WOTEfix*: Loans not Grants

© P Dawe December 2024   V0.1

In the interests of equality between students and other recipients of benefits ALL benefits should be treated as loans, with the debt repayable when people have the ability.

The benefit paid when at university, when the person is unable to earn, is not only accumulated as a debt, but they also have the cost of their education charged to the same loan account.

Yet people who are able to work are given their benefits without the obligation to repay.

The genesis of the UK benefit system was The Tithe. Here everyone contributed a tenth of their income and the pool would pay out if circumstances went bad. This morphed into Mutual Insurance where People would pay into a common pool and if circumstances went bad for a member of the Mutual, the pool would pay out. Later, governments took control of “insurance”, collecting taxes and paying out “benefits” when individual circumstances went bad. 

Unfortunately, politicians found that by promising to pay out regardless of the bad circumstances and regardless of tax income, they could enjoy the popular vote. This led to the advent of deficit finance, the government could make the pay-outs, even when the taxes did not cover the cost of the pay-outs. 

Worse, some of the public now see this insurance, not only as a right, when they are in bad circumstances, but expect pay-outs even when the circumstances are self-induced. Some of the public even game the benefit system. Choosing worklessness, rather than doing low prestige work. Thus, we have labour shortages in many low prestige jobs, while having suitable people content to live off benefits.

One should similarly argue that all government, and indeed charity, grants, should also be loans, rather than grants.

Why do businesses enjoy government hand-outs, with no obligation to repay? Many charitable projects that relied on grants, fail when the grants stop being paid?

*WoteFix- is an initiative to highlight discussion topics and subjects that need fixing but are not policy documents (WOTE will not be doing policy, remember?) but deserve to be noted and discussed with politicians who are smart enough to acknowledge and understand the significant bond of trust represented by the Wote Pledge.