The Budget Thread 2009

[kyser_soze]

Perhaps, but one might out that this government has, since 1997, not spent that much on the poor anyway.

IMHO the waste, policies and practices that needs to be cut to restore sanity to the public finances isnt associated with the poor or fixing inequalities in any case, so cutting them shouldnt affect the poor and could easily result in more funding for projects that actually do help fix inequalities.

You're labouring under the missapprehension that governments are capable of spending money efficiently. They aren't. You could get rid of PFI, ID cards and actually get some civil servants who knew how to manage IT procurement (and service procurement generally) and you'd still have vast lakes of cash being pissed up the wall - it's what bureaucracies do; suck energy out of any given system to feed themselves. If all of the stuff you've mentioned was fixed there'd be something else that money would be 'wasted' on.

 

[TomPaine]

manage IT procurement (and service procurement generally)

Yeah this is a big problem and something I've seen first hand sadly.

 

[littlebabyjesus]

You're labouring under the missapprehension that governments are capable of spending money efficiently. They aren't. You could get rid of PFI, ID cards and actually get some civil servants who knew how to manage IT procurement (and service procurement generally) and you'd still have vast lakes of cash being pissed up the wall - it's what bureaucracies do; suck energy out of any given system to feed themselves. If all of the stuff you've mentioned was fixed there'd be something else that money would be 'wasted' on.

Not just governments, all large organisations. Large capitalist companies also waste vast sums of money on administration and unnecessary levels of management. The private health care system of the USA is a classic case in point.

 

[agricola]

You began this by defending the morality of capitalist inequality.

No, I said that the state should not take more money than a person takes for themselves from that persons earnings.

To your second point, I would far rather the resources currently in the hands of the rich were in the hands of the state, some of it no doubt to be wasted, some of it to be used usefully to the benefit of all.

In that case, enjoy your current government, which wastes a great deal of what it takes off everyone.

Getting the state to spend its money wisely is a separate fight, but the level of social provision in high-tax countries is higher than in low-tax countries, surprisingly enough.

Its not a separate fight, its a fight that has to be won before they start increasing taxation.

 

[littlebabyjesus]

Its not a separate fight, its a fight that has to be won before they start increasing taxation.

Why?

 

[kyser_soze]

Not just governments, all large organisations. Large capitalist companies also waste vast sums of money on administration and unnecessary levels of management. The private health care system of the USA is a classic case in point.

Indeedy. I've often wondered actually what structure wastes more - a highly localised structure with many individual 'units' that replicate services (e.g. you have 5 PCTs, each with HR, accounts, IT) or hughly centralised bureaucracies...would be an interesting management study I reckon, you could look at basic costs, but then start factoring in stuff like skills redundancy (i.e. if 1 person who deals with 1000 accounts in a central office is off vs 5 people dealing with 200 each being able to 'cover' if one is off), speed of response, ability to deploy local knowledge etc.

Does anyone know of such a study?

 

[TomPaine]

Why?

Because if not then my guess is that high taxes + waste + poor services = Tory government back in power within 5 - 10 years. And thus the cycle continues...

 

[agricola]

You're labouring under the missapprehension that governments are capable of spending money efficiently. They aren't. You could get rid of PFI, ID cards and actually get some civil servants who knew how to manage IT procurement (and service procurement generally) and you'd still have vast lakes of cash being pissed up the wall - it's what bureaucracies do; suck energy out of any given system to feed themselves. If all of the stuff you've mentioned was fixed there'd be something else that money would be 'wasted' on.

They are though capable of spending money more efficiently than they are currently doing, which is the minimum of what should be happening. I agree that bureaucracies have a history of inefficiency, but that usually is related to a lack of adequate, independent and rigourous oversight (which is of course even more true with regards to the EU than it is to us) and can be remedied to a large extent.

 

[littlebabyjesus]

Because if not then my guess is that high taxes + waste + poor services = Tory government back in power within 5 - 10 years. And thus the cycle continues...

Raising taxes = need to show the improvements that have been made to justify the increase

I would argue that the two go together.

 

[TomPaine]

Indeedy. I've often wondered actually what structure wastes more - a highly localised structure with many individual 'units' that replicate services (e.g. you have 5 PCTs, each with HR, accounts, IT) or hughly centralised bureaucracies...would be an interesting management study I reckon, you could look at basic costs, but then start factoring in stuff like skills redundancy (i.e. if 1 person who deals with 1000 accounts in a central office is off vs 5 people dealing with 200 each being able to 'cover' if one is off), speed of response, ability to deploy local knowledge etc.

Thinking of it from an I.T perspective it seems to make sense to have lots of separate units capable of replicating the skills then one large unit that does all the work. Thinking of our servers we have several that run the DB split over them and it is far more effective.

The US health care system is a mess, partly because of the behemoth it has become as well as the greed, corruption and the governments support of HMO's and Big Pharma.

 

[kyser_soze]

TBH it would be really bad for Labour to win the next election, because even with a recovery, the party as it currently stands is completely devoid of new policy ideas or any sense of direction - I mean the tories haven't really either as philosophically they're a bit at sea since their 'moralist' impulse is completely undermined by their (post-Thatcher) market liberalisation impulse (altho I suspect that, as a party, they've moved into a place where social liberalism is becoming entrenched to a greater degree)

 

[kyser_soze]

They are though capable of spending money more efficiently than they are currently doing, which is the minimum of what should be happening. I agree that bureaucracies have a history of inefficiency, but that usually is related to a lack of adequate, independent and rigourous oversight (which is of course even more true with regards to the EU than it is to us) and can be remedied to a large extent.

OK, so by what measure/s are you going to assess efficiency in PS spending?

 

[agricola]

Why?

Because otherwise you are just throwing more wood on the fire in order to try and put it out.

Look, this government has been absolutely appalling generally, and has (specifically) spectacularly failed to deliver its promises in reducing inequality and raising opportunities for the poor (and especially the young poor). Their demands for more tax income, starting with the rich (and no doubt trickling down) is not so that they can start to help the poor, but rather so they can continue on their merry way with the same old shite they have been doing since 1997.

It is for that reason that they should be opposed.

 

[littlebabyjesus]

Unfortunately I think I agree (with KS). Labour probably needs to lose the election so that it can ditch its Blair/Brown New Labour legacy. If it does lose, I hope it is by a landslide of a kind that will bring calls for renewal.

 

[agricola]

OK, so by what measure/s are you going to assess efficiency in PS spending?

Thats a very difficult question to answer here, Ill have to think about it.

 

[kyser_soze]

No probs, we've all got all day

 

[kyser_soze]

Unfortunately I think I agree (with KS). Labour probably needs to lose the election so that it can ditch its Blair/Brown New Labour legacy. If it does lose, I hope it is by a landslide of a kind that will bring calls for renewal.

I reckon the kind of renewal that you're after wouldn't be able to happen without the party splitting - which might not be a bad thing of itself...

 

[tbaldwin]

Indeedy. I've often wondered actually what structure wastes more - a highly localised structure with many individual 'units' that replicate services (e.g. you have 5 PCTs, each with HR, accounts, IT) or hughly centralised bureaucracies...would be an interesting management study I reckon, you could look at basic costs, but then start factoring in stuff like skills redundancy (i.e. if 1 person who deals with 1000 accounts in a central office is off vs 5 people dealing with 200 each being able to 'cover' if one is off), speed of response, ability to deploy local knowledge etc.

Does anyone know of such a study?

Efficiency comes from simplicity. Unfortunately many people have been misled to believe that we need clever people with clever solutions....Thats why the UK is full of hopeless self serving bureacracy....
We need to simplify everything from tax to spending....
The amount of money councils.pcts etc waste on bureacracy is truly staggering....
The amount they have to spend in the first place is also huge.....Look at the budget of local councils and then wonder why they achieve so little?
How much money is spent paper chasing, writing silly strategies and policies and paying complete twats six figure salaries to oversee it all.....

 

[littlebabyjesus]

I reckon the kind of renewal that you're after wouldn't be able to happen without the party splitting - which might not be a bad thing of itself...

It's a shame Robin Cook is dead. The kind of renewal I'm after would have to include an explicit acknowledgment that the Iraq War was a disastrous mistake. But I don't see potential leaders who aren't tainted by it.

 

[TomPaine]

The amount they have to spend in the first place is also huge.....Look at the budget of local councils and then wonder why they achieve so little?

yes I've been told by various folk as well that if they have money left over in their budget they will effectively waste it, to make sure they get at least the same amount next year.
My mate who works in I.T for a council in Yorkshire was telling me about how their office operated and frankly it was a fucking piss take.

 

[tbaldwin]

yes I've been told by various folk as well that if they have money left over in their budget they will effectively waste it, to make sure they get at least the same amount next year.
My mate who works in I.T for a council in Yorkshire was telling me about how their office operated and frankly it was a fucking piss take.

The thing is that local councils waste huge amounts whether Tory,Labour or Liberal. Each of have 100s of millions and yet there is a shoratge of youth clubs....Many libraries are closing down.....They spend a fortune on strategies for children and many playgrounds are old and full of rusty equipment.....
They spend thousands and thousands on writing older peoples strategies and leave old people to the mercy of private nursing homes where there treated like shit....

 

[Jeff Robinson]

Half baked measures like this 150K tax scheme are useless and political maneuvering. They also unfair in that obviously not all those who earn over 150K will be paying it only some i.e. those who don't have the means to avoid it.

Excuse me while I go to fire up my scanning electron microscope and see if I can arrange a few atoms into the shape of a violin.

it should either be everyone over that amount or nobody, not this hodge podge method.

I'll go for "everyone" myself. How about a little positive discrimination in helping to achieve a level playing field? The individuals who have no means of avoidance take care of themselves, the dodgers with the offshore bank accounts could be dealt with by using electronic cattle prods. Or stun guns, I'm very flexible on the latter point to be honest.

 

[kyser_soze]

yes I've been told by various folk as well that if they have money left over in their budget they will effectively waste it, to make sure they get at least the same amount next year.
My mate who works in I.T for a council in Yorkshire was telling me about how their office operated and frankly it was a fucking piss take.

That's a problem across the public sector tho - all govt depts, PCTs in the NHS, LEAs/schools etc all have to spend their annual budgets by year end or else any surplus comes off the next year. It's a bullshit way of managing thing to an extent - for example, it means that they can't 'save' for major capex projects, relying instead on PFI, but at the same time I can see why it's there as well - your average tory council would just cut services back to the minimum and use the surplus to reduce ctax bills...

 

[agricola]

No probs, we've all got all day

Having thought about this, IMHO the criteria has to include:

i) the social cost/impact of the programme / service - theres little point in, using an example from this forum, closing a Remploy plant when all the employees will just end up on the dole or incapacity benefit;
ii) clear and rational aims and, at the start of the programme / service, a clear criteria for failure of the programme after a set period of time (together with clear lines of responsibility);
iii) the availability of an alternate service or programme not funded by the state - basically, does the state actually need to do something where an alternative already exists;
iv) environmental factors relating to the service or programme - ie the state should look to fund only those things that are more environmentally acceptable than present or alternate alternatives (ie railfrieght getting a greater priority than air or road);
v) the justifiability of the programme, service or body. I am thinking especially here of the various "training" junkets that people go on, the existence of certain (probably most) quangos and so on;
vi) the benefit to the taxpayer, both directly and indirectly.

 

[TomPaine]

Excuse me while I go to fire up my scanning electron microscope and see if I can arrange a few atoms into the shape of a violin.

Fact is though, some of the people who are getting hit with this are being made to pay for other peoples cock ups (well we all are ultimately). This isn't about whether you think people earning over 150K should be paying more tax (fine I can agree with that), its about whether some of those earning over it will be made to pay more whilst the dishonest can carry on their merry way.

Lop sided legislation like this is just a populist measure designed by the government to make it look like they are "doing something".

Hence why I said if they do tax people above 150K and you believe that taxation should be fair, then everyone earning over that should be liable, not just some random group.

 

[Paulie Tandoori]

Don't be a cunt all your life.

i genuinely wasn't having a go at you.

 

[danny la rouge]

The state should never take away more out of a persons earnings than that person is left with.

It does, and always has done, for people on low incomes. (Via the combined direct and indirect tax regime). It still does not for people on high incomes, even those earning over the 50% band.

I wonder if you think the 50% band means 50% of the person's income is taxed? It doesn't.

Let's say your taxable earnings are £155, 000 per year.

The first £38, 800 is taxed at 20%.
The next portion, over £38, 800 but below £150, 000 is taxed at 40% (ie £150, 000 minus £38, 800).
Then the amount over £150 000 is taxed at 50% (in this case £5, 000).

Add those sums together, and work that out as a proportion of taxable earnings. That gives you the percentage which goes to income tax.

(Remembering of course, that a lower proportion of a wealthy person's earnings goes on direct taxation like VAT, and that some of their bigger typical expenditures has not VAT element, such as private schooling. Adding in various tax allowances etc, you get a different picture to the one I think you're imagining).

(Remember also that Darling scrapped the 10% tax band last year, thereby adding a real burden to the lowest earners).

 

[Darios]

It's a shame Robin Cook is dead. The kind of renewal I'm after would have to include an explicit acknowledgment that the Iraq War was a disastrous mistake. But I don't see potential leaders who aren't tainted by it.

It would also be good to have a mainstream party that was willing to ask some hard questions about the U.K's relationship with the EU.

 

[Darios]

It does, and always has done, for people on low incomes. (Via the combined direct and indirect tax regime). It still does not for people on high incomes, even those earning over the 50% band.

I was saying this earlier in the thread. Is there even any point in debating how much the high-earners should be taxed when the real question is whether the government should be taxing the poor less.

 

[tbaldwin]

I was saying this earlier in the thread. Is there even any point in debating how much the high-earners should be taxed when the real question is whether the government should be taxing the poor less.

Of course there is a point to debating how much the rich should be taxed. Todays financial times headline was talking about "threat of exodus due to 50% tax rate"
And though its probably an exaggerated threat, rich people can move themselves and their money quite easily usually.
So how exactly can we ensure they pay more of their share?
The impression i get from most comments on the budget is that there is not really much of an alternative to what Darling has done.
There is much more emphasis on pessimism than anykind of alternative and that really is quite depressing.