Quote:
Originally Posted by Ignitionnet
Tax credits were introduced in 1999. Our debt to GDP ratio continued to fall until 2003, and even after that the current budget was still in balance for a time after 2003 with the borrowing being soaked up by capital expenditure.
Tax credits were introduced for a similar reason to the minimum wage - an attempt to arrest the increase in the UK's GINI coefficient and subsidise lower paid work to reduce reliance on out of work welfare. Google GINI it if you don't know what that is, but given you're so certain it was just about building a client state I won't hold my breath.
Try not to let facts get in the way of a nice rant.
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Tax Credits Act 2002
What has debt to GDP ratio got to do with it? Even though public debt as a %age of GDP still increased prior to 2008. I am talking about having to borrow when you shouldn't. We are talking about around
£40bn each year prior to 2008. In household terms if you have a good income and you are still having to take out additional loans, your spending is too high. The previous systems to tax credits were less generous but were still acceptable.
After 2008 you had the changing of housing benefit with the Local Housing Allowance which was AGAIN far too generous(50th percentile rather than the current 30th). Labour admitted as much in a 2009 report. That again increased borrowing more than it needed to.