Monday, April 8, 2013

"There is no such thing as public money"—Mrs Thatcher



No, Mrs Thatcher was not a libertarian. But she at least understood that the money that governments' spend is sweated from the toil of the individuals who earn it.

And no, Mrs Thatcher was no infallible goddess. But compared to what came before and (most especially) after, she may as well have been.

And no, Mrs Thatcher did not do everything right: but she had a vision that rose above that of merely lining her own pockets, and she had the balls to see it through.

R.I.P. Mrs T.

Sunday, April 7, 2013

Missing the point of "the Bedroom Tax"

Of course, the Bedroom Tax is not a tax: it is the removal of a subsidy, which is not the same thing at all.

However...

The point of the Bedroom Tax is not to address the housing shortage in this country (because a shortage of physical buildings does not really exist); the point is to address the shortage of suitable housing.

There are various organisations—Local Councils and Housing Associations, essentially—who have a legal obligation to provide housing for people. However, it is often very difficult to house these people (whilst complying with the other laws governing what is suitable): this is largely because tenancies, once awarded, are not only for life but can actually be passed on as an inheritance (although only once).

As such, a woman with four kids can be awarded a large house; once those kids have grown up and moved on (probably to other subsidised tenancies), the mother is still allowed to live in the four bedroom house. And then to pass it on to one of her children.

What this means is that there are many people living in subsidised houses that have lots more rooms than they need—whilst down the road, there might be another mother with four kids who is forced to live in a two bedroom flat.

As I said above, there is a shortage of suitable housing—not an absolute shortage.

I have spoken to housing providers who are cautiously in favour of the Bedroom Tax. This is because it will allow them a fighting chance to comply with their legal obligations to provide suitable homes for the homeless.

And, ultimately, this is what the Welfare State was envisioned to be—a safety net for those reduced to penury on the streets, not a lifestyle choice for those who want a nice life paid for by everyone else.

Monday, April 1, 2013

IDS and £53 per week

There has been an awful lot of kerfuffle on Twitter about this article today, culminating in a petition urging Iain Duncan-Smith to "prove his claim of being able to live on £7.57 a day, or £53 a week".

Like many causes celebre of the Left, the actual situation is not so cut and dried—especially as regards the earnings of the man who initiated the question.

The first reference that I saw was to a paragraph in this BBC story...
Market trader David Bennett, 51, who works between 50 and 70 hours a week and earned around £2,700 last year, said his housing benefit had been cut from £75 a week to £57. His income works out at around £53 per week.

This paragraph raised some general questions in my mind...
  1. If Bennett really is only earning £2,700 whilst working 50 to 70 hours a week, then perhaps market trading is not the job for him? Perhaps he should find a job that doesn't force other people to subsidise him?
  2. Personally, it boggles my mind that anyone would work such long hours for so little money: perhaps the Inland Revenue ought to have a long, hard look at Mr Bennett's accounts to ensure that he is declaring his full income?
However, the paragraph also raised some rather more specific questions too...
  1. Bennett's declared income of £2,700 equates to £51.92 per week (£2,700 ÷ 52): in fact, 52 × £53 = £2,756. So is this, in fact, what the BBC means by "his income"?
  2. Mr Bennett gained more money from his Housing Benefit (£75 × 52 = £3,900) than he supposedly did from his market trading activities. And this is still true even after his benefit was cut (£57 × 52 = £2,964).
  3. Assuming that Bennett's rent is £75 per week (the amount of his previous HB payments) then, after the cut, he has to find an extra £28 from his £53 per week earnings—leaving him with only £25 per week. This does seem somewhat tricky to live on.
So, given that the BBC's paragraph was ambiguous at best, I went to visit this Telegraph article cited in the petition mentioned above. And what do we find there...?
David Bennett said he earned around £2,700 last year - around £50 a week - and has had to borrow money after his housing benefit was cut to £57 a week. It later emerged that Mr Bennett also gets tax credits, which can be worth between £37 and £50 from the Government. However, he is left with just £53 a week after paying rent and bills.

Right. So Mr Bennett was being slightly economical with the truth; as are the BBC—who have not altered their story as of 10pm today. There is, I think that you will agree, a considerable difference between these three options:
  1. having £53 per week to pay for everything—including rent and bills;
  2. having £53 per week to pay for everything except rent;
  3. having £53 per week left after paying rent and bills.
The petition calls for Iain Duncan-Smith to go for Option 1—that is, to pay for everything with £53 per week.

Whereas the man who inspired the whole thing—David Bennett—actually lives on Option 3, i.e. that he has £53 per week after paying rent and bills (and what, exactly, is covered in "bills", e.g. is travel included?).

These are two very different propositions.

I have, in my working life, lived on considerably less than £53 per week (or £212 per month) after paying rent and bills. Even in 2008, having done the calculations, I was living on just under £60 per week (after rent and bills)—not much more than Bennett.

As some people have pointed out, the real issue is that David Bennett might feel totally helpless because he might be on that kind of income for the foreseeable future.

However, that point simply comes back to whether Mr Bennett should be working as a market trader—given that he earns only £2,700 per year doing so. After all, if the money is that important to him, even MacDonald's would pay him the minimum wage. If Mr Bennett chooses not to do that—which he might, for all manner of reasons—then that is his choice.

But that is no reason why everyone else should be forced to subsidise that choice.

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