Promises The Sun.
A couple of good ideas here, but it's only scratching at the problem. Bearing in mind that Nulab are going to be out for good in two years' time, we can ignore the idea about the present gummint "ending Incapacity Benefit by 2013". When the Tories get in, the economy will, as like as not, be in a real mess. IB was abused by the self-same Tories to mask true unemployment back in the 1980s (the number of claimants increased from 600,000 in 1979 to about 2.6 million in 1997, it hasn't changed much since then), what's there to say they won't continue with this fraud?
Secondly, anything James 'Photoshop' Purnell says is to be taken with a pinch of salt. Or preferably not at all.
What's the MW policy on this?
1. Double the personal allowance.
2. Reduce income-means testing to no more than the basic rate of tax*. For millions of employees, actual and potential, who currently face marginal deduction rates of 70%** to 100%, this would on average treble their effective hourly pay - which ought to get half (?) of the five million benefit claimants willing to work again.
But is it enough to make work worthwhile? There still have to be jobs for them, so let's continue with MW's business tax policies ...
3. Scrap VAT, first on services and ultimately replace VAT on new goods with a lower rate to cover refuse collection costs. Assuming that the price-elasticity of everything is roughly unity (I don't know what else to assume), this would increase output by about 15% by volume - there'd be at least the same amount of money to spend on goods and services that are 15% cheaper. The private sector employs about 22 million people, that's potentially 3 million more vacancies.
4. Scrap Employer's NI (which would be more or less fiscally neutral, and if not, who cares? There is plenty of corporate welfare we can scrap). This would increase the number of people that businesses otherwise want to employ by at least 10%.
Steps 3 and 4 will reinforce each other, heck knows what the overall increase in employment will be, but surely we'd have something approaching 'full employment' (whatever that is). Assuming that a service business has to make a 20% mark up on salaries to cover overheads and make a profit, the break-even price it would have to charge for £1's worth of gross wages would drop from £1.66 to £1.20!
Finally, if we are to have a welfare system at all, the least-bad system must be a universal, unconditional, non-taxable, non-means tested flat rate cash benefits for all low- and non-earners, regardless of household composition and wealth.
Council Housing & Housing Benefit stick out like a sore thumb here; they will never be universal. Housing Benefit is the benefit that should be replaced with Workfare jobs - surely it is better for the State to give people £90 a week for doing something however marginal the benefit to society than to pay people to sit at home? Once this has sorted itself out for private tenants, then this could be extended to Council Tenants as well, the State would just be a landlord like any other.
* The purists say that there should be no personal allowance at all - everybody should get the CBI and pay the same rate of tax. Details, details.
** Basic rate tax, plus Employee's NI plus Tax Credit withdrawal.
Nicked Bags
5 hours ago
5 comments:
"it is better for the State to give people £90 a week for doing something however marginal the benefit to society that to pay people to sit at home?" Yes, even if it is just plucking ribbons of polythene off hedges.
A good list, except for raising the tax threshold. If you have cbi, you don't need tax relief. Guess I must be a purist, but not as much of one as anticitizenone!
Are you saying you'd make councils charge market rate for rent?
I'd have no housing benefit - CBI would be enough to rent a basic accomodation
Marksany, you are a purist! As the CI booklet to which I linked explains:
"Whilst all citizens would benefit from a more generous [CBI], there would be an equal and opposite pressure against income tax rises to fund it. So two basic variables – the Citizen’s Income level and the income tax rate required to fund it – would be inherently linked and stable."
But I am a pragmatist not a purist.
And an MW led gummint would not 'make' councils do anything. But social housing belongs to The People. So we are all co-owners of it, and I see no reason why it should be let out at below market rents (when I say 'market rent' I mean 'as much as they can get', rather than 'as much as in the private sector', I have no problem if social rents in £ and p are lower than in private sector).
Would only add the social aspect to council housing.
Its loaned. It must be maintained by the council, but damage, neglect must be paid by the tenant.
Gardens must be kept properly / bins emptied, rents paid etc.
otherwise the property is taken away and a dormitory placing in some government owned barracks is offered instead.
Anon, that sort of ties in with this idea.
I like the sound of 'government owned barracks', sort of halfway between social housing and open prison. Somewhere in a field in the middle of nowhere.
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