Britain needs to reduce its £169 billion budget deficit. That means either more public spending cuts or an 8p rise in income tax.
Our annual tax take is already over 37% of GDP — it’s time to take public spending around the back of the House of Commons for a kicking.
Everyone has their own priorities, of course:
- Even the most frothy right-wingers want taxes to pay for nuclear weapons and other military toys. But beyond that they say make citizens pay directly for roads, health care, and even local policing.
- At the other end are those who’d tax the rich down to their last bottle of Château Lafite on principle, and decide how to spend the loot later. (These are the guys who get the girls in college, but who lose them later to investment bankers).
Sensible people – even rich ones who don’t want to live in a fortified bunker in Wales – believe there’s a middle road to public spending. Yet the past few years of drunken driving by Gordon Brown has seen us drift away from it.
Here’s a graphic of the UK’s public spending bill:
Click to enlarge the size of public spending (Source: Guardian)
Download this public sector spending graphic as a PDF
With a right-of-center coalition now in place and wielding the axe, it’s time to cut back, and to enable (or force) people to take responsibility for their own lives.
It’s also time for us bloggers to voice our personal public spending peeves!
1. Pointless university degrees
In theory it’s great that 45% of young people now go to university, compared to 20% in 1980. In practice, too many are barely literate or numerate, and are doing pointless degrees. Worse, the graduate salary premium is disappearing, even as these students rack up more debt. I’d refocus public spending towards science, engineering, and maths, and ration social science and arts degrees.
2. Military grandstanding
Britain is no longer a global superpower. Yet our military spending of £57 billion is third highest in the world. We should posture within our means, and retain a cheap nuclear deterrent sufficient to blow up a half-a-dozen capital cities. If Canada and Spain can spend £15 billion, why can’t we?
3. Rich and middle-class kids
Environment degradation due to over-population and over-consumption is my biggest fear. It’s therefore intolerable that I’m taxed so that middle class parents find having kids more affordable, and rich ones can give theirs extra ponies or a bigger first flat in Fulham. I’d scrap all child benefits for any household with an income over say £40,000 a year.
4. Non-working class kids
I don’t mind helping the working poor, but I don’t want to fund feckless layabouts to have kids at our expense. Then again, I don’t want innocent kids to suffer, either. How about some sort of tax clawback for non-working parents? In this scheme, child-related benefits would effectively be a loan, which is taxed back from the non-working parents (even out of their benefits) when their kids reach 18. Having children is a right, but you should pay for it.
5. Quangos
Government spending on quangos is out of control. You don’t spend billions without achieving something, but I doubt it’s very efficient. The justification for quangos is that getting private enterprise and individuals involved means money is better directed. Here’s a different idea – get the State out of the way entirely and let private enterprise and market forces address needs directly. Government can set the rules with tax and regulation to tilt the playing field.
6. Unfunded public sector pensions
Why can’t public sector employees fund their pensions as they earn like everyone else? It seems an anachronistic hangover from the days when the State consisted of a few thousand Whitehall mandarins and everyone died at 60. Ideally the whole public/private pension system should be unified.
7. Defending indefensible criminals
We spent nearly £2 billion on publicly funded legal services last year. Three-quarters of that would probably survive scrutiny, but paying anything to give legal aid to hoodlums who routinely terrorize neighborhoods is galling. Oh for an Australia to send them to. Unfortunately we can’t even deport known terrorists.
8. Obviously polluting transport strategies
Enough roads already. I wouldn’t mind so much if they helped, but all the evidence is they don’t; build more roads and you get more congestion. Visit L.A. for evidence. Perhaps some new toll roads would be a fair compromise.
9. Lesbian socialist empowerment outreach workers
I used to think these were a myth until a much more right-wing friend started sending me Guardian adverts. It’s not just that these roles exist, or that they’re clearly created to appease liberal guilt. The pay is high, too, and the opportunity cost of having well-educated people involved in such nebulous careers is scary. Meanwhile, one lesbian kiss on a soap opera or Barack Obama’s election in the US achieves more for equality in a day than 1,000 of these non-jobs does in a decade.
10. The bloated BBC and its licence fee
I love Radio 4, I love the BBC’s news coverage, and though it never links to me I even love Robert Peston’s BBC blog. But it’s a joke that the licence fee costs £123 million to collect, when it’s a non-negotiable tax. It’s also ridiculous that this publicly-funded channel spends millions on Jonathan Ross and his ilk. I’d scale the BBC back to its radio output (I’d scrap Radio 1), a serious TV culture channel, and a news and current affairs channel. There’s a place for pop music, reality TV and dancing celebrities – it’s called the commercial sector, and it delivers it all without charging me.
Readers, what don’t you like paying taxes for? Get it off your chest below!
Comments on this entry are closed.
Good point on the military…. do you guys really need a military at all? It’s not like the Germans are going to invade again, are they? I’d scrap the military, and just keep MI-6.
.-= Financial Samurai on: The Katana: 200th Post And A Thank You To All Readers! =-.
Our annual tax take is already over 40% of GDP…
Do you have a source for that? In 2008-9 the tax burden was 37.2% of GDP (see Public Finances Databank, C1: http://www.hm-treasury.gov.uk/psf_statistics.htm )
I agree with 1, 2, 3, 5, 6, 8, 9 (qualified) and maybe 10.
But I have to disagree with 7. Legal aid is there so that people get a fair trial – even criminals deserve that much. (From a brutally selfish point of view, having fair trials to start with reduces the risk of expensive and embarrassing scandals caused by miscarriages of justice.) If you want to cut the cost of legal aid, try reforming the courts to cut the cost of trials instead (which would benefit people who pay for their own defence too).
@Niklas – Thanks for that, I was working off this 39% estimate from 2008 and rounding up given the economic backdrop.
Going deeper to the primary source, it seems they have now updated their estimate to your figure, but the table hasn’t been updated – so I agree with your figure and will update the article above.
That said, it’s hard to see how the figure hasn’t deteriorated further!?
Aha!
your point of view is so egocentric and selfish. “My money my money my money!! I don’t care about others, they should die, they are crap”.
This world is full of shit because people like you.
“Readers, what don’t you like paying taxes for? Get it off your chest below!”
I like paying taxes, to make sure that everybody, even poor people can get a good education and life (and a LOT of briant people were poor).
I like paying taxes for health care so I can live my live without worrying about if I can affort dentist, a broken leg or something else.
But I hate paying VAT because it’s the worst taxe in the world as it’s not according to your revenue, so rich people pay as much as poor which is not fair at all.
Regarding point (7) and fair trials, I know what you’re saying and in principle I agree. I wrote that entry with a heavy heart.
I suppose I’d like to solve the problem by jailing/treating recidivists for a decade or more, rather than for six months bail or a suspended sentence or three months and a goody bag. But that takes me dangerously close to Daily Mail territory I know, and I don’t particularly want to go there.
Most people don’t commit crime, and nearly everyone doesn’t commit more than one or two crimes. (A lot of young males have a fray on their record, for instance, but they don’t become career violent muggers).
Local mini-crimewaves are disproportionately committed by a handful of offenders, often due to drugs (which I’d likely legalize, in a very clinical way, but that’s a debate for another day! 😉 )
Bottom line: I feel we have to stop paying over the odds for the long tail across the welfare state to preserve the idea of fairness.
@Damien – Well, that’s a very typical kneejerk reaction if I may say so. I’ve paid as much as 40% of my income in tax, not including VAT and other ‘stealth’ taxes. While I think taxes should be lowered, I’m not arguing that here at all.
I get frustrated with your kind of view, to be honest. I was talking to a leftwing friend from the US who expressed similar sentiments, and she had absolutely no idea of how much the US is taxing and spending.
Do you know that 20% of Americans pay 70% of taxes? Yes, in the supposedly very unfair US, the wealthy support by far the most of the tax burden (as it should be in my view, too). Do you appreciate how your view of endlessly taxing and spending is crippling our future?
If you can point out where I say “My money my money my money!! I don’t care about others, they should die, they are crap” then good luck to you – because you won’t.
I’ll concede the vast majority of your points here 🙂
Except maybe “In theory it’s great that 45% of young people now go to university”….. because to my mind it is absolutely and mind-bogglingly DUMB if we think 45% of the population should go to university. It’s saying that “higher education” is appropriate for mediocre intellects. If it gets to 50% then it is truly being extended to the merely average. This is to my thinking totally inappropriate and devalues the entire concept of higher education and getting the most performance out of the country’s rarefied intellects. Surely by now we are sending to university some students who would have – a few decades ago – struggled to get into technical college. And as you so rightly highlighted, they are studying pointless degrees. How many ‘media studiers’ does the UK economy need? Arguably, NONE!
I think a big dose of fees all round, with massive bursaries for the truly gifted, would help to reduce the number of students back to a worthwhile 10% or so of our school system’s output. Then we can maybe also stop the remedial maths and English teaching for freshers!
I think the Open University is a wonderful institution (I’ve taken a few courses myself – all paid for from my own pocket, and worth every penny…) More power and funding to the OU to enable more mature students to get back into education when they’ve had a taste of life and can actually VALUE the education.
Sorry, that was all bit of a rant wasn’t it 😉
On number 7, I fall in line with Niklas above – trial by jury and full access to the Law for all is absolutely fundamental to a civilised society. Take that away and you are goosestepping up the Hig Street to tyranny. Galling as it may be to fund the defence of many legal-aid cases, we still need the system of justice to work. Now, if we could tackle it from the end of the obscene charges lawyers make – which is, let’s face it, cartel pricing – and some of the frivolous cases, then so much the better.
Linking the topic of law’n’order and other people’s kids, a return to the good old days of well-timed clips around the ear from the local bobby would not go amiss either. Children today have too many rights – I saw this coming years ago when Esther Rantzen started up Childline and I overheard a couple of teenagers on the bus saying “Well, I can do anything I want now, I just tell my dad I’ll call Childline!” They have a ‘can’t touch me’ attitude which is stoking anti-social behviour, IMHO.
The other point with kids, I like the attitude of “You breed ’em, you feed ’em”. Going beyond your points 3 & 4 , I would also restrict all child benefits to the first child only.
And finally, the BBC… I don’t have a TV, so I don’t pay for a licence! In line with my frugal usage of the corporation, I’d gladly see it reduced to the BBC News website, Radio 3 and Radio 4. All the rest can go 😉 I accept I may not be entirely unbiased in this opinion…. But I do agree, though, pop music, reality TV, soap operas and SPORT all belong in the commercial sector.
I think I need to go and sit down now, I seem to have just had bit of a Daily Mail moment 🙂
All public sector jobs should be at minimum wage. Any that can’t be filled at that cost should be outsourced to the private sector.
.-= Neil Wilson on: A primer on Modern Monetary Theory (MMT) =-.
With you on anything child-related – I am so chuffed the Child Trust fund is axed, why should I be part of buying a teenager’s first motorbike 🙂
We’re also sponsoring the wrong sorts of folk to have children, which you covered too. The university system is a joke – I think your 20% figure for 1980 is too high – I think it was in single figures, and seemed ot work best then.
Point 7 is off the mark IMO – the problem is effective sanction to the crims, but everyone should have the right to a fair trial. It doesn’t matter if he’s got previous, you still have to prove the allegation beyond reasonable doubt. Not being able to deport crims because of their yuman rites is daffy, I agree.
There was an election not so long ago, you’d have got my vote on this ticket 🙂
.-= ermine on: Why Office Work is Bad For You =-.
I think the benefit system needs drastic reform. The whole point of benefits is to stop people starving when they lose their job, not to enable them to live comfortably without needing to work. Hence the state should spend more on job creation or even additional education and less on actual monitary hand outs. People who really are looking for work would appreciate improving their trade/intelectual skills and would turn up to work.
A full week’s work on minimum wage should be a worthwhile step up from living on benefits. We’ve got a system of reverse Darwinism where families with one working parent are finding it hard to get by but a family of 2 unemployed parents can afford to keep churning out kids as it atcually makes them richer.
I’ll admit that this is a simplistic view on the subject, and avoids looking at the complexities in any way (and also may possibly be factually inacurate as I have not researched this) but I think there is a lot of work to be done in this sector which could vastly improve GDP if put together correctly. Imagine a Britain where everyone wanted to work and strove to improve thier standard of living; that really would be an impressive thing.
@ermine @Macs – Thanks for the comments. I am really impressed with how liberal-minded the readers of Monevator are, regarding the defense of point 7. 🙂
As I say I wrote it with a heavy heart, after reading one too many stories about a ten-times convicted burglar whose representation ties up the courts for months with dubious legal technicalities and who in the meantime continues robbing on bail, because he’s addicted to drugs and they cost a fortune so, being practical, what else is he going to do?
To be clear, I definitely wasn’t suggesting we just put people in jail on the nod from PC Plod. More a rationalisation of this sort of waste and obfuscation, and a dose of reality.
Re: University entrance figures, they were a bit inconsistent when I looked back, partly I think because of whether people counted different sorts of institutions as universities. I’d add that in a globalized world, I still think it’s not a bad thing that we aspire to send more better-able students to university provided that they’re doing genuinely useful, value-adding degrees.
To say it’s impossible to educate someone in school to be better capable of doing a degree seems to me a bit defeatist. It also flies in the evidence of the public school system, which regularly turns whatever it’s given into university material, albeit at great cost.
@Sam – We apparently need the military to keep our ‘special relationship’ with the US, which has many benefits but also involves getting dragged into murky conflicts in the Middle East. 🙁
Wow, that’s a rather interesting graphic. Wonder how long it took the person to put it together. And I enjoyed your list. I have to agree with the pointless university degrees and that math, engineering and science are the strong suits to study.
I was surprised to find that Britain is 3rd highest in military spending. Wow.
And non-working class kids. Even here, we see our kids so reliant on their parents to give them everything at a moments notice. I see it in my own children. I definitely see this one on the rise. Today’s generation was not taught to work hard for their means. Hopefully the hard ass economy right now, will scare them a bit.
I hate seeing such a large chunch of my paycheck go in taxes. And to know that Social Security will probably not even be available to me when I retire. So there goes that money! And that I still drive on road with tons of potholes because they haven’t fixed them…yet I pay for them. I hear my taxes go to education, but I don’t see it in my children’s school. It’s a shame I have to hand over hard earned money when the government doesn’t seem to know didly squat about managing finances.
@Christine – I hope you’re right about kids learning lessons from the recent downturn, but I’m not optimistic. In some ways it’s been a story about society bailing everyone out, as well as the bankers continuing to earn ridiculously big bonuses despite their well-known failings – and even over-inflated house prices recovering on the back of huge cuts to interest rates to stop them correcting. The lesson a smart kid in the UK might reasonably draw is there’s no consequences for reckless and spendthrift action.
Perhaps it’s a bit different in the US, where you’ve had a much more significant housing crash?
Investor, I thought this would be right up your street: http://www.liberal-vision.org/2010/05/27/quangos-a-go-go/
Suggest a quango (or more than one!) you would like to see scrapped 🙂
@Niklas – Great stuff. I think sharing a bed with the Tories is already starting to rub off… 😉
“These are the guys who get the girls in college, but who lose them later to investment bankers”
Rough!
Money gets girl!
.-= Financial Samurai on: Oops! The World Is Coming To An End! =-.
Interesting list, Investor. I had to look up the term “quango” though. It sounded like a ballroom dance, but I knew only the French would be crazy enough to spend tax dollars on that.
As a native of Southern California, I have to say I disagree with your take on #8. New highways are among the most efficient tax dollars the government can spend. The resulting infrastructure promotes regional jobs and economic growth and the infrastructure benefits future generations.
As for more roads equals more pollution. That assumes pollution-reducing technology remains static. Although the population here has essentially doubled since 1970 – along with the miles of highway and number of cars on the road – the pollution is far far far less here than it was when I was a kid growing up back in the 70s.
On #2, significant technological benefits come from military research and development spending. For example, you can thank defense spending for helping to launch the integrated circuit chip and ARPANET, which was the precursor to the Internet.
I’m with totally with you on #7, Investor. I would never advocate reestablishing Australia as a penal colony, but perhaps San Francisco would be willing to take those pesky recidivist hoodlums off your hands? (That throw-away comment was especially for you, Sam.) 😉
All the best,
Len
Len Penzo dot Com
.-= Len Penzo on: 19 Things Your Suburban Millionaire Neighbor Won’t Tell You =-.
Haha, there probably is a quango for ballroom dancing somewhere in the country Len. Maybe staffed by French emigres.
Re: Cars, I agree about short-term pollution issues being eventually solvable. But I have read several studies showing how creating new roads just creates new drivers, with the result that a similar amount of time is spent stuck in traffic. Also, it changes the business ecology, so it makes sense to base work a 45 to 60 minute drive away from where people live, with the result that people waste two hours commuting. If we have to have commuting, at least on a train you can read. I spent weeks of my life in traffic in LA in the 90s. Hideous miles of stinking traffic, hot cars and hot tempers, awful roadside architecture etc, especially if you read how LA was pre-War. (And I’m a rare European fan of LA, once you get off the highways!)
I’m not going to dispute the efficiency of the dollars spent – I suppose I am disputing what’s put on the balance sheet, and what is not counted at all. (Hidden social / environmental / personal costs). Also, I’m not anti-car – I think it’s great people have the freedom to drive about the place etc. But we have roads. We have that freedom. Enough already. (IMHO! 🙂 ).
Re: Defense, very much agree it has led to plenty of advances. The UK actually has a thriving defense industry that’s fueled by US dollars! 😉
However firstly I’d say that’s not a reason to spend on our own out-sized forces – we can create technology for other nations silly enough to do so. 😉 More importantly, there’s lots of ways in which massive government spending can create incentives for the discovery of new technologies and businesses, etc. At the moment the US south is being poisoned by a BP oil well. If the US threw the $546 billion annually it spends on the military (source) at new technology for a post-oil age, that would generate billions of dollars of business, scientific advances, and so on. It doesn’t need to be military spending (think of the space race, though I except that’s quasi-military).
Finally, we don’t expect the government to be the most efficient judge of how to allocate resources in any other field to lead to scientific and technological progress – especially those of us who are economic liberals, Len 😉 – so why should we when it comes to military spending?
To end on a note of cooperation, I agree about turning San Fran into the new Sydney, just for Sam. They’ve already got Ellis Island ready for the new intake.
Although I don’t like to admit it I agree with a lot of the above.
1. Most degrees are useless as they are not tailored towards a vocation which for the bulk of society is the point. Most 18 year olds go to university simply because they don’t know what else to do, they pick a degree that interests them, has low taught hours, minimum course work and exams, is in a city with the right male / female ratio, is near their favourite sports team… whatever! The best outcome most achieve is showing that they have obtained a certain level of study and they would be better skilled for most of the jobs they get by taking other types training. If that’s what they want to do then fine, but not out of my pocket. The government should allow 100% fees on all useless degrees. How do we pick a useless degree? It’s one where it doesn’t meet a shortage in skills. How do we determine a shortage in skills? Well the Office for National Statistics could waste even more employers time with another questionnaire, or they could ask unions or trade bodies, or they could look at previous ones to see what industries employ high amounts of none UK workers as this to me is a clear indicator of where we have a mismatch of jobs and skills. Degrees, HNDs, apprenticeship’s, whatever, that meet this requirement should be heavily subsidised with strict performance targets for students to ensure that any that do it to get out of working for a few years on the cheap get the boot.
3. I completely agree! Benefits should be taken back to basics. Actually, I’m in this category so scratch that and give me the money!!! We get family allowance as it was known, it’s universal although they tax it above a certain income, if we didn’t get it by the time we’ve paid childcare, parking, diesel etc my wife would have to work an extra 15 days a month to maintain our current financial situation. Could we survive without it, yes!
4. The country… the world is over populated. The TV advert that really used to get my blood boiling was the one that said ‘… by having children your contributing to the UK economy so come get paid for it…’ (or words to that effect). True, if they start work at 16, retire at 65 and die a week later, anything else and it isn’t so clear cut. There are droves of people who are in the situation where the most profitable way to spend their life is to sit at home popping out berns but the fact is we just don’t have anything for them to do!
8. Fix the problem by making it more expensive, are you sure your not a politician already? Well we have the Dartford Crossing, Humber Bridge, Congestion Zone, M6 Toll and are about to get the A14 replacement as a toll road. There is also talk about tracking vehicle movements to pay per mile. All of these take capital intensive technology and use energy to manufacture, install, collect data, send bills, collect payment etc etc. Why not keep it simple, scrap all road taxes and put it on the cost of fuel. That way you drive less distance you pay less, you drive a more economical car you pay less. Or is that too simple? Whilst we are looking at road funding, there seem to be a lot of European lorries in the country, they bring their cheaper fuel with them, don’t pay road tax, break minor laws, have accidents then wander home never to be seen again. Couldn’t we sell a tax and insurance pack on the boat/train that covers them for 1 day, 1 month whatever. Of course someone will pipe up ‘anti-competitive’ which is why our lorries are restricted to the European 56mph instead of the UK speed limit 60mph and Diesel is Europe is 40ppl cheaper than the UK in some parts of Europe. Hmmm.
I could go on all day but then everyone would end up as pessimistic as me. Be happy 🙂