployed on flaky New Deal schemes.
Anyone aged 18-24 was taken off Jobseekers’ Allowance after 6 months (and over 25s after 18 months). Then began the endless merry-go-round. A 2007 study found half a million claimants had been parked on New Deal twice, 170,000 three times and and some an amazing TEN times. Overall, more than 25% of those on unemployment benefits at the time the snapshot was taken had already been on New Deal programmes more than once. Reason: so that any calculation of those claiming benefit would understate the true picture.
Other ways of disguising reality have included pushing claimants into part time work. The number of people who say they are working part-time because they cannot find a full-time position now stands at over 1 million.
But – returning to invalidity/incapacity benefit.
You accuse the Tories of shunting people nto IB as a ‘tactic’.
But I remember Tory ministers being astonished by the sudden rise in those claiming invalidity benefit. Were we becoming a sicker society? How come if life-expectancy and other health metrics were moving in the right direction etc.
In fact, the drift to what was then invalidity benefit happened beneath the Tories’ radar. They only twigged to what was going on when the BMA complained that GPs were being intimidated by patients into signing them off as eligible for IB.
…….. and I should add that the total number of individuals dependent on benefit is higher under Labour than it ever was under the Tories
That is not true, though is it?
Yes, it is true. It’s now touching 6 million. A record.
Phil @ 47
But I remember Tory ministers being astonished by the sudden rise in those claiming invalidity benefit.
Can you name a single Tory minister who asked such a question? Who are we talking about?
Personally I would like to see the thirty year ule scrapped and the cabinet papers made public on this subject at least. Very interesting reading.
In fact, the drift to what was then invalidity benefit happened beneath the Tories’ radar.
How can you seriously suggest such a thing? How could two million people suddenly switch from unemployment without either the Governments’s knowledge or consent to such a move? Who was the minister in charge of the DSS at the time? What was he doing when thousands of DSS assesment panels were ‘unilaterly’ lowering the standands and the shift towards IB was clearly showing up in the figures? Are you saying that such a move was not driven by the Tories desire to get unemployment down?
Jim
Check this out:
- Today there are 10.4 million working-age people not working in the UK. Of these, 5.9 million are claiming out-of-work benefits.
- Throughout the last ten years, prior to the recession, the number claiming out-of-work benefits has been at around 5.4 million.
- Benefits are the main source of income for three in ten households in the UK
- In 2008/09, £74.4 billion was paid directly to working age adults and children, about 40% of the total social security budget.
- The total cost of and number of people claiming Disability Living Allowance {formerly called Incapacity benefit and Invalidity Benefit} are up 50% since 1997.
(Source: Dynamic Benefits, Centre for Social Justice, http://www.centreforsocialjustice.org.uk/)
“Benefits are the main source of income for three in ten households in the UK”
Does “Benefits” include the State Pension in this instance?
Phil @ 49
I do not dispute that there are lots of people on benefits under Labour. What I have disputed that this is significantly higher for longer than under the Tories.
The Tories had pushed roughly six million onto benefits in the 1990s and most of them stayed there.. The move from unemployment to incapacity benefit clearly occured under the Tories and the evidence suggests that this was a cynical move to massage the unemployment figures at the time. This was widely known at the time, even if Tories are now reluctant to admit it.
At the time, they moved 2 million people from one benefit to another and now, because the political landscape has changed they have sidestepped this and now have became the Party who wants to clamp down on IB claiments.
Of course this has been a lot easier for them because the media and, it has to be said, the inept Left have let them off the hook. However, I wish they would at least acknowledge the fact that this problem is largely of their making.
Jim @ 51
The move from unemployment to incapacity benefit clearly occurred under the Tories and the evidence suggests that this was a cynical move to massage the unemployment figures at the time.
Part of my difficulty convincing you that you are wrong about this stems from the complexity of the subject. But heck – let’s get into the technicalities.
One of the problems in making comparisons is that under the Tories during the 80s and early 90s, the relevant benefit was Invalidity Benefit (IVB). Unlike its successor, Incapacity Benefit (IB), IVB was NOT withdrawn at retirement age and was therefore paid to pensioners up til death. Therefore, when we look back at the figures before 1995 (when IB replaced IVB) we have to remind ourselves that quite a lot of claimants under the Tories were not of working age, but were retired people. And since folk tend to get sicker as they get older, you can bet that a pretty hefty proportion of those getting IVB in those days had moved onto it in the years approaching retirement.
Since 1995 the figures relating to IC pertain to claimants of working age only.
You asked about the ministers -the switch from IVB to IB in 1995 was chiefly brought about through the efforts of Peter Lilley and William Hague.
They introduced tougher, more objective criteria and required proper medical tests. (Previously doctors could more or less sign patients onto IVB as they liked and there was no procedure for review after a few months or years.
These tough reforms are hardly consistent with your view that the Tories were deliberately encouraging claimants in this direction. They are more consistent with my view that they were alarmed and horrified by the drift of claimants to a more generous (and lifetime guaranteed) benefit. The advantages to the claimant were obvious – more dosh, no need to seek work, no need to sign on. There were no advantages in all this to a Tory government.
I hardly need add that Labour OPPOSED the tighter criteria.
Between the Tory reforms of 1995 and 1998 the number of claimants FELL significantly, as planned.
However,iIt began to rise again as soon as Labour were elected.
We know (see above) that between 1997 (when Labour took office) and 2009, the number of working age claimants increased by 50%.
What kinds of people were these new claimants under Labour?
A Parliamentary Question in March 2006 elicited that in August 2005, 30 per cent of claimants under 50 who moved on to the benefit during that month had previously been in receipt of Jobseekers Allowance in the 90 days immediately prior to taking up Incapacity Benefit. That is, they were clearly people on the dole being redirected to IC so Labour could massage the figures.
When measured in 2001, lmost half of the decline in measured claimant count unemployment was matched by an increase in the number of people claiming incapacity benefit under Labour. (Source: Hansard 25 Oct 2001; 473)
“Part of my difficulty convincing you that you are wrong about this stems from the complexity of the subject. But heck – let’s get into the technicalities.”
It is not complicated at all, it is quite simple. The tories moved 100s of thousands of people from unemployed to disability to make the unemployed figures look better. The fact that you don’t understand that, or more to the point won’t accept that, marks you out as nothing more than a tory troll.
Try Ian Dales site he like tory trolls spouting rubbish.
Phil @ 52
There are several problems with your post. First of all the Tories were not moving people as acts of benevolence, they were moving these people of the unemployment register as a cynical ploy as unemployment was a hot political potato. Once unemployment became less destructive politically to the Tories, the policy was both slowed down and reversed.
You appear to be suggesting that Labour are somehow softer on the ill than the Tories, that is untrue.
Most of the Labour Party and the left in general have sat idly by and watched as some of the weakest members of society have been scapegoated and stigmatised by the right.
The coming election will almost certainly see the end of the Labour Party as a viable political entity, because they have continued with Tory Party policy of ramming the poor and use them as scapegoats. Any political party that abandons the poor to their fate deserves to die a slow painful death in my book.
Sally + Jim
I don’t know why you think the Tories were so ashamed about the unemployment figures that they’d go to the lengths of pushing claimants onto more generous benefits at taxpayers’ expense.
My recollection is that they were pretty brazen about unemployment, saying it was ‘an acceptable price to pay’.
My other recollection is that they were keener on limiting public spending than increasing it.
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