David Cameron says UK needs to Lower tax and Lower Welfare

David Cameron has recently promised to end the “merry-go-round” which happens when low income earners are taxed and then handed back money in benefits. David Cameron says “UK needs to Lower tax and Lower Welfare”.

He says it’s wrong to try to treat the symptoms of the economic and social problems that the UK faces, while ignoring what’s actually causing the low pay. This comes amid the debate over the planned welfare cuts, worth £12bn, although the details have not yet been revealed.

While ministers have pledged to protect the child benefit and pensioner benefits, MR Cameron’s speech is a good indication that most of the £12 will be coming from the housing benefit and tax credits.

The treasury has reported that approximately 4.5 million families received working and child tax credit in the year 2013 to 14, while almost 70% were in some type of employment.

The Government has already set out plans to reduce the benefits cap from £26,000 to £23,000.

He said that there is a “tolerance of government failure” in the current social policy and said that schools have been consistently failing generations. Mr Cameron also said that he aims to make sure that work is paying, and strives to reduce the tax burden on those who have low incomes, while ensuring the minimum wage is reflecting improvements in the economy, and guaranteeing that young people will have the necessary skills for competing in the workplace.

The problem is that people who are on minimum wage then have that money taxed, before the money is given back by the government (and more) in welfare. This means that the symptoms of the problem are being dealt with, but it’s also creating a cycle of people becoming “welfare dependent”, something which effects the way that people see themselves, damaging their self-confidence and motivation to work.