why were tax credits introduced to start with

meluvnext

Why/when were tax credits introduced. I know for a fact I would never be able to manage working 40 hours per week or less even on the minimum wage and pay for childcare costs, so I am presuming the government recognises this and this is why tax credits were introduced.

Do you think if there were no tax credits our costs of living would be cheaper?

I have encountered so many problems with tax credits, I know some people who dont have kids earn minimum wage and tax credits means they are not entitled to health care costs. Myself being in the 4 week run on of tax credits through being forced to quit my job have found diffculty in claiming legal aid to take my employers to tribunal.

So really with the tax credits your probably no better off in all honesty.

MissMoneypenny

Tony Blair brought them in and said tax credits would be "a vote winner". The Labour Minister, Frank Field MP, resigned his ministerial post over them as he said they would just become " a poverty trap". Frank Field MP is now helping the new government in a special role but still remains firmly (old) Labour.

Frank Field's mantra is: A fair days work for a fair days pay; British jobs for British workers.

melly1980

What happened is sucessive governments sold everyones good well paid jobs down the river so that their chums in the city could make a quick buck out of ripping apart companies, flogging them on, outsourcing to cheaper regions and profiting form the pyramid scheme that is the stock exchange. As a consequence the country has been turned into a bunch of £5/hour monkeys and the only way to keep these people spending and consuming is to part fund it.

MissMoneypenny

meluvnext wrote: »

Myself being in the 4 week run on of tax credits through being forced to quit my job have found diffculty in claiming legal aid to take my employers to tribunal.

So really with the tax credits your probably no better off in all honesty.

A bit late now, but next time you get your house contents insurance, take the optional extra of Legal Cover. Just make sure it a good legal cover and covers what you want, by reading it first. I just took my house contents cover out with Insure as they have a good legal cover policy that covered what I wanted, through a company called ARAG. I got cashback through https://www.topcashback.co.uk too. I paid an extra £19.99 a year for this legal cover.

That way you don't have to rely on asking the governmnet for help and you take back control.

New Labour certainly liked to keep tabs on everyone with their tax credit forms: cameras everywhere: Freedom of Infomation act: althougth that backfired when that act forced them to reveal their expenses (despite the fact that Brown used taxpayers money to try to fight that revelation, in court).

meluvnext

MissMoneypenny wrote: »

A bit late now, but next time you get your house contents insurance, take the optional extra of Legal Cover. Just make sure it a good legal cover and covers what you want, by reading it first. I just took my house contents cover out with Insure as they have a good legal cover policy that covered what I wanted, through a company called ARAG. I got cashback through www.topcashback.co.uk too. I paid an extra £19.99 a year for this legal cover.

That way you don't have to rely on asking the governmnet for help and you take back control.

New Labour certainly liked to keep tabs on everyone with their tax credit forms: cameras everywhere: Freedom of Infomation act: althougth that backfired when that act forced them to reveal their expenses (despite the fact that Brown used taxpayers money to try to fight that revelation, in court).

I have been told to check my car insurance policy for legal cover, but I do not want to loose my no claims

tinkerbell28

Because the last govt wanted everyone indebted, so they would keep voting them in. Give them the good times, keep them spending, then get them reliant. Like a drug dealer.

House prices rose stupidly, so did everything else, people felt "rich" they thought they were middle class on a 25k a year job. The govt was throwing money at people to enourage this boom in everything, and to make people feel rich.

All it has done is pushed prcies up on everything to beyond realism, driven down wages, driven down the aspiration to get a good education therefore job and wage, it was all built on sand.

Now people have become reliant on these credits, it's going to be cold turkey until the economy adjusts to reality.

MissMoneypenny

meluvnext wrote: »

I have been told to check my car insurance policy for legal cover, but I do not want to loose my no claims

Have you checked to see if a claim on the legal policy would affect your car insurance policy NCB?

TBH, I'm not even sure if the car legal policy would cover something like you want?

MrsBartolozzi

As I remember it...
The Labour govt introduced the name "tax credits" as a replacement to family credit which was brought in by John Major's government, which was itself a continuation of various low income families' benefits. This gives a history.

tinkerbell28 wrote: »

Now people have become reliant on these credits, it's going to be cold turkey until the economy adjusts to reality.

Having been unemployed for a period last year I have seen that the majority of jobs advertised are basically part time (30 or fewer hours ). Whether TCs have enabled employers to create these half-jobs allowing the tax payers to pick up the financial slack or they have enabled people to work less and still maintain a particular standard of living, one thing is clear: if TC's were to be removed completely many people could not afford to work. I know myself that I was pushed into accepting a "half-job" of 20 hours per week (by the JC) as I was assured that TCs would make it pay a full time wage. I am still looking for full time work, but should the tax credit net be removed many many people would be left high and dry. I have yet to see any part time job which would make up the shortfall and crucially, fit around my current job.

I am not defending the TC system, but the bigger picture needs to be viewed. My current employer manages to operate with almost all of it's non-management staff earning below employer's NI limit. Surely if something needs to be done employers need to be part of the "something"?

anguk

That's part of the tax credit problem. Employers no longer had to pay decent wages because the government would subsidise people with the tax credit system so full-time jobs with a decent wage disappeared. Employers could get rid of full-time jobs replacing them with part-time (which is much cheaper for them) because the government would top up the earnings.

I also think it's no coincidence that house prices have rocketed since we've had tax credits, once upon a time you could get a mortgage with one average full-time wage, then when tax credits were introduced people had more income so were willing to pay higher house prices. The knock-on effect of that is now we're in a situation where you often need 2 wages and tax credits to be able to afford a mortgage, and the knock-on effect of that is with 2 parents working childcare has to be paid for too. Everyone has ended up trapped in a tax credit circle.

Tony Blair himself said that tax credits were a vote winner and he's right, throw money at people and they'll be happy. But of course all that extra money had such a knock-on effect with other things financially, people who receive tax credits have become reliant on them and now the country is in such a bad financial state that cutbacks have to be made and people are struggling. Throwing money at voters to keep them happy is great in the short term but it was never something that could be maintained long term.

"A fair days work for a fair days pay" is an excellent mantra but employers aren't going to do that as long as the government are willing to subsidise low wages.

melbury

Wasn't it something to do with blackmailing people into voting Labour!!!

Trouble is that people are now so dependent on tax credits that they can't imagine living without them, as they count them as part of their income.

no-oneknowsme

meluvnext wrote: »

I have been told to check my car insurance policy for legal cover, but I do not want to loose my no claims

I telephoned my car insurance provider to ask them could I use my legal cover to help me with an employment matter and was told that motor legal cover applies only to motor legal problems.

This was last year though and was when I was insured with Budget insurance so not sure if its the same with all insurance providers.