Issues with the benefit system

[Peter Sarf]

The very fact that it's contracted is part of that problem, of course. If Network Rail did it directly you'd have an obvious apprentice-to-manager career path, as you say.

Its all profits or savings now. The future could be someone elses problem.

 

[GS250]

The very fact that it's contracted is part of that problem, of course. If Network Rail did it directly you'd have an obvious apprentice-to-manager career path, as you say.

Its a bit off topic but on an APMP Project Management course there were a number of delegates working for Network Rail. They all suggested that recruitment was a massive problem. NR did/do seem to have a preference for graduates but the big gap is that they were struggling to recruit anyone with experience. Those delegates had all managed to get in 15+ years ago courtesy of their experience in trades or tech but reckoned that they wouldn't have got in in the present environment. Funnily enough they suggested to a couple of us that we apply for the more IT related assistant PM positions. Having got to know us over the week of the course they reckoned we were more than capable. Apparently they were crying out for these roles as most transitioned to a full PM within 3 years. I certainly did apply for a good few of these but as per usual HR processes won the day. Not really a big problem as I was employed FT anyway.

At least...there appears to be an apprentice course now. Although its minimum of 4 GCSES's which will rule out some who are practically excellent but just not academic at all.

 

[The Ham]

At least...there appears to be an apprentice course now. Although its minimum of 4 GCSES's which will rule out some who are practically excellent but just not academic at all.

4 GCSE's should be achievable for most though, even if they have to do a 16-18 "equivalent" course to get it or have a go at retaking some of the exams they didn't do well at.

If you've got a target to reach then most are more likely to be motivated to get there, even if it's hard work getting there.

That's not to say that there aren't those who would still fail to reach that level.

 

[DynamicSpirit]

This is one key reason why Universal Basic Income has potential. You give the same base "benefits" to everyone (plus extras like child benefit), then you claw them back through tax once they earn a decent amount, so you don't get that "but I get nothing if I work" - at very low levels of pay you *do* let them keep the benefit *and* the pay.

It has the attraction of simplicity, but the problem is, the cost would be absolutely horrendous if you wanted to pay the universal income at a level that would allow everyone to live comfortably: In order to pay for it, you'd risk having to tax people who are working at such a a high level that could make many people seriously question whether it's worth their while working when, after tax, they end up getting so little more than they'd get on UBI anyway.

I'm also not sure about the ethics of UBI: We already have enough of a problem in the UK with a culture of entitlement. Do we really want to go further down the road of creating a system in which everyone expects that the state (for which read: All other taxpayers) will provide them with free money without demanding anything in return?

Personally, for people below retirement age, I'd much rather see some kind of system that gives everyone the opportunity for a decent living - but always with the expectation that it's a two-way street: If you want the state to provide for you, then you have to make some effort in return. In practice that would probably mean replacing many current benefits with some kind of guaranteed job doing community work for anyone who wants one.

 

[Bletchleyite]

Personally, for people below retirement age, I'd much rather see some kind of system that gives everyone the opportunity to for a decent living - but always with the expectation that it's a two-way street: If you want the state to provide for you, then you have to make some effort in return. In practice that would probably mean some kind of guaranteed job doing community work for anyone who wants one.

There's an interesting argument there, namely that "job creation exercises" may actually be worthwhile, i.e. rather than just looking at work like weeding the streets and picking up litter as a cost not worth spending on, instead realising that if you're going to pay someone benefits, paying them a bit more to do something useful to society could have a fair bit more actual value both to them and to society.

 

[DynamicSpirit]

There's an interesting argument there, namely that "job creation exercises" may actually be worthwhile, i.e. rather than just looking at work like weeding the streets and picking up litter as a cost not worth spending on, instead realising that if you're going to pay someone benefits, paying them a bit more to do something useful to society could have a fair bit more actual value both to them and to society.

That's pretty much my thought exactly. The marginal cost of paying someone a wage to do something useful as opposed to paying them benefits isn't going to be that big. Society gets the benefit of whatever work they do. You're no longer encouraging a selfish culture of entitlement. And it's actually probably better for the benefit claimant too - since they get what for most people is likely to be the satisfaction of spending time doing something useful, rather than simply spending their days getting bored doing nothing.

 

[Bletchleyite]

That's pretty much my thought exactly. The marginal cost of paying someone a wage to do something useful as opposed to paying them benefits isn't going to be that big. Society gets the benefit of whatever work they do. You're no longer encouraging a selfish culture of entitlement. And it's actually probably better for the benefit claimant too - since they get what for most people is likely to be the satisfaction of spending time doing something useful, rather than simply spending their days getting bored doing nothing.

There are other ethical benefits too. Instead of spraying nasty chemicals once a year and leaving dead brown weeds lying around, the weeds are properly removed by hand and the streets look clean and well maintained, making the UK a nicer place to live, and someone gets to stand back and look at it and know they made it a nicer place to live, too, plus they've been at least paid minimum wage for doing it.

It's hard work but I'd certainly rather do it than sit bored.

 

[GS250]

There are other ethical benefits too. Instead of spraying nasty chemicals once a year and leaving dead brown weeds lying around, the weeds are properly removed by hand and the streets look clean and well maintained, making the UK a nicer place to live, and someone gets to stand back and look at it and know they made it a nicer place to live, too, plus they've been at least paid minimum wage for doing it.

It's hard work but I'd certainly rather do it than sit bored.

It is...but there are plenty of people happy to sit at home watching the TV 24/7.

 

[Trackman]

But within that are huge issues. UC is calculated monthly. Fine if your wages are paid monthly. Not fine if your wages are paid weekly or 4-weekly. Someone paid 4-weekly has one month a year with two pay-packets, and the "extra" pay will clean out their UC entitlement the following month. Great.

There's a fix for that, contact them and ask them to move the payment to the next month. I think the report comes from HMRC and they split it. I did it for a friend as he was having no joy with them. I think they didn't know what the question was / badly trained initially.

It is...but there are plenty of people happy to sit at home watching the TV 24/7.

Wait until they get older.
I used to take my dear old housebound dad out in the car as he was going mad at home and was absolutely sick of TV.
I got him playing online chess and online-poker which he seemed to enjoy.

 

[Tetchytyke]

There's a fix for that, contact them and ask them to move the payment to the next month

True, but it took the Child Poverty Action Group starting legal action to get the DWP to portion out wages. IME a lot of DWP staff still don't get it. I left the advice sector in 2020 and it may- I hope it has- have improved.

 

[ainsworth74]

True, but it took the Child Poverty Action Group starting legal action to get the DWP to portion out wages. IME a lot of DWP staff still don't get it. I left the advice sector in 2020 and it may- I hope it has- have improved.

It hasn't...

 

[Tetchytyke]

instead realising that if you're going to pay someone benefits, paying them a bit more to do something useful to society could have a fair bit more actual value both to them and to society.

Sadly this government went the other way, with mandatory "work experience placements" that involved doing a week's work for benefit income.

Oddly enough, the likes of Poundland much preferred a constant steady stream of "work experience" placements being paid £70/week, compared to having to pay an actual employee minimum wage.

 

[DynamicSpirit]

Sadly this government went the other way, with mandatory "work experience placements" that involved doing a week's work for benefit income.

Oddly enough, the likes of Poundland much preferred a constant steady stream of "work experience" placements being paid £70/week, compared to having to pay an actual employee minimum wage.

Yeah that's the thing. If you are going to go what I would call the 'guaranteed job' route, of expecting people to do something in return for being given money, then it does need to be designed so people are being paid at least the minimum wage, which that work experience scheme didn't do. And it also should be be designed so that whatever people do is seen as and treated as an actual, valued, job in its own right not as merely as just work experience.

 

[Bletchleyite]

Yeah that's the thing. If you are going to go what I would call the 'guaranteed job' route, of expecting people to do something in return for being given money, then it does need to be designed so people are being paid at least the minimum wage, which that work experience scheme didn't do. And it also should be be designed so that whatever people do is seen as and treated as an actual, valued, job in its own right not as merely as just work experience.

Henve the idea that it should be things of civic benefit but that are otherwise considered uneconomic. And things the worker can take pride in. The local park or street looking nice they can, a sub minimum wage shift in Poundland rather less so.

 

[Dai Corner]

Henve the idea that it should be things of civic benefit but that are otherwise considered uneconomic. And things the worker can take pride in. The local park or street looking nice they can, a sub minimum wage shift in Poundland rather less so.

Sure, but having the town look nice and tidy doesn't help pay for public services or support for those unable to work.

 

[Bletchleyite]

Sure, but having the town look nice and tidy doesn't help pay for public services or support for those unable to work.

That fundamentally misses the point, which is simply that if you're paying someone not to work and they can work it's better to pay them to work even if that work is relatively uneconomic.

 

[GS250]

That fundamentally misses the point, which is simply that if you're paying someone not to work and they can work it's better to pay them to work even if that work is relatively uneconomic.

An 'earn your benefits' scheme, even if just a few hours a day is fair enough.

 

[Dai Corner]

That fundamentally misses the point, which is simply that if you're paying someone not to work and they can work it's better to pay them to work even if that work is relatively uneconomic.

Only if you can't find them something economically productive to do though?

 

[The Ham]

It has the attraction of simplicity, but the problem is, the cost would be absolutely horrendous if you wanted to pay the universal income at a level that would allow everyone to live comfortably: In order to pay for it, you'd risk having to tax people who are working at such a a high level that could make many people seriously question whether it's worth their while working when, after tax, they end up getting so little more than they'd get on UBI anyway.

I'm also not sure about the ethics of UBI: We already have enough of a problem in the UK with a culture of entitlement. Do we really want to go further down the road of creating a system in which everyone expects that the state (for which read: All other taxpayers) will provide them with free money without demanding anything in return?

Personally, for people below retirement age, I'd much rather see some kind of system that gives everyone the opportunity for a decent living - but always with the expectation that it's a two-way street: If you want the state to provide for you, then you have to make some effort in return. In practice that would probably mean replacing many current benefits with some kind of guaranteed job doing community work for anyone who wants one.

If you set it as £350/month (so the same as UC) that would be £4,200 per year, however with housing benefits retained that would likely be just enough to live.

With tax then paid on anything above this, those earning £12,000 would still be better off by about £1,800 if tax remained at 20%. However you probably wouldn't, you may increase that to around 25%,. At 25% tax that would cut the uplift to £1,200, however would mean that someone earning £36,000 was no better off and those earning just below the 40% rate (and all those above) would be about £700 a year worse off (change it to 24% and the break even point shifts to £45,000 and those above this are only marginally worse off, there's scope to adjust the percentage rate a little, for example at 24.5% to lower the break even point and tax those higher up a little more than at 24%).

By doing away with a LOT of paperwork (which is very costly to government) for a lot of benefits, especially for those in work benefits or carer's allowances, it may not be all that more expensive overall. It would also simplify payroll, as everyone is taxed the same rate from £0 until they hit the 40p tax rate. It would also mean that it would mostly always be worth working more as you'd be keeping about 75p from every £1 earned (although those on housing benefits may see less than this).

The main exceptions would be when childcare costs come into play or if you did a few extra hours but on an extra day (say you did a 7 hour day normally but then worked 9 hours across two days) as you may not cover your extra travel costs. (I'm sure that there's other cases, however these would likely be reasonably infrequent).

An alternative option would be to set it at about £7,000 (so the same as maternity pay), so someone on £12,000 would be £2,900 better of with a tax rate of 34%, and the break even point being about £33,000, to stop those on £50,000 being about £2,400 worse off on that tax rate you may then lower the 2% NIC threshold (or lower it quite a bit and up the NIC rate a bit above that), or fine tune the tax rate down a little.

For instance cut the 2% band from £50,000 to £33,000 but increase it to 3% would put someone on £50,000 £850 a year worse off, and someone earning £100,000 a year £1,500 worse off.

 

[DelayRepay]

Henve the idea that it should be things of civic benefit but that are otherwise considered uneconomic. And things the worker can take pride in. The local park or street looking nice they can, a sub minimum wage shift in Poundland rather less so.

And the worker gains experience, and maybe a confidence boost if they've been out of work for a while, which will help if they decide to apply for a different job. You could go a step further and combine it with (free) training - so you do maybe three days of work a week and spend two days at college but still receive a full week's wage. The training offered as part of the scheme would be tailored to skills needed locally. It could also cover basic numeracy, literacy and digital skills training.

 

[Peter Sarf]

Personally, for people below retirement age, I'd much rather see some kind of system that gives everyone the opportunity for a decent living - but always with the expectation that it's a two-way street: If you want the state to provide for you, then you have to make some effort in return. In practice that would probably mean replacing many current benefits with some kind of guaranteed job doing community work for anyone who wants one.

I have discussed this in the past (not on here) always comes back as someone saying they will be taking someone else's job. I reckon tat all that need sto happen is documant jobs/tasks that were not getting done before.

Sure, but having the town look nice and tidy doesn't help pay for public services or support for those unable to work.

It does come fairly free if you are otherwise paying them to sit at home on benefits doing nothing.

Only if you can't find them something economically productive to do though?

Well as long as an economically productive task pays more then the claimant will move on to that better job of their own accord.

And the worker gains experience, and maybe a confidence boost if they've been out of work for a while, which will help if they decide to apply for a different job. You could go a step further and combine it with (free) training - so you do maybe three days of work a week and spend two days at college but still receive a full week's wage. The training offered as part of the scheme would be tailored to skills needed locally. It could also cover basic numeracy, literacy and digital skills training.

Fundamentally the claimant gets back into the habit of living in a routine. As in getting out of bed at precise times, going out to work, keeping clean etc etc.

It is hard enough sticking to that when retired.

 

[Yew]

We already have enough of a problem in the UK with a culture of entitlement. Do we really want to go further down the road of creating a system in which everyone expects that the state (for which read: All other taxpayers) will provide them with free money without demanding anything in return?

Perhaps if we stopped companies from feeling entitled to pay poverty-wages, and instead related it to the value that they produce, we'd be in a better situation?

 

[Dai Corner]

Perhaps if we stopped companies from feeling entitled to pay poverty-wages, and instead related it to the value that they produce, we'd be in a better situation?

How do you measure the value a personal carer or cleaner, say produces?

 

[Yew]

How do you measure the value a personal carer or cleaner, say produces?

How much does their employer charge customers for their services? I'd daresay there is some surplus value there.

 

[Dai Corner]

How much does their employer charge customers for their services? I'd daresay there is some surplus value there.

Well yes, the employer has overheads and taxes to pay and hopefully make some profit for his efforts.

 

[Yew]

Well yes, the employer has overheads and taxes to pay and hopefully make some profit for his efforts.

And how does he make those profits? By paying his staff less than the value of their labour.

 

[Dai Corner]

And how does he make those profits? By paying his staff less than the value of their labour.

You think everyone should, and would want to, be self-employed? Organising other workers has value too.

 

[DynamicSpirit]

Perhaps if we stopped companies from feeling entitled to pay poverty-wages, and instead related it to the value that they produce, we'd be in a better situation?

1. Would you be willing to pay more for all the stuff you buy so that the companies concerned can pay higher wages?
2. I'm not quite clear what this has to do with the sense of entitlement that I was referring to anyway?

 

[Cdd89]

One problem I have with Basic Income is how you restrict it to residents of the relevant country.

I think this is necessary otherness people will disappear to places with low costs of living (or start collecting multiple Basic Incomes). And I suspect that the enforcement required would eliminate many of the supposed paperwork savings.

(I have lots of other concerns and problems, and like those above I generally favour a job creation type system for those considered able to work, if there really isn’t enough employment to go around).

 

[DynamicSpirit]

One problem I have with Basic Income is how you restrict it to residents of the relevant country.

That's a good point. You can add to that the question of, would the UBI (Universal basic income) be for residents of the UK or only for citizens of the UK who are also resident here? If it's all residents, you've suddenly made all the problems with dealing with immigration much worse because everyone is going to want to find any excuse to get a visa to live in the UK if it means you immediately get automatically given UBI. On the other hand, if it's only citizens, then you've just created a vast inequality between UK citizens - who all receive UBI, and non-citizen residents - who don't.

Also, your point about not giving it to citizens who go and live abroad is a good one, but the flip side to that is that if you insist on that people must be resident in the UK to claim UBI, emigration of UK citizens to live abroad will suddenly drop to almost zero (not only that but you'll see a sudden overnight influx of loads of people who currently live abroad - returning here so they can claim their monthly salary-for-doing-nothing).