Nobody likes paying tax. Though for most people and businesses, it’s an unavoidable and legal, and arguably social and moral, responsibility. However, there is an increasing misconception about the use of taxes and a disconnect in how wider society benefits from tax revenue as a whole. Part of this is derived from the flawed and ignorant perception that taxes fund public services that bear no relevance on people’s day-to-day lives, and welfare that merely supports the “lazy” and “workshy”. As a result, for many, there’s resentment in paying tax without the realisation that it benefits everyone.
The reality is that tax isn’t universally realised as a contribution to society. That’s resulted in an ignorant belief where some people feel they aren’t seeing much for their taxes, while others who don’t pay tax, do.
Public services aren’t just for the poor, they’re for the public. And that means everyone. Yet the provision of public services is often ignored by those who would argue they see no personal “return” on their taxes. In fact, many are quick to take for granted the universal access to state education, healthcare and other vital public services that at some point everyone has benefited from. Moreover, that stance is often heightened when considering local authorities and the services they provide.
Council tax represents only a fraction of the money local authorities have to spend, with the remainder coming from central government grants and councils’ revenue streams such as rent, fees and other charges. But despite their low profile in contrast to central government, local authorities have a huge remit in providing public services that affect people’s day-to-day lives.
Children’s services, education, environmental services, licensing and planning are just some of the services provided by local authorities that have a direct impact on everyone. Nonetheless, some people would inexplicably argue that they see little benefit from local authorities or from paying council tax.
Part of these attitudes stem from the government’s socially divisive approach in demonising the public sector and, on a second front, those that rely on the welfare system. On the latter especially, some people have sadly taken the bait and furthered the misconceptions around welfare, who receives it and the circumstances that led them to be in that position. Unsurprisingly, that’s just increased some people’s resentment in paying tax.
Contrary to popular belief, not everyone in receipt of benefits is a teenage single mother who repeatedly fails to practice birth control or any other Daily Mail-esque twisted and deeply offensive stereotype. Furthermore, welfare isn’t intended as a subsidy for the lazy, it’s for the vulnerable in maintaining a fairer society.
Aside from pensioners, many people receiving benefits are actually working but on low wages that don’t enable a basic standard of living. The disabled are also eligible for benefits to assist with extra costs caused by their disability. Broadly speaking, most benefit claimants are simply victims of wider social problems such as high unemployment and unaffordable housing. Do they not deserve the support of a system that is contributed to by the taxes of those that are more fortunate?
The welfare reform being introduced targets a section of society that has become the go-to scapegoat. At the same time, the 50p tax rate is also being abolished for high earners – no wonder there’s a growing sentiment of ‘them and us’.
Reform of some kind is necessary to ensure the vulnerable, not the minority who abuse the system, have access to benefits while reducing a rising and untenable welfare bill. I’m not exactly a benefit sympathiser as where the system has been abused or unnecessarily depended upon, I’ve seen the negative impact it can have on communities and local economies for generations. Yet this group actually counts for the minority and there’s a distinct lack of empathy for those that are genuine claimants and a disregard for the situation that led them to needing support.
The bedroom tax for example will see recipients of housing benefit who are deemed to have a spare room in social housing losing 14% of their housing benefit. If they’re deemed to have two or more spare rooms, they’ll lose 25% of their housing benefit. The government claims this will result in a more efficient use of social housing and help to reduce the housing benefit bill which I agree is very much needed. But many tenants will be penalised for additional rooms they need for medical reasons or other valid circumstances that have been overlooked by the government. The state of social housing isn’t their fault yet they’re being made to pay the price for it.
Another often ignored reason for the rising housing benefit bill is the number of largely middle class buy-to-let homeowners. Many will rent to low-income or unemployed tenants in receipt of housing benefit, knowing the rent will be met by the state. They’ll therefore charge high rents with no moral consideration. Seemingly, when it’s the middle classes who are the culprits of being a drain on welfare, the vitriol from the government and others isn’t quite the same.
Given the perception of welfare and public services, some view their taxes as almost being a penalty for hard work that merely gets diverted to the undeserving. The bigger picture of the social gains provided by taxes gets lost in the diatribe. Consequently, these attitudes gradually erode any sense of social cohesiveness.
Taxes aren’t an exclusive subsidy for the low paid or unemployed, nor do they fund public services that only benefit the “have-nots”. The ignorance and aloofness that leads to this misconception is hugely flawed and only serves to perpetuate a fallacy that is increasingly damaging to society.
Saturday, 6 April 2013
Sunday, 29 January 2012
The right principles but a flawed approach – why the government’s stance towards the proposed benefit cap needs a rethink
The proposed benefit cap of £26,000 a year (or £500 a week) is arguably the most prominent proposal in the government’s Welfare Reform Bill. The cap is intended to ensure anyone on benefits does not earn more than the average gross earnings of working families and it has been well received based on public opinion. Unsurprisingly, the sentiments of some right-wing politicians and media (in suggesting that most people on benefits are merely abusing the system) have gone some way to reinforce that.
There are of course people on benefits who knowingly abuse the welfare system and have made a lifestyle choice not to work. And the more generous the welfare system is, the less likely they are to have an incentive to work. One aim of the government’s proposed benefit cap is to address this by eradicating the perception for some that benefits are an alternative to employment. But the government has failed to acknowledge that these attitudes do not account for everyone on benefits. Indeed, the government’s one-size-fits-all approach is the fundamental failure of the proposed reform.
The reform also doesn’t take account of the respective circumstances of someone on benefits, particularly those that have not been subject to long term unemployment and families with children. On the latter, the Bill was defeated in the House of Lords following an amendment that child benefit be excluded from the cap.
In the current economic climate, many unemployed people have been subject to redundancies in both the private and public sector. Being on benefits for them is not a choice but a necessity due to circumstance. However, the rhetoric of the Bill appears to ignore this and effectively plays the employed against the unemployed in galvanising public support for the reform. The government has also neglected to fully consider the impact of the cap on those recently made unemployed.
Take a family living in modest privately rented accommodation where the main earners have become unemployed. Under the proposals for the benefit cap, their housing benefit may not meet their rent payments and consequently they could be compelled to move to cheaper accommodation and possibly social housing. Yet social housing is subject to waiting lists and local authorities have increasingly sold their housing stock in recent years. Compounded by the legacy of the Right to Buy scheme, social housing stock surely cannot meet the demands of an increasing number of people that may require it. Alas, the government has seemingly disregarded this in formulating its policy.
The government has argued that people should not live in accommodation beyond their means and taken in isolation, they’re right. But a family whose financial situation has deteriorated in a short time, and due to no fault of their own, is not the same as the families the Daily Mail like to report on.
There isn’t an apparent solution to this but the government doesn’t appear to have given it much consideration. Some have accused the government of “social cleansing” in forcing those on benefits to move home, particularly in London where rents are higher than elsewhere in the country. This could lead to further ghettoisation of the “haves” and the “have-nots” – something I doubt some members of the coalition government would be averse to given their own social class and views on society.
The lack of consideration for children in the Bill is a further error on the government’s part.
The government has argued that making child benefit exempt from the benefit cap would encourage some people to have more children to receive more in benefits. Regrettably, for some that is perhaps true. But the children themselves should not suffer for their parents’ poor choices. What the government fails to acknowledge is that it cannot always legislate to address attitudes in some sections of society. Therefore there will always be irresponsible people that choose to procreate without the means to responsibly support a child.
At present, child benefit is a universal benefit and should not be considered in the context of welfare payments. Furthermore, is it right that parents and their children be subject to reduced benefits if they suddenly become unemployed? Surely helping people in their time of need is the crux of the welfare system. Yet the Bill goes against this very principle.
In many respects, the proposed benefit cap may appear well intentioned and it is right that no one is better off on benefits than they would be in employment. Indeed, for many, £500 a week in benefits is frankly too generous. The cap aims to ensure deliberate unemployment is not rewarded or seen as a viable alternative to working. But despite its aims, it’s not been fully thought out and clearly lacks pragmatism.
The benefit cap needs to be compatible with the principles of a fairer and pragmatic system. But if the government cannot achieve this, the proposed reform will not differ from attempts of previous governments that have tried and failed to overhaul the British welfare system.
There are of course people on benefits who knowingly abuse the welfare system and have made a lifestyle choice not to work. And the more generous the welfare system is, the less likely they are to have an incentive to work. One aim of the government’s proposed benefit cap is to address this by eradicating the perception for some that benefits are an alternative to employment. But the government has failed to acknowledge that these attitudes do not account for everyone on benefits. Indeed, the government’s one-size-fits-all approach is the fundamental failure of the proposed reform.
The reform also doesn’t take account of the respective circumstances of someone on benefits, particularly those that have not been subject to long term unemployment and families with children. On the latter, the Bill was defeated in the House of Lords following an amendment that child benefit be excluded from the cap.
In the current economic climate, many unemployed people have been subject to redundancies in both the private and public sector. Being on benefits for them is not a choice but a necessity due to circumstance. However, the rhetoric of the Bill appears to ignore this and effectively plays the employed against the unemployed in galvanising public support for the reform. The government has also neglected to fully consider the impact of the cap on those recently made unemployed.
Take a family living in modest privately rented accommodation where the main earners have become unemployed. Under the proposals for the benefit cap, their housing benefit may not meet their rent payments and consequently they could be compelled to move to cheaper accommodation and possibly social housing. Yet social housing is subject to waiting lists and local authorities have increasingly sold their housing stock in recent years. Compounded by the legacy of the Right to Buy scheme, social housing stock surely cannot meet the demands of an increasing number of people that may require it. Alas, the government has seemingly disregarded this in formulating its policy.
The government has argued that people should not live in accommodation beyond their means and taken in isolation, they’re right. But a family whose financial situation has deteriorated in a short time, and due to no fault of their own, is not the same as the families the Daily Mail like to report on.
There isn’t an apparent solution to this but the government doesn’t appear to have given it much consideration. Some have accused the government of “social cleansing” in forcing those on benefits to move home, particularly in London where rents are higher than elsewhere in the country. This could lead to further ghettoisation of the “haves” and the “have-nots” – something I doubt some members of the coalition government would be averse to given their own social class and views on society.
The lack of consideration for children in the Bill is a further error on the government’s part.
The government has argued that making child benefit exempt from the benefit cap would encourage some people to have more children to receive more in benefits. Regrettably, for some that is perhaps true. But the children themselves should not suffer for their parents’ poor choices. What the government fails to acknowledge is that it cannot always legislate to address attitudes in some sections of society. Therefore there will always be irresponsible people that choose to procreate without the means to responsibly support a child.
At present, child benefit is a universal benefit and should not be considered in the context of welfare payments. Furthermore, is it right that parents and their children be subject to reduced benefits if they suddenly become unemployed? Surely helping people in their time of need is the crux of the welfare system. Yet the Bill goes against this very principle.
In many respects, the proposed benefit cap may appear well intentioned and it is right that no one is better off on benefits than they would be in employment. Indeed, for many, £500 a week in benefits is frankly too generous. The cap aims to ensure deliberate unemployment is not rewarded or seen as a viable alternative to working. But despite its aims, it’s not been fully thought out and clearly lacks pragmatism.
The benefit cap needs to be compatible with the principles of a fairer and pragmatic system. But if the government cannot achieve this, the proposed reform will not differ from attempts of previous governments that have tried and failed to overhaul the British welfare system.
Subscribe to:
Posts (Atom)
©
iamalaw