Fun Online Poll Results, the EHRC and the Royal Family

Turnout was quite low in last week's Fun Online Poll, but thanks to the 51 people who took part. The responses to the question "What should income-related benefit withdrawal try to achieve?" were as follows:

Minimise the cost of welfare - 47% (1)
Show people they can't get something for nothing - 24% (2)
Create jobs for bureaucrats and snoopers (incl. those who voted 'other' and specified something similar) - 22%
Encourage claimants to work cash-in-hand - 6%
Discourage claimants from working - 2%

1) I'm glad that nearly half voted for "Minimise the cost of welfare". Remember that people on welfare (including Tax Credits) lose between 70p and £1 in tax and benefits withdrawal for every £1 they earn gross (to which we add the unascertainable cost of all the form-filling and hassle). I see income-based benefits withdrawal as a kind of income tax on welfare claimants.

We know from the Laffer Curve that the revenue-maximising income tax rate is probably a lot less than 70% (let alone 100%), so if we want to collect as much 'tax' from welfare claimants as possible, surely it must make sense to see what happens if we reduce the withdrawal rate to the same as the basic rate of tax (which means, in practice, they would continue to be paid benefit and be given a BR tax code for PAYE if they work) with an extra 19% deduction for social tenants, instead of charging them below-market rents and then making them claim Housing Benefit if they can't even afford that (which could be collected quite simply by giving them a K-code for PAYE).

2) I simply do not understand why so many voted for "Show them they can't get something for nothing". The basic rate of benefits must surely be set at just above the breadline, i.e. £64.30 for Income Support seems 'about right'. Under current rules, a welfare claimant who finds low paid, temporary or part time work is barely better off if he accepts it, but with the withdrawal rate set at 31% or 50%, it would be easy to double or treble your net income. Isn't that far more likely to 'send a message' that work is the best route out of poverty?

I accept that 31% or 50% are probably not the 'cost minimising' rates of benefit withdrawal (it's probably more like 60%), but surely it is better to pitch them on the low side, as this makes work more worthwhile, with all round wider benefits to society and to employers, which are difficult to quantify but no doubt significant.
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OK.

Having found out that the Equalities and Human Rights Commission cost the taxpayer £51 million in its first two years of existence, roughly as much as The Royal Family (which costs either £7.9 million a year or £41.5 million a year, depending on how you interpret this article), so that's this week's Fun Online Poll: "Who is better value for taxpayers' money: The Royal Family or the Equalities and Human Rights Commission?"

Vote here or use the widget in the sidebar.