News0 min ago
Employing extra public sector workers does NOT mean more people paying taxes
There was some idiot on TV the other day saying extra public sector workers means more people paying taxes. When will these people get it into their thick heads, it's the same money paid by the state that is paid back to the state as tax, ie the same money going round and round. No wealth has been created!
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I can see the point that it's better to pay someone £20000pa and claim back maybe £3000 in taxes and NI than pay someone £20000 a year in benefits , but it usually doesn't work like that. You pay them maybe £20000pa then you have to add on employer's NI and employer's pension costs so that brings up up to nearer £25000 . Then you have to train them, buy them a desk and laptop, etc. You also need to pay someone to supervise them and check their work. So the cost can very soon exceed £30000 pa. And some of them will still get tax credits. So it ends up coosting a lot more.
Nick Robinson's TV programme about public sector spending and the tax burdens has been fascinating. It's very difficult to curb expenditure. There are always good reasons put forward to spend public money, but once you start spending money you can't stop because there are always loud complaints about vicious cuts depriving the old, the young, the sick, etc.
If you then try to tax people more they complain because they think someone else should pay the taxes -usually the bad old bankers or the rich, but as Nick Robinson pointed out they already pay 50% tax and there are so few of them that it would raises little and can actually raise less as the super rich leave the country.
It's not an easy problem and I don't see any party that can face the challenge and get us out of it.
Nick Robinson's TV programme about public sector spending and the tax burdens has been fascinating. It's very difficult to curb expenditure. There are always good reasons put forward to spend public money, but once you start spending money you can't stop because there are always loud complaints about vicious cuts depriving the old, the young, the sick, etc.
If you then try to tax people more they complain because they think someone else should pay the taxes -usually the bad old bankers or the rich, but as Nick Robinson pointed out they already pay 50% tax and there are so few of them that it would raises little and can actually raise less as the super rich leave the country.
It's not an easy problem and I don't see any party that can face the challenge and get us out of it.
Jake you have the wrong end of the stick, I am a) not insightful and b) totaly aware that at the time he had the support of certain banking institutions as the botoom fell out of gold, It is only in hindsight that people saw it as an error. It is now held up by the right as incompetence by him.
Another example would be Black Monday - or Wednesday they both cost a lot more than the gold and who was in power then I don't know the oress never mention it.
Another example would be Black Monday - or Wednesday they both cost a lot more than the gold and who was in power then I don't know the oress never mention it.
JTP, people supposedly trust their politicians not to make a *** of things, so you wouldn't necessarily go out and buy up gold, meanwhile other parties have made as many mistakes, including this coalition, but we have to go forward now, or fall right by the wayside. And the Greeks are learning this the hard way, that you can't have a massive public sector, pay enormous wage, pension bill, retire earlier than most private sector workers and still have an economy and a country to run. They and the Euro masters have created this leviathan, and it's been coming our way, so to save a few million, billion, like the Greeks, changes have to be made, and jobs will go.
No one is an expert on here, but they can venture their opinion, which is what it's all about.
No one is an expert on here, but they can venture their opinion, which is what it's all about.
Jake, As I pointed out elsewhere here on AnswerBank recently, if Osborne had a crystal ball - which Tories obviously believed Gordon Brown to have - he'd have sunk every penny in the Treasury into gold on Day One of the Glorious Coalition. By now, he'd have got back most of what Gordon's action cost us, given that gold has rocketed in value since.
(I trust no one will be so foolish as to suggest that there was no money in the kitty, because, if so, where did we get the millions to lob - literally - into Libya?)
(I trust no one will be so foolish as to suggest that there was no money in the kitty, because, if so, where did we get the millions to lob - literally - into Libya?)
A point of economics people:
If a man/woman has a salary they buy things, thus ensuring that people in shops, manafacturing, transport are employed (they also pay tax etc). If the money is available but not being spent it doesn't go to the exchequer only salaries etc are taxed.
This is why it is better to have people in work. But of course if you have a large pool of unemployed people it means they are more likely to work for less, I wonder who benifits from that.
If a man/woman has a salary they buy things, thus ensuring that people in shops, manafacturing, transport are employed (they also pay tax etc). If the money is available but not being spent it doesn't go to the exchequer only salaries etc are taxed.
This is why it is better to have people in work. But of course if you have a large pool of unemployed people it means they are more likely to work for less, I wonder who benifits from that.
The PRIVATE sector being subsidised! Where has all the money gone? Has Branson got it stashed away in his new bank, courtesy of the taxpayer?
http://www.guardian.c...ain-tax-fares-hammond
http://www.guardian.c...ain-tax-fares-hammond
Possibly slightly off topic, but Brown didn't need a crystal ball, surely, to know that removing the tax relief on pensions would completely and utterly balls up the pensions of many people.
My pension is worth a fraction of what it was, and is significantly less than a public sector worker in an equivalent position to me (there probably isn't an equivalent position - so lets say on similar money), and yet they are booing and hooing that they are going to have to work longer, pay more and get less - or to put it another way, do what people in the private sector are having to do.
Well welcome to the real world.
My pension is worth a fraction of what it was, and is significantly less than a public sector worker in an equivalent position to me (there probably isn't an equivalent position - so lets say on similar money), and yet they are booing and hooing that they are going to have to work longer, pay more and get less - or to put it another way, do what people in the private sector are having to do.
Well welcome to the real world.
Davethedog- your point seems attractive at first glance. It is true that you create extra public sector jobs and pay people for doing them they will pay spend money. But in essence isn't this the same money that you have to take from taxpayers to pay the new workers, so the original tax payers have less to spend. Is there any new spending?
Factor thanks for the sanity. However the fact is that we are using billions of public money to shore up the private sector and the public sector is paying for it.
A small case, and not one I am complaining about, I have a chronic disease and I hace to see a specialist once a year and have done for 8 years but not any more my GP now has that responsibility.
A small case, and not one I am complaining about, I have a chronic disease and I hace to see a specialist once a year and have done for 8 years but not any more my GP now has that responsibility.
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The idea that all public sector workers are effectively a black hole into which money is thrown and nothing of benefit to the economy or society is returned is hogwash.
For example, I was chatting earlier today with my friend and local government employee (I'm private sector by the way) and he was showing me an email he'd just sent to a local councillor. The email concerned a complaint by a member of the public who was annoyed that a road which previously had a speed limit of 30mph had been changed to 20mph and that various road 'humps' had been installed. The person in question had written to her local councillor complaining that this 'traffic calming' scheme was hindering her journey to work and was a waste of public money (it was installed in 2008 so it had taken this person 3 years to put pen to paper for some reason). The councillor in turn had written to my mate who runs the road safety section at my local council and asked him why the scheme had been constructed.
It turns out that the project cost approximately £70,000. Sounds like a lot of money doesn't it? Except when you see the benefits. In 2004 the accident figures (taken over a ten year average) for this stretch of road were annually - 2 deaths, 23 accidents resulting in serious injuries and 39 other accidents resulting in minor injuries. The scheme was constructed in 2008 and the reported figures for 2010 (as an annual average) were – 0 deaths, 5 accidents resulting in serious injuries and 17 other accidents resulting in minor injuries.
According to DfT's figures, each death costs the tax payer £1,600,000, a serious injury, £180,000 and a minor injury, £14,000.
This means that before the scheme was implemented, each year the cost to the taxpayer due to accidents was £7,886,000. Afterwards it was £1,138,000. That's a saving of £6,748,000 per year. That's quite a considerable return for a £70,000 investment. To put it further into context, my mate (who is a chartered Civil Engineer) earns about £36,000. He runs a small team of people – 4 in total who each earn about £25,000 each (rough estimate). That's a total salary outlay for the local authority of approximately £136,000. I make that £70,000 plus £136,000 equals £206,000 per year to save almost £7 million per year - on one scheme alone! And they do two or three of these schemes every year.
That is just one example of the public sector saving the public purse millions of pounds. Let's not forget that my mate and all of his colleagues pay tax and national insurance as well.
More importantly, let's not forget that since this scheme was implemented on this stretch of road, not one person has been killed since 2008.
For example, I was chatting earlier today with my friend and local government employee (I'm private sector by the way) and he was showing me an email he'd just sent to a local councillor. The email concerned a complaint by a member of the public who was annoyed that a road which previously had a speed limit of 30mph had been changed to 20mph and that various road 'humps' had been installed. The person in question had written to her local councillor complaining that this 'traffic calming' scheme was hindering her journey to work and was a waste of public money (it was installed in 2008 so it had taken this person 3 years to put pen to paper for some reason). The councillor in turn had written to my mate who runs the road safety section at my local council and asked him why the scheme had been constructed.
It turns out that the project cost approximately £70,000. Sounds like a lot of money doesn't it? Except when you see the benefits. In 2004 the accident figures (taken over a ten year average) for this stretch of road were annually - 2 deaths, 23 accidents resulting in serious injuries and 39 other accidents resulting in minor injuries. The scheme was constructed in 2008 and the reported figures for 2010 (as an annual average) were – 0 deaths, 5 accidents resulting in serious injuries and 17 other accidents resulting in minor injuries.
According to DfT's figures, each death costs the tax payer £1,600,000, a serious injury, £180,000 and a minor injury, £14,000.
This means that before the scheme was implemented, each year the cost to the taxpayer due to accidents was £7,886,000. Afterwards it was £1,138,000. That's a saving of £6,748,000 per year. That's quite a considerable return for a £70,000 investment. To put it further into context, my mate (who is a chartered Civil Engineer) earns about £36,000. He runs a small team of people – 4 in total who each earn about £25,000 each (rough estimate). That's a total salary outlay for the local authority of approximately £136,000. I make that £70,000 plus £136,000 equals £206,000 per year to save almost £7 million per year - on one scheme alone! And they do two or three of these schemes every year.
That is just one example of the public sector saving the public purse millions of pounds. Let's not forget that my mate and all of his colleagues pay tax and national insurance as well.
More importantly, let's not forget that since this scheme was implemented on this stretch of road, not one person has been killed since 2008.
I agree birdie1971 that some investments are cost effective, although i do always take these figures with a pinch of salt. I have worked in boths ectors and I got quite good myself at justifying changes and claiming to have saved hundreds of thosuands of pounds. In the end I got disillusioned with it- someone would centralise operations and claim a saving of a million pounds; a year later someone would decentralise the same thing and also claim savings of a million pounds; and so it went on. By the time someone discovered there were in fact no savings it was too late - the consultants had already collected their fees or the managers had taken their bonus and moved on.
Even when the savings were genuine they were often just wasted somewhere else. I wonder how the savings from this road scheme (which I accept seems worthy) materialised - was there a reduction in the number of hospital doctors and mortuary attendants needed, for example, or were they just paper savings?
I am sure the supporters of the "5 a day coordinators" etc will be able to produce figures that show savings on paper (fewer hospital visits, less days lost at work etc) but if you ask them to collect in the saved money and hand it over I doubt it could be done.
Having said all that, of course I agree that much of the spending by the public sector is worthwhile. The difficulty is finding out which bits add value and which don't, and the problem is that once spending is set in motion it is difficult to stop- there are complaints from public sector unions and politicians, about savage cuts, and the public generally doesn't like to see cuts in services. (Nor do we like paying for those services through higher taxes- most people feel someone else should be paying it all.)
Even when the savings were genuine they were often just wasted somewhere else. I wonder how the savings from this road scheme (which I accept seems worthy) materialised - was there a reduction in the number of hospital doctors and mortuary attendants needed, for example, or were they just paper savings?
I am sure the supporters of the "5 a day coordinators" etc will be able to produce figures that show savings on paper (fewer hospital visits, less days lost at work etc) but if you ask them to collect in the saved money and hand it over I doubt it could be done.
Having said all that, of course I agree that much of the spending by the public sector is worthwhile. The difficulty is finding out which bits add value and which don't, and the problem is that once spending is set in motion it is difficult to stop- there are complaints from public sector unions and politicians, about savage cuts, and the public generally doesn't like to see cuts in services. (Nor do we like paying for those services through higher taxes- most people feel someone else should be paying it all.)
tiggerblue #I work for the UKBA and we make millions every month from overseas nationals paying for visas. And no, the workers do not profit from this as it goes straight to the treasury. ##
I dont know anything about UKBA but if you make millions every month from visas that means thousands every month are comming into this country .
We are told that up to a third of these visas are issued to people who stay here illegally , which costs us millions in benefits . If true, the service you are so proud of costs us tens of millions, not makes millions. . Maybe you can explain this discrepancy ?
I dont know anything about UKBA but if you make millions every month from visas that means thousands every month are comming into this country .
We are told that up to a third of these visas are issued to people who stay here illegally , which costs us millions in benefits . If true, the service you are so proud of costs us tens of millions, not makes millions. . Maybe you can explain this discrepancy ?
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