What should the neighbours pay for?

Mr Jememy Hunt has stirred up a big debate over family size and benefit incomes. He is saying people need to take responsibility for their own decisions, whilst his critics say that the state must act as the insurer of last resort whatever choices people make.

In the end it comes down to what the neighbours think. There is no state money, only the money that taxpayers send the government. Mr Hunt is inviting us all to reconsider what it is fair and sensible for the neighbours to pay.

The question is easy to answer in many cases. Most of us are very ready to pay for a neighbour who is seriously ill, disabled so they cannot work, or elderly. None of us wish to pay for a neighbour who has substantial capital of his or her own, a rich husband or wife, or the ability to take a job on offer that would pay their bills. We do not wish to keep anyone in champagne and luxury cars, but do want to help those in trouble have decent food, clothing and a home.

As Mr Hunt has discovered, it is the cases in the grey areas that are difficult. A benefit system has to set out rules for everyone that are fair and straightforward. It also has to handle a very wide range of circumstances, all of which are slightly different.

I would be interested in your thoughts on Mr Hunt’s points. How do we send the right message about what the neighbours will pay for? What if any are the limits of benefit payments for an individual family? How do we protect the children whilst telling the adults they have to show some responsibility?

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42 Comments

  1. P H
    Posted October 9, 2010 at 8:33 am | Permalink

    Not easy the disabled clearly need to be judged individually. A lot of the unemployed would just stop claiming if they were actually made to sign each day or perhaps do some training/job hunting/voluntary work every day for a few hours.

    I also remember the old "enterprise allowance scheme" which gave people some benefits while they stated a new business for 12 months this was a great help to me years ago.

    But they really need to get the banks to lend to small businesses again so they can actually take people on again.

    • Iain Gill
      Posted October 9, 2010 at 11:12 am | Permalink

      Re "perhaps do some training/job hunting/voluntary work every day for a few hours" what nonsense, its a full time job looking for a new job, if you ask for people to do things like this then you kill their ability to look for a new job

      Smacks of total lack of understanding

      • Robert
        Posted October 9, 2010 at 1:47 pm | Permalink

        "It's a full time job looking for a job". What nonsense. If that were true everyone in a job would have to resign before they sought a new one. It does take lot of effort to find a job, but it's an effort many on the state benefit payroll seem unwilling to make.

        • Iain Gill
          Posted October 9, 2010 at 10:59 pm | Permalink

          i disagree

          being between jobs you need to be able to answer your mobile to recruitment agents 24/7 you absolutley cannot do many voluntary things which would distract from taking those calls and being able to hear and speak clearly

          sure folk very long term unemployed with little experience and where some voluntary work could help their skills base, confidence, and CV maybe worthwhile because they are unlikley have much luck left to their own devices, for many of the folk thrown out of work in this recession they are highly skilled, highly motivated, contributing members of society already they do not need govt dictats to divert their job hunt sideways into "voluntary work"

          yep is easier in many ways to find a job when you have a job, many reasons for this, so i stick by what i said

          funnily enough on many of the sink estates with 99.99% benefits dependancy there is already an informal community giving self help to each other, probably not the "voluntary work" you imagine, but good tight community stuff never the less

          • Robert Taggart
            Posted October 10, 2010 at 2:21 pm | Permalink

            As an accomplished artist (drawing dole !) one finds there be no need to make any such effort. The money is not great, but, the living is easy !

  2. Mark Wadsdworth
    Posted October 9, 2010 at 8:46 am | Permalink

    As UKIP said in their welfare manifesto, roll child tax credits (bad benefits) and child benefit (good benefits) into a higher flat rate child benefit (about £30 per child per week) but restrict this to the first three children per family i.e. per mother.

    That'll fix it.

    • Robert Taggart
      Posted October 10, 2010 at 2:24 pm | Permalink

      If such a benefit were to be it should apply to the first child only… we could then follow the 'lead' given by China… without the 'menace' !

  3. Nick Leaton
    Posted October 9, 2010 at 8:47 am | Permalink

    The question is easy to answer in many cases. Most of us are very ready to pay for a neighbour who is seriously ill, disabled so they cannot work, or elderly. None of us wish to pay for a neighbour who has substantial capital of his or her own, a rich husband or wife, or the ability to take a job on offer that would pay their bills. We do not wish to keep anyone in champagne and luxury cars, but do want to help those in trouble have decent food, clothing and a home.

    =====================

    You've missed the point. People don't mind paying for people who need help.

    However, people who don't save, and then need help also fall into this category.

    They didn't need help, but because they didn't save, other people are forced to bail them out by the use of threats from the state. The voters don't get asked if they want to help, since you don't allow any voter any say on an issue. You just dictate.

    ie. A safety net is acceptable to most people. A fraud isn't.

    So, everyone should be forced to save, in order to prevent them forcing other's to bail them out.

    Start by abolishing all future state pension accruals. Make people save 8-10% into a fund. Then in retirement, it goes into drawdown. If and only if, the fund runs out, do we all help. i.e The guarantee is as a last resort.

  4. JimF
    Posted October 9, 2010 at 9:26 am | Permalink

    Start by disincentivising child production amongst those who are unable either to cope with or afford children.

    It is bizarre that the natural order of things is for survival amongst those who are responsible and best equipped to cope with having a family, but we are penalising just these young people with ridiculous levels of income tax/student grant repayments/Council Tax/excessive property prices, and using the money confiscated from them to incentivise and support the hapless and irresponsible to produce more children.

    Not really a traditional Conservative Party policy, is it? It has to be turned upside down.

    • electro-kevin
      Posted October 9, 2010 at 5:03 pm | Permalink

      This predicament is very real among our young and is causing a decrease in the country's IQ level.

  5. simon
    Posted October 9, 2010 at 10:49 am | Permalink

    Nobody wants to :-

    – give public money to loan sharks . If the recipients of benefit have got overdrafts or doorstep loans this is exactly what is happening . Consumer protection to outlaw extortionate rates anyone ?

    – the recipient to fritter the money away . Food stamps and vouchers anyone ?

    – subsidise buy to let landlords who are milking housing benefit by charging over the odds

    – pay mortgage interest long-term for people who overextended themselves by buying a house they could not realistically afford . Reimbursment maybe ?

    People cannot avoid being relieved of too much of their earnings by the financial services industry . This increases the need for public assistance .

    – unreasonable proportion of peoples lifetime earnings paid in mortgage interest due to high house prices

    – unreasonable charges on poorly performing pensions and terrible annuity rates

    – rubbish rates for savers

    The unhelpful divide between public and private sectors will always remain whilst one has to pay to entrust their money to the spivs to bet on the casino and accept appauling annuity rates and the other is insulated from that sort of thing .

  6. Javelin
    Posted October 9, 2010 at 10:53 am | Permalink

    The root cause is a general attitude. Grey areas are biased by an attitude. The black and White areas are not.

    Alot of people believe they are entitled to univeral benefits – which they are not. End universal rights and benefits and you will change the attitude and that will turn the grey areas the same way as the attitude. Mr Hunt will be forever swimming upstream other wise.

    Disabled carers show responsibility – so of Mr Hunt wants to promote responsibility it will then be hard for him to stop that.

    Mr hunt needs to choose his principles carefully.

  7. StrongholdBarricades
    Posted October 9, 2010 at 11:07 am | Permalink

    Slightly on topic:

    If currently 75% of those companies listed on the UK stock exchange are owned by non-British companies does that mean that their profits are repatriated in a quid-pro-quo to their domiciled tax place?

    Is that also why one of the reasons the burden is falling upon the general tax payer?

    Reply:Not all the profits – much of the money is spent here on plant, equipment and buildings, R and D etc. The Uk can also tax the company and the employees.

  8. Stuart Fairney
    Posted October 9, 2010 at 11:44 am | Permalink

    I take the John Galt position. However, to look at this in its wholeness, when ever the state spends money, it is really saying

    "This is so important, so vital, so indispensable, that we will jail those people who refuse to contribute, including your mothers"

    So, in the case of national defence, sorry ma, pony up or it's Holloway for you. In the case of law and order, sorry ma, you have to pay since we don't want to be Somalia, but am I really going to jail my mother so some work-shy prole can add to his or her pointless brood?

    Not in this lifetime.

    If you apply this test (as you surely must because this is the reality) almost all state spending falls away.

  9. Acorn
    Posted October 9, 2010 at 11:46 am | Permalink

    It is looking like it will not be a question of who will pay; but, what will they pay with! The first shoe has just dropped in the US this week. They have discovered that lenders foreclosing on defaulted mortgages, can't prove who is the legal owner of the debts. The "toxics" still stuck in the banking system, are so complex, that multiple frauds may have been committed.
    Mr Chang is worth a read. If you have not followed his previous posts, I suggest you do. He sums up the whole scene for amateurs. http://www.marketoracle.co.uk/Article23321.html

  10. Paul
    Posted October 9, 2010 at 11:50 am | Permalink

    @Nick Leaton: "Make people save 8-10% into a fund."

    I think they tried that – it was called National Insurance, but they just subverted the money into paying debt interest for unnecessary projects creating non-jobs.

    Seriously, what do you do when someone saves properly, is made unemployed and drinks his money out of depression in the first week? Your logic of compulsion would be that you should force him to spend his money wisely and at a sensible rate. i.e. the state may as well take the money into their safekeeping from the start. And can you trust the state with it?

  11. Alan Jutson
    Posted October 9, 2010 at 11:53 am | Permalink

    John

    The Welfare State has gone from its original purpose of an INSURANCE POLICY (National Insurance Contributons funded) as a short term Safety Net, to its present form of a Long Term Subsidy with no limit (for those who have not even paid any premiums).

    The Welfare System needs a complete rethink otherwise it will just become more and more expensive to finance, as more and more people realise that their is no reward in working. Even your present proposals of a £25,000 cap is tax free, so it equates to earnings nearer £35,000 which is greater than the median.

    Yes of course help the Disabled, yes of course pay a decent State Pension, yes of course have Healthcare. But to fund a complete lifestyle for people who can work but choose not to, out of the wages of people who do has to stop.

    On a more recent subject Child Benefit for 2 children and no more, if you want more then pay for them yourself. The first child is always the most costly.

    How about no payments unless you have a contribution record of 5 years ?

    What ever happened to the idea of family support.

  12. gyges
    Posted October 9, 2010 at 12:04 pm | Permalink

    Tax all benefits as income.

    • Robert Taggart
      Posted October 10, 2010 at 2:25 pm | Permalink

      Agreed, as one whose 'benefit' be below the tax take starting point !

  13. Peasant
    Posted October 9, 2010 at 12:11 pm | Permalink

    It would really help to have a proper baseline of what it costs to live in each region – a decent no frills, 'not starving or homeless' baseline, not all these studies based on what people would like to be able to spend, which turn out to include computers and holidays.

    There should also be time limits. Six months for someone who has lost their job to get back on their feet. Anything longer than that and that person needs to seriously prove to their neighbours that they are earning their welfare benefits.

    A lot of the problems will be short term transition ones – the people currently set on a life on benefits who already have lots of children. Once the new rules are in place, they will think more seriously about adding to the size of their family if they know their income won't be going up to match. So maybe the cap should apply for children born after a certain date, with child benefit (but not other benefits) not capped for existing children.

    • Iain Gill
      Posted October 9, 2010 at 12:35 pm | Permalink

      you need a computer to be able to find a job in many walks of life these days, you need a computer to do any course of study

      not a luxury in this day and age

      • Alan Jutson
        Posted October 9, 2010 at 9:30 pm | Permalink

        Ian
        The local Library have them (computers) to use for free.
        Also many Towns have voluntary help centres where those searching for work can get job leads, can use a computer, can get help with the production of a CV, and get practice at interview techniques.

        Your own Computer is handy and an advantage, but not absolutely essential.

        • Iain Gill
          Posted October 9, 2010 at 10:48 pm | Permalink

          you are not seriously arguing this point?

          if all the folk in between jobs tried to use the library and their already over crowded computers there would be no space to move in there with the queues, to say nothing of the old versions of work processing software they typically use and so on

          most job boards and recruitment consultants are web based these days, without a PC and internet connection you will not find a job for the vast majority of moderately and highly skilled work, you can get by without internet if you have a laptop and use wirless connections in coffee shops and so on – this is modern day reality

          Re "voluntary help centres where those searching for work can get job leads, can use a computer, can get help with the production of a CV, and get practice at interview techniques" mostly targetted at the very low end of the market and pretty useless for anyone with any real experience

          • Alan Jutson
            Posted October 10, 2010 at 4:14 pm | Permalink

            Iain

            Have not seen any queues outside any Libraries anywhere, given they have extensive reference books, which may help proactive searching etc, it is surprising.

            Take your point about internet searching and most jobs being on line, But as I said before, whilst computers are an advantage and prefferable (and they are) they are not an absolute must have.

            Fully aware of what is required for job searching as my Daughter has had to go through the system having been made redundant last year. She has now found a perminant job after temping for many months.

          • Iain Gill
            Posted October 10, 2010 at 9:34 pm | Permalink

            well i know several towns in different parts of the country where every single library PC is taken from opening to closing, and folk hanging around waiting for someone to leave

            probably we visit different places at different times

  14. ferdinand
    Posted October 9, 2010 at 12:12 pm | Permalink

    We have to start from the assumption that a blanket payment will offend most of us due to it's random effect. The opposite of no state help is unacceptable. The middle road is the only sensible route and that is using means testing. We cannot escape it. To make people uncomfortable in poverty is the greatest driver of personal betterment.

  15. Norman
    Posted October 9, 2010 at 12:27 pm | Permalink

    The simple answer is we want no one to living in poverty and those whom are genuinely disabled we want to see have a decent standard of living.

    The left hijacked the definition of poverty in the 60's and twisted the meaning into a never ending benefit system which, no matter how rich our country became, would still see huge numbers classed as 'living in poverty'.

    One of the goals of the coalition should be to redefine what real poverty is and then start defining how much the universal benefit should be.

    • JohnnyNorfolk
      Posted October 9, 2010 at 4:52 pm | Permalink

      How about less tax and only pay for those that need it.

      • Bazman
        Posted October 9, 2010 at 8:55 pm | Permalink

        'The deserving poor' by any chance?

  16. Peter Richmond
    Posted October 9, 2010 at 12:42 pm | Permalink

    One more radical way could be to have one universal benefit – a cash sum given to every citizen when they reach the age of 18 with nothing more provided by the state. This sum is then to provide for their education or other training, together with an investment for helath insurance. If they squander the money then tough – No other support is to be provded

    • Bazman
      Posted October 9, 2010 at 9:01 pm | Permalink

      Or a national minimum income. Idiots live free with no 'benefits'?

  17. Johnny
    Posted October 9, 2010 at 1:46 pm | Permalink

    We object to Asylum Seekers jumping housing queues because of the politically correct policies of some Left Wing Councils.

    We object to neighbors who are long term dole claiments having above the "National Average Salary" Why should the rest of us work all week, study for qualifications, travel and toil, only for our taxes to go to certain cases of say a single Mother with five clidren from five different Fathers, not living with any.

    We object to paying a couple on the long term dole over £100,000 per annum in equivalent benefits as they have ten or twelve children. These people often smoke, drink and have all the latest technology gadgets too.

    I support those who are sick, old or vunerable, the ones who suddenyl lose their job but have always paid their way, the couple who put off having a baby as they are responsible enough to wait until they can pay for it.

    Most of us are caring and compassionate for those around us in our Community. After all, we have all paid our taxes for decades, with little reward.

  18. FaustiesBlog
    Posted October 9, 2010 at 2:29 pm | Permalink

    Yes, what we pay is determined by our neighbours.

    In 'deprived' or workless areas, where most people are on the dole, it is in their interests to vote in favour of doling out taxpayers' cash to the feckless – because they want such treatment themselves.

    They aren't paying for it, so why not?

    Democracy allows people to vote away the rights and property of others. How is that fair?

    Perhaps we should adopt American-style republicanism – the way it was intended to be and not in its perverted, current form.

    • APL
      Posted October 10, 2010 at 1:17 am | Permalink

      FaustiesBlog: "Perhaps we should adopt American-style republicanism – the way it was intended to be and not in its perverted, current form."

      Not a bad idea, given our political class doesn't like our English constitution, and has been busily subverting it since, …. well, since they started paying themselves from our pocket.

      So, Ok, let's get a new constitution, let's adopt the US constitution, it did well for them for two hundred or so years.

  19. electro-kevin
    Posted October 9, 2010 at 4:59 pm | Permalink

    The coalition's decision to cap benefits at £26k is cowardly. It is as bereft of integrity as the promise to cap immigration from 'outside' the EU (as if that amounts to anything !)

    £26k in benefits equates to pre-tax earnings of £35k in the world of work. Try getting anything like that in the private sector without extensive training. For most hard-working families earnings of that sort is but a dream.

    I don't think even you, Mr Redwood, have much of an idea just how dispiriting it is to end up with less than benefit scroungers after a 50 hour week of shifts.

    We understand the need to forgo our child tax credit, but not while this issue is ducked by your government. So expect Poll Tax type protests if things aren't sorted.

    • APL
      Posted October 10, 2010 at 1:21 am | Permalink

      Electro-kevin: "£26k in benefits equates to pre-tax earnings of £35k in the world of work. Try getting anything like that in the private sector without extensive training."

      Good point and illustrates much emanating from the current government is very similar to the last, all 'presentation and spin'.

  20. Bazman
    Posted October 9, 2010 at 5:08 pm | Permalink

    In some areas there is no work. No work! Impossible for some people to understand. Not only do the poor have to be poor they are not even allowed to have children. They do not really have anything else good in their lives or any sort of career, so have children instead as a focus for their existence. The children photos are often all over the house proving this. Many small minded mean people would say they should not even have SKY TV. Most people do not have children they cannot afford and is anyone seriously for penalising the children of the feckless and less fortunate? Where will that lead? Nowhere good that's for sure. Good to see the Tory party keeping their promises to their grass roots and cutting benefits to those that least deserve it though. The 'hard pressed' middle classes. I'm hard pressed to believe some of the things wrote by them and their sympathisers.

    • JimF
      Posted October 10, 2010 at 9:50 pm | Permalink

      Please tell me who pays when everybody lives like this?

  21. Simon Too
    Posted October 10, 2010 at 12:32 am | Permalink

    There is a difference between the short-term help one is willing to give a neighbour and the long-term help. In the short term the problem will, one hopes, be temporary and in any event it takes time to adjust financially. For example, it is not practical to downsize a home within three months and, given the cost of the transaction, is not something one would wish on a neighbour. In the longer term, though, that is just what one does expect the neighbour to do.

    In the short term some degree of indemnity for expenses is appropriate : for example, payment of actual council tax. In the longer term, though, such indemnities are corrupting. A long term indemnity on council tax corrupts by removing an incentive to move to a more affordable area and nullifying the financial accountability of the local council to its electors. Payment of a fixed sum would be better, although one would have to accept that in the same way as staying in or moving to a high tax council would produce an actual loss, a move to a low tax council would produce an actual gain.

    Council tax is just an example : all benefits that act as an indemnity are, in the long term, corrupting in some way.

    • Bazman
      Posted October 13, 2010 at 7:35 pm | Permalink

      Not a priest/accountant by any chance are you? Is redemption by cuts in income what you proposing? The numbers do not add up as there will always be not enough work, or more realistically work these people can do, in these areas that will pay more than the various benefits received. If you think they should just have their income cut for their 'lifestyle' choices then just say it.
      If more people just came out with this as their real opinion then maybe the argument could be advanced, but that's not what it is all about. Is it?

  22. Lindsay McDougall
    Posted October 10, 2010 at 1:13 pm | Permalink

    How about addressing the situation of a man who has a wife and two children, then divorces her, marries a younger woman and has a couple more children. Given Britain's high divorce rate, there must be many such men, some of them wealthy, resourceful and cunning.

    Who pays for the costs of the first family? I'll wager that the taxpayer foots a lot of the bill. There is only one attitude that the state should take towards such a man. It is the question posed by Smeagol "What's it got in its pocketses?" I'm not sure that a bunch of civil servants such as the CSA is up to the job. Private detectives might do better.

  23. A.Sedgwick
    Posted October 10, 2010 at 4:02 pm | Permalink

    Jeremy Hunt should be applauded for some straight talking. Linking your piece to the hamfisted announcements on family allowance – this should be taxed at source with an exemption form as with savings interest, R85, to pay without deduction. It should cease at 16 years and only apply to children 1,2 and 3 from now on. A good concept has been hijacked over the years by loss of social respectability and responsibility and mass immigration.

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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