Government Responses to Wealth Flashcards
Government Responses to Wealth Structure
Introduction National Living Wage Bedroom Tax Benefit Cap Universal Credit Conclusion
Government Responses to Wealth Introduction
- Most current ones are individualist in nature
- Because Conservative government
- Incentivise work, encourage self reliance
- Collectivists believe causing more inequalities
- 1/4 children in poverty
National Living Wage
K- Introduced April 2012 by former Chancellor George
Osbourne.
- £7.83 per hour for workers over age of 25
- Set to rise to £9 by 2020
An- Successful as absolute poverty is decreasing and
unemployment is near all time low
- Lowest paid workers receiving biggest pay rise in 20
years
- Full time workers expect £2000 extra a year
An- CPAG criticise that its still not enough
- Earnings are clawed back as people losing
entitlement to tax credit
- Not keeping up with rising costs
- Family with 2 children £50 short a week, single
parent family £74 short a week.
Ev- Making progress but still not enough. Maybe Living
Wage Foundation’s ‘real living wage’ of £8.75 is what
is needed to make work pay.
Bedroom Tax
K- Introduced April 2013.
- Social housing tenants with one extra bedroom have
benefits reduced by 14%, those with 2 or more reduced
by 25%.
- People on average losing between £14-£25 a week
An- Reduce cost of welfare
- Government say it will help the 300,000 people
living
in overcrowded housing.
- DWP goal is to move 30% of people affected by 2017
An- Criticisms that it discriminates against foster carers
and disabled people
- Legal challenge that it discriminates against disabled
people with specially adapted rooms
- Helen Goodman, Labour MP said 1000 in her
constituency affected, only 100 homes.
- 90% of people having income reduced without
solution
Ev- DWP claim only 8%, under their goal as simply not
enough homes.
- Why SNP absorbed tax with devolved powers
Benefit Cap
K- Introduced in Jan 2017
- £23,000 in London, £20,000 for rest of country
An- Should incentivise work as claiming tax credits gains
exception from benefit cap
- Makes system fairer as no one claiming more than
median income.
An- Affected 116,000 poorest households, including
320,000 children.
- May make finding work harder as many families
having to move away from support systems.
- After housing costs, a family in a three bedroom
house in Leeds at local allowance rate is £100 short a
week.
Ev- DWP backed study found people less likely to find work, defeats purpose and makes it ineffective.
Universal Credit
K- Rolls 6 legacy benefits into one monthly payment
- Should be fully rolled out by 2022-2023
An- Successful as incentivises work, makes system
simpler and more efficient.
- Ministers say early trials found more likely to work
An- Unreliability causing many landlords to refuse people
on universal credit.
- Also causing late rent payments.
- Could cause rise in evictions, homelessness
Ev- 3 million people lost £1800 a year, causing more
inequalities
- Should be fixed before being rolled out.
Responses to wealth conclusion
- Ineffective as most focus on getting people to work
- Most people in poverty are already working
- Should help people in work more
- Real living wage, tax credit system
