Friday, 25 November 2011

Does the Government spend our money wisely?

The Nick Robinson programme, "Your money and how they spend it", was a fascinating insight into how government spends our taxes. The gap between the public's perception and reality was huge. I thought I understood what the deficit meant. I clearly didn't. It was explained so simply.

When Nick went round the Trafford centre, and asked people how much cash representing the government spend per family per year, was in his briefcase, the result was a shock. The guesses varied between a joke £5 to £5000, whereas the correct answer was £22,000. The comment made was "we don't see much of that".

There is a tax calculator on the BBC Website, which will tell you whether you put more money into the system than you take out or vica versa. I tried it, and found out, not surprisingly, that I am very much a contributor to public spending, rather than taking out more than I pay in tax.

The following statistics are quite enlightening "Some 60% of households are net recipients from the Treasury... The top 10% of households contribute, on average, five times more than they get back....The top 1% of earners - just 300,000 people - pay 27% of all income tax...In 2010-11, we spent more paying interest on our national debt than we did defending the realm." The table on the website illustrates that income earners under £23,000 receive more in benefit than they contribute, whereas over that figure the reverse is true.

More surprising, however, was the fact that government generosity varies, depending upon the political anticipation of a spending or budgetting cutback decision. For instance, politicians fear pensioners and health most, an illustration being the huge rise in the cost of the pensioner's winter fuel payment, with people like Peter Stringfellow, who clearly does not need the money, paying it back and saying he doesn't want it. The public thought that millionaires like Paul McCartney didn't deserve the payment, which is not means tested.

It also became clear that one of the largest expenses, is now interest on government borrowing.

Education and Health, understandably, are no go areas  for political cutback.

The government most fear our elderly voters, who are becoming a larger and larger proportion of our population - a sector which is going to continually increase.

So what is the point? The power of lobbying, and political vote winning sometimes trumps objective common sense.

When one considers that:-
  • Justice was one of the three pillars of the welfare system back in 1947, when Clement Attlee introduced it during an age of austerity, rations, and post war malnourishment.
  • Civil Legal Aid (as opposed to criminal) - or giving to the poor the rights of access to the Legal System including child care cases, divorce, child abuse compensation cases, housing problems, immigration etc. costs a minute £350 million out of a total justice budget of £8.9 billion
  • The government wants to slash the legal aid budget, so as to radically reduce the availability of this fundamental legal right from the poor
  • They are only taking such a fundamental step because they think they can get away with it politically.
  • Conservative policy of saving is being cleverly disguised in an age of global cutbacks and austerity, when any cutbacks the government decides to impose must  be agreed to without protest. If there was sufficient political fear at the unpopularity of such an outrageous decision, another area of cutting back would be chosen instead.
  • Recently it was announced that £250 million had been found to enable us to have a bin collection every week because of public outrage
The whole thing does not make sense in proportionate terms. To justify their position, the government repeatedly says that we spend more on Legal Aid than any country in the world, as though it is something to be ashamed of, when it clearly isn't. It is something to be proud of - surely? It is like saying - "we spend more on the health of our public than America does, and this position is obviously unsustainable, so we must stop doing so many hip operations, and make people suffer in pain." How mad would that be?

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