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Monday, April 1, 2013

IDS and £53 per week

There has been an awful lot of kerfuffle on Twitter about this article today, culminating in a petition urging Iain Duncan-Smith to "prove his claim of being able to live on £7.57 a day, or £53 a week".

Like many causes celebre of the Left, the actual situation is not so cut and dried—especially as regards the earnings of the man who initiated the question.

The first reference that I saw was to a paragraph in this BBC story...
Market trader David Bennett, 51, who works between 50 and 70 hours a week and earned around £2,700 last year, said his housing benefit had been cut from £75 a week to £57. His income works out at around £53 per week.

This paragraph raised some general questions in my mind...
  1. If Bennett really is only earning £2,700 whilst working 50 to 70 hours a week, then perhaps market trading is not the job for him? Perhaps he should find a job that doesn't force other people to subsidise him?
  2. Personally, it boggles my mind that anyone would work such long hours for so little money: perhaps the Inland Revenue ought to have a long, hard look at Mr Bennett's accounts to ensure that he is declaring his full income?
However, the paragraph also raised some rather more specific questions too...
  1. Bennett's declared income of £2,700 equates to £51.92 per week (£2,700 ÷ 52): in fact, 52 × £53 = £2,756. So is this, in fact, what the BBC means by "his income"?
  2. Mr Bennett gained more money from his Housing Benefit (£75 × 52 = £3,900) than he supposedly did from his market trading activities. And this is still true even after his benefit was cut (£57 × 52 = £2,964).
  3. Assuming that Bennett's rent is £75 per week (the amount of his previous HB payments) then, after the cut, he has to find an extra £28 from his £53 per week earnings—leaving him with only £25 per week. This does seem somewhat tricky to live on.
So, given that the BBC's paragraph was ambiguous at best, I went to visit this Telegraph article cited in the petition mentioned above. And what do we find there...?
David Bennett said he earned around £2,700 last year - around £50 a week - and has had to borrow money after his housing benefit was cut to £57 a week. It later emerged that Mr Bennett also gets tax credits, which can be worth between £37 and £50 from the Government. However, he is left with just £53 a week after paying rent and bills.

Right. So Mr Bennett was being slightly economical with the truth; as are the BBC—who have not altered their story as of 10pm today. There is, I think that you will agree, a considerable difference between these three options:
  1. having £53 per week to pay for everything—including rent and bills;
  2. having £53 per week to pay for everything except rent;
  3. having £53 per week left after paying rent and bills.
The petition calls for Iain Duncan-Smith to go for Option 1—that is, to pay for everything with £53 per week.

Whereas the man who inspired the whole thing—David Bennett—actually lives on Option 3, i.e. that he has £53 per week after paying rent and bills (and what, exactly, is covered in "bills", e.g. is travel included?).

These are two very different propositions.

I have, in my working life, lived on considerably less than £53 per week (or £212 per month) after paying rent and bills. Even in 2008, having done the calculations, I was living on just under £60 per week (after rent and bills)—not much more than Bennett.

As some people have pointed out, the real issue is that David Bennett might feel totally helpless because he might be on that kind of income for the foreseeable future.

However, that point simply comes back to whether Mr Bennett should be working as a market trader—given that he earns only £2,700 per year doing so. After all, if the money is that important to him, even MacDonald's would pay him the minimum wage. If Mr Bennett chooses not to do that—which he might, for all manner of reasons—then that is his choice.

But that is no reason why everyone else should be forced to subsidise that choice.

36 comments:

  1. "I have, in my working life, lived on considerably less than £53 per week (or £212 per month) after paying rent and bills. In fact, having done the calculations, I was living on just under £60 per week (after rent and bills) as recently as 2008. "

    Isn't £60 per week more than £53 per week rather than "considerably less"?

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    1. Yes, but it isn't contradictory, because there are two separate statements: he has "in his working life" lived on much less, and "as recently as 2008" he was living on just under 60 per week.

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  2. lets see one of these people cutting benefits live on them not for a week or a month for a year let there kids live the life and there wives then they will see how hard it is.

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    1. But benefits are not a source of income, people should not be living off them for a year. Benefits are there to help sustain the minimum requirements of life in the period (a few months) between a person losing a job and finding another one.

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    2. That doesn't apply to in work benefits. According to the homeless charity Shelter, only one out of every eight people who receive housing benefit is unemployed - the vast majority of HB claimants are pensioners, carers, people with disability and, of course, people on low incomes

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  3. Anon 1,

    "Isn't £60 per week more than £53 per week rather than "considerably less"?

    Yes. But then that was easy to calculate—when I was paid £24k a year.

    I have, of course, lived on far, far less than that (my first job paid £12,500 a year).

    DK

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    1. £60 in 2008 is worth roughly £64.80 now; 20% over the £53 figure. But the point isn't that £53 is impossible for someone to live on (even after rent+bills are taken care of), or that IDS couldn't do it - thousands of people, like yourself and myself, can and have lived on small amounts. The point is for him to experience what it is like for himself, in order to gain the personal perspective of what it is like to do so.

      Personally, I am on JSA (+aged under 25). I would love to have £60, £64.80, £53 or whatever after bills are paid for.

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  4. 10:37 Anonymous: The quote you have posted does not dispute that £60 per week is more than £53

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  5. No, but I have edited for clarity.

    DK

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  6. Wouldn't someone earning £2700 a year for a 50-70 hour week also qualify for tax credits?

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  7. Maybe they should go for the Jobseeker's allowance amount for 16-25 year olds then? £56.25. That'll make all the difference. After all, IDS thinks that's excessive too.

    I've voted Liberal or whatever guise all my life. I believe in coalitions, I accept the situation that the party finds itself in. I even accept that there will be horrible policies that come from such a government that the party cannot stop. However, I can't accept the desperate defence of those policies. Danny Alexander's piece in The Sun, the bloody Sun, yesterday was appalling and upsetting.

    These welfare reforms disgust me. You can examine certain examples in minute detail all you like, but this broad raid on the less well off cannot be justified.

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  8. vote ukip get these morons out

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  9. Shut up you dirty, horrible scumbag.

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  10. Then you're hero without any discernible vices if you were able to live thus. I work 50-plus hours a week as a national newspaper journalist on a 'good wage' in London and we regularly go £250 a month over our budget without any irregular activities. We are destroying the 'working 'class in London with the cost of living and must do something about it before we find our infrastructure crumbling

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    1. All your 'surplus' goes on 'rent'. Be it to your landlord/mortgage company or in taxes.

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    2. A couple of lunches less per month at "The Ivy" should just about balance your books then...

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  11. Anon,

    "We are destroying the 'working 'class in London with the cost of living and must do something about it before we find our infrastructure crumbling"

    The single worst thing that this and previous government's have done is to continue to push up the price of energy—and that pushes up the price of EVERYTHING.

    DK

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  12. "vote ukip get these morons out"

    And get Ed Balls back. Brilliant!

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    Replies
    1. A vote for the Tories is likely to split the UKIP vote but at least UKIP will take votes from Labour and the Lib Dems as well, which can not be said of the Tories.

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  13. LS,

    "And get Ed Balls back. Brilliant!"

    Although it would be both appropriate and moral for Balls to take the flack whilst having to sort out the mess that he and his fellow goons created...

    DK

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  14. Excellent post. And people wonder why newspapers are going to the wall when the lazy fuckers that work for them can't be bothered scratching below the surface, and bloggers are.

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  15. "If Bennett really is only earning £2,700 whilst working 50 to 70 hours a week, then perhaps market trading is not the job for him? Perhaps he should find a job that doesn't force other people to subsidise him?"

    Good luck with that in the current job market.

    Having found myself long-term unemployed and been shunted into the Work Programme, I've found the private provider's focus to be on finding a way for me to become self-employed - with setting up a market stall being one proposed panacea to unemployment (though I've so far managed to rebuff that proposition by pointing out that I have no retail experience). I've been told that if I were to become self-employed and be unsuccessful, I'd only be £15 a week worse off than I am now, because I could still claim various benefits and credits, go to soup kitchens, etc - I don't think their figures take account of my energy bills, though.

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  16. Daily Mail dishes the dirt:
    http://www.dailymail.co.uk/news/article-2302545/Im-ducker-diver-Truth-BBC-welfare-victim-dared-Iain-Duncan-Smith-live-53-week.html

    After reading this, I'm not convinced he actually is left with £53 per week after rent and bills, as per the Telegraph claim. He estimates his monthly earnings to be £200, and apparently gets £433 in housing benefit and tax credits a month. His housing benefit is £57 a week, so that would be £247 per month, so his income from tax credits must be £186 per month. So, excluding housing benefit, he gets £386 per month. From that he presumably has to pay £153 on the portion of the rent not covered by housing benefit, and apparently £176 on utility bills, leaving £57 per month. He claims after he's also paid his £5 council tax, his landline and mobile phone bills, and (sadly) his Sky subscription, he's left with £23 a month. That's £5.31 per week.

    At this point I might wonder if someone at the Telegraph dropped a decimal place somewhere, but my guess is that "£53 per week" refers simply to his own estimate of his income from work. £53 multipled by 52 weeks is £2756 per year, which is as near as dammit the £2700 he claims to have earned in 14 months. Given he says he's been unable to work much this year because of the weather, he probably earned the full £2700 last years, so that's not far off £53 per week on average last year. He didn't include his tax credits, which would be (based on the figures in the Mail) an additional £43 per week. So, before rent and utilities, he has £96 per week to live on. After rent and utilities (and council tax top-up), he has £19 per week to live on (some £14 of which he apparently spends on phone bills and Sky). I can't imagine he lives on £5 a week, so I'm guessing he gets help from friends and family (as I do too).

    I'm going to say, IDS should be made to live on £19 per week after rent, utilities and CT (undoubtedly IDS' rent, bills and CT would be much higher than a market trader's, so it's only fair).

    Reading the article, we learn Bennet had a job as a credit manager (I have no idea what that is) until 3 years ago, when he was made redundant. He has been working as a market trader for 14 months, but has earned only £2,700 in that. The "70 hours a week" is clearly a bit misleading (he said he sometimes worked up to 70 hours a week, but on the other hand says over the winter he's been barely able to work at all). He obviously has personal problems (he's divorced, he apparently plays poker) and combined with the base depression of being unemployed it's not hard to imagine these are barriers to him finding work. It's hard not to feel that he should cancel his Sky subscription and stop playing poker. He's definitely not a Saint. But I still feel sorry for him.

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  17. Not sure I agree on the Sky subscription: that's probably the most cost-effective entertainment in terms of pounds-per-hour that you could have.

    More generally, what Anonymous at 2:49AM said. The reason he's running this hopeless business is because he's been shunted off JSA onto a "self-employment" scheme in order to rig the unemployment numbers. Which, in turn, implies that he wasn't able to land a minimum wage job when he was on JSA.

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    1. A library is far more cost-efficient at the point of use, being free.

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  18. DK I could support these measures if we had seen a reduction in the cost of running that circus at Westminster.

    However, we have not seen one MP made redundant, nor have we seen the John Lewis list replaced with the ASDA or Aldi one.

    Quite frankly I'd like to see the whole herd of Westminster piggies living on £53 a week for a year!

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    1. This comment has been removed by the author.

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    2. "However, we have not seen one MP made redundant,"

      A great many MP's would have been made redundant if LAbour and the LibDems would have accepted the boundary changes equallying constituency sizes and reducing the number of MP's overall. All parties would have lost MP's. But LAbour the great vanguard of the poor blocked it, as it plays to their advantage of needing less uk voters.

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  19. IDS should be made to do this challenge. I want to know where I am going wrong! I'm long term sick/disabled. None of my conditions shall magically cure themselves, well not in my lifetime.

    IDS did do some programme a while back, think Tim Loughton was in it too. Tower Block of Commons? Think that was what it was called, and if I'm right then IDS QUIT AFTER 24 HOURS! If he's going to do this he HAS to relinquish his expenses etc and be placed in a small flat or bedsit with gas/electricity PAYG meters. Also unsure where he's got £53 from, 'award' him £71/week but deduct £12/week for social fund. He has to do this challenge.

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    1. IDS quit after 24 hours because his wife had been diagnosed with cancer.

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    2. IDS pulled out of the programme when his wife was diagnosed with breast cancer.

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  20. £53 per week to feed and hydrate yourself should not be a problem for anyone -- I assume all bills & other outgoings are covered before the £53. I'd probably struggle if I wanted to go out & entertain myself though, but over a month i'd have no issue saving enough to do that once or twice.
    CP

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  21. Don't forget the guy is self employed. So the 2700 he quotes is his net taxable income, not his gross income. Quite a bit of his living costs could be assigned to business costs and thus reduce his net income. He could run a van for example and claim all the costs against taxable income. If so he shouldn't use it for private use, but who's to know if he did? Easy little fiddle there. Plus you can assign a proportion of your utility bills to business costs - maybe only 10-20% but every little helps. And so on and so forth. I severely doubt that his gross profits from market trading are £2700.

    A few years ago a guy I know got divorced. He was running several market stalls at the time and a shop selling bric-a-brac too. He informed his ex-wife's solicitor that his net taxable income for the year was £3000, and thus wouldn't have to pay any child support. And had the paperwork to 'prove' it.

    If I was this guy I'd have thought long and hard about sticking my head above the parapet like he has - I doubt his accounts would survive a thorough going over by HMRC.

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  22. I have been a market trader for years and it's impossible to work seventy hours a week, When does this guy do his buying? he could work five days plus maybe a Sunday market in the summer, And on average seven to eight hours a day work it out.
    Who does this guy think hes kidding when he says he takes £2700 a year he must think we are all wet behind the ears in the seventy's my stall rental was over £400 a week often taking over £2700 a week.

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  23. Wish I could afford Sky!

    It seems to me that the point here is that IDS doesn't have to live on £53 a week. He's already got himself a good job! I seriously doubt this guy lives on that amount, except by his own design. And I am somewhat surprised at the knocking the self employed are getting here! I'm self employed, have been for a long long time. What's wrong with that? Some weeks, I don't earn anything at all! Last year, I had a pretty good year by my standards, I still can't afford Sky, a smart phone or a decent holiday! Perhaps I'm just being a selfish twat?

    A lot of anonymous posters on here!

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