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Benefit cuts: The how and the who

Stephanie Flanders | 14:22 UK time, Thursday, 10 June 2010

What do we cut - and who would it hit? When the comprehensive spending review starts in earnest in a few weeks' time, those two questions are going to be right at the centre of public debate.

The Budget on 22 June will set the scale of the challenge: the amount by which spending needs to be cut. The review has to decide the what - and the who.

Ministers have already made it pretty clear that benefits and tax credits are in the frame for cuts. As they keep reminding us - every penny saved from these is a penny that does not have to taken away from front-line services. It seems clear to me that child benefit for the middle and upper classes is not long for this world.

The Conservatives' promise to protect it was always shaky: yes, David Cameron promised to protect it in one speech, at the party conference last year. But - as I pointed out at the time - it was not in the party's manifesto. By and large, he and other ministers would "forget" to mention it in the litany of benefits that they would keep. It was left to advisers to assure us, off camera and "on background" that the benefit would indeed be kept.

What better time, then, to have some basic facts about what our £200bn benefit system actually does - and who actually receives the cash. The ONS has just released a treasure trove of data on this, in a report showing how taxes and benefits affect household income.

The facts show that income inequality, after tax, was roughly the same in 2008-9 as it was 10 years earlier. You might see this as an indictment of Labour policy - but inequality would have risen without Labour's increases in benefits and tax credits. It inherited a very redistributive - or progressive - system, and then made it more so: before taxes and benefits, the top fifth of household earned £73,800 a year in 2008-9, fifteen times more than the poorest fifth, who earned, on average just £5,000. After taxes and benefits, the richest earn only four times more than the poorest, on average: net earnings at the top fall to £53,900, whereas the income of the bottom fifth goes up to £13,600.

Interestingly, the system is even more redistributive when it comes to retired people, and has become more so in recent years. For those households, income in the top fifth starts off 16 times higher than the bottom fifth. After taxes and benefits, the ratio falls to just three to one.

If that was all you knew about the benefit system, you'd think that cutting benefits would be a disaster for the poor. But here's the really interesting fact from the ONS document: the poorest 40% of the population only receive just over half - 56% - of the cash benefits paid out in a given year. Put it another way, nearly half of all cash benefits go to households that are not poor in income terms.

Though they may not believe it, the "middle classes" do pretty well: for households in the middle fifth of the income distribution, 20% of their net income came from cash benefits in 2008-9. Even for families in the quintile just above them - that is, in between the middle and the top fifth of households - nearly 10% of net income came from benefits.

On the basis of ONS figures, the think tank Reform has previously calculated that the government spends more than £30bn a year on benefits for middle-class households. They define middle class as an income of more than £15,000 a year for every adult, and £5000 per child - or £40,000 for a couple with two kids, in 2007-8 money.

Now those benefits include state pensions: indeed, that's one reason why the system has a bigger effect on retired people. But, as the Social Market Foundation points out in a timely report out tomorrow, they also include other universal benefits which, in the context of a "fundamental" review of government's priorities, stick out like a sore thumb.

The Conservatives and the Liberal Democrats have already stuck their toes in the water when it comes to taking away tax credits from the better off. But you have to assume that the spending review will prod them to go much further.

There are nine questions which any public spending programme will supposedly have to answer; for those who want to read the list it's on page eight of the Spending Review Framework released by the Treasury on Tuesday. The key ones are "Is this activity essential to meet government priorities?; "does the activity provide substantial economic value?"; and "can the activity be targeted to those most in need".

When it comes to child benefit, the SMF and many other think tanks say that the answers are, respectively: "no", "no", and "yes." Means-testing child benefits and removing the family element of the child tax credit from all households in the upper half of the income distribution would save just over £6bn a year - the same amount that departments are laboriously finding in cuts this year.

The SMF also wants to make only the basic winter fuel payment to over-60s - now £200 a year - universal, and means-test the higher payment of £300, which now goes to everyone over 80. That would save £1.3bn a year. To further stick the boot in for pensioners, they also want to freeze their - higher - personal income tax allowance for five years. That would save £1bn. It would not be popular, but it's worth noting that their allowance is already very close to the coalition's professed goal, for everyone, of £10,000 a year.

The think tank also wants the government to remove the VAT exemption from magazines, books and newspapers, which now costs the Treasury £1.5bn a year - on the grounds that the vast majority of the money goes to families in the top half of households. But, as a share of their income, poorer households spend more than richer ones on these products. And newspapers are already having a hard time competing with the web. I'm sure Mr Osborne is thinking about doing this, but he may well decide that the extra £1.5bn in revenues is not worth aggravating all of Fleet Street.

I'll have more to say about VAT in a few days. All I would say now is that I think it's inconceivable - both from a political standpoint and an economic one - that the government would raise the standard rate of VAT substantially but leave child benefit and other pillars of "middle-class welfare" untouched.

Comments

Page 1 of 2

  • Comment number 1.

    I currently work in a school, as an ICT Technician. The ammount of money that is presently been thrown into the Building Schools for the Future (BSF) 'campaign' could quite easily be cut. It seems obvious that the money that is been put into the building works them self is required, however, there is an excessive amount been thrown at 3rd party companies (Managed Service Providers) to provide ICT Support to the schools. The money that these companies will receive anually far out reaches that which schools are current given to provide ICT budget and hire staff.

    As such, i believe that if the government wants to cut public spending, this should be the first place to start.

  • Comment number 2.

    I have always understood "benefits" to be payments made by goverment not covered by Hational Insurance Contributions. When and how did the basic State Pension become a benefit when I contributed for 45 years and my employer deducts 50% of the basic state pension from my company pension to represent the contributions they made?

  • Comment number 3.

    Stephanie

    Given the scale of the social protection budget (this year, forecast as £200 bn, two sevenths of total public spending, and therefore around two fifths of the spending that is "cuttable", with health protected and debt interest rising), the cuts will have to go beyond child benefit for better off families.

    If the social protection budget has to find 40% of the cuts, that represents around £25bn a year, to be fully in place by,say, 2015-16. As you say, limiting child benefit to poorer families would gather in about a quarter of that. But to get the other three quarters, I reckon we would have to do most of the rest of the list below, at least to some extent:-

    (a) freeze all benefits/tax credits given to able-bodied jobless for at least next year and give below inflation increases for the remainder of the Parliament;

    (b) means test all disability benefits;

    (c) abolish (or at least reduce for pensioners not on means tested pension) the Winter Fuel Payment, and abolish free TV licences for over 75;

    (d) raise means tested benefits to pensioners and disabled people by less than inflation during the course of this Parliament;

    (e) consider ending open ended benefits for able bodied people below pension age - say allow receipt for only 6 months a year, or 24 months in any 4 year period; and, last but no means least,

    (f) consider means testing what is by far the biggest single benefit - basic retirement pension.

    I wonder what your colleague Nick Robinson would make of the political implications of a list like that?

  • Comment number 4.

    There are a lot of difficult decisions to be made by the incoming government on the 22nd June as you say Stephanie, and they will no doubt be causing something of a headache. I notice also that you are still very defensive of Labour's policies...
    One area that is not debated much is something that I remember reading in the analysis of notayesmanseconomics.
    "One curiosity is that all of our three main political parties are committed to increasing overseas aid by £4 billion a year by 2013. One might think that someone would question whether in our current financial situation we can afford it, for example is it more important than schools or the NHS? As far as I can tell this appears to be the most sacred of the sacred cows."
    It still appears that some cows are more sacred than others...

  • Comment number 5.

    Easy way to save £50billion in 5 years and you don't have to punish pensioners, cut the foreign aid budget. I'm still trying to work out how they can justify the british taxpayer subsidising country's that have space programs and nuclear weapons programs. Answers on a postcard please....

  • Comment number 6.

    The problem with comparing income inequality over a decade is that, say an average 5% rise in income for a poorer person equates to a lot less than a person on a higher income getting 5% increases each year. This money divide gets worse each year unless the tax and benefits system redistributes the wealth.

    However income disparity gets a lot less when fiscal drag occurs i.e. personal tax allowances are not increased, so if we recalculate the wealth gap it's probably less than we think - still too much for those earning £5000 per year - how do they live on that?

    Whatever the why and wherefores, everyone is going to feel the pain whether rich or poor!

  • Comment number 7.

    As you say, we have a £200,000,000,000 benefits system. If we can smash this by twenty to thirty per cent, then that is the vast majority of our structural deficit.

    Cut child, housing, disability, longterm unemployment etc and we'll have a better society

  • Comment number 8.

    If the plan is to hit middle income families (and why not - they will not starve - provided the rich are hit harder) then there is an anomaly in the current tax system that needs dealt with.

    Where one parent works and earns £60k they pay a large chunk of their income out at 41% tax. The other parent may stay at home and bring up the children although this happens rarely now.

    Where two parents both work and earn £30k each none of their income is taxed at 41%.

    This devalues the contribution of the homemaker and makes the system inequitable.

    If benefits are to be based on household incomes then so should tax bills.

  • Comment number 9.

    Interesting, Perhaps the most telling points made ware:

    "income inequality, after tax, was roughly the same in 2008-9 as it was 10 years earlier." and

    "the poorest 40% of the population only receive just over half - 56% - of the cash benefits paid out in a given year."

    It is against these facts that we have idiots on this blog demanding draconian cuts in benefits with little or no reference to the 44% of cash benefits paid to what they would call the undeserving poor!

  • Comment number 10.

    I'm married with two kids, both under the age of 12 and have just learned that I'm NOT "middle class" by dint of the fact that our household income is 20% below £40,000. Yet I pay £thousands in tax, that the rich can treat as voluntary, simply because I can't afford an accountant.

    One other reason the Tax system is so unfair is the unfair and regressive Council Tax! Even a property valued at say £5million plus in central London is still ONLY in Band H for council tax. But I cannot claim housing benefit to offset my Band D council tax burden - apparently I earn too much. It's sick!

  • Comment number 11.

    Please , please find something better than the censorship called moderation, or make it work within a reasonable timescale.

  • Comment number 12.

    As you intimate Stephanie, calculating post tax income adjusted for individual and household benefit receipts(and accounting for a considerable array of allowances) is prety complex. However, if we include the (non-wage/none-salary) income of sole traders and the self employed (and given that their final remuneration is frequently down to the prowess of their accoutant), then does this not muddy the income distribution picture further? While bearing in mind that this non-PAYE sector of the workforce has grown significantly over the last 30 years.

  • Comment number 13.

    Do you think that instead of endlessly rabbiting on about cutting univeral or near universal benefits from the endlessly attacked middle classes we might consider large number of teenage to thirty year olds who have made benefit a way of life.

    There is a strong case for declining benefit for those who decline to work and simply see it as a way of getting enough money to provide for their booze and fags.

    Can we please restrict benefits to those who really need it and stop giving it to those who cannot get up in the morning and who find work beneath them.

    As a start if you have been on benefit for 6 months you should be required to take whatever job is offered.If you loose it due to a less than enthusiastic effort to carry it out then you should not have benefit reinstated.

  • Comment number 14.

    You are living on another planet if you think that cleggmeron are going to seriously attack middle class benefits no matter how convincing the figures are (and they are convincing).

    It would be more progressive to have a carbon tax and reduce VAT and it would demonstrate a real commitment to green policies and Road Tax could be abolished to give a low cost road pricing effect. To produce more tax income without large deflationary effect try a fixed term wealth tax.

  • Comment number 15.

    "The system as it stands is profoundly progressive: before taxes and benefits, the top fifth of household earned £73,800 a year in 2008-9, fifteen times more than the poorest fifth, who earned, on average just £5,000. After taxes and benefits, the richest earn only four times more than the poorest, on average: net earnings at the top fall to £53,900, whereas the income of the bottom fifth goes up to £13,600."

    I think it is worth pointing out that the ONS data isn't just talking about taxes and cash benefits. It is also including "benfits in kind" - ie the estimated value to each of us of things like the NHS and State Education. If you *just* look at the effects of Tax and Cash Benefits, the system is no-where near so progressive (highest 20% on £49k and lowest 20% on £7k). So it's Government spending that is making the big difference not the benefit system.

    It's also made clear in the report just how regressive indirect taxes such as VAT are - with the poorest 20% losing a much higher proportion of the income on indirect taxes than the richest 20%.

  • Comment number 16.

    Judging by the waistline of many parents at my local school the child is the last place this benefit is spent.

    I say Scrap child benefit to all parents and give them free uniforms and school meals.

  • Comment number 17.

    Thought: Could we (1) throw away entirely the ghastly business of Income Tax with its myriad rules and intrusiveness (2) issue to every household a minimum amount needed to cover true essentials and which would perform the role of old age pension, unemployment pay etc and cancel those special payments (3) increase (double? triple?) VAT to compensate? This would remove the unfair differences in which people earning the same gross salary get differing amounts of take-home pay, remove the burden from employers of dealing with Income Tax, leave businesses with a mechanism they already have for handling VAT (simply changing the %age and so a few minutes' effort). Yes; goods cost more but (2) would reflect that. Govt bureaucracy and its cost would be reduced and the whole business of collecting revenue to pay for state-provided services (roads, defence, NHS etc) would be simplified. Those who enthuse over making higher earners pay more tax should be satisfied, for those higher earners spend more and so contribute more via VAT. This leaves little scope for the politics of envy, so beloved by Labour and its shirking classes and could give us a rather nicer society.

  • Comment number 18.

    "Now those benefits include state pensions"

    Do you mind? I worked 40 years for my state pension for which I paid, not tax but national insurance, so that I would have it in my old age. It is not a benefit but something I have earned.

  • Comment number 19.

    My goodness! An hour and one half ago I sent in a two line complaint about the time taken to moderate, and about the fact that it exists at all. There are nine others in the queue ahead of me also awaiting moderation! Wow will Britain really manage to extricate itself from the mess.

  • Comment number 20.

    My combined income is circa £58,000 and I can assure you that this after income tax /NI, paymement of all household expenses, mortgages, stealth taxes etc there is not a lot left as disposable income. Take away the £42 child tax benefit and tax credit of something similar will be a hardship. The upshot is that my disposable income will be reduced, reducing my purchasing power on say local services, restaurants, shops etc. Oh by the way, and very, very importantly I am not Middle Class!

  • Comment number 21.

    I have a vested interest in that I am a pensioner and I do draw the basic state pension.

    I find it hard to think of a reason that pensioners should get a higher personal allowance than anybody else. I would see myself as typical of many pensioners. No huge income. Some savings - but crucially my mortgage is paid off. We get a winter fuel allowance - which is derisory when set against the cost of heating - but I have invested heavily in insulating my house. So, yes, freeze the pensioner's personal allowance till every body else catches up.


    I am reluctant to see child benefit means tested. It does get paid direct to the mother tax free. The father may earn £200,000 a year, but that doesn't mean that he gives the mother sufficient money to feed and clothe her children. In that income bracket, there is a strong probability that his income goes on booze, fast cars and a mistress.

    Other pillars of middle class welfare can be slashed, but child benefit cuts could cause massive damage to the next generation.

    But the bottom line is this, Stephanie. The government is short (ie income less than expenditure) by £2500 per person. Unthinkable though it sounds, in our modest household that means we will have to be £5,000 a year worse off or we go the way of Greece.

    Economic revival may reduce this burden as people get off the dole and businesses pay more in corporation tax. But as you rightly identofy at the end of your piece, we will definitely pay more VAT and I expect the scope of VAT to be broadened.

  • Comment number 22.

    I believe as a society we need to balance: (a) the protection for our low income people and (b) sufficient incentive for people to be motivataed to work and (c) strongly penalising those who wants to sit at home without work

    we need to check our benefit system which has become rotten.

    Govt hands out benefit in 'CASH' - a portion of this cash is used by the benfit receivers to buy alcohol, to have sky, to go to vacation and to go to theatre.

    I think we should minimize the 'CASH' component of the benefit system and go towards "PAYING IN KIND" mehanism of benefit system when people get vouchers for buying strictly grocery, clothes, medicines and utility bils rather than for paying for those items which are not necessary.

    Also this 'Kind' payment system will ensure that the benefit reaches the right entitled person (i.e., the child actually gets proper diet and care, rather than their guardian blowing the money). This "kind payment' system will also less appeal to the small section of the society who are doing benefit cheat and fraud.

    Guys - we go this route - we can save billions and billions!!

  • Comment number 23.

    There you are, the answer is in Stephanies text.......If 44% of £200 billion benefits cost is paid to people who are well off then just stop it now. That's £88 billion by my reckoning !

    Then we get rid of a good ? percentage of backroom staff and pen pushers (or keypad knockers) in the public sector !! Yes we'd have higher unemployment but the Governments Bill would be vastly reduced. We might actually get answers when we have a query to a public body because there'd be no one for them to pass the query to ! Or better still some of them might get proper jobs, or even start Businesses, and begin to contribute to a leaner Economy.

    And beleive it or not I'm left of centre :-)

  • Comment number 24.

    From the DFID website....UK Expenditure on Development (International Development) in 2008/2009 was £7 Billion.

    I know this area, like the NHS has been ring-fenced, my question is.WHY?
    Surely we should be using proportions of this immense figure to lessen the 'Pain', David alluded to the other day.

    I realise we have commitments, but really, we should be putting this country back ontrack first before we start to worry fully about other countries.

  • Comment number 25.

    I agree that we need to means-test benefits, as I cannot see why we are paying huge benefits sums to median-to-well-off people.

    But, beyond this, I'm also concerned that a broad brush approach will hit those in genuine need, whilst protecting those who are not. According to the latest figures, whilst jobseeker allowance is paid to 1.5 million people, the total (of working age) living on benefits is over 5 million. Of the 3.5 million difference, more than 2.5 million are on incapacity benefit. Are there really 2.5 million people unable to work on health grounds? Given Britain's generally good health status, this really seems too hard to believe.

  • Comment number 26.

    Why can prisoners not be forced to sell their houses and possessions to pay for their keep while in jail - like we make the elderly do when they need to go into care?

  • Comment number 27.

    If we are talking of means-testing benefits, let's not forget the state pension.

  • Comment number 28.

    If, as seems likely, some benefits currently paid universally are changed to a means tested variety (and which, ideally, is a sound stance to take in order to attain 'fairness'), then of course there has to be a new or expanded bureaucratic layer aded to the public sector to do the testing, the appeals, etc etc. At a time when the public sector should be shrunk, not enlarged, this has to be a concern. As with so many suggestions for supposed cuts, is anyone actually doing the calculations that would produce the NET cost savings accruing from such a change to means testing, after allowing for additional staff needed to execute the policy? It is the net savings that matter and that should form the basis for any decision making.

  • Comment number 29.

    "There are nine questions which any public spending programme will supposedly have to answer; for those who want to read the list it's on page eight of the Spending Review Framework released by the Treasury on Tuesday. The key ones are "Is this activity essential to meet government priorities?; "does the activity provide substantial economic value?"; and "can the activity be targeted to those most in need"."

    One question that does not appear in the Spending Review Framework list is "will it alleviate or worsen poverty traps". This should be near the top of the list especially if Ian Duncan Smith's aim of getting people back into work is being taken seriously.

    There are currently some appalling poverty traps in the benefits system - e.g. docking unemployment benefit (and other benefits) once someone finds a part time job; not giving Tax Credits unless someone is working at least 30 hours per week (£9000+ even on minumim wage); the subsequent tapering of such tax credits; means testing of benefits; etc, etc. Any attempt at cutting the cost of benefits that makes these poverty traps worse and actually forces people out of work and on to the dole would be hopelessly counterproductive. On the other hand fixing these poverty traps and helping people into work (even if only part-time) would be highly beneficial to the economy.

    Joined up policies needed here....

  • Comment number 30.

    philof 1949 wrote
    (e) consider ending open ended benefits for able bodied people below pension age - say allow receipt for only 6 months a year, or 24 months in any 4 year period; and, last but no means least,

    (f) consider means testing what is by far the biggest single benefit - basic retirement pension.

    e As a single man with £16 in the bank this already happens. No benefit, I pay Council tax, prescription charges and dental charges. Despite being unemployed and having no income other than interest payments charged at 20% I pay more in Taxes than I earn!
    f so why have I paid NI for nearly 40 years. This is not a benefit it is my pension bought and paid for in the same way as a private pension.

  • Comment number 31.

    Good place to start would be payments that are based on income rather than wealth. For example, how can it be that payments such as tax credits, child tax credits and EMA are based on the past years income irrespective of whether or not you are a millionaire? In fact with EMA, the second years payment is based on the first years income with no need to declare what the second years income actually is, even it had risen ten-fold! Point is that these payments are getting to people who don't need the money as well as those that do. How complicated can it be to have another 2 columns to fill in when you do the application, one that shows cash savings and the other that aggregates other assets such as property equity, shareholdings etc? I have a feeling that this would stop payments being made to less deserving causes and save the exchequer a packet into the bargain. Dare one go as far as to suggest the same for State Pensions and winter fuel allowances?

  • Comment number 32.

    Stephanie, you didn't mention the huge administrative burden there is in all this DWP complxity. Figures I have seen suggest that perhaps £50Bn + is the cost of the department to run the 50+ benefits with £145Bn actually delivered. Given that the OAP is nearly half what is actually paid out and which is cheap to run it's apparent that some of these benefits probably cost more to administer than they deliver. It seems likely that simplification to 25 benefits could save about £15Bn without cutting the total actually delivered.

  • Comment number 33.

    "thatmcgrath" doesn't seem to be interested in the subject to hand only in complaining about moderation (or "Censorship" as he calls it) Bet he/she doesn't like peodophiles, murderers or rapists being DNA tested, or caught out by CCTV cameras as well !!

  • Comment number 34.

    Come on people there is no point in pretending the world is other than it is.
    #2 Jeff there is no national insurance fund that contributions go into and benefits are paid out of. There is a small and reducing amount of benefits which are non means tested and you get if you have paid enough NI. But the employee and employer contributions go into the general taxation and the benefits are paid out of general taxation. But the inputs do not relate to the outputs. NI is not an insurance its simply a payroll tax.
    #5 We do not pay overseas aid purely out of the goodness of our heart. Its a means of influencing other countries to do things we want or need them to do. It is a lot easier to get the police interested in finding lost tourists if you have trained some of their senior officers at Hendon. It is probably better to eliminate a contagious desease in Africa by innoculation than to wait for it to arrive here with the next wave of illegal immigrants. The best way to reduce the amount of opium poppies being grown in a country may be to provide aid to set up the infrastructure to grow strawberries for sainsburys. Indeed sometimes, when you need that base for some covert operations or overflying rights for your planes. you may not always be in a position to question if a mercedes benz car is the best thing for distributing agricultural supplies in the bush.
    Believe you me if we stop being a responsible world citizen we will find a lot of discussions with other countries begining and ending with the words "We Sympathise with your problem ambassadour but we are a poor country with many demands on our limited resources". They are right we can't expect them to be concerned with our problems if we don't help them with theirs.

  • Comment number 35.

    Cuts ? Higher unemployment. Who are affected not the rich not mp's, not celebs, not footballers, not 6 fig council bosses, not nhs bosses. The 'rich' have created the problem, bankers and the rest, let them pay the debt.
    Why do the top make the mistakes and the 'bottom' suffer for it.
    The problem is what top earners are earning, governments seem affraid to hit them. Make the hit global then they can't go anywhere and hide.
    We haven't heard from Sir Freddy recently. Has he gone into hiding?

  • Comment number 36.

    What do we cut - and who would it hit?

    I've been listening to 'two brains' on student fees and grants - this is really a form of complex simultaneous contributory benefit payment.

    The sums looked like this students 1.5 Million fees that the student pays 3250 fees that the Government pays (the benefit payment!) 7500 so each student costs 10250 a year to teach(!).

    Quite obviously this situation does neither suit the student nor the Government.

    So looking at alternatives:

    the present situation cost us 112.5 bn (out of a total cost of 161.25 bn)

    Lets try getting rid of the fees entirely which would suit the students - we could then afford to send just 1.05 million students to university.

    Lets try giving a full living grant to student as well as spaying all their fees - this would be a wonderful thing for students (assuming everyone got a full maintenance grant) then we could afford 0.71 Million students for the same cost as now.

    OK lest make a 20% cut to save some money too so this would result in 0.57 Million students. Just over a third of those who presently go to university!

    Downsides: we would have to close 2/3 rds of universities, university places, university staff, and of course unemployment would rise by a million. But we could afford it, and the student experience would be roughly the same as universities were in their hey-day.

    (I'll post the computations if anyone is interested, but they are fairly simple!)

    This is just an example of the consequences of fiddling with just one benefit - everything has consequences - mainly in raising unemployment!

  • Comment number 37.

    #36 continued

    Oh and the housing market might recover a bit quicker because graduates would not be burdened by absurd debt levels!

  • Comment number 38.

    It is inaccurate and misleading to call the State Pension a Benefit. It is not. It is an entitlement paid for by contributions to National Insurance over up to a lifetime of work, and that is how it was defined in the 1911 Act which first set up state pensions separate from the old Poor Law.
    To means test state pensions would be a strong disincentive for anyone to save for their own private pension, unless they were so rich that they could disregard the loss of state pension. Does the Government really want that to happen? You would need to build up a pension pot which would give you a private pension significantly larger than the State Pension, with associated benefits added, housing and council tax benefits. Few people can now do that, with all the expenses of living and raising a family taking priority.
    Geoff

  • Comment number 39.

    @10 "...Yet I pay £thousands in tax, that the rich can treat as voluntary, simply because I can't afford an accountant."

    Surely if you think an Accountant can save you £thousands, it would be worth spending a little of that on an Accountant's fees?

  • Comment number 40.

    I think we are making this too complicated. We need to reduce government spending and it is going to effect all of us in some way or another. Rather than cherry pick or means test benefits (remember the reason we stopped means testing was because it was too expensive to administer) lets just cut all benefits by a percentage amount. I would suggest something between 5 & 10%

  • Comment number 41.

    At the expense of seeming pedantic I think the verb `earn' has been inappropriately used in the blog. If we all earned our income this country would be an exceedingly productive place.

    The welfare system in Britain has been used as a means not to redistribute wealth on the principle of equality but on the basis of buying votes from interest groups. This has had the affect of penalising many single people on low wages who are just as hard-working as families.

    We are now in the situation where the entire take from income tax is less than the total welfare spend. This is just silly and needs to stop.

    The tax and welfare system needs major reform. The proposal by the coalition to take people earning less than GBP 10,000 per annum is a sound proposal. I don't think it goes far enough but it is nice to see some sense finally coming from the political class.

    Sure, there are going to be winners and losers. I expect to lose my Winter Fuel Allowance which has been much appreciated since I turned sixty. At the moment I don't need it so the money would be better spent on the halt and the lame but there will come a time in the not too distant future when such would be welcome.

    I think we need to get back to a principled welfare that sustains those without rather than a process by which people have what they paid in tax given back to them; often incorrectly.

  • Comment number 42.

    2.5m on incapacity benefit - i think as a society we need to come together and change the definition of "incapacity"

    All this sounds like a joke - with money earned by hard work being 'robbed' from honest people!

  • Comment number 43.

    We're all in this together I heard somewhere - presumably the banks that received hundreds of billions pounds of taxpayer's money to keep them from the poverty line will be queuing up to find out how to hand it back then?

    The 'undeserving rich' have been by far the greatest beneficiaries of state largesse to date, I'm sure Mr Cameron will redress this with alacrity however.

  • Comment number 44.

    I would support in principle the slashing of the overseas aid budget, mainly because there is well-documented abuse whereby the agencies charged with administering it are directing it to speculative commercial development rather than developing economic self-sufficiency for the poor, especially in food supplies.

    That abuse arises because the agencies are managed by people on six-figure bonuses for generating 'economic benefit' money using the aid budget. A shopping centre, electronics factory, mineral exploitation or office block generates money and gives them bonuses - feeding the poor or teaching & helping them to feed themselves doesn't.

    Nor should we be pouring taxpayers money into economies whre governments are using funds to run 'national pride' projects - space programmes being a good example.

    There is the argument that overseas aid provides diplomatic and political 'goodwill' but it seems a ridiculously expensive way of 'buying friends'. We should recognise that having lost an empire we cannot buy a new one.

  • Comment number 45.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 46.

    "Govt hands out benefit in 'CASH' - a portion of this cash is used by the benfit receivers to buy alcohol, to have sky, to go to vacation and to go to theatre."

    Are you real?

    Why even bother giving them vouchers? Just reintroduce the Workhouse. I'd go a step further and repeal the Child Labour Laws. Get the blighters up a chimney or down a pit by the age of five. They'd soon appreciate the value of a day's work for a day's pay eh? They might be dead by twenty two but hey, think of the billions we'll save not having to pay 'em a pension.

  • Comment number 47.

    One way of saving money could be to move away from cash based benefits to electronic/token based payments.

    A vast proportion of benefit payments will end up being spent in Supermarkets. If a proportion of benefits were vouchers only redeemable for food/clothes (not booze, fags etc) then the government could get Asda/Tesco to tender for being the voucher provider, and supply them at a discount to the government.

    It must be worth at least 5% to a Supermarket to ensure that the benefits are spent in their store over a competitor, so this could reduce the cost to the government by 5%.

  • Comment number 48.

    "when people get vouchers for buying strictly grocery, clothes, medicines and utility bils rather than for paying for those items which are not necessary."

    And then what we could do is send people round to their houses and count the number of people in the family and count the number of pots, pans, plates, knives, forks, spoons etc and make them sell any surplus cutlery, crockery, furniture and anything else.

    Y'know. Proper means test 'em.

    Go away and read The Road to Wigan Pier by George Orwell. And then resign your job and try a bit of "Love on the Dole" yourself.

  • Comment number 49.

    JOHN FROM HENDON

    Having accused me falsely of having personal debt problems, will you withdraw that false, and in other circumstances, libellous comment

    If you do not it simply tells everyone that you are a 'man' beneath contempt

  • Comment number 50.

    @20 (angrymiddleclass) no one on a salary over 20k needs benefits. If your mortgage is too big, downsize. That'll bring your bills down too. You can't expect the tax payer to fund your lifestyle.

    @35 (c1rt5r) if you're reading this blog, surely you'll sufficiently educated to know that it isn't the rich who've created the problem. The government has been spending more than it receives in tax - mostly because it's been employing too many people (often on fairly low wages).

    @36 (John_from_Hendon) sure, some cuts will mean greater unemployment. But cutting benefits - child benefit, tax credits - from those on, say, over 40k family income (I'd go lower - 25k family income) - won't result in public sector job losses; perhaps fewer lattes sold at Starbucks, and lower employment by them, but that's what austerity means these days: fewer lattes. One of the things we *must* get away from is paying people to have children: if you can't afford another child (on your own income), don't have one.

  • Comment number 51.

    Very fundamentally the entire taxation and benefit system needs to be simplified

    To save money, target resources better, and cut staff numbers

    That alone would save I reckon £40bn each year, every year, and not only that, it would improve the benefit received, thereby ensuring it was pain free

  • Comment number 52.

    If we are really serious about Saving Tax-Payers money, and in the re-distrubition of Wealth then Shut down ALL the Government Departments in Whitehall, and let just a handful of Civil Servants Work from Home,

    Secondly, Sack 500 odd MPs' and spread out the rest across ALL Government Departments [ in Name only ], while also Working Full - Time from Home, upon a Fixed - Income.

    Thirdly, Get rid of the Monachy altogether, and convert ALL of those current Royal Residents into Homes for the Homeless, this should get many from the Cardboard Cities living in Boxes off of our Streets.
    Also convert the House of Commons and Government Building into Rented accommodation for the Homeless.

    Fourth. Tax ALL UK Resident Millionaires at a FIXED Income Tax-Rate of 95%.

    Fifth. Scrap Trident.

    Sixth. Scrap ALL Quangos.

    Seventh. Scrap Overseas Aid.

    Eight. End ALL British involvements in Overseas Wars.

    Ninth. Place ALL Banned Drugs onto Prescription.

    Tenth. Raise ALL Pensions to the same levels across the board in whatever Sector People Work.

    Eleventh. Reduce the State Retirement Age downwards to between 55 - 57 Years of Age to allow our Younger Generation a chance to know what having a Full - Time Job is ALL about.

    And Last but not least, allow Banks to fail and Ban the Payments of ANY Bank - Bonuses, also scrap the TV Licence along with ALL the other methods of levelling any Standing - Charges upon Gas, Electricity and Phone - Line Rental etc: and Cap the fuel-rises in these same Areas.

  • Comment number 53.

    Local government needs to be on the list too, my local city council spends 26% of its budget on "leisure and recreation" and another 20% on "museums and tourism" - only 9% is spent on housing! Priorities!!

  • Comment number 54.

    I'm curious, how do you define poor and how do define rich?

    People throw these terms around like there were confetti and without really understanding what they mean. We're in serious danger of falling apart as a society if we keep judging everything based purely on financial terms.

    I know plenty of people who are poorer than me financially but who are far richer than me in terms of their quality of life because they are simply not prepared to sacrifice quality time with their partners and children, even if it means earning more money.

    I don't see why I should be penalised through higher taxation and less benefits just because I'm prepared to make the sacrifices that others won't.

  • Comment number 55.

    Means testing benefits just creates work for bureaucrats. Why, oh why do we pay for one army of bureaucrats to manage a progressive tax system and then another army of bureaucrats to manage a means testing system.

    What you actually need to do is *increase* child benefit to a sensible amount, scrap tax credits and recover via the tax system - probably by equalising the personal allowance with the NI thresholds. (To be honest a 1p increase in income tax would be a good thing to finally break the 'taboo' that government's can't raise income tax).

  • Comment number 56.

    magnetic_monopole

    can you give us an example of an 'undeserving rich' person?

    And not just based on your opinion but on objective and undeniable facts that they don't deserve their richness.

    The only ones I can think of are Footballers but I'm sure many will argue differently.

    Presumably you have no problems with deserving rich people?

  • Comment number 57.

    Brilliant, as always. One question comes to mind though, do pensioners who have sold their homes to fund living in a residential home get the winter fuel payment? There are implications here. Obviously people go over their figures very carefully before taking such a step and Government changes could very well have an impact. There has been a lot of talk about allowing pensioners to stay in their own homes, but what if they don't want to, what with maintenance, gardening and not least, security. An endless stream of 'strangers' doing these things and providing care may not be to everyones' taste, besides which 'care in the community' might be hard to come by. Regards, etc.

  • Comment number 58.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 59.

    Mortgaged_Mike

    "@20 (angrymiddleclass) no one on a salary over 20k needs benefits. If your mortgage is too big, downsize. That'll bring your bills down too. You can't expect the tax payer to fund your lifestyle."

    Downsize from what? a Flat to a caravan?

    58k doesn't buy much these days or haven't you been keeping up with the property & mortgage market?

  • Comment number 60.

    46. At 6:28pm on 10 Jun 2010, Dearne Valley Lad wrote:
    "Govt hands out benefit in 'CASH' - a portion of this cash is used by the benfit receivers to buy alcohol, to have sky, to go to vacation and to go to theatre."

    Are you real?

    Why even bother giving them vouchers? Just reintroduce the Workhouse. I'd go a step further and repeal the Child Labour Laws. Get the blighters up a chimney or down a pit by the age of five. They'd soon appreciate the value of a day's work for a day's pay eh? They might be dead by twenty two but hey, think of the billions we'll save not having to pay 'em a pension.

    ----------------------------------------------------------------

    I've got a better idea, get rid of ALL the Pen - Pushing Job and put ALL Workers onto Hard Manual Labouring Jobs, then perhap they might realise how easy it really is to get a Sore Back, but then I know how blistfully keen ALL the Office Lovers are in looking forward to this very Hard back-aching Work in ALL Outside Weathers.

    Then after Work you can ALL hold your Heads high, that is if you can still manage to stand up.

  • Comment number 61.

    *34 The fact that politicians never put money aside to make future promises does not negate their obligation to fulfil that promise.
    A Social Security Benefit comes from general taxation and is not a promise for contributions made.
    There is little diference in the relatioship between employee and employer and between employee and government as far as basic state pensio is concerned - it is still the same as a comercial contract.

  • Comment number 62.

    How about the hundreds of £billions of 'benefits' and 'tax credits' given to the banks?

  • Comment number 63.

    I am happy if benefits are cut provided there is a reduction in my National Insurance contribution. If the benefits are means tested and exclude me why should I contribute if it an insurance scheme ? What exactly does national insure you against if you have been prudent and saved your money ? I have already contributed for 42 years.

  • Comment number 64.

    56. At 7:11pm on 10 Jun 2010, I_IS_McCool wrote:
    magnetic_monopole

    can you give us an example of an 'undeserving rich' person?

    And not just based on your opinion but on objective and undeniable facts that they don't deserve their richness.

    The only ones I can think of are Footballers but I'm sure many will argue differently.

    Presumably you have no problems with deserving rich people?

    ----------------------------------------------------------------

    If being Poor was so good for ANYONE, then why would ANYONE want to be Rich deservingly, or otherwise in the First-Place?

  • Comment number 65.

    Steph wrote "
    "What do we cut - and who would it hit? When the comprehensive spending review starts in earnest in a few weeks' time, those two questions are going to be right at the centre of public debate.When the comprehensive spending review starts in earnest in a few weeks' time, those two questions are going to be right at the centre of public debate."

    But hose are not the questions for the spending. In Milton Keynes on Tuesday the Cameroon said:

    'How we deal with these things will affect our economy, our society - indeed our whole way of life,'' he said.

    ''The decisions we make will affect every single person in our country. And the effects of those decisions will stay with us for years, perhaps decades, to come.'

    This is of course 'the change'agenda. The spending review (invented in its current form I think by J Gordon Broon) is aimed to ensure that the strategy of the government is carried out within the resources likely to be available as forecast from the progress of the economy and fiscal policy.

    So it is about the 'effects of decision' .. actually the effects that the government thinks it has a mandate for and wants to bring about. So cuts (dropping policies and practices) and refocusing resources on the achieving the 'desired effects' within what is possible the purpose of the review. It is in no way business as usual with a chop here and a chop there.

    So this issue around benefits and taxes (benefits for taxpayers can be seen as tax reductions for particular groups of the population.) is their purpose and effects within the overall political philosophy of the government cabal... the politburo indeed.

    Cameroon intends a revolution here without a doubt. But above all it is about the outcome this faction of the Tories wantIt is not going to be business as usual (just slightly less!)The constitution empowers government to do this and if too much legislation can be avoided places the executive beyond the reach of Parliament.

    Random consultations are false participation, designed to pretend to 'Invite you to Join the Government of Britian' and gain your good feeling about things.


  • Comment number 66.

    My 'Big Idea' is to end the payment of Child Benefit after the second child.

    I have read that child births will rise from previously circa 585,000 per year to over 700,000 putting huge strains on our child centred services.

    This country appears to completely child centric and ending CHB after the second cild (in about 10 months time - i.e if there is already a bun in the oven!) would start to reduce the numbers over time.
    The benefits would be no means testing of this benefit, less GP, midwifery,hospital effort to ultimately less schools and infrastructure as our population is reduced gently rather than heading towards 70Million.
    Anyone who has three or more children (Cameron/Clegg?) would pay for the children themselves.
    Child Benefit (Family Allowances) only used to be paid for the second child and not the first so there is some precedent to an extent.
    How could anyone complain they need a benefit that would be no longer payable for a person who doesn't exist?

  • Comment number 67.

    Testing, Testing one two....

    Since when did my state pension become a benefit, eh aunti beeb....?

    How come I'm paying your wages then you moderate me.......???????

    Think I'll offshore the lot, tally ho!

  • Comment number 68.

    There is no reason to cut benefits at all. The Structural Deficit is negligable as worst - why - the official estimates are based on how low the Unemployment Rate gets before inflation sets in. This is called NAIRU and is set at about 5%. Most economists use this to calculate the Structural Deficit to be about £80Bn plus. Progressive economists know that the true rate for NAIRU is roughly 2%, not 5%. As a result the Structural Deficit is actually negligable, so no need to cut for this reason.

    More info see: Structural Deficits - the great con job

    No need to cut to pay back government borrowing either as it is nowhere near out of control yet, though it will be under this government, because of the cuts.

  • Comment number 69.

    How come you moderate my perfrectly legitimate post out, yet it took 3 attempts by your incompentent moderators to remove a post containg my email address.....?

    WHy are you moderating people's thoughts / idea's ?

  • Comment number 70.

    Post number 20....thats a good one, you have a combined income of £58000 per year and you think you should get child benefit LOL, I assume that as you have a combined income, you are taking advantage of two personal tax allowances too, that means that at LEAST 12,000 of your household income is free of tax
    My situation is that I earn £19,000 per anum, have a wife and two teenage sons and my income is the only money coming in to the house, I also cant afford any form of pension despite being fully aware of the importance of making some provision, I just cant afford it, I am very well qualified but salaries in the private sector are now under such pressure as small companies are struggling for survival, the only reason that I have a job at all is because I am very good at what I do.
    So to be honest my opinion is that nobody on £58,000 per year should get universal benefits....we just cant afford it, I cant even afford to heat my house...we just freeze and put up with it, and I DONT expect any help with my heating bills either, its my problem
    Just out of interest...does all or part of that £58,000 come from employment within the public sector by any chance ?

  • Comment number 71.

    Remember we all have to get old.

  • Comment number 72.

    Come on Mortgaged Mike!

    I'll tell the kids we are moving to some sink estate, lets call it downsizing!

    The only tax payer funding my lifestyle is me which I don't have problem with. I do object to the idea that I'm deemed one of the middle classes who have to cough up!

  • Comment number 73.

    66

    It is a fair enough idea, yet will save very little money I am afraid

  • Comment number 74.

    LondonHarris wrote:

    "If being Poor was so good for ANYONE, then why would ANYONE want to be Rich deservingly, or otherwise in the First-Place?"

    I don't understand your point.

    I wasn't trying to compare rich versus poor, I was merely suggesting that people should think more carefully before they start throwing words around like undeserving and deserving.

    The same arguement could equally apply to undeserving versus deserving poor people.

    But to answer your point:

    Firstly define poor? Are we talking Ethiopian Poor or UK Council Estate Poor?

    Secondly, I know plenty of people who are 'poor' and glad for it, as they don't want the responsibilies that inevitably go with earning more money.

  • Comment number 75.

    68. At 8:03pm on 10 Jun 2010, Charles Jurcich wrote:
    There is no reason to cut benefits at all. The Structural Deficit is negligable as worst - why - the official estimates are based on how low the Unemployment Rate gets before inflation sets in. This is called NAIRU and is set at about 5%. Most economists use this to calculate the Structural Deficit to be about £80Bn plus. Progressive economists know that the true rate for NAIRU is roughly 2%, not 5%. As a result the Structural Deficit is actually negligable, so no need to cut for this reason.

    More info see: Structural Deficits - the great con job

    No need to cut to pay back government borrowing either as it is nowhere near out of control yet, though it will be under this government, because of the cuts.


    Utter fantasy

  • Comment number 76.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 77.

    Cominsenz

    What planet are you living on?

    We have an ageing population in this country which is why our pensions are knackered. We need more children to be born to ultimately pay for those pensions.

    The population growth that you are talking about has not come from child births, it has come from unchecked immigration.

  • Comment number 78.

    I notice no mention or accounting of the biggest wealth transfer of them all, social housing.

    Having 1/5 of households benefitting from life long charity rent because for a few months many years ago they had a genuine housing need is bizarre.

    I pay my taxes to help the poor, not to provide high quality charity housing to those with middle class incomes.

    That politicians lack the courage to allow the building of adequate family homes with gardens is not my fault, and i certainly don't want to pay for it.

  • Comment number 79.

    What a surprise to discover that the Boy George doesn't want to upset his new friends in Fleet Street. If successive governments feel constrained to do the right thing for ALL members of society by a few whisky sodden hacks who have sold their souls for thirty pieces of silver then God help us.

    A free press is an essential part of a healthy democracy, but just how free is the press with editorial power concentrated in so few hands. Reading Stephanie's remarks above clearly indicates her view - that the press (and the wider visual media) does not serve the interests of the people as a whole.

    Are we now to believe that Dave, Nick, Boy George et al have to clear their agendas for government with people like "the dirty digger" (a quasi Aussie/US citizen depending on which rag he is subverting), then what was the point of voting.

    However, given that Dave's only work experience was in PR, he must feel right at home peddling the sort of nonsense we read in the poodle Tory press. The most imortant question is - "is he fit for purpose" - when it comes to the monumentally important task of steering the country through its biggest crisis in 65 years, or is he all surface gloss and pointless preening. Certainly, President Obama was heard to comment, after meeting Dave for the first time, "what a lightweight".

    So Dave, do you have a mind of your own, and do you care about society (as opposed to the Tory shibboleth that is Mrs Thatcher) as a whole, or are you and your team of public school chums just a bunch of spolit brats who think running the country might be "a bit of fun - something to keep you occupied for a while"?

  • Comment number 80.

    We are in a fascinating position. The solution is simple - spend £20Bn less than we take in taxation until the national ebt is repaid. This will mean cutting current spending by £180Bn per year. The real issue issue is that the vast majority of people think that someone else should pay and that it is not their issue issue.

    Some great posts here and we had to wait all the way to 30 odd before we got the first "soak the rich" comment. The problem with that is there aren't enough of them and they tend to leave.

    The real issue as I see it is that we have confused "right" with "privileges". I was reading yesterday a comment by a woman on "jobseekers allowance" (what a misnomer - she had quit her last job) and 2 children complaining that she had to choose between food and putting petrol in the car. How can people without jobs expect to have cars? From my perspective benefits should b there to stop people starving or freezing to death - not to maintain any kind of "lifestyle".

    We need to make work worth it. It is immoral to create a system where the working poor feel like mugs for working whilst they see people on benefits enjoy things that they cannot. I would end income tax and the minimum wage, allowing people to keep what they have earned. The minimum wage creates unemployment and underemployment, protecting those in work from the unemployed. This minimum wage is then taxed. You really could not make it up.

    Pensions- the state pension is a ponzi scheme, plain and simple. The term National Insurance should be scrapped as it fraudulent. We are not insured against anything - current contributors are paying for current recipients and as there is a demographic timebomb about the explode, it will go pop. I am over 20 years aways from state retirements and expect it to be bust by them. This is another example of individuals confusing "rights" with "privileges". Bernie Madoff promised people great returns - he didn't pay out either.

  • Comment number 81.

    Mangizmo,

    TBH I have no idea how you can provide for your family on your stated income.

    In answer to your question, 80% of the combined income is mine from the private sector -never been employed in the public.

  • Comment number 82.

    70 - You are exactly the kind of person who suffers the most from the current system. You pay income tax to people who are not prepared to take low paid work as it is beneath them. Good luck to you.

  • Comment number 83.

    The situation in the UK is the fact we have a benefits culture, its so easy for the benefits system to give out money , i grant you there are genunie cases yes! but would it not be better for the benfits agency rather than give out money to claiments , maybe they should introduce a voucher system for those on benefits for example, food, clothing,vouchers , a type of credit card style voucher, that the benefits syetm can credit each week or month however it may work !!!so the benfits agency knows that the money is being spent food clothing etc we live in a nation that has a drink and drug problems ,we hear it on the news all the time ,we see supposedly grown up adults spending their benefits on drinks/drugs with no respect for the true purpose for what it is supposed to be for, it has to change

  • Comment number 84.

    Someone needs to explain to me how the middle classes receive so many cash benefits. Other than £20 child benefit, which i would agree we don't really need, what else would a family with joint income of £55000 receive?

    Also, clarify what constitutes a poor income? Then we can put some context to your statement that "nearly half of all cash benefits go to households that are not poor in income terms.".

  • Comment number 85.

  • Comment number 86.

    Stephanie, your figures seem to imply there are 13 million people aged over 80 in the UK - or have I misread?

  • Comment number 87.

    I do think there is a link between the daft rise in residential property value and increase in consumer spending since the introduction of Child and Working Tax credits. You've only got to look down any surburban street to see how many families run two newish cars; and looking through windows it is not hard to miss the mahousive televisions adorning the walls, decorated in the latest tat from the large DIY retailers.

    I appreciate that the cheap money era has stoked house prices, but I also suspect that Tax Credits have a played a part in stoking the fire.

    Don't get me wrong, I'm neutral about Tax Credits, but I am interested to speculate what effects cutting/reducing these benefits will have on the economy. With less cash in people's pockets, it's going to hit the non essentials, like for example, the fast food retailers, mobile phone shops and DIY stores etc...a resounding yes, I hear many of you say.

    But will some good come out of this - will it encourage some individuals to realise that the only way you can get money in this life is by working for it (other than stealing it or winning the jackpot)! Will it encourage people to save money, rather than spend, spend spend?

  • Comment number 88.

    @20 / 72 (angrymiddleclass) - are you seriously maintaining that 58k income is not middle class? You're trying to tell me it's working class?

    If I read this page (http://www.statistics.gov.uk/cci/nugget.asp?id=334%29 correctly, 80% of the country earn less that you. If that's a joint income from two earners, then that comes own to 60% of the country.

    If we're going to get anywhere with this deficit, anyone earning over 20k needs to take a hit - and some below that.

  • Comment number 89.

    78 Sizzler - spot on, both housing benefit an social housing are so widely abused that in my view it would be better to have flat benefit allowances and allow the market to settle on private rents. I heard a girl on the bus yesterday gabbling into her mobile to a mate, advising her that she should not stop at 4 kids, because you have to get to 5 to get the extra bedroom (this is not an urban myth)

  • Comment number 90.

    #49. Kevinb wrote:

    "JOHN FROM HENDON

    Having accused me falsely of having personal debt problems, will you withdraw that false, and in other circumstances, libellous comment

    If you do not it simply tells everyone that you are a 'man' beneath contempt"

    I did not say any such thing - try actually reading what is written.

    Your one lines stupidities that maintain that all debts must be forgiven might quite reasonably lead any rational and independent observer that you have personal debt problems related to negative equity or you are completely, irrationally and stupidly maintaining that people who borrow money don't need to pay it back. You are encouraging people to fraudulently believe that they do not have to pay their debts back in that you maintain that borrowing must be forgiven to get out of the crisis we are in.

    Let me first ask you this very simple question, so simple even you should be able to understand it!

    1. Do borrowers need to meet their legal obligations to repay their debts? (A simple yes or no only.)

    then : Assuming your answer is yes and you do not encourage fraudulent default - which is against the criminal law.

    Explain why you persistently encourage borrower to believe that they will not have to repay their debts?

  • Comment number 91.

    Today, around lunchtime, I drove past one of the bigger music festivals that is about to start in the Midlands and what an experiance. The streets were awash with young people carrying cases and cases of beer. I wonder how many of these fine examples of todays youth are students, unemployed and general parasites on the rest of society.

    Where do they get all the money from? and why aren't they at work or trying to find work. Actually I think I have just answered my own question cos judging from some of the appearances beer money had taken precedent over soap money, razor money, shampoo money and money for any kind of personal hygeine product

  • Comment number 92.

    79

    No idea what you are trying to say at all

    Try again

  • Comment number 93.

    #90 addendum.

    Kevinb, you will see that the 'you' described in my posting was the general you and no even in response to a posting from you.

    You (and this 'you' is you Kevinb) are acting like a raving lunatic!

    You fancifully write garbage and the nonsense that you write is just gibberish. You have demonstrated time and time again that you understanding of the law relating to finance is almost non-existent.

  • Comment number 94.

    Angrymiddleclass wrote

    TBH I have no idea how you can provide for your family on your stated income.

    ---

    Seemingly you personally are in the top 20% of earners in the country - and most of those below you seem to manage to provide ok?

  • Comment number 95.

    #36

    decimal point error in the line

    "the present situation cost us 112.5 bn (out of a total cost of 161.25 bn)"

    should read

    the present situation cost us 11.25 bn (out of a total cost of 16.25 bn)

    sorry

    It does not change the conslusions or the arguements.

  • Comment number 96.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 97.

    truths33k3r

    You are totally right and this confusion between rights and priviledges is at the heart of wider problems in our society.

    There are many people out there who seem to think that just because they are born they have a God given right to whatever they want without having to work hard for it, in fact they will do anything but. This will include anything from running up rediculous debt to out and out theft, anything but earn the money first.

    God help us

  • Comment number 98.

    KevinB

    On Mervyn King

    You are fiercly and abusively protective of Mervyn King, why?

    You never address the issues and the analaysis of his actions and inactions, why?

    Are you being paid by the Bank of England or associated with the Bank of England or the Treasury?

    Let me ask you one final simple question:

    If someone can be shown to have known that their actions created a gigantic problem is it right and proper that we should let them off of the hook?

  • Comment number 99.

    angrymiddleclass
    To be honest, its tough, but we are happy enough, we just have to live within our means, we cant afford holidays (although we live in a beautiful area so that helps), I have personally never flown in an aircraft and I am 48 !!, we genuinely can not afford to heat the house in winter BUT I have no debts because if I cant afford it...we dont have it...simple, my take home pay is £1200 per month, no overtime or bonus, no pension, no health insurance, no company car...nothing, and that has to support a family of four , my two sons eat like a horses and I recieve and expect no state help whatever
    I dont mean to be harsh, but what I do not consider fair, is the idea that you should recieve child benefit so that you can continue to frequent the local resteraunts....it is questionable whether even I should get child benefit

  • Comment number 100.

    This comment was removed because the moderators found it broke the house rules. Explain.

 

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