Is Greggs £300 staff bonus actually a donation to the Tory government?

Loadsamoney: Greggs is giving around £7 million to the government – indirectly, as the £300 per-employee bonus will be taken from their Universal Credit claims.

On the face of it, this looked like a pleasant display of solidarity with hard-working staff – but it seems they won’t actually be any better-off.

Bakery chain Gregg has announced a £300 bonus for thousands of staff members – their share of a £7 million total resulting from a “phenomenal year” for the company.

There’s just one problem: most of these people are on Universal Credit and any bonuses they receive will be subtracted from their benefit payments in the future.

That’s the word from Twitter user Ally Fogg, anyway. In a tweet that has, itself, proved phenomenally popular, this person stated [boldings mine]:

“Just asked my Greggs inside informant if everyone is chuffed about their ~£300 bonus?

“‘Not really. Most of us are on Universal Credit. We’ll get the bonus end of Jan & it will be taken out of our UC payments in March. They’ve basically just handed £7m back to the govt.'”

So we see that Universal Credit is a poverty trap.

The Tories have succeeded in keeping minimum wages lower than the minimum that people need – in reality – in order to pay all their bills.

This means people on minimum wages – like the majority of Greggs employees – must claim state benefits, and the state benefit at the moment is Universal Credit.

UC automatically adjusts the amount of benefit people receive according to any changes in their income – in real time. So a £300 bonus would wipe out a working claimant’s benefit payments for a period of time.

And the money would stay in the Treasury. The employees won’t see any extra cash at all.

Ally Fogg went on to lay no blame on Greggs:

“I’m not criticising Greggs. They’re trying to do the right thing. Problems are 1/ Service sector wages are so dismally low that the govt (or taxpayers) are effectively subsidising employers to enable them to pay starvation wages, and 2/ UC is a chaotic, counterproductive mess.”

But obviously something needs to change if companies really want to give their staff a boost. Does anybody have any suggestions?

Source: Greggs staff to get £300 bonus after ‘phenomenal year’ – BBC News

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11 thoughts on “Is Greggs £300 staff bonus actually a donation to the Tory government?

  1. trev

    Back in the late 80s the boss where I worked payed the employees a Christmas bonus consisting of a plain brown envelope containing cash. It was entirely separate from our wage packets (also cash) and didn’t go through the books and wasn’t included on our wage slips.

    1. kastaka

      Unfortunately these days if you didn’t declare that as a recipient, you could be liable for criminal charges of benefit fraud…

      1. trev

        Yes and I certainly wouldn’t recommend anyone to not declare any income if claiming Benefits. Fortunately, back in the days when I was working full time, there was no in-work Benefits that I was aware of and wages matched the cost of living more than adequately.

  2. Dan

    I suppose Greggs could always give staff bonuses in cash so that the UC system doesn’t pick up on it…

    1. Mike Sivier Post author

      Tax avoidance?

      I know – it’s hilarious, considering the Tory tendency on tax.

  3. trev

    No disrespect to the staff but I never go to Greggs as they are too expensive, the pasties are nicer at the Pound Bakery, a sort of cheaper version of Greggs, where you get two pasties/sausage rolls for a quid.

  4. Gareth Morgan

    I’ve had a more detailed look at this, shows between three-quarters and two thirds of the bonus goes to the government for people on Universal Credit. Points out there may be much better ways to get rewards to the workers.

Comments are closed.