The strange case of the Social Security budget
Looking at what AB asks and with the 10p tax row set to rear its beautiful head again I've been doing a bit of digging and have discovered the following conundrum.
The government claims three things:
1. Inflation is no more than 3% and possibly even lower.
2. The number of people out of work is steady, if not falling.
3. New arrivals to this country do not cost the taxpayer anything.
In this year's budget, expenditure on social security payments is expected to rise from £159bn to £169bn – an increase of 6.3%.
If my three points above are correct, how is this justified?
New Judge Wed 07/05/08 11:05
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3 New arrivals to this country do not cost the taxpayer anything.
the goverment lied about number 3 ?
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Inflation is lower than 3%?: well yes, if you includewhite goods, clothing and electronics and luxury goods, which have largely decreased in price.
Take away these things from the equation - I would love to see the real figure on things which actually need to live - housing, fuel and food!!
Unemployment Figures steady or falling?: Well yes, kids are now paid to stay on at school (just one of the factors that cloud the true facts).
The Government can twist figures any way they like!
You can make figures read exactly as you wish.
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Government expenditure has risen in other areas.
Health £105bn to £111bn
Education £78bn to £82bn
Overall expenditure has gone up from £589bn to £618bn.
Government receipts have risen by £24bn (must be all them poles paying tax). Do you expect the government not to spend it?
Have you only just realised New Judge that Governments are very good at spending our money.
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Question Author
Strangely I had realised that, Gromit, and some time ago.
My point is that we are led to believe that as a result of this government's policies (as summarised in my three points) Social Security payments should, in real terms, be on the decline.
Yes, there is an increase in other areas of spending, but social security sees the highest increase. The NHS budget increases by 5.7%, Education by 5.1%, Defence by 3.1% and Law and Order by nil.
Why is it that all other areas of publlc expenditure (apart from "Other", which sees an increase of 8.1%) are treated less generously than Social Security, bearing in mind what we are led to believe?
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Just let them carry on.
No matter which party is in power we will moan about this tax, this cut, this policy etc.
Best way is just to pay no interest whatsover because what can you do about it?
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The vast majority of the Social security budget is spent on state pensions. These have to go up by the Retail Prices Index (4%+). Two other factors increasing the cost:
1. There are more and more people receiving State Pensions.
2. They live lomger so they get the pension for lomger.
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As Tichfield has pointed out, you may have a static population working/claiming benefits, but what benefits they are entitled to will not be static. In the case of more older people claiming pension every year, expenditure will increase every year for the foreseeable future. Or until the pensions timebomb is dealt with.
http://www.cer.org.uk/articles/murray_esharp_0 7apr03.html
BTW - £8bn of benefits go unclaimed every year.
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I think the government know more than we do. With a possible recession and housing slump on the way it can only lead to more redundances. They are probably planning for this with more social security payments which are paid in real time and cannot wait until the end of the tax year.
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I can think of a situation where there can be a decrease in the number not working but an increase in the benefits paid. If someone is on Incapacity Benefit (IB), the rate increases after 28 weeks and again after 52 weeks. If there were fewer folk receiving IB but those receiving it were on it for a longer period, the total payments would have to increase.
If everyone who claimed IB stayed on it for more than 52 weeks, they would see their benefit increase from £63.75 per week at the start of their claim, to £84.50 per week after a year. The total budget would have to increase by 32,5% for no increase in the number receiving it.
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