The Benefit Cap rationale is unscrupulous UK employers!

The Benefit Cap …I could go on and on with the impacts of this policy and without any form of conspiracy theory whatsoever say that UK employers who have staff on full time minimum wage jobs will get rid of them and replace with 2 part time staff covering the same post!

If that sounds truly conspiracy theory writ large reader then look at the FACTS of what it means for the employer and for the tax and NI take by government if instead of paying a salary of £13,286 per year which is 35 hours per week at £7.30and in the left hand column below; as opposed to splitting that into 2 lots of 17.5 hour jobs at £7.30 per hour …

obc-income-tax

No Income Tax take or National Insurance take for central government and no Employers NI is what the Benefit Cap makes possible for UK employers – You can hear the cries of Hallelujah from the Institute of Directors and CBI can’t you?

The employer saves £714.01 on a £13,286 salary – a saving to the employer of 5.37% on the employers wage costs!!!  If anyone believes UK employer would not do this then how is the weather on Cloud Cuckoo Land?

Now if only the Tory government could come up with some form of devious plan to ensure that some 208,000 or so existing tenants on benefit would have to work 16 hours each week on the lowest possible wages and work at any old time their employer sees fit .. AND …

… a further 197,000 of new workers each and every year (the 1.31 adults in the 150,000 households refused social housing due to Benefit Cap) who would give their right arm to keep a roof over their children’s heads  ….

And there you have the real reason for the BENEFIT CAP!

Think of how the Tories will sell this when it comes to fruition!  The policy may see 150,000 per year job losses for existing workers YET those 150,000 will be replaced with 300,000 new (ahem!) jobs for new workers!!!

Anyone hear Theresa May saying “The success of our handling of the economy has created a further new 150,000 jobs” in the House of Commons?

Yes we all can can’t we!!

(PS – This net 150,000 new workers (ahem!) would also increase the welfare bill by about £400 million per year in Working Tax Credit and no tax or NI take  – not including any child care costs which the taxpayer would also pick up!!)

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If you are a tenant affected, an activist or campaigner who would like to support those affected in your area, in fact anyone affected by or concerned with the Benefit Cap can contact me in confidence at benefitcap@outlook.com.

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12 thoughts on “The Benefit Cap rationale is unscrupulous UK employers!

  1. It’s no conspiracy theory that businesses use part-timers to avoid employment taxes. I was on the board of a directors of a small charity. Front-line services could have been staffed by people working more than 16 hours a week, but instead the most we offered was 16 hours a week so that we minimised the amount of Employer’s NI we had to pay. Was it fair? – I don’t think so, but I was outvoted.

    I’ve had a fair few jobs myself at 16 hours a week – too many hours to get JSA (and the NI credits that go with it), but not earning enough until recently for each week’s work to count towards my NI record. The result is I’ve had to pay £13 a week in Class 3 NI to protect my eligibility for the Basic State Pension. I think a lot of people have fallen into this trap without realising it.

    1. Wasn’t arguing it was a new ‘device’ for employers; rather that the benefit cap guarantees a steady stream of hundreds of thousands more workers who have no choice BUT to work part-time irregular hours at the employers choosing and for minimum wage

  2. I was just commenting on the first few paragraphs before I had read the whole article, but I do agree with the points you are making throughout.

    They inflate the supply of labour using the benefit cap and other wheezes, deflating wages and minimising the cost of hiring people. The captains of industry get bigger bonuses for the resulting bigger profits. Meanwhile the government gets to crow about having “created new jobs” and reducing spending on benefits because the claimant count has gone down even though many are part-timers doing jobs that would have been done by a full-timer. Meanwhile the tax take goes down, so giving an excuse for more austerity. And so long as people don’t ask why we still need austerity after this “economic miracle” the cycle continues.

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