What a
state we have come to. The government,
in furtherance of a manifesto promise is seeking to reduce, with the long term
aim of eliminating, Working Tax Credits.
These are
effectively subsidies paid to workers, who are not paid sufficient by their
employers. They were invented by Gordon
Brown. Brown was very adept at creating
long fused bombs for successor Chancellors of the Exchequer. In this crazy world of Brownomics, people get
taxed highly and then get some of the tax that they have just paid, refunded to
them.
The
Conservative’s approach has been to increase the starting point when taxes
commence. This was a Liberal Democrat
idea (also pushed by yours truly) however, the Conservatives, with a
strengthening economy have taken this further than the Lib Dems dreamt of.
This surely
is the right way to go. Lift more and
more people out of tax, altogether and therefore make work pay, for those
trapped on welfare. Linking this with a
reasonable National Minimum Wage means that gradually, the lower paid get to
keep more, or indeed all of the money that they earn, and the government gets
their hand out of the pockets of the poor and ‘nanny statism’ starts to recede. How could it ever have been right, other than
in the fantasy world of socialistic
policy, to take money from people through the wage packet and then give it
immediately back?
One can
expect die-hard Socialists to support the continuance of such lunacy – big
government is what they are all about – but one would expect better of
Conservative MPs. I repeat, the Conservative
manifesto included clear reference to the plan to reduce the deficit and to do
so, in part, with cuts to welfare payments.
Did these rebellious Conservatives think that David Cameron and George
Osborne had discovered the source of Labour’s evergreen money tree? That welfare would be cut and no one would
feel any pain? We need to get people out
of the trap that Brown and Labour set for them.
Unfortunately, that means pain.
From a purely electoral perspective, what better time than at the start
of a five year parliament?
As a
country, we need to stop people ‘gaming’ the system. Refusing to work extra hours because to do
so, would jeopardise their benefits. As
a country we cannot afford it, neither in terms of an over-bloated welfare bill
nor in terms of lost efficiency and opportunities in the workplace.
Much as I
hesitate to create further issues with this matter, maybe some of the effect
can be mitigated by incentivising employers to pay more in salary and wages to
the low paid. Something that gets them
to paying above the National Minimum Wage much earlier. Maybe further reductions in employers
National Insurance? Working Tax Credits
have acted as a subsidy from the tax payer to low-paying employers. I doubt that even Labour didn’t intend that but
this is a certain consequence. It is estimated that low paid employees would
need around 60-70p per hour extra, to make-up for the shortfall. That ought to be possible! Especially when one considers the years of
the tax payer subsidy that employers have had!
Not for the
first time, Labour is in a mess over Working Tax Credits. Instinctively they oppose any welfare cut. They just can’t help themselves. However, they also understand that Brown’s
lunacy has created both a welfare trap for people and a spending trap for
successive governments. So they find
themselves in the position of opposing the reductions and yet not committing to
reinstating them if they ever got back into power. Typical Labour hypocrisy – vociferously
oppose a measure while quietly hoping it goes through, so as to save yourself
the bother of make the tough decision, in the future.
The SNP
position? Well of course, being
socialist in nature, they too oppose it.
They are not too noisy about it though.
Maybe they are scared that some might say, if you are that bothered, why
not use Holyrood’s tax raising powers and whack 3p on Income Tax, in Scotland
and use the money raised to subsidise those Scots affected by the cuts.
There is
also mischief being made by the Liberal Democrats and, of course, Labour, in
the House of Lords. They are talking
about amendments and opposing the government’s actions by voting against
them. At the moment the Conservatives do
not have a majority in the House of Lords.
This could be quickly changed and it should be made clear to these
foolish peers that this is something the Conservatives would do. This might give those peers, pause for thought. After all, a Conservative majority in the
House of Commons, already exists, imagine how much more radical the
Conservatives could be if they also had an active majority in the House of
Lords! Maybe something for the
ultra-political George Osborne to consider?
These Lib
Dem peers know that their proposed actions fly in the face of parliamentary
convention. The Conservative government
was elected, into a majority government, on a manifesto that clearly included
the prospect of welfare cuts. Indeed,
many commentators attribute the success of the Conservatives, in the election,
to their economic policies and the competence demonstrated in the last five
years. The Lib Dems have long held the
belief that the House of Lords needs reform, I fear that this is how that will
achieve it, though I sincerely doubt this will turn-out well for them.
The UK
needs these cuts to go ahead. Not just
to be able to better balance the books but more importantly to wean people off
of welfare benefits. Conservatives must
hold firm and do the right thing!
