I make no apology for speaking from an ivory tower- well at least a glass one on the banks of the Thames in Brentford.
Several friends went to the Union Conference last week and reported back the frustration of delegates struggling to find words to articulate the injustice of the coming cuts which will undoubtedly hit their members a lot harder than the inhabitants of our ivory towers here in London.
If the country is to avoid the damaging conflicts predicted by the unions then those of us who have jobs, net disposable income and who control the levers of financial policy had better recognise that there is substance in the arguments of the unions and those they speak for.
This blog concentrates on two issues
Tax and benefit fraud
I instigated a discussion on a bulletin board on mallowstreet last week. This resulted in the website polling members the question “Tax evasion or benefit fraud- which is the most heinous crime? The results are published next week but how’s this for a comment;
The answer to that is obvious if you define heinous as meaning cruel and inhumane – it is tax evasion since that results in the inhumanities of unrelieved poverty. Benefit fraud by contrast merely lowers the standard of living of the tax-payer.
That from an actuary
Fiscal policy and banking regulation
If banks are making money from the implicit taxpayer support, then taxpayers would presumably want that money deployed to build up banks’ capital reserves even more, to protect them against the next crisis.
According to Government statistics:
Year 2007 – 2008
Tax receipts £549bn
Gov’t expenditure = £583bn
Gov’t debt = £527bn (excl financial sector intervention)
Gov’t debt = £614bn (incl financial sector intervention)
Year 2008 – 2009
Tax receipts £534bn
Gov’t expenditure = £621bn
Gov’t debt = £617bn (excl financial sector intervention)
Gov’t debt = £707bn (incl financial sector intervention)
Year 2009 – 20010
Tax receipts £508bn
Gov’t expenditure = £674bn
Gov’t debt = £777bn (excl financial sector intervention)
Gov’t debt = £1004bn (incl financial sector intervention)
National average earnings (wages) are currently increasing at 1.5% per annum.
However in the last financial year Government debt increased by 26% is you/ exclude financial sector intervention and 42% if you include it. But tax receipts fell 5%.
Perhaps next week we ought to to ask another question
Who has done more harm to the public purse- the public sector or the banks?
Until those of us in Ivory Towers can accept that issues such as tax evasion and financial irresponsibility , I can see little chance of us reforming the public sector on whom so many union members rely.