Morning Line: Benefit cuts are only half the story

Never mind all this tinkering with Income Tax,all you Journalists completely miss the basic fundemental fault with Britain to-day. That is the rise and rise of institutional employment to the cost of personal enterprise.. Education is largely geared to getting a job in the Institutions from Govt. Depts. to The Media and everything in between. They are all basically services with over paid salaries attached, coupled with over generous superannuation.. In terms of wealth creation they contribute very little . .If you all spent time trying to run a small business in Britain you would understand what I mean. Business is over regulated to the point where most people want to give up. Armies of busibodies who give no support ,demanding useless paper returns on everything from packaging, to pointless and unnecessary, costly training courses whichj teach your Grandmother to suck eggs. When you do make a profit, very little incentive is given to capital investment to grow and create more worthwhile jobs. EU employment regulations are totally unjust. Tribunals are totally biased in favour of the recalcintrant employee, even when caught for theft. If you dont believe me carry out an independant suvey you will soon find out. In addition the minimum wage is a distinct handicap for business people to employ youngsters who require lengthy training and are non-productive in the early years. We have exported our enterprise to Asia and the like. Nothing will change for the better until this state of affairs is reversed radically.

We need to cap any "benefits" at the level you'd earn for doing a full time job on the minimum wage!

Why should we be paying £5000 a month or whatever in Housing Benefit etc?

Well done Lorna! I am not your greatest fan but this is an excellent article and one which I hope will get lots of attention.

Graham Barlow you are also right that the UK needs industry and not bureaucrats. There is much skill and enterprise in these islands that does not suit the European dream. It was no secret that the UK was too strong for the Europeans and the main reason for blocking our entry into the Common Market; now, sadly, they have their way and we have become a dependency on Europe for agriculture. I am not against Europe but it does not, and never has, suited our strengths.

It is no good taking on the bureaucrats on the illogicality of our tax system. They are all in it together they have a vested interest in keeping the pot boiling. Its their living. Its their superannuation ,its their expenses. Its called the public sector Gravy Train and there is an even bigger one in Brussels. Please take up the cudgel to get Britain back to what it does best m,aking things and selling them to the rest of the world.. The Bureaucrats are an abberation and an irrelevance.

Yes we need radical change to our flawed tax system and most points raised here are good. The lower half of the taxed populace have little disposable income, because a high proportion of their income goes in taxes, utilities etc. Imagine the boost to them and the economy if they had more available to spend!

However, I cannot see the removal of some benefits forcing employers to pay more, as is suggesteed. They will still pay the minimum wage, so some safety net is required..... unless the minimum wage was increased of course.

I thought the personal allowance was clawed back for the higher paid.

I have checked and I am right that the pesonal allowance is clawed back for those earning over £100,000.

In 2010, for every £2 of earnings over the £100,000 threshold, the personal allowance will reduce by £1. This means that for someone earning at a level of £112,950 or over, their personal allowance will disappear completely.

3 urgent things need doing to wean the UK off the bureaucrats and dependancy on benefits;

1. With the exception of schools, hospitals, nurses, doctors ambulances, real police (not the plastic kind) and firemen ALL non-essential backroom civil servants (thats all Whitehall depts and Local Council depts) should be with immediate effect placed on a 4 DAY WEEK.

2. ALL benefits, with the exception of old age pensions, should be immediately cut by 5%, then cut again every year by another 5% for the next 5 years.

3. Quangoes are currently costing upwards of £100 BILLION a year. This must be cut immediately to £50 billion or lower.

Thousands of private sector workers have already agreed to wage freezes, shorter weeks, pension scheme cuts etc. rather than redundancies. I see no reason why non-essential civil servants can't agree to the same.

Going to a 4 day week will save over £20 BILLION, cutting Quangoes £50 BILLION and slowly reducing ALL benefits except OAP by 25% over 5 years will save countless BILLIONS.

These savings should be use to restore the UK's competitive position by for example;

1. Reducing Employer and employee National Insurance contributions immediately by 2.5% each

2. Reducing Corporation Tax immediately to 18%

3. Removing the high earner 50% rate immediately.

4. Raising the NIL rate income tax band to £10k

Good article and interesting debate.

Graham, you are on the right track, and Lorna is just beginning to see the light.

Will George and Cable (I guess the latter will never, he is happy to support all and sundry, with our money).

Before we get any sense, get ready for massive disruption as the unions try to protect, not their workers but, their dues and the jobs of the nobs in the unions, their salaries, perks and pensions.

The public service unions are the miners of yesteryear, digging away in our pockets to enhance their wealth!

Its all very well denegrating public service, until you need to send your children to school, or take your ailing parents to hospital - public service provides a service to the public, not to toffs who make the policies, who have personal probably inherited wealth which enables them to make private provision for health, education & to travel in their own cars rather than using public transport.

All of these have to be paid for & are paid for by taxing us - I have no problems being taxed if services are provided.

However, my problem with taxation is what the money is used for - I am totally against wars, & I believe that there is no need for a billion pound defence most people accepted the destruction of other nations as long as we benefited. We are not living during the colonial years where nobody thought about the people they were colonising & abusing, & robbong them of their resources.

If it were not for the unions, we would still be working longer hours than anywhere in Europe: big business makes profits by cutting down on any perks for the ordinary worker, while the employers are able to write most off their earnings as expenses!!!

Civilised societies provide for their vulnerable - children, old people - not providing for them, we might as well have Mugabe running the country.

I agree that increasing the amount of untaxed earnings would benefit those on minimum wage, & I do believe that the young who chose to collect their giro rather than work for their money makes them less likely to have any aspirations, which is key to improved mental health of the population.

Targeting public sector jobs will be a regression to Victorian times, when no one but the wealthy has access to health care, or affordable housing. I suppose it does not bother employers that there are many people who do not want to work in finance, where profits are the bottom line, & ethics an unknown quantity!

Excellent article Lorna.

I also agree with almost everything that Rose G has written.

It is very easy to jump on the bandwagon and knock Public Sector workers and all their so called non-jobs but your contributors should realise that those that lose their jobs arent miraculously going to be employed in the Private Sector.

Without a fundamental change in our political system, including banning imports and curtailing new technological advances we can never have full employment again.

I remember when millions of people were employed in factories, on the docks or in coalmines, all doing useful productive jobs which have been replaced due to automation and cheaper imports. What replaced those jobs? Public sector where possible and the rest became the long term unemployed.

There are thousands of people who want to work who cant get jobs. Lets not get obsessed about the unemployed who are on benefits. Why force people to work when they dont want to and in many cases are not capable of working productively?

Yes it is essential to have a differential between employment and benefits , which can be done by raising the minimum wage but in this modern age no-one should starve and if someone is unemployable then so be it.

Yes, another good article.

Can I suggest a measure that I reckon would virtually solve state revenue problems at a stroke: the removal of the state subsidy (tax relief) for private pension contributions. Not only does this benefit the rich disproportionately, it also distorts the market in savings products.

After all, Lawson scrapped tax relief for insurance when he was Chancellor so why not for pensions?

With the abysmal annuity rates, saving for a pension is already of questionable value. Scrapping tax relief would be the final nail in the coffin.