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ursaminortaur
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Universal credit

#172960

Postby ursaminortaur » October 11th, 2018, 10:50 am

John Major has compared the damage that continuing to roll out Universal credit would do to the Tory Party to the damage caused by the Poll tax.

https://www.theguardian.com/society/2018/oct/11/john-major-universal-credit-could-result-in-backlash-like-poll-tax#img-1

The former Conservative prime minister launched a fierce attack on the flagship benefits scheme, saying it could do as much damage to the Conservative party as the poll tax did in the late 1980s with a potential backlash among voters.
While the former Tory leader said he supported the logic behind the welfare changes, which are to be introduced for 3.95 million more people from July next year, he questioned whether they were workable in practice.
The former Labour prime minister Gordon Brown urged the government on Wednesday to abandon the full national rollout, suggesting that Britain was otherwise on course for a summer of discontent and poll tax-style chaos.
The shadow chancellor, John McDonnell, and the archbishop of Canterbury, Justin Welby, have also called for the scheme, the most radical changes to welfare since the second world war, to be scrapped.


Earlier John McDonnell had confirmed that Labour would scrap Universal credit if it won the next election

https://www.independent.co.uk/news/uk/politics/labour-ditch-scrap-universal-credit-john-mcdonnell-government-next-election-chancellor-a8572721.html

John McDonnell has confirmed that Labour would scrap the universal credit benefit system saying “it’s just not sustainable, it’ll have to go”.
He and other figures had already signalled that Labour was likely to move to such a position, but the shadow chancellor’s comments are the strongest sign yet of what Jeremy Corbyn would do if he wins power.

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Re: Universal credit

#172970

Postby gryffron » October 11th, 2018, 11:47 am

In the computerised 21st century, it should easily be possible for someone to work a few hours, for their payslip to go online to the tax office, and for DWP to calculate and payout a benefits top up at the same time they receive their wages. That's what UC is supposed to do, and afaik it does actually work (??)

There are problems with UC for sure. Partly because they have squeezed in benefit cuts along with it. And even I, a raving right winger, think the 6 week wait for benefit payments to start is barking. How can low earners be expected to cover that gap?

The problem is, that what went before is not fit for purpose either. Gordon Brown left us with an appallingly complex set of benefit rules, which takes dozens of pages to apply for, takes weeks to calculate, and is completely unable to cope with flexible working. Taking months for payments to catch up with flexible work patterns.

Labour and the Trade Unions have a pathological hatred of flexible working. But its not going to go away. Not without mass unemployment as the alternative. And nor do I think it should. It is better in every respect for a person to have a few hours work a week, than for them to be full time unemployed. Better for their pocket, lifestyle, future employability, social life, self esteem, mental health, government balance of payments, everything. Hey, it's even better for "fairness". "From each according to his ability" - Remember that bit Labour?

So UC needs to be fixed, yes. But scrapping it is not the solution. We'd only be left with an archaic system of staggering complexity that suits no-one. As usual, back to the dark ages with Labour.

Gryff

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Re: Universal credit

#172980

Postby ursaminortaur » October 11th, 2018, 12:34 pm

gryffron wrote:In the computerised 21st century, it should easily be possible for someone to work a few hours, for their payslip to go online to the tax office, and for DWP to calculate and payout a benefits top up at the same time they receive their wages. That's what UC is supposed to do, and afaik it does actually work (??)

There are problems with UC for sure. Partly because they have squeezed in benefit cuts along with it. And even I, a raving right winger, think the 6 week wait for benefit payments to start is barking. How can low earners be expected to cover that gap?

The problem is, that what went before is not fit for purpose either. Gordon Brown left us with an appallingly complex set of benefit rules, which takes dozens of pages to apply for, takes weeks to calculate, and is completely unable to cope with flexible working. Taking months for payments to catch up with flexible work patterns.


But the old system is still in place and being used. Hence either stopping the roll-out of Universal credit whilst it is fixed or scrapping it and rethinking are viable options. Which of those paths is best I can't say but just stubbornly pressing ahead with the rollout despite the problems doesn't look like a good idea.

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Re: Universal credit

#172985

Postby Charlottesquare » October 11th, 2018, 12:54 pm

gryffron wrote:In the computerised 21st century, it should easily be possible for someone to work a few hours, for their payslip to go online to the tax office, and for DWP to calculate and payout a benefits top up at the same time they receive their wages. That's what UC is supposed to do, and afaik it does actually work (??)

There are problems with UC for sure. Partly because they have squeezed in benefit cuts along with it. And even I, a raving right winger, think the 6 week wait for benefit payments to start is barking. How can low earners be expected to cover that gap?

The problem is, that what went before is not fit for purpose either. Gordon Brown left us with an appallingly complex set of benefit rules, which takes dozens of pages to apply for, takes weeks to calculate, and is completely unable to cope with flexible working. Taking months for payments to catch up with flexible work patterns.

Labour and the Trade Unions have a pathological hatred of flexible working. But its not going to go away. Not without mass unemployment as the alternative. And nor do I think it should. It is better in every respect for a person to have a few hours work a week, than for them to be full time unemployed. Better for their pocket, lifestyle, future employability, social life, self esteem, mental health, government balance of payments, everything. Hey, it's even better for "fairness". "From each according to his ability" - Remember that bit Labour?

So UC needs to be fixed, yes. But scrapping it is not the solution. We'd only be left with an archaic system of staggering complexity that suits no-one. As usual, back to the dark ages with Labour.

Gryff


There are some issues re how RTI works that ought to have been better thought through, currently if an employer only employs staff below the NI threshold and hold their tax codes so that no tax will need deducted then no RTI reporting is I believe required by the employer, accordingly HMG does not have a real time picture for everyone in employment. In addition the RTI records will likely not join up with UC records, we already have things like CIS reporting within HMRC that have daft lead times before employer records update re the monthly CIS returns.

Frankly they ought to be concentrating on fixing/improving the current systems rather than faffing about with MTD for vat and possibly MTD in general; catch is fixing existing systems before doing the next whizz bang is not sexy.

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Re: Universal credit

#172987

Postby Charlottesquare » October 11th, 2018, 1:00 pm

ursaminortaur wrote:
gryffron wrote:In the computerised 21st century, it should easily be possible for someone to work a few hours, for their payslip to go online to the tax office, and for DWP to calculate and payout a benefits top up at the same time they receive their wages. That's what UC is supposed to do, and afaik it does actually work (??)

There are problems with UC for sure. Partly because they have squeezed in benefit cuts along with it. And even I, a raving right winger, think the 6 week wait for benefit payments to start is barking. How can low earners be expected to cover that gap?

The problem is, that what went before is not fit for purpose either. Gordon Brown left us with an appallingly complex set of benefit rules, which takes dozens of pages to apply for, takes weeks to calculate, and is completely unable to cope with flexible working. Taking months for payments to catch up with flexible work patterns.


But the old system is still in place and being used. Hence either stopping the roll-out of Universal credit whilst it is fixed or scrapping it and rethinking are viable options. Which of those paths is best I can't say but just stubbornly pressing ahead with the rollout despite the problems doesn't look like a good idea.


No expert on UC or benefits generally but there was an interesting comment on R4 yesterday suggesting a fix to the current cashflow issues re UC and the current loan advances being subsequently collected causing financial difficulties. The suggestion was leave the loan advance outstanding and collect its repayment if/when the claimant comes off UC from their final entitlement, however many years in the future that might be.

I suspect there may be commonsense fixes re some UC impacts if our politicians are prepared to start thinking like the recipients and really appreciate how some live hand to mouth.

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Re: Universal credit

#173002

Postby gryffron » October 11th, 2018, 1:40 pm

Charlottesquare wrote:In addition the RTI records will likely not join up with UC records

Really? I thought this was the whole point of RTI + UC. And the bit that the techies were finding so difficult. If they are not/cannot be tied together then what is the point - of either?

Gryff

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Re: Universal credit

#173003

Postby Lootman » October 11th, 2018, 1:44 pm

ursaminortaur wrote:John Major has compared the damage that continuing to roll out Universal credit would do to the Tory Party to the damage caused by the Poll tax.

Funny how Major and Brown have opined on this - two former PM's with a pretty bad reputation and one of them, Brown, who presided over the economic crisis a decade ago that led to us needing austerity in the first place.

But anyway there is a big difference between the two. With the poll tax you had Tory-voting pensioners refusing to pay the tax. But the recipients of welfare are not in such a strong position - if they want to go "on strike" and not collect their welfare, so what?

Welfare recipients do not have a lot of leverage. It's rather like when students go on strike. Who cares?

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Re: Universal credit

#173022

Postby ursaminortaur » October 11th, 2018, 2:25 pm

Lootman wrote:
ursaminortaur wrote:John Major has compared the damage that continuing to roll out Universal credit would do to the Tory Party to the damage caused by the Poll tax.

Funny how Major and Brown have opined on this - two former PM's with a pretty bad reputation and one of them, Brown, who presided over the economic crisis a decade ago that led to us needing austerity in the first place.


Brown handled the financial crisis quite well which as you well know was caused by American sub-prime lending and trading in derivatives rather than something created by the Labour party in the UK. As to Major he was a reasonably good PM but hamstrung by the "bastards" in his cabinet and elsewhere in his party.


Lootman wrote:[
But anyway there is a big difference between the two. With the poll tax you had Tory-voting pensioners refusing to pay the tax. But the recipients of welfare are not in such a strong position - if they want to go "on strike" and not collect their welfare, so what?

Welfare recipients do not have a lot of leverage. It's rather like when students go on strike. Who cares?


It was the protests/riots and fears of the effect of the poll tax on voters which led the Tories to replace Margaret Thatcher and replace the poll tax with council tax rather than the people not paying and that worked with John Major winning the subsequent election.

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Re: Universal credit

#173024

Postby Charlottesquare » October 11th, 2018, 2:43 pm

gryffron wrote:
Charlottesquare wrote:In addition the RTI records will likely not join up with UC records

Really? I thought this was the whole point of RTI + UC. And the bit that the techies were finding so difficult. If they are not/cannot be tied together then what is the point - of either?

Gryff


Whilst the RTI updates appear to transfer to UC there have been some concerns that they do not always link seamlessly with UC, I am not sure all required data is clear from the RTI submissions, there have certainly been some concerns expressed in the accounting press especially where RTI data is impacted by expenses etc, see below:

https://www.taxadvisermagazine.com/arti ... its-update

https://www.taxadvisermagazine.com/arti ... its-system

Whilst in most cases it ought to work what you appear to have is data from a set of rules re payroll processing needing to mesh to provide data for benefits, there are, I believe, differences re what is/is not included within each.

And the RTI link ups to Personal Tax Accounts is reported to have problems re accuracy and delays though I cannot really speak first hand re this as I do not get my clients to provide earnings etc from their accounts, I still rely on them giving me old fashioned P60s etc, but there have certainly been a few gripes from accountants on Accounting Web.

I have no issues with HMRC wishing to improve their systems I just wish they would design them properly, test them properly and communicate them properly before rolling them out, they do not have a great track record.

For instance MTD for VAT (which starts next April in theory) is looking like a train wreck right now; any vat registered people on here yet received the letters that were supposed to be sent to them in September? If you are not working in an accountancy role good chance you know little about it and what the new requirements are re digital records . If your current accounting year straddles that date do vat registered business entities appreciate they might have to record x months of the year in current systems and y months on a new system then cobble the two together to prepare their year end accounts?

https://www.gov.uk/government/publicati ... al-for-vat

And for all those relying on an app to link with their current say excel records (paper ones a no no), yes that is going to be possible we believe, but cashbooks may not be that simple where each purchased supply needs individually detailed in the digital records; how does one then record a single payment of multiple invoices (supplies) in light of 3.3.3, compliance, I am still seeking an answer.

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Re: Universal credit

#173025

Postby Charlottesquare » October 11th, 2018, 2:44 pm

Lootman wrote:
ursaminortaur wrote:John Major has compared the damage that continuing to roll out Universal credit would do to the Tory Party to the damage caused by the Poll tax.

Funny how Major and Brown have opined on this - two former PM's with a pretty bad reputation and one of them, Brown, who presided over the economic crisis a decade ago that led to us needing austerity in the first place.

But anyway there is a big difference between the two. With the poll tax you had Tory-voting pensioners refusing to pay the tax. But the recipients of welfare are not in such a strong position - if they want to go "on strike" and not collect their welfare, so what?

Welfare recipients do not have a lot of leverage. It's rather like when students go on strike. Who cares?


They have votes.

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Re: Universal credit

#173026

Postby Lootman » October 11th, 2018, 2:45 pm

ursaminortaur wrote:Brown handled the financial crisis quite well which as you well know was caused by American sub-prime lending and trading in derivatives rather than something created by the Labour party in the UK.

It was Brown's job to understand the forces and events in the economy and he failed to do so. FDR had a sign on his desk in the Oval Office that said "The buck stops here". Brown is culpable because it was his job to predict crises and he did not do so.
ursaminortaur wrote:
Lootman wrote:But anyway there is a big difference between the two. With the poll tax you had Tory-voting pensioners refusing to pay the tax. But the recipients of welfare are not in such a strong position - if they want to go "on strike" and not collect their welfare, so what?

Welfare recipients do not have a lot of leverage. It's rather like when students go on strike. Who cares?

It was the protests/riots and fears of the effect of the poll tax on voters which led the Tories to replace Margaret Thatcher and replace the poll tax with council tax rather than the people not paying and that worked with John Major winning the subsequent election.

Regardless, nobody should support the idea that a government can be changed by "riots" or "protests" or strikes.

If you want to execute a political idea then do what UKIP and the Tea Party both did. Form a party, contest elections and win at the ballot box. Nobody thinks that Labour would do any better than the Tories, who should be given the time to show their ideas can work.

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Re: Universal credit

#173197

Postby SteMiS » October 12th, 2018, 8:11 am

ursaminortaur wrote:John Major has compared the damage that continuing to roll out Universal credit would do to the Tory Party to the damage caused by the Poll tax.

He's wrong (IMO, obviously). Being unpleasant to people on benefits and to immigrants are two areas that generally have little impact on public opinion. Indeed to many they are virtues not criticisms. On the other hand, the mere suggestion that pensioners might lose some of even their most unsupportable benefits is pretty much electoral suicide.

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Re: Universal credit

#173202

Postby johnhemming » October 12th, 2018, 8:50 am

I don't know the details of the issue with Universal Credit, but it is quite likely that the savings introduced by Osborne affected low paid people in work. Those are the sorts of savings that tempt the treasury and should be resisted. At one stage the marginal rate of withdrawal of benefits for working people were around 85%. It had generally been brought down to 65%. One of the key priorities of Universal Credit was to reduce effective tax rate yet further as that makes it much more worthwhile working.

If it is that, and I have no proof that it is, then it is not something that it would be well advised for the government to do.

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Re: Universal credit

#173267

Postby Lootman » October 12th, 2018, 12:48 pm

SteMiS wrote:the mere suggestion that pensioners might lose some of even their most unsupportable benefits is pretty much electoral suicide.

Can you tell us which pensioner benefits you consider to be "unsupportable", and why?

Because the only benefit I am likely to get is the state pension. And you know, I earned that with my contributions. It's not welfare in that sense.

I do get the heating allowance, I suppose, and could give that up. And eventually I will get a free TV license. But what else?

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Re: Universal credit

#173274

Postby malkymoo » October 12th, 2018, 1:16 pm

Lootman wrote:Can you tell us which pensioner benefits you consider to be "unsupportable", and why?

Because the only benefit I am likely to get is the state pension. And you know, I earned that with my contributions. It's not welfare in that sense.

I do get the heating allowance, I suppose, and could give that up. And eventually I will get a free TV license. But what else?


Free bus travel
Free eye tests
Free prescriptions
Christmas bonus (all of £10!)

But dwarfing all of there is the fact that pensioners pay no national insurance. Despite being the biggest users of NHS services they pay nothing towards NHS services through national insurance, unlike the working population (yes, I know it't not quite as simple as that). I think asking better-off pensioners to pay a reduced rate of national insurance (say 5%) would be quite justified. (I speak as someone who would be liable to pay this levy)

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Re: Universal credit

#173286

Postby Nimrod103 » October 12th, 2018, 2:16 pm

malkymoo wrote:
Lootman wrote:Can you tell us which pensioner benefits you consider to be "unsupportable", and why?

Because the only benefit I am likely to get is the state pension. And you know, I earned that with my contributions. It's not welfare in that sense.

I do get the heating allowance, I suppose, and could give that up. And eventually I will get a free TV license. But what else?


Free bus travel
Free eye tests
Free prescriptions
Christmas bonus (all of £10!)

But dwarfing all of there is the fact that pensioners pay no national insurance. Despite being the biggest users of NHS services they pay nothing towards NHS services through national insurance, unlike the working population (yes, I know it't not quite as simple as that). I think asking better-off pensioners to pay a reduced rate of national insurance (say 5%) would be quite justified. (I speak as someone who would be liable to pay this levy)


Where do you get this idea that NI pays for the NHS? It pays for state pensions, with about 20 billion left over for other benefits.

The NHS is funded from general taxation, which pensioners pay like everyone else. If pensioners paid NI, they are in effect paying for their own pensions, having also paid NI for them while working. I know none of this taxation is hypothecated, so you may object, but that is how the numbers stack up.

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Re: Universal credit

#173291

Postby Watis » October 12th, 2018, 2:35 pm

I don't have a problem with the idea that pensioners should pay NI on earned income. I write this as someone who may well be in that position in years to come.

And as there is no longer an official retirement age, the argument is easier to make.

Watis

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Re: Universal credit

#173292

Postby BobbyD » October 12th, 2018, 2:37 pm

johnhemming wrote:I don't know the details of the issue with Universal Credit, but it is quite likely that the savings introduced by Osborne affected low paid people in work. Those are the sorts of savings that tempt the treasury and should be resisted.


Personal allowance increased from £6k to £11k under Ozzy. Giving with one hand and taking back with the other just leads to unnecessary employment for hands, and turns people from self sufficient workers in to state dependants.

This is exactly the sort of simplification and efficiency which should be encouraged...

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Re: Universal credit

#173295

Postby johnhemming » October 12th, 2018, 2:49 pm

The UC changes were ones from the 2015-17 parliament. The original UC plans were more generous and I assume that was in the marginal rate of removal of benefits.

The changes you are referring to were mainly during the 2010-15 parliament.

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Re: Universal credit

#173300

Postby Lootman » October 12th, 2018, 3:03 pm

malkymoo wrote:
Lootman wrote:Can you tell us which pensioner benefits you consider to be "unsupportable", and why?

Because the only benefit I am likely to get is the state pension. And you know, I earned that with my contributions. It's not welfare in that sense.

I do get the heating allowance, I suppose, and could give that up. And eventually I will get a free TV license. But what else?

Free bus travel
Free eye tests
Free prescriptions
Christmas bonus (all of £10!)

But dwarfing all of there is the fact that pensioners pay no national insurance. Despite being the biggest users of NHS services they pay nothing towards NHS services through national insurance, unlike the working population (yes, I know it't not quite as simple as that). I think asking better-off pensioners to pay a reduced rate of national insurance (say 5%) would be quite justified. (I speak as someone who would be liable to pay this levy)

Most of NICs go to fund one's state pension and when one becomes a pensioner then that pension has been fully earned. So continuing to pay NICs would be inappropriate - that would be treating NICs exactly like income tax. And anyway, for most pensioners the bulk of their income is not earned income and so would not attract NICs anyway.

As for the NHS I happen to agree that is unsupportable in its present form, and that we will eventually have to pay for it at the point of delivery. But that would be an unpopular policy change and probably the way it would be sold is to initially exclude children and pensioners.


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