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Tuesday, 11 December 2012

Tax and Spend ...

In the midst of all the fuss about companies like Starbucks actually obeying the tax laws set up by the Westminster Incompetents, the Guardian posted a graphic breakdown of how the money gathered in tax in in 2010/11 in the UK is actually divided up among the various Whitehall Departments. The amount involved was a hefty £691.67 billion, which was a mere 0.34% increase after adjustment for inflation, on the previous year. Several aspects are very intriguing and thanks to a friend and fellow blogger, The Gorse Fox, I am able to put them into a neat perspective.

The top five Whitehall Money Reducers are in descending order -

  • The Department of Work and Pensions 
  • Department of Health
  • Department of Education
  • HM Revenue and Customs - (The Department that actually collects the taxes!)
  • Debt Interest Payments - (The Treasury itself!) 
Sixth is the Depratment of Defence, the interesting aspect being the way the costs are broken down, with the Navy in receipt of less money than the RAF or the Army. Now here is the crunch, the cost of the MoD is just 1.8% of GDP, less than most developing nations (some of them in receipt of UK 'aid' grants) spend on "defence." Another interesting revelation there is that "Administration" costs the MoD £2.3 billion. That's probably why a large number of non-commissioned ranks are also having to draw on Income Support, Housing Benefit and possibly other "social security" benefits. 

The breakdown of the Dept of Work and Pensions budget is also interesting. Setting aside the fact that, from the budget headings, "work" doesn't seem to be part of its activities, the split of spending is £79 billion on "benefits" and £69 billion on "pensions." The fact that the first part of that includes some £8.18 billion for "pension credit" - an allowance paid to those whose pensions are inadequate. Surely common sense says that should be scrapped and made a part of a targetted increase in overall State Pensions? Oh. Yes. Sorry, my mistake, we're dealing with Whitehall here, such a common sense approach would probably axe about 20,000 civil service posts, and we definitely can't have that!

Likewise, the Dept of Health gets a whopping £105 billion, of which a mere £66 billion goes to hospitals and the like, and another £21 billion goes to doctors, prescriptions and so on. So what exactly do they do with the other £18 billion? It certainly isn't obvious from the graphic.

HMRC gets a whopping £45 billion, of which some £40 billion goes to "Tax Credits" and "Child Benefit" the latter being far and a away the lesser of the sums involved. So what is it they do that costs £5 billion? Again, not explained. Seems to me that they must be overpaid and living in luxury at the HMRC sites around the UK. The Treasury itself costs around £2.43p in every £1,000 taken in tax and the school for civil servants (where they get the chip inserted that makes them useless for anything else) costs the taxpayer £0.33p in every £1,000 in tax. (My former employer which trained Fire Officers and Fire Fighters was deemed "too expensive" at around £0.03 on the same scale). 

The Cabinet Office, according to the Gorse Fox's numbers, costs £0.82p per £1,000 tax, Parliament (tricky, they spread the costs through a number of 'front' departments) costs around three times what the Lords does and both cost more than the Royals. 

What these numbers reveal is that over half the tax take goes to the Department of Work and Pensions, the Department of Health and HMRC. I think one of the major scams this reveals is that "Pensions" are classified as a "Benefit." In my view, it is something we are all required to contribute toward throughout our working lives. It is not, therefore, a "Benefit." We are merely receiving back what we've paid for - in most cases over 40 years. A "Benefit" is something one receives without having contributed toward it, but, of course, in the twisted accounting of Whitehall and the Treasury, the money we've all paid toward these pensions has been spent on all manner of other things, for which they had no income and the contributions were never invested, so now, the money is running out, and it must, therefore, be the fault of these freeloading pensioners ...

Perhaps Baroness Thatcher had a point when she said; "The trouble with socialism is that you eventually run out of other peoples' money."

I suspect we're getting close to that point. 


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