Monday, November 16, 2015

Playing with Numbers – Whitehall Farce

The first rule of publishing, even for bloggers, is always check your sources and supply references or links. A few days ago I received my Annual Tax summary for 2014-15 from HM Revenue & Customs, and I’m sure many of you will have had yours dropping onto your doormat too.

The facing page tells me what income I’ve had and from where, what my allowance is and how much tax I’ve paid on my income. However, the interesting bit is on the reverse side of the page – “How your tax was spent in 2014-15”

There is a list of items with my contribution in descending order of amount with the top one way out in front, and it’s Welfare. It doesn’t include pensions, that’s the third one down, so the implication is that the largest portion of my tax is spent on benefit scroungers Welfare. So, let’s check the source.

The first thing to do is plug the figures into a spreadsheet and work out the percentages, see graphic left. As you can see Welfare is at the top and accounts for 25.29%. So off we go to the UK public spending website which gives the details of government spending.

Here we find that total spending for 2014-15 was £748.1 billion with Welfare accounting for £111.1 billion which works out to er, 14.85%. That’s quite a difference. The first figure is 70% higher than the second – something must be wrong!


So let’s check some of the other budget lines. Health figures are quite close – 19.9% and 17.93%. So is Education – 12.5% and 11.27%. And Defence – 5.41% and 6.06%. They’re in the same ball park. The “Other” items look pretty equal too at 36%. The discrepancy arises when we look at Pensions, which on my letter amount to 12.79% whereas according to the actual spending figures amounts to 20.02%. Again that’s quite a difference.

So, it’s not Welfare that’s crippling the economy, it’s State Pensions! The baby boomer generation has reached retirement age and life expectancy is increasing. You’d think our government would have seen this coming but they rarely look forward more than a few years – 5 tops. That’s why we are still debating Heathrow and Trident and Crossrail is 30 years late. And you can’t upset the demographic that is the most likely to vote you out of office if you upset them.

And that’s not all. A couple of other interesting figures emerged too. Interest on the National Debt works out to 5% of spending, that’s £37.37 billion. With the debt standing at £1.4 trillion that works out to an interest rate of 2.67% which sounds about right. Using 5% of income to service debt doesn’t seem to me to be a very big burden but it does indicate a vested interest in keeping rates down.

The other interesting figure is the 0.61% or £4.5 billion we pay to the European Union in membership fees.

And finally, as a comparator, there is the £10 billion and rising subsidy to fossil fuel companies which is hidden in there somewhere. This at the same time that subsidies for clean renewable energy is being slashed.

1 comment:

  1. Thanks for a good analysis, shows up the falsity of Government statements clearly. Even without the deficit the Conservatives would still want to slash everything to ribbons, local government is particularly hard hit, and policing is set to go the same way unless the recent atrocities make them see sense.

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