Wednesday, October 28, 2020
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Reader’s comment: Tax credits all over again

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In response to Kathy Gyngell: Mrs May denies the reality of the housing crisis, Robert wrote:

It’s another example of how politicians and public servants find convoluted and illogical arguments to justify splurging public money. Spending an extra £2bn on council housing will simply give Theresa May, and those of her rather condescending ilk, more social housing to ‘look down’ on. The idea that, magically, this spending will get these so-called ‘second class citizens’ to have a class epiphany and say ‘I’m an Estate Person’ not a ‘lower class council house tenant’ – that is, I accept the new label given to me by my betters – is nonsense.

It was the same with expanded spending on tax credits. Tax credits, it was claimed, would remove the ‘stigma’ of being on ‘benefits’ yet people still regard tax credits as government benefit payments – which they are. Calling a government benefit a ‘tax credit’ may have been designed to ultimately get the vast majority of people on benefits back to work, off the ‘stigma’ of being ‘on the dole’ for example, and reduce the overall cost of welfare payments but it has simply vastly inflated the benefits bill (£30bn-plus, now, a year for tax credits alone) because both employers and employees have used tax credits as a way to get the state to subsidise low pay, often part-time, work. Something ostensibly designed to reduce welfare dependency ended up massively increasing it.

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