I am going to get a lot of stick for this post but here goes. The Universal Credit is being made out to be big saviour by the Tories in terms of making work pay and benefits not. However, I have some personal experience in recent months which has made me look at what people are getting and why.
I have had requests to go part-time and people turn down jobs, all because of benefits, not career choices. As readers will surmise, its not like I work in a low-paid industry, but in the City.
But here we go, if you work part time for 60 hours a month and earn say £13 an hour, not great, but far above even the living wage in London, it comes to £720 a month - for effectively 2 days work a week. Annually that is £9360 per year, so no income tax to pay as it is under the free amount threshold. On this there is NI of course, which amounts to £193 per year, so net income is just £9,165.
Also let's say you are also a single mum, you would be in receipt of the full working tax and child tax credit of £7,165 per year. Then there is child benefit at £4175 for her child. Of course, this person lives in Southwark and so get housing benefit and income support to help with the rent and council tax - this amounts to another £7592 a year (I checked).
All in all this is a net amount of £28,097 income. Now, this is post-tax income of £2,341 a month, or a little over £500 per week. I am not saying this is some kind of luxury lifestyle in an expensive City, far from it. It is a net income equivalent to half of what someone would earn doing a full time £85,000 job. Or a normal full time job paying £40,000 a year.
So my beef is that the real cost per hour is huge, when viewing private sector income and state sector support together. The work value delivered is £9360, so even with a margin of 30% this equates to £3000 of added value - but the cost in benefits etc is £19,000. I am yet to work out a way to matrix this with gross productivity per hour which is falling in the UK, but given we are in effect paying £36 an for work that has a market rate of £13, there may be a link?
No wonder to me now why so many of my team are kicking their boyfriends out and begging to go part time. Maybe Universal Credit is the answer, but from my perspective we are a long, long way from a Capitalist economy now.