Over the Welfare Bill impasse, a few points of clarification should do it for anybody with sense

In her first move as finance minister, Arlene Foster is right to echo Theresa Villiers in ramping up pressure  to implement  the Stormont House Agreement and pass the £ 10 billion budget and the Welfare Bill. Unless Sinn Fein gives way, the budget will have a  £500 million gap. Funding for 30,000 public sector redundancies will be withheld and corporation tax will not devolved to Stormont.

No doubt before the election the DUP were hoping for a modest improvement in what was already billed as the better deal of the Stormont House Agreement. But it’s Sinn Fein’ s U turn over welfare funding that’s at the heart of the impasse.   Key points seem still to be clarified. Will there be a time limit for the payment of  Employment Support Allowance ( ESA) which is one of Sinn Fein’s grievances?. If these and other details can’t be conceded  or explained away, the choice seems to be between continuing defiance or  compliance ( a gentler word than surrender).

A trade off has been made between softening the blow of welfare cuts, and spending on public services.   But it has to be faced. The money allocated to mitigation is not enough for full protection from the blast of the cuts.  So while the blows have to some extent been softened the cuts can’t be wished – or threatened – away. Blame the  Brits if you like but freezing or wrecking the Assembly would be pointless.

Whatever the politics, concern at the impact of welfare cuts – already implemented and in the pipeline  – is real  enough. But so are the measures to ease them.  It may be cold comfort to say that while  most poor people will be still poor,  they won’t be much worse off.

An authoritative analysis was made by the Institute for Fiscal Studies a few weeks ago.  . It concludes that the  UK Government has made substantial benefit cuts which hit poorer households incomes. Northern Ireland has been hit harder than average, as we have large numbers of disability claimants.

 But the IFS make it clear that the costs of failing to implement the Stormont House Agreement are higher than complying with it .  By failing to ratify it,  UK government will take of £114 million and rising from Northern Ireland’s annual spending by  departments. The SHA  provided £94 million to soften the blow.

This would require cuts in other areas of 0.9 % of overall spending,  1.6% of resources excluding Health . The IFS adds “ Remember this is less than the ‘fines’ of £ 114 a year. Finding a further £20m for welfare would mean cutting resources by further 0.2% or excluding Health  by  0.3%.

However more cuts are to come. Northern Ireland’s  share of £12 billion UK wide cuts expected to be announced next week is estimated at a further 2-3% for Northern Ireland, or £450m. I think we can be sure that this will happen, whatever the protests from the Assembly.

It’s true  of course that averages have little meaning  when it comes to welfare payments. Northern Ireland has some of the poor people in these islands and the poor are hardest hit by welfare cuts. But how worse off will they be  when ther full range of cuts are implemented?

Many of the severest will be softened.

  • The reviled household benefits cap will affect very few families because most have children. And those affected will be able to submit claims for discretionary support
  • The “ bedroom tax” will be offset by a ‘separate fund’ for most social-sector tenants
  • No time limit has yet been set for employment support allowance (ESA) without doing training or voluntary work ( a year in England). This needs to be urgently  clarified.
  • Universal Credit to replace Job Seeker’s Allowance over time will start to be rolled out. But payments can be split, paid every 2 weeks, and housing element paid direct to landlords. A “Supplementary fund” will provide cash support for those who lose from lower ‘standard’ disability premiums.
  • The UK Government cut funding it gives to NI to fund rates rebates (as in rUK) But the Executive has made up difference (as in Wales, Scotland, parts of England)

The desire to cut corporation tax to 12.5%  will cost  an estimated £300m a year, equivalent to  3% annual expenditure or , 5% excluding health). It’s hoped CT reduction will help create 37, 500 jobs by 2033, ( worryingly over- exact figures surely) and  that’s a mighty long wait.

 In conclusion, the main point to grasp is  the Treasury “fines” of £ 114 m a year and rising, are higher than the marginal cost of implementing the Welfare Bill, a comparatively  small  concession. If this doesn’t happen what passes for fiscal and economic  strategy will be in ruins. Even if the Assembly continues to tick over, devolution will be a mockery  and we will in effect be entering a new period of economic direct rule – if we’re not there already.

 

 

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  • Steven

    The reviled household benefits cap will affect very few families because most have children.

    Sorry, why would having children exempt people from the household cap? If families have children they are more likely to be affected by it because it’s an overall cap on income. In England, it affects single people and small families in London and the South East because of house prices. In the midlands and the north it affects large families and has become known as the ‘family tax.’

  • scepticacademic

    “It’s hoped CT reduction will help create 37, 500 jobs by 2033, ( worryingly over- exact figures surely)” – you can say that again – it’s pie in the sky – RoI had 1st mover advantage, NI will be a slow 2nd – stable door, horse bolted, etc

  • scepticacademic

    Some quick back-of-the envelope calculations: 37,500 new jobs in 17 yrs = 2,200 jobs / yr. Hardly game-changing numbers.
    Plus, current NI claimant count unemployment is ~44,000.
    Then there’s the 30,000 planned public sector redundancies.
    Can someone explain how the CT reduction is worth a £300mill+ cut in the block grant?

  • chrisjones2

    How will we produce the people to fill them. Unemployment is almost lower than that. Then there is the skills gap as the current unemployed and the former civil servants fleeing work wont have them. We will need thousands immigrants – a new Plantation of Scots fleeing Scottish Independence!!!

  • Robin Keogh

    Can somebody answer me a question please.What is the SDLP’s position on this welfare reform chaos?

  • Kevin Breslin

    We have graduate unemployment particularly in the West of Northern Ireland, large parts of the Republic of Ireland and GB. There are thousands of people going into our universities who are doing engineering, science, mathematics, business, economics and professional subjects who are either unemployed or underemployed simply because society as a whole has a culture that believes people don’t have skills unless some government training program gives them it.

    We don’t have the belief skills or people are adaptable … Rubbish, I’ve gone from physics and maths to social research to electronic engineering to computer science to CAD program development to neuroscientific modelling … with periods of depressing unemployment, failed interviews, rejection letters and applications all around to place just to get something.

    We don’t have skills means we don’t have the confidence to try to learn skills. Someone had to have learnt those skills, developed those skills, some human being or team or network of them. Skills didn’t fall from the sky, skills are developed in the experience of challenging situations.

    Look at the graduate employment rates for these subjects 60-70% in some cases, with many simply having to leave this region. Maybe those with 2:2’s or 3rds or difficult personal circumstances or lacking experience, but where there is a will there must be a way.

  • Brian

    Some further background on Sinn Féin’s reverse ferret over welfare reform.

    In the end, December’s deal was agreed in haste when the Government threatened to wind up the moribund talks process. Now it seems that Sinn Fein is realising how badly exposed its negotiators left it to accusations of a sell-out.

  • Cue Bono

    Is it generally agreed that this whole welfare debacle was as a direct result of Adams trying desperately to sound as if he was pursuing the same policies on both sides of the border? If so it is very likely to backfire pretty badly on him and the Sinner party as a whole.

    One thing that became very clear during the general election was that SF are economically illiterate. Hilariously so. If they think that making a complete horlicks of the northern economy is going to help their electoral prospects in the south then they are barking mad.

  • El_Commi

    The £300m figure for Corp tax is at the low end of the estimates. Higher estimates are around £700m – £800m.
    There is little evidence to say it will pay off.

    http://www.taxresearch.org.uk/Blog/2014/06/03/when-it-comes-to-corporation-tax-northern-ireland-is-walking-into-a-disaster-all-of-its-own-making/

  • Cue Bono

    Their policy is to make sure that the Sinners can’t blame whatever happens on them.

  • El_Commi

    Due to EU rules on fiscal autonomy costs incurred via the reduction in Corporation tax must be bourne by the region.
    This doesn’t just mean the loss of money from Corporations who are current paying corp tax here. It also means the costs of implementing the differing tax regime compared to the rest of the UK and the costs incurred from UK companies using transfer pricing and similar schemes to relocate profit here.
    Some of this can be ameliorated by the legislation, but costs are likely to be substantial. £300m is an optimistic figure.
    Arlene’s previous assertion that it will give people £3000 more in their pockets- is equally optimistic.

    It’s a lot of money to throw away on a gamble.

  • Robin Keogh

    So u dont know what their stance is then?

  • Robin Keogh

    Far better then they row back on the mistake rather than continue with it

  • Cue Bono

    I would have thought so. Either way they are going to look bad, but at least that way they won’t be causing long lasting chaos in the process.

    Edits to add: Did I completely misinterpret what you said there? Are you actually defending this shambles?

  • Cue Bono

    Not exactly no. They certainly won’t put their heads on the chopping block to push it through, because they know that would let the Sinners off the hook, and would lead to them getting the blame. Imho.

  • Dan

    Sure, isn’t it only a year to the Assembly elections?…the con artists should be able to string this out until then at least. What’s a couple of hundred million out of the budget when it means Sinn Fein can continue to loot the public purse on behalf of their core vote.

  • Cue Bono

    Their core vote is in decline, and this won’t help them to attract new votes from people with properly functioning brains. Robin gets it. This was an utterly moronic move by SF driven by dear old Uncle Gerry trying to ride two horses at once.

  • Zig70

    How can a fine on the money that you are ultimately responsible for be a threat? You are essentially fining yourself in order to blackmail your subordinates to do your bidding.

  • Deke Thornton

    If…If lower corporation tax is such a winner…Why isn’t the rest of the UK adopting it? Indeed why not the EU? The RoI gambled and got a short term winner. In a race to the bottom that could implode. It certainly is a high risk gamble for NI. And no short term winner either.

  • Gopher

    In the absence of any sound economic reasoning in their manifesto SF went back on the agreement and took a blind punt on Labour. That docket is well and truly beaten. The assembly is unsustainable without the Stormont House Agreement being implemented. I imagine its got to the summer recess whenever that is.

  • aquifer

    The benefit of any CT cut can be multiplied up if our parties can commit to a timetable in advance, so that companies can plan to invest.

    i.e. The benefit of any CT cut will not be multiplied up.

  • Robin Keogh

    Let me explain this to you simply. The northern executive is part of a consociational arrangement, as such these matters cant be resolved without SF imput. The SF leadership sits in the mother parliament in Dail Eireann. If Dublin decides Stormont can allow a bill or a law to pass then it will happen, if Dublin decides it wont, it wont. End of Story.

  • Pete

    There can be no debate over this. Welfare Reform needs implemented. Sinn Fein’s position on this is completely indefensible.

  • aquifer

    Militant irish separatists are no strangers to blackmail. If we feel gratitute for no longer having pistols pointed at our heads, are we just suffering a recurring version of Stockholm syndrome? Former kidnap victims now in a mental cage?

  • Old Mortality

    Robin
    Are you suggesting that Enda Kenny has an effective veto on Stormont legislation? That’s quite a revelation. In any case, I don’t think Mr Kenny or anyone in his party would lose much sleep over welfare reform in NI.

  • murdockp

    Corporation Tax, only people who have never run a business think it is a good idea to cut it.

    Northern Ireland is a basket case to do business in for the following reasons:-

    Endless red tape
    A planning system that is not fit for purpose
    Building regulation approval not fit for purpose
    Civil Service not fit for purpose
    Poor work ethic

    High sickness levels
    Poor skills
    Negative cultural outlook
    Racism
    Sexism
    Homophobia
    Old fashioned conservative ways

    Suppression of younger voices in the workplace,
    Culture of lying and corruption.
    Rubbish airports
    High transportation costs to market
    Lack of infrastructure investment
    Waste

    Cutting taxes will not pull the employers in but addressing the above list will.

    THe ROI is the opposite of most of this list, hence the massive inward investment.

    Simples really.

  • Croiteir

    the way is the airports and seaports, the economy north of the border is unable to support the level of STEM graduates and the only hope to stay locally is to get a job in the souths expanding and far more diverse economy. Thankfully no one listens to those clamouring for a cull in teacher training on the grounds that their are not enough places for graduates north of the border or else the universities here would be “Social Workers R Us” academies and our children would not have the education to pursue a worthwhile career elsewhere.

  • Croiteir

    Cause they are raking it in from the localised south east of London economy which can easily bear this rate. We can’t. It is called the cost of the union to non unionists

  • murdockp

    Especially when the re-balanced expenditure per capita will be the same as the ROI, the very country they want to join. If anything mapping capex NI /ROI will improve the chances of a united ireland.

    At the end of the day SF is pretty much a communist party representing the workshy and long term unemployed. They don’t really understand economics.

  • Kevin Breslin

    One in 5 adult people in the island of Ireland are qualified to be teachers including the Taoiseach so I’m a little empathetic to the argument. More teachers are needed with a growing population but our population is ageing more than it’s growing and I’m sorry but we need to steer biology and chemistry students to the health services a little more than the classroom.
    You are right we don’t have the economy to support highly specialised STEM, but we do have the economy for highly specific STEM. I agree with the need for cross border economy, E&I Engineering in Burnfoot Donegal taking advantage of the low corporation tax, is less than 10 miles from Magee University. IntertradeIreland have both cross border science & engineering knowledge transfer and business skills knowledge transfer between a company and universities. There does seem to be more diversity in these than the KTPs from Invest NI which are virtually Belfast Centric.

    Indeed unless you are a company based in Belfast, cross-border or international business seems to be the only way to go. There is some possibility in investigating greater cross-island KTP, particularly Scotland and Antrim for example and I think more people should look at that.

  • Kevin Breslin

    For the record the Tories and Lib Dems lowered corporation tax from 24% to 22%. In terms of the EU, the Benelux countries and some Balkan countries have.

  • Kevin Breslin

    The administration costs are minuscule in the greater scheme of things, and the EU rules stop Gran Canaria becoming a Spanish low tax zone, Corcica being a French low tax zone, Scilily and Sardins being Italian low tax zones etc. if these regions can’t even pay their own way.

    The whole different tax regime arguement is nonsense, company accountants face a new tax regime whenever there’s a new budget, or setting up in a different country. Many UK companies like Tesco have two tax regimes to deal with because they set up in ROI anyway. That’s a very silly arguement when it’s the business sector pushing for this. And the UK does have tax differentiation in Scotland and will have more, there’s been a Tartan tax on VAT and now one for income tax, so the UK treasury has the ability for effective federalised tax regimes. We also have tax agreements between Northern Ireland and the Republic for cross order workers do these difficulties are far from insurmountable.

  • Kevin Breslin

    Hate my that my automatic spellchecker doesn’t recognise Sardina.

  • Kevin Breslin

    Isn’t it a gamble to assume all these corporations will stay here forever if we do nothing? That they will have the same profits every year too.

  • El_Commi

    Sorry, I realize my point on the costs incurred wasn’t entirely clear.

    The costs incurred from companies relocating taxes to N.I. from elsewhere in the UK will be bourne by us.
    Effectively, a company shifting it’s tax base from Leeds (or anywhere else in the UK), to Northern Ireland to save on Corporation tax will cost the treasury money.
    That money must be recouped from our block grant. Effective legislation could potentially mitigate this risk; I’m not well educated on legislation, but I am not hopeful the law will deal with this problem effectively.

    The HMRC document explains where the costs come from, cost estimates start on page 25.
    https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/81554/rebalancing_the_northern_ireland_economy_consultation.pdf

    The business sector is of course pushing for it, because why wouldn’t they say no to less taxes? But we have to balance the needs of our economy, our people and businesses.

    Handing a blank cheque over will not do this.
    There are significant bodies out there, PWC amongst them who are dubious this change will amount to much.

    Even if we take the £300m figure (which as I said above, is the very low end of the estimates), in order to offset the cost to the block grant, the N. Ireland Economy would need to grow by around a third. Private Sector profits would need to generate an “additional £2.4 billion in. This
    translates into an additional £10 billion of Gross Value Added (GVA)
    (current figure £28 billion).”
    http://speri.dept.shef.ac.uk/2013/03/14/corporation-tax-northern-ireland-policy-debate/

    A lot of references in the NI documents point towards the ROI as an example to emulate, but the ROI headline rate is not whats important.
    ““in order for low tax rates to be of value they
    must be matched by other factors – the legal environment including regulation,
    double tax treaties, ease of incorporation… etc.}”
    https://www.tcd.ie/iiis/documents/discussion/pdfs/iiisdp375.pdf

    The IMF in a report discussed how such creative accounting structures can work. (See tricks of the trade page 47)
    http://www.imf.org/external/pubs/ft/fm/2013/02/pdf/fm1302.pdf

    The public consultation document’s summary responses also confirmed this when a number of those in favour said invest depends on a range of factors. (section 2.17)
    https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/190154/condoc_responses_rebalancing_ni_economy.pdf

    Finally, the choice isn’t between doing nothing and throwing money at companies.
    Take a look at the NIAO of Invest NI; 60% of jobs created were in call centers. 3.5% of all jobs created lasted 6 years. If my memory serves, the Selective Financial Assistance costs over this same period amounted to around £519m
    (http://www.niauditoffice.gov.uk/invest_ni_final.pdf )

    There are other, smarter ways to rebuild the N.I. economy, a reduction in corporation tax is unlikely to do that.

  • Cue Bono

    Thank you very much Robin for providing me with my first belly laugh of the day. And there was me thinking that you had a titter of wit.

  • Cue Bono

    They are doing their core vote no favours by keeping them on the sh1t heap.

  • Cue Bono

    If they have enough children to fill the bedrooms then they are unaffected. If they have empty bedrooms then they have to move to a smaller house or be docked benefits in kind. This is what the left laughably calls a ‘bedroom tax’.

  • Steven

    If they have enough children they might be unaffected by the bedroom tax, but they will be affected by the household benefits cap.

    The article seems to suggest that somehow having children prevents the imposition of the cap, when (unless some concession has been made) the opposite will be true.

  • Kevin Breslin

    The smart way to save the economy is call center work subsidized by our Invest NI money, that can easily relocate in a heartbeat. Yes, so instead of giving them a tax cut, let’s give them bloody tax money. Lowering corporation tax isn’t throwing money at companies, it’s keeping money in companies that they can invest in labour and infrastructure here.

    Does Call Centre work constitute the IT jobs and STEM jobs that all these economists keep going on about? What about people here with Asperger’s Syndrome or who might be mute, or have Mental illness surely better to put them on a phone rather than basically anything else. If you have a stammer and can’t find any other job, go lie in the street and die. That’s the mentality.

    As for GB companies moving their financial centers to Northern Ireland, that may be far better for the Treasury than them moving their financial centers to the Republic of Ireland, which they are doing anyway. Having a financial center here will create jobs here, take people out of welfare here and reduces the subsidy that English, Scottish and to a lesser extent Welsh people have to pay here.

    I am aware that lower corporation tax isn’t a magic bullet, the Republic did a lot more else than that, however it was a magic incentive that has kept job creating companies in at a very difficult time for their economy, and is keeping many Northern Ireland people even off the dole already as border workers.

    If NI could match the Republic or even GB in terms of Research and Design funding and Tax credits, if NI could milk the Euro currency advantage through cross-border production perhaps there would be a better chance, and labour mobility across the Orange and Green thresholds wouldn’t hurt either.

    However relying on Invest NI to subsidize our (declining) Call-Centre Industry and sticking to the status quo is a gamble, it is a risk and I will have no apologizes for saying so. It is the epitome of a Paradox of Thrift perma-bear mentality and who’s inertia is going to ensure the insecurity that its mentality thinks it’s avoiding happens much faster.

  • El_Commi

    I wasn’t advocating increasing call centers as a smart way to improve the economy. I’m not sure where you got that from. Rather I was highlight that throwing money at companies with little requirements is unlikely to work.

    That is what the corporation tax reduction is proposing to do.

    SFA gives them money from the public purse, Corp Tax does the same by asking they don’t pay into the purse in the first place.

    There is no evidence that any money saved through a reduction in corporation tax will result in an increase in jobs. There is no requirement in the currently proposed legislation to make additional employment an outcome of lower taxes.
    What is effectively being proposed is that if we hand over public money to companies in the form of a reduction in their bill, they will choose to reinvest it in jobs. This is wishful thinking.

    Even if this were to be the case, and every penny saved was spent in increased employment or investment in the local economy, this would need to result in an additional £2.4bn in private sector profits to offset the loss to public expenditure. This is highly unlikely to happen.

    Additionally, there is little evidence to show that the lower Corp tax rate down South was the driver for FDI- they have operated a low tax regimes since the 1950’s, and has only seen the boom in FDI in recent years a significant portion of which dried up with the 2007/8 crash.
    I would provide sources, but I suspect you didn’t read the previous ones.

    Business relocating tax bases from the rest of the UK to N. Ireland, with little to no growth in employment would be disastrous for us locally, and likely have little impact on the UK as a whole. I haven’t seen any evidence that British businesses are relocating the RoI for tax purposes, at least in any significant numbers.
    That won’t be the case for relocation to N. Ireland.

  • Kevin Breslin

    Again, you aren’t saying anything about the smart ways to increase private sector industries. If anything you are suggesting a cut to Invest NI so the government takes on the full role of creating jobs, with a name like El_Commie that doesn’t surprise me, but Communism doesn’t have a mandate here.

    Bombardier has just chosen to cut jobs, and if it leaves its corporation tax rate to the UK through NI would be 0% not 15%. It is wishful thinking to believe it would still be employing people and paying taxes over here if it wasn’t over here but in Canada, they can simply in-source the work, as could Seagate, as could other companies assuming these FDIs didn’t fancy investing elsewhere. They can reduce their total tax bill here to zero, simply by not setting up here. 15% is a payment into the purse, it is a payment new FDIs would be paying instead of zero.

    But even many small to medium corporations set up in Northern Ireland would be helped by reducing their corporation tax bill.

    Also the big difference between a tax cut and a subsidy is this: a company could fail and the government would not need to cut their losses, with a subsidy the government would be losing money. On a partial level a tax cut privatizes losses and profit, a tax subsidy nationalizes losses and privatizes gains. Subsidies are higher risks than tax cuts.

    I have no problem with communism so long as it has a mandate, people are making their own co-operatives, developing their own technology and funding their own trade, boycotting corporations they disagree with and spending on the ones they do … but that’s not going to be financed by taxing the rich if the rich aren’t here. And if GB is getting rich and we’re not, I’m not too optimistic about expecting charity.

  • El_Commi

    There is no evidence to suggested that new companies coming here would offset the cost of attracting them.
    It is a hope that by handing out £300-800m to private enterprises they will grow the economy in our stead. That frankly won’t happen.

    My name isn’t because of political affiliations, although I am left of center – it’s from my younger days playing video games. It kinda stuck and is used most places where I have an online presence.

    As for smarter choices, FoE, in association with trade unions and business groups, (including the CBI) have proposed a possible avenue – I trust their numbers add up, and whilst their plans are certainly expensive they have the guarantee of being able to demonstrate the economic activity they will generate, unlike corporation tax which only guarantees a public sector cut.
    http://www.foe.co.uk/sites/default/files/downloads/ni_green_new_deal.pdf

    Paul MacFlynn from NERI also wrote a paper not too long ago about alternative industrial policy focused on R&D. NERI work on the local economy, (Pauls in particular) related to pay and employment has been pretty comprehensive in the last number of years.

    http://www.nerinstitute.net/research/a-new-industrial-policy-for-northern-ireland/

    I’m not in a trade union, or the Green party either :p

  • Kevin Breslin

    Lowering corporation tax will be the alternative to subsidies, so it’s not handing money out it’s not taking money in, and that money can be used to expand and make jobs.
    I have no problem with Green New Deal but 3 Execuitve parties as well as the Greens backed that and one vetoed it or Research & Development but all the tax credits and the avaliability of research funds from the EU isn’t being seen as fiscal stimulus for the companies out there. There’s a less than 2% uptake rate for both here.

  • Reader

    Well, it wouldn’t…

  • Cue Bono

    That is a cap of £500 a week. I would suggest that there are a hell of a lot of working people out there who would be delighted to have £500 a week.

  • jm

    Totally agree with you!

  • Steven

    Yeah, £500 a week on the household income for the WHOLE family. That’s combined employment related benefits such as JSA or ESA, child benefit, child tax credits and housing benefit.

    Rent in London is going to swallow up a massive amount of that for any family, and the inclusion of CTC and CB means that large families in areas where rents aren’t as high (like NI) will struggle to come in under that amount.

    It is not the equivalent of a working person getting £500 a week in wages, even if it has been beautifully sold that way by the political class. It’s not as generous as it looks, and if you still think it is, go and have a read about some of the problems it has caused.

    If you have a large family, it will be tough. I’ve seen it here in England, and it will be a problem in NI.

  • Reader

    He may mean Southern Command, or Mary Lou, or Gerry Adams rather than the actual southern government.

  • Reader

    “A Fine” is a convenient term to say that Stormont is receiving less pocket money than it would otherwise have received, as a penalty for its irresponsible and chaotic behaviour. But it is just a metaphor, so if it doesn’t work for you I’m sure it’s possible to search for the long, boring, accurate version instead.
    And Stormont isn’t fining itself, it is being fined.

  • Zig70

    As I see it Stormont only shuffles the money about. Essentially the British government is fining itself because it picks up the tab at the end of the day.

  • barnshee

    what is the tartan tax on vat?

  • barnshee

    “It is not the equivalent of a working person getting £500 a week in wages, ”

    Indeed not– a working person on £500 a week in wages would pay £100 in tax and Nat Insurance –£400 — is less than £500 in benefits —with the the added advantage that on benefits there are “no go to work costs” .

    “It is not the equivalent of a working person getting £500 a week in wages, “– its a damned sight more.

  • Steven

    Again, it’s not comparable to a single persons weekly wages because it is a cap on the entire household. That includes the benefits that working people get too, such as child tax credits (if on a low income) and child benefit. Also, it’s being lowered from £26k to £23k, so won’t be £500 in this parliament.

    It is not a damned sight more. Don’t get caught up in the misunderstanding about the benefit cap. It sounds a lot because it’s been designed to sound like a lot. If you live in an area of high rent or have a large family, there is a good chance that you will struggle financially, have to move, or face rent arrears and/or eviction.

    You don’t have to believe any of this of course, feel free to still compare a household income to a single persons wage, but I would urge you to have a read at some of the research that has been carried out over here. Maybe start with this http://www.jrf.org.uk/blog/2015/01/benefit-cap

  • barnshee

    I`m comparing the bread winner for family who is working and on £500 a week

  • barnshee

    Might I suggest that your presumably free choice for a “large family” might be in part at least your problem?

  • Steven

    The breadwinner who also gets Child benefit for each child and gets help from someone who presumably stays at home or maybe works part time? So reduced childcare and a part time wage to go along with the £500 a week? All of a sudden that household income has gone up quite a lot with those components. So does the £500 a week for the entire family where there isn’t a ‘breadwinner’ look as much?

    “Might I suggest that your presumably free choice for a “large family” might be in part at least your problem?”

    And on this, that might make sense if the policy wasn’t retrospective. So for those who already have a large family, what would you suggest they do?

  • barnshee

    ” All of a sudden that household income has gone up quite a lot with those components. ”

    Ignoring the fact that it has already gone down by tax and nics

    “And on this, that might make sense if the policy wasn’t retrospective. So for those who already have a large family, what would you suggest they do?”

    How do you change the policy without making it ” retrospective” and why should others pay for individual choice on family size?

  • Steven

    Unemployment benefits are taxed as well though.

    “How do you change the policy without making it ” retrospective”

    You introduce it on a future date. Hardly fair to punish people who already have large families is it? So again, what would you suggest they do? It was you that brought up choice, so what choice do they have?

    “Why should others pay for individual choice on family size?”

    Should I pay tax that goes towards infrastructure if I don’t have a car then? We pay these things because as a society, we have decided that we should help certain groups of people who might need a hand with additional costs.

    I actually don’t disagree on some of the ideas to cap or limit some payments, but they have to be in the future: people have to know what’s coming. Then they would have a choice. At the minute, retrospectively introduced policies such as the bedroom tax or the benefit cap cut people’s entitlement without giving them any options or choices.

  • Cue Bono

    “Yeah, £500 a week on the household income for the WHOLE family.”

    Which many working people would give their eye teeth for. Do you think there should be any limit at all on the amount of money handed out to people who do absolutely nothing to earn it?

  • Cue Bono

    “So for those who already have a large family, what would you suggest they do?”

    Perhaps go out and work for a living?

  • Steven

    No, I don’t think there should be no limit- see my posts below.

    The maximum payment of £500 includes many other benefits that are not employment replacement benefits, benefits which working people are also entitled to. You seem to be suggesting that people who are unemployed get all this money because they are unemployed. Wrong. For being unemployed they get £70 a week. The rest goes towards housing and child costs that are too expensive for unemployed people to afford. And if you looked at the data, you would see that many working people who are on low wages get these benefits as well.

    I’m very happy to put you in touch with front line organisations that I work with, and they can tell you first hand about sending people to food banks because of the introduction of the cap. It has caused misery for large families, and forced people out of London. And in NI, it will do the same for those who have 3 to 4 kids and no work.

  • Steven

    And if they are a lone parent and can’t afford childcare for 2 or 3 kids while they are at work? Or if they live in an area of high socio-economic deprivation which has a very high unemployment rate? Or act as a full time carer for someone?

    Have a think about this, seriously. It’s not as simple as you are making out. I agree with many of the policy ideas that this government and the last coalition have come up with, but the implementation has been cumulative, rushed and not at all responsive to family circumstances or regional variations.

    Oh, and I found this on an advice website- council tax obviously won’t apply in NI but the rest is valid.

    A couple with weekly net earnings of £500, for example, with four children and rent and council tax liabilities of £400 a week, could be receiving an additional £400 in HB and CTB, child benefit and tax credits.

    Seriously, before you swallow all the things that are skimmed over on the news or in the papers, have a read of something a bit more objective and decide for yourself whether this is ‘fair’.

  • AndyB

    Steven, I think you need to invoke two arguments here.

    On the benefit cap, it’s the Widescreen TV argument. A father has a well-paid secure job for years and has kids and/or buys an 54″ LED TV in cash. Suddenly the owners go bust and he is made redundant and has difficulty finding work, and his wife is pregnant with baby number 6. A benefit cap penalises him for behaving reasonably and lawfully in the good times when he had financial and job security.

    On the bedroom tax, it’s a penalty on families who are scraping by, who cannot find a smaller house locally, and cannot afford a removals van either. My own concern is what if a family can find a smaller house and move into it, but what if their rent in the new house is higher than their rent in the old house? That ends up increasing the HB bill, not cutting it.

  • barnshee

    What £900 a week? ?

  • Steven

    Yes, I don’t disagree with the BT in principle, especially when overcrowding is such a problem in some areas. But surely you have to have someone refuse a suitable alternative property before applying the BT. There are also very few 1 bedroom properties and it becomes really difficult to re-house people and they end up stuck paying it but having nowhere else to go to.

    I’ve seen some local authorities pay for removal vans and associated moving costs to get people into smaller properties if they are able to find one. But supply is the problem.

    And I think the BT has a minimal influence on the HB spend, if any. But again, it’s being sold on the ‘fairness’ ticket.

  • Steven

    yes, that’s 2 people in work, between them earning 500 a week. They are entitled to approximately 400 a week extra in benefits.

  • Kevin Breslin

    It’s a tax rise or fall of 1% that the Scottish Parliament have

  • piouspriest

    I predict that Cameron will allow the political impasse in NI to continue. At the opportune moment, he will declare a regional concessionary package that ,simultaneous delays the SNP threat, whilst offering sufficient concessions for SF to chalk it up as a victory.