Budget hits the poorest hardest, says IFS

Malcolm.

nickmason wrote: »

And I know a lot of very high earners - those with household incomes of #100k or more - who are doing exactly that, leaving. Which is why you can't just hammer the rich.

Don't you get to enjoy tax breaks on your childcare, though? If you contribute a large amount, then I would think you are getting a #100 "voucher" for #60. Which is of course pushing the price up, and allowing it to appear higher than it really is.

Yes, however the tax break is limited to approximately 240 a month per parent.

This doesn't pay for one child...

Shakethedisease

I think part of the argument the Tories have, which is one to which I am sympathetic is that if you make people stand on their own two feet then it may be a little painful at first but ultimately they will usually be better off.

No they won't. Dream on.

http://www.parentdish.co.uk/2010/08/23/uk-families-face-highest-childcare-costs/

Working mothers have to fork out more for childcare in Britain than in any other country in the developed world.
A third of family income goes towards nurseries and childminders - almost four times the cost in Germany and three times that of France.
A study from the Organisation for Economic Co-operation and Development, a group of 32 industrialised nations, found that 33 per cent of a British family's net income goes towards the cost of childcare.
This is higher than every other country in Europe and the rest of the Western world.

No childcare = NO job, and no job for the forseeable future.

So they're stuck. Divorced, widowed, split-up, abandoned, whatever.. all stuck on benefits with a job, ironically, totally unaffordable... because of the cost of the childcare needed.

This is going to be a major, major spanner in the works for this 'get em off benefits' drive. All the corporation tax, higher tax bands, pupil premiums, private sector iniatives, growth forecasts and re-assurances in the world... ain't going to make any responsible parent leave their young kid(s) in the house for an hour or two a day alone for ANY job..

Good luck with that George !

Malcolm.

nickmason wrote: »

Is this where I say "the IFS is a very well respected and independent body, so their figures showing a u-curve on relative costs of the budget must be right?" To be honest, it looks right to me - although I do agree that there's a lot of tax evasion at one end and avoidance at the other.

Yes. Thanks for responding to the questions!

I'm off to bed.

Generali

Shakethedisease wrote: »

No they won't. Dream on.

http://www.parentdish.co.uk/2010/08/23/uk-families-face-highest-childcare-costs/




No childcare = NO job, and no job for the forseeable future.

So they're stuck. Divorced, widowed, split-up, abandoned, whatever.. all stuck on benefits with a job, ironically, totally unaffordable... because of the cost of the childcare needed.

This is going to be a major, major spanner in the works for this 'get em off benefits' drive. All the corporation tax, higher tax bands, pupil premiums, private sector iniatives, growth forecasts and re-assurances in the world... ain't going to make any responsible parent leave their young kid(s) in the house for an hour or two a day alone for ANY job..

Good luck with that George !

Are you trying to claim that all people on benefits are single mothers? That's a pretty grubby piece of stereotyping.

Very few of the 2,500,000 unemployed will be single mothers as only people actively seeking work are counted as unemployed.

Rochdale_Pioneers

Generali wrote: »

I think part of the argument the Tories have, which is one to which I am sympathetic is that if you make people stand on their own two feet then it may be a little painful at first but ultimately they will usually be better off.

Find me a politician who doesn't agree that work is better than dole. The notion that Labour encouraged a massive benefits culture to have a "captive" pool of voters is nonsense - why then did they get record numbers into work and see massive reductions in claimants?

I might be a leftie, but me and my friends work. We hate the scroungers as much as the rest of you. I want to see measures in place which allows people who want to work but are stuck on benefits (due to low wages on offer, high childcare costs etc) are able to do so. Thats what tax credits and Surestart were for.

So if the government want to have a more strident go at getting people into work, I have no objection. Its the TIMING we object to. They keep saying that we cut benefits to encourage people into work. What work? They're also doing everything they can to crash the economy (ask the BoE) and that means less jobs.

This is the figleaf Clegg is trying to hide behind. "IFS didn't take into account our job creation measures which will create 2.5m, new jobs".

No. It wont! Attacking people for being unemployed when government policy put you there is unfair and the polar opposite of what they claim to be doing. Get the economy growing strongly and then have a push to get people into work and a lot of us on the left would support it - its exactly what we did a decade ago after all.

Generali

Rochdale_Pioneers wrote: »

Find me a politician who doesn't agree that work is better than dole. The notion that Labour encouraged a massive benefits culture to have a "captive" pool of voters is nonsense - why then did they get record numbers into work and see massive reductions in claimants?

I might be a leftie, but me and my friends work. We hate the scroungers as much as the rest of you. I want to see measures in place which allows people who want to work but are stuck on benefits (due to low wages on offer, high childcare costs etc) are able to do so. Thats what tax credits and Surestart were for.

So if the government want to have a more strident go at getting people into work, I have no objection. Its the TIMING we object to. They keep saying that we cut benefits to encourage people into work. What work? They're also doing everything they can to crash the economy (ask the BoE) and that means less jobs.

This is the figleaf Clegg is trying to hide behind. "IFS didn't take into account our job creation measures which will create 2.5m, new jobs".

No. It wont! Attacking people for being unemployed when government policy put you there is unfair and the polar opposite of what they claim to be doing. Get the economy growing strongly and then have a push to get people into work and a lot of us on the left would support it - its exactly what we did a decade ago after all.

That's all well and good but unfortunately Labour's policies can't be paid for. The Government can tax a maximum of about 40% of GDP but was spending about 52% of GDP at the time of the election. As a result, they were spending about 1/4 more than the maximum income the Government can take.

The nominal deficit doesn't have to be cut entirely but it needs to be no more than RPI+real GDP growth in the medium term otherwise the deficit spirals unsustainably. Bond markets have made it clear to Greece and Ireland that they will not sustain deficits of any size indefinitely.

The deficit needs to be cut now, not later as if the Government doesn't decide to do it then the markets will take the decision out of its hands.

There is a very interesting piece of research that Morgan Stanley have just released about national (in)solvency that I will try to start a thread on. It's a little tricky as the original document can't be accessed without a password and it's 6 pages long so not suitable for copying and pasting. It's well worth a read and quite sobering.

I posted it here:

https://forums.moneysavingexpert.com/discussion/2686191

andykn

bendix wrote: »

Well, what do you know. An indepedent research group issues a report which was commissioned and part-funded by End Child Poverty concludes that . . . .

Do I need to go on?

I suspect that the exact same group using the exact same data would have come to an entirely different conclusion had the report been commissioned and funded by, say, the CBI.

Graham_Devon wrote: »

EDIT: Just read the article (had been listening to this on the news this morning rather than reading the article). Part funded by "End Child Poverty". Says it all.

bendix wrote: »

Not just part-funded. Commisioned also.

End of discussion.

Er, no. Unless you find any errors in the facts presented, and the Coalition don't seem to have so far, shooting the messenger just says that you have no answer to the facts.

andykn

Really2 wrote: »

So relative poverty increased under labour, actual poverty stayed about the same, would that be correct?

Why is everyone avoiding the built up problem that was benefit dependency? That is also why labour failed to hit their targets.

I dont want a labour, boo, Tory, boo on this TBH. Just that labour were as equally poor at dealing with poverty and the causes, and that was in a boom.
It is hardly surprising a bust welfare spending being reigned in.

The route cause and the financial situations are the causes and would have been the same in reality who ever got in power.

The point is that the Tories are actually making it worse by design.

All New Labour did was made the rich richer more than the poor got richer.

Thrugelmir

andykn wrote: »

The point is that the Tories are actually making it worse by design.

All New Labour did was made the rich richer more than the poor got richer.

Most if not of all the future personal tax changes currently in place. Such as the raising of employees NIC , freezing of personal tax allowances were in Labour's budget small print in March.

The June budget if anything was beneficial to the lowest paid as it significantly raised personal allowances. Although much of this gain will be eradicated by VAT rise in the short term. Until personal allowances are raised to a higher level.

I'm sure that the lower paid won't forget the messup over the 10p tax rate. Certainly no consideration for the poor when that was decided.

Wookster

Rochdale_Pioneers wrote: »

So if the government want to have a more strident go at getting people into work, I have no objection. Its the TIMING we object to. They keep saying that we cut benefits to encourage people into work. What work? They're also doing everything they can to crash the economy (ask the BoE) and that means less jobs.

This is the figleaf Clegg is trying to hide behind. "IFS didn't take into account our job creation measures which will create 2.5m, new jobs".

No. It wont! Attacking people for being unemployed when government policy put you there is unfair and the polar opposite of what they claim to be doing. Get the economy growing strongly and then have a push to get people into work and a lot of us on the left would support it - its exactly what we did a decade ago after all.

Nice to see you keep banging the spend spend spend drum Rochdale.

Labour had its chance to sort out the benefits/ welfare system when the times good, instead the opportunity was squandered and spending was profligate.

As a result tough choices need to happen now, and yes, these are Labour's cuts.