Forum Topic

You want to be clear on terminology, and say that you're using the term "welfare" to define all DWP spending that isn't state pensions. Fair enough that you take out state pensions, but why don't you also agree to take out (i) personal social services (looked after children, etc), (ii) pensions to older people that are not state pensions and (iii) other payments to older people? This is the approach adopted by IFS - or do you argue that they are wrong, and on what basis?You ask "Where did I say that because civil servants compiled the figures they must be accurate?" Well, at 19:39:00 on 19/11/14 you wrote that"the way the figures are accounted for isn't entirely transparent… [it is] not a deliberate attempt to deceive - it's apparently how the civil service has accounted for staff pensions for years …" If you can't even get your own remarks straight it's no wonder the rest of what you write is so dubious.And who said anything about "a vast right-wing conspiracy"? That's a figment of your own over-active imagination; I was simply pointing out that the government issue dodgy figures and the right wing-press seizes on them: hardly a conspiracy, vast to otherwise.Next, in spite of all the evidence, you continue to claim that welfare spending is vast. It isn't, and "reforming" it isn't the solution to our problems but simply adds to them. You really need to recognise that the whole austerity agenda is failing, even in the government's own terms: if people have less money they are able to contribute less in taxes, which is why the deficit is increasing.Finally, what is wrong with taxation? Taxes are what enables the government (or it would do, if we had a government that believed in morality) to provide for a civilised society.Oh, and one more thought: another way of reducing government spending would be to stop wasting so much on "defence" - taking part in stupid and unnecessary wars for a start, and scrapping the ludicrous two aircraft carriers that have no aircraft (very useful, that) and stopping the replacement for Trident - or do you support these drains on your hard-earned?

Richard Carter ● 3869d

...And therein more proof that some people will take exception to even the most straightforward case, regardless of how it is presented.Let's start off by being clear in terminology: I'm using the term "welfare" to define all DWP spending that isn't state pensions. Evidently you'd like a more nuanced definition. Now. Where did I say that because civil servants compiled the figures they must be accurate? I did not. That the civil service has accounted for employees' pensions within a "welfare" budget-head simply enables us to decide the motivation for the way the figures were presented. You want us to believe that this is a vast right-wing conspiracy to enlighten the Daily Mail and Telegraph as to the amount spent on benefits. As if they didn't know this already and were reporting it as such long before the pie chart came out. The second non-issue you took exception to was my claim that aside from welfare the pie chart is broadly accurate. And it is. Because whether welfare consumes 13 or 25% of spending, you're not (at least, not yet) disputing that the relative expenditures between policing and health and education are *broadly accurate*. In itself this information serves a useful purpose for taxpayers who, until now, have never had information on government spending presented in roughly the same way as councils are required to document local spending when council tax bills are issued and who, as studies have found, overestimate the amounts spent on welfare compared to more productive uses of taxpayers' money.Finally, let's turn to the underlying problem with your reply: the nonsense that welfare expenditure is not vast. Some front, incidentally, from a Green Party activist who wants to put every adult in the country on welfare (http://www.newstatesman.com/politics/2014/08/citizens-income-71-week-person-would-make-britain-fairer), but let's not digress.The government, outside welfare and pensions spending, is now smaller than at any time since the early 1940s. And yet the state takes vastly more in taxes than it did in the 1940s. The reason? Spending on pensions and welfare has exploded.We have a national debt of £1.7 trillion - and rising. This is at root a debt crisis. It's because our country - in fact nearly all western economies - have been living beyond their means whilst becoming less competitive and demanding higher standards of living than the emerging economies of Asia and South America. And it's coincided with the explosion in capacity of capital to relocate wherever it is best protected. I have to ask how someone as well educated as you, Richard, arrives at the conclusion that the answer to these realities  is to borrow more, spend even more on welfare and tax ordinary people (and it will be ordinary people who end up paying, as always) even more. Because the reality is the opposite.Reining-in welfare (and, incidentally state pensions - not by cutting them but by bringing forward, and then regularly, increasing the retirement age) is not about taking from the poor to give to the rich: the state gives very little to the rich (the removal of child benefit from couples earning more than £42,000 has saved far more than the Bedroom Tax has, next time you want to get on your class war-horse).  Entirely rethinking welfare and pensions is the only way the government can live within its means. We need to eradicate our national debt - not just the deficit: the debt - so that we can free up that massive chunk of the pie chart that should have been labelled "money down the drain" - interest payments on our debt. The Conservatives are dishonest about this: doing that requires tax rises as well as cuts into the medium term, but at least they recognise the problem. In other words, the pie chart is the very least of your problems, Richard.

Adam Gray ● 3869d

To put it most generously, that's a pretty feeble response, Adam: that there are minor variations in the way that "welfare" can be expressed is an argument for more transparency. And the differences are minor: one calculation puts the total at 13.6 per cent, the other at 16 per cent; both figures are very different from the government's claim that welfare takes up 25 per cent of expenditure.And you earlier claimed that the figures must be right because they were put together by civil servants. Quite apart from your apparent view of the civil service as a wholly neutral body (that has no longer been the case for at least 30 years), the figures presented in the document that was sent out are even more dishonest than I'd thought. They come from the Treasury's Public Expenditure Statistical Analyses 2014 (http://bit.ly/11jol8w), and the relevant figures are presented in Table 5.2 (it's on page 71). The total claimed as "Welfare" is actually Total Social Protection - and it is not labelled as welfare anywhere in the document (the sole reference to welfare is a mention of the Welfare Cap on page 47) - and is exactly as the IFS describe it.And your suggestion that "Aside from the issue of welfare, the pie chart is broadly accurate" is frankly  ludicrous, given the wholly mendacious nature of that claim. The aim of the exercise is clear: it's to suggest, quite falsely, that expenditure on the feckless and the workshy is much greater even than people imagined. The Daily Telegraph, for example, had this to say about it: "Families will be sent letters by the Government showing that a quarter of their taxes are spent on Britain’s welfare budget …They will show that more of voters’ money is spent on the benefits bill than any other area" (http://bit.ly/1xRJxNv), and the Daily Mail this: "The average worker pays more than £1,100 a year towards Britain’s bloated welfare bill, according to Treasury figures to be sent to voters … The initiative is intended to promote ‘transparency’. But ministers believe it will also strengthen their arguments for welfare reform" (http://dailym.ai/10NggcL). In other words, if they can get away with the claim that welfare is much greater than it is, then they can cut payments to the poorest in society even more, whilst liberating cash to hand out to the better off.

Richard Carter ● 3869d

You're far too kind to this wholly mendacious exercise, Adam: calling it not entirely transparent is like referring to bank robbers as naughty boys, and to claim as you do it's not a deliberate attempt to deceive beggars belief. The breakdown in the stuff sent out suggests that a quarter of all government spending goes on welfare, purely to imply that we are wasting vast sums on the workshy; the truth is very different.The Institute for Fiscal Studies has produced a breakdown that is much more accurate (http://www.ifs.org.uk/publications/7424). They show that included in the figures lumped together in the government's definition of welfare are billions on personal social services (things like expenditure on looked after children), government pensions other than the statutory state pension (not just government employees but military and NHS pensions - and ex-Prime Ministers' and MPs' pensions) and other spending on older people (see their paper for the full details). When these figure are taken out, the proportion of all spending on "welfare" reduces from around 25 per cent to 13.6 per cent: very different than the impression given.The IFS has produced a slightly different analysis (all such figures rely on assumptions about where to put spending) which suggests that the proportions genuinely spent on welfare are 5 per cent on families with children, 6 per cent on the unemployed or people on low incomes, and 6 per cent on the sick and disabled. Again, a very different picture.You raise a big issue that there's no space adequately to cover here in suggesting that the argument that austerity is wrong, so I'll just make one point: just imagine how much more we could spend on services and on investment if we were able to raise more money in taxation because people were paid more in proper jobs.Finally, you are right to point out that there are many other areas of taxation than income tax. The IFS has produced another very useful guide, this time breaking down the sources of taxation (http://www.ifs.org.uk/bns/bn09.pdf). They show that, for 2012-13, the main sources of government income were forecast to be: income tax (26 per cent), NI contributions (17.9 per cent), VAT (17.2 per cent); none of the others raised more than 7.4 per cent.

Richard Carter ● 3870d

It is, on balance, a good idea. But the way the figures are accounted for isn't entirely transparent. For example, all pension contributions of those the government employs are included in the "welfare" total, when they're not welfare in any sense (not a deliberate attempt to deceive - it's apparently how the civil service has accounted for staff pensions for years, but certainly helpful to Conservative attempts to make people believe benefits are the vast proportion of Iain Duncan Smith's departmental spending).But yes, just as the public tends to over-estimate the proportion of the population that is from a black or minority ethnic community, they also tend to assert that the government spends far more on things they disapprove of, and far less on things they support.As for debt servicing, greater than the amount spent on defence, approaching the amount spent on education - and growing.  It's why those claiming that so-called "austerity" is unnecessary are deeply wrong. Just imagine how much more we could spend on services, on tax cuts and on investment  if we did not have to waste money on debt repayment.The fundamental problem with approximating individuals' tax contributions is that Income Tax and National Insurance are not the only tax streams the government receives: there is no way they can work out how much VAT each of us has paid; or how much Corporation Tax is due to the profits we've helped generate for particular companies; Inheritance Tax etc. So it's a largely notional construct.

Adam Gray ● 3870d