When the Coalition came in the promised no more red tape for small business owners and the self-employed of which I’m both. Then the Agency Workers Directive came in and then rather than do what the French do, which is to ‘translate’ the directive to be compatible with their ‘civil code’, which in our case would be ‘common law president’ they basically just did everything it said the way it said it. Every EU Government has the power to use ‘proportionality’ to interpret laws and the French make the biggest use of this. This basically says that any government can interpret an EU directive on the basis of what it was intended to do on no on the technical detail with which it is written.
As someone who holds a Masters in the Economics of Information Systems it is my golden rule that one should never introduce a new information system, such as a way of collecting tax, without first exhausting possibilities of expanding the use of existing information systems.
The information systems I’d like to expand are National Insurance, to reduce burden on small businesses who engage agency workers or self-employed subcontractors as well as traditional employees, and the student loan system, to replace welfare benefits and collect fines and other orders to pay money more efficiently to disincentivise crime.
I would like Employee National Insurance to be optional, with the exception of a ‘basic element’ to cover holiday pay, A&E, and other essential services. I’d like Employers NI contributions to be abolished. With this optional NI, employees would be able to subscribe to any number of social insurances that central government would provide, or not do so and take out private or people insurance with other providers such as private insurers or mutual health trusts. The social insurances NI could be used to fund are:
- Public health insurance (i.e. the NHS hospitals and primary care and sight tests, all prescriptions)
- Public parental leave insurance (to replace SMP, SPP)
- Public incapacity insurance (to replace SSP, IB, ESA)
- Public payment protection insurance (to replace Mortgage interest relief, Job Seekers Allowance, and other costs that arise due to redundancy, etc.)
- Public emergency relief insurance (to protect people in areas at risk of flood or victims of Acts of God that private insurance companies won’t fund, such as those in my ward of Treforest living near the River Taff).
There could be many other schemes that could be introduced, such as to provide low cost energy to vulnerable groups like pensioners or disabled. The actual payment out of these insurances could be done using the new information systems the UK Government is creating for ‘Personal Independent Payment’ to replace Disability Living Allowance. All it would mean is adding a few more categories to include non-disability related elements, such as pregnancy, maternity and paternity.
I’d like NI to be paid by and the insurances paid out to any UK citizen of working age wherever in the EU they are whether they are in work as an employee, self-employed or director, or whether they are out or work claiming welfare or in education receiving a student loan or grant.
People out of work or whose income falls below a certain amount each month, instead of being entitled to the various welfare benefits should have to take out a maintenance loan, using the information systems for the student loan scheme. They would pay their National Insurance out of this loan. All the people out of work on say incapacity benefit or ESA would have to take out this loan and each year, and like I as a student see, they will get a statement every year showing how much they were paid out and the amount of interest they are paying on it. It might be that a ‘carrot and stick approach’ could be used where those who do any work, even just a couple of hours, wouldn’t have to pay the interest. Like students they wouldn’t have to pay the loan back until their income was over 21,000GBP.
People trained in economics and IT, and who like me have been through the whole benefits and tax system, from claiming income support, incapacity benefit, housing benefit, disability living allowance, and tax credits, as well as the rest of the system paying Class 1 and 2 NI and income tax, paying dividend tax, filing VAT returns, PAYE statements, CIS statements, paying corporation tax and doing self-assessment as well as receiving student loans have a more intrinsic understanding of the system than may others who may only have been exposed to one part.
So I think great credence should be given to how I think the system could be improved with minimum cost in terms of new information system, and how to overcome the following fears which I and others have had
- The fear of coming off benefits and going back into work in case it doesn’t work out
- The fear of losing essential benefits like free sight-tests and prescriptions due to increased income
- The fear of making a wrong calculation on PAYE, VAT, CIS and the 2000GBP fine that could follow
- The fear of being fined due to errors or omissions on the complex self-assessment system
- The fear of not being able to pay for life’s essentials due to loss of employment or being forced of benefits
- The fear that because I have a good day where my disabilities aren’t as bad as usual that the government will use it as evidence to take all my support away
The maintenance loan could also be used as a supply side policy to get rid of rogues like loan sharks and payday loan providers. Employees who can’t afford a new washing machine or need money to pay for essentials like food should be able to use this extension of the student loan system to fund it safely then pay it back through the payroll like they would a student loan.
This maintenance loan system in place of benefits could also be used to collect fines for parking tickets, fixed penalty notices, County Court Judgments, child support and compensation payments. If someone’s maintenance loan was reduced or the ‘student loan’ component of their wages went up when the person was issued such an order then they may see the consequences of their actions more clearly and act more appropriately in future.
