TAX CUTS.

If there is one concept that is guaranteed to raise hackles at the BBC, it is the idea that government might seek to cut taxes. For years now the BBC has assiduously retailed the Labour line that any cut in taxation would result in less doctorsnursesnteachers and so as Prudence Brown has cranked up taxation, the Conservative Party backed away from the idea of cutting tax (wrongly in my view). But now that dear Prudence has mired the UK economy in recession, all of sudden Labour is now making noises of tax cuts. As are the Lib-Dems! So the Tories under Boy David have been forced to come out and say that a future Conservative government would look to cut taxation. However what got my attention this morning was on Today circa 6.30am when John Humphrys was sneering at the Conservative notion that tax cuts could be paid for through efficiency savings. Humphrys seemed much more comfortable with the Labour notion that in order to cut taxes you just borrow more and more and more. It might be news to fat cat BBC presenters like Mr Humphrys BUT there is no organisation in this land that, if pushed, could not find efficiency savings. In fact this is a central engine of effective capitalism. But in the neo-socialist cossetted world of license-payer funded indulgences, Humphrys seems unable to grasp this key economic tenet. Labour under Brown has built up a bloated public sector which, like the BBC, could provide substantial savings were the axe to be taken to parts of it. But the BBC prefers to wallow in the tax and spend philosophy of Labour and that is why it will prove very difficult for Cameron to obtain a fair hearing for his (belated) tax cuts.

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23 Responses to TAX CUTS.

  1. Boba Fett says:

    Interesting theory, any evidence?

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  2. David Vance says:

    Not a theory, an observation.

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  3. Cockney says:

    Magicking up a figure for efficiency savings is a lot easier than actually achieving it, so it’s right that the Conservatives should be challenged on the detail of these plans but you’re right that there seems to be ample fat that could be cut out of public services. Perhaps given the massive conflict of interest the Beeb should be banned from commenting on this either way?

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  4. mailman says:

    The problem for Labour is that they have backed themselves in to a corner.

    The public service is now so BLOATED that the Government cannot afford to cut taxes simply because it cannot afford to not pay its own massive civil servant pay roll!

    A truly prudent Government would have reduced government expendature over the good years and put money aside for rainy days.

    This government has shown a capacity to do neither.

    So while tax cuts are a fantastic idea and will really get the economy going…it just aint gonna happen while the government is so bloated with free loaders who do nothing.

    Mailman

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  5. These free-loaders don’t just do nothing, Mailman: they vote NuLab!

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  6. David Vance says:

    Cockney,

    Completely agree with the magicking efficiency savings up bit and it is proper that this be challenged. But by contrast, the scale of debt that Labour are piling up is but a mere detail to the BBC. The bias lies in their two-faced approach I guess.

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  7. David says:

    What the BBC also don’t like to mention is that the Tories have promised to fund the tax cuts – in other words to demonstrate where the money is coming from. So they will show where the waste is and how to pass the savings on to us, while Labour will just write a big cheque. You’d think with all the economists on the payroll at Television Centre they would have one with a brain in his head. Apparently not.

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  8. mailman says:

    The Government could take some steps to producing these savings quite easily really.

    1. Start off by imposing a mandatory freeze on all new appointments to the public service.

    2. Offer early retirement to those 55 and over so as to get them off the Governments books (lets face it, their pensions are already funded anyway, so no net increase in costs), and

    3. Cut all non-critical spending…sorta like what real people do when faced with their finances being squeezed!

    Any attempt to cut down on government bloat can only be a good thing!

    Mailman

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  9. Original Robin says:

    Not paying unemployment pay to Poles who return to Poland can help, same for tax credits,family allowances etc shovelled over there.
    Stop paying £60 million a day to the EU is a big saving as well.
    Charging foreign trucks for the use of our roads would net £300 000 000 a year to put in the coffers.

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  10. Mark says:

    I am looking forward to Grauniad Society becoming a little thinner each Wednesday !

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  11. mailman says:

    Original Robin,

    The tax credit system is a real problem for me.

    Tax credits is nothing more than welfare, but more importantly, it requires a whole legion of minions to administer!

    Hence why Id prefer any kind of “refund” to be done through reduction in tax rates…simply because you dont need a vast army of mandarins to administer a tax cut!

    Mailman

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  12. MarkE says:

    Since 1997 the public headcount has increased by about 600,000.

    In the same period a similar number of jobs have been moved off balance sheet (to private contractors and PFI “partners”).

    That implies a net increase in the public payroll of over 1 million, perhaps 1.25m.

    These jobs have not been government workers (Doctors, nurses, teachers, the emergency services and armed forces*) but already overmanned administrative roles or non jobs.

    The average government salary is £30k but about 1/3 of this is recycled through tax and NICs. JSA is about £60/week.

    That represents a net saving of £17 Billion every year, with no cuts to public services (£30k x 2/3 x 1m less £60 x 52 x 1m).

    *Whether the first three of these jobs are best provided by inevitably corrupt politicians is another debate, but not one you will see on the BBC

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  13. mailman says:

    MarkE,

    no matter how attractive wholesale redundancies look, its simply not doable because of the follow on impact that will have on government spending (ie. welfare) and how job losses sucks money out of local economies…as the tories found when they went jihad and closed down all the Mines in Wales (thus making the entire country unemployed).

    Mailman

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  14. Anonymous says:

    Cockney,

    Efficiency savings can be found relatively easily across the public sector. From my own experience of working as a civil servant at westminster, in just one sub-department in a directorate you could find about 25% waste. Secretaries only busy 50% of the time. Part times who only seem to do photocopying and nothing else. Computer helpers who are idle 50% of the time. Why not centralise some of these people, cut a couple of jobs, and use the remaining people across different departments in one building, and you’ve cut a fair amount of waste.

    In addition, I’ve been told by a friend who used to work at the Environment Agency that waste there is off the scale. People with nothing to do half the time – so they end up writing guidance documents on how to write guidance documents. Someone even wrote a guidance document outlining which words should be avoided in any documents produced by the Agency.

    And if my girlfriend was here, she could go on forever about waste in the NHS (where she works).

    To find waste in the public sector is straight forward. All you need to do is just ask someone who used to work there.

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  15. Mailman says:

    Well to be fair Anonymous, asking someone who worked there is a terribly “unscientific” way of finding out what the civil service is like, especially if that person has an axe to grind.

    Mailman

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  16. Anonymous says:

    Mailman

    But if you asked enough former public sector workers, you might develop a fairer picture. Not every ex-public sector worker will have an axe to grind. A sufficiently sized sample and an unbiased estimator can be estimated. My friend’s story of his time at the Environment Agency, or mine as a civil servant might be outliers. But I very much doubt it.

    In fact the opposite argument can be put: how does asking current public sector incumbents what the civil service is like provide a fair outcome? They might have reason to distort the truth, to encourage recruitment or for other personal reasons.

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  17. Jon says:

    I don’t have an axe to grind – but I can tell you that there is great savings that could be made in Local Government – Just get rid of the consultants who make a hell of a lot of money from council tax payers – these people do not work for the council but are brought in at great cost to the tax payer. There are also hundreds of expensive quangos that are unaccountable but have the self -serving interest in interfering in all our lives. How about phasing out the “5 a day” co-coordinators or the Breast Feeding consultants or what about the new “climate change” coordinators.
    During the last General Election there was a lot of uneasiness in Local Government in case the conservatives won – even the people who work for government know there is far too many people employed and that one day the bubble will burst. This is probably true in the BBC , and that is why they would prefer borrowing to savings.

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  18. sawtooth says:

    Much of the public sector expansion since 1997 has involved hiring people (at the taxpayer’s expense) who can be relied on to vote Labour in order to keep their non-jobs.

    The same applies to the BBC’s approach to public spending, and the kind of anecdotal evidence mentioned above could be replicated a hundred-fold in the Corporation. Indeed, some of their employees don’t turn up to the workplace at all, but simply stay at home on full pay, whether claiming to be sick, or else “developing a project”.

    Many public sector organizations and quangos could be closed down altogether with no loss of productivity or to the national life.
    As the BBC would be bound to screech endlessly in their defence, the best policy for the next Conservative government would be to start by privatising the Corporation, in their first month in office.

    This would begin the useful process of “de-funding the Left”.

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  19. MarkE says:

    Mailman

    I think the point has been on another thread here, but Thatcher didn’t close the mines; the miners wanted £100 for producing £50 worth of coal. Thatcher declined to tax healthy companies out of business to provide subsidies so the mines closed. Scargill’s use of the miners to defy the democratically expressed wishes of the electorate merely added bitterness to the matter.

    The local effect of the closures was significant because many of the areas affected were one trick ponies – take away the mines and there was no other work (although I’m not sure why this is such a problem – when I was unable to find work in one area, I moved to another; I’ve never understood why people feel fixed to a piece of ground). The same does not apply to government sinecures as they are spread through the country (albeit with a bias to loyal, Labour voting areas). I would rather pay a former civil “servant” £60/week JSA than £600/week and see them damage the economy by doing something harmful.

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  20. Original Robin says:

    I`m sorry to say but I hate senior civil servants of Grade 5 and above.Especially the ones in the Department against Transport.Hangings too good for them.

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  21. mailman says:

    MarkE,

    The point I was trying to make was around the impact sudden large scale unemployment has on local economies.

    While coal may have been a unsustainable business in the UK, the impact of sudden mass unemployment probably ended up costing more than the subsidies to keep the industry going?

    Mailman

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  22. spoton says:

    1.7trillion in debt…burning our money.. just go there and read i needed to sit down after reading the articale bet the bbc could make excuses for the debt never mind lets borrow some more,

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  23. MarkE says:

    Mailman

    The cost of unemployement in the 1980s could last only until the jobs lost when the mines closed were replaced (or until the former miners left the job market – “I’m not working in a call centre, I’m a miner and prefer to die of pneumonicosis than have any other job”). Subsidies to keep the mines open would have been an infinite, open ended commitment.

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