Category Archives: Economy

What Things Cost

Often in debates about public funds, there will be arguments along the lines of ‘why are you spending £10 million on x, when that could be used to pay for y which has a much greater marginal utility.’  However, as far as I’m aware there isn’t an easily accessible and exhaustive list of public pricings for different public policy choices- even budget papers require a lot of interrogation to get to allow you to get to useful comparison points.

That’s why the Guardian’s piece today on 23 things you could pay for with £10 million could be very useful. Even more useful is the spreadsheet at the end of the document, which gives the unit cost of a whole range of public and private goods, from teachers’ wages to house prices to energy bills to Prince Charles.

The Price of Everything

Pre-2008 Tory Policy on Financial Regulation and Public Spending

In the course of the budget debate, I’ve had the teeth-grinding experience of listening to a que of Tory MPs stand up and denounce the lack of regulation on financial services and increased spending under the last Labour Government. Of course, the Labour response to this has always been to point out that prior to the banking crisis the Tories weren’t arguing for more regulation or spending cuts- in fact they were arguing for less regulation in the mortgage sector and increasing public spending overall.

Having just heard one Tory in the chamber flatly deny this was the case, I thought it was worth digging out the report on which this claim is in-part based.

Freeing Britain to Compete: Equipping the UK for Globalisation was written by John Redwood and welcomed by the Shadow Cabinet in August 2007.

Here are some insightful excerpts:

(p59)

Mortgage Regulation. We see no need to continue to regulate the provision of mortgage finance, as it is the lending institutions rather than the client taking the risk.

(p80)

10.3. Sharing the Proceeds of Growth
David Cameron and George Osborne have also stated that they would share the proceeds of growth between tax reductions and increased public spending. This formula commits the Conservatives to increasing the total of public spending by more than the rate of inflation, but not by as much as the overall increase in the UK’s economic output across the economic cycle. This not only explicitly rules out spending cuts, but will mean a substantial increase in the amount that can be concentrated on those public services which are most valuable and important to all of us; and it will also mean a redoubling of efforts to improve productivity and efficiency throughout the public service, so that each pound spent goes further.

The impact of such a refreshing approach should be significant, as an incoming Conservative government would be able to maintain and improve the quality and funding of public services, and to reduce tax rates. To make this possible, a Conservative government should reform the public sector, and emulate the success of the private sector by delivering more efficient service each year, although with the added benefit of more money, which the private sector (such as the UK’s manufacturing industry) often has to do without. We should ask the public sector to deliver more with more. The manufacturing sector has to deliver more with less each year.

And here’s what George Osborne said about the report on August 17th 2007:

“The Policy Group Report we launch today is the most impressive and comprehensive analysis of the state of the British economy produced by any political party in recent times.

“And the Report offers us a set of imaginative policy proposals directed at improving the competitiveness of our economy, rescuing our pension system and ensuring that more Britons and more parts of Britain share in the global prosperity of our times.”

Here’s my question.  Why on earth have the Tories still got all this on their website?

Tax liabilities: 20p, 40p and 50p- who pays?

This spreadsheet from HMRC shows the number of taxpayers who pay the basic rate, ‘higher rate’ (40p) and the ‘additional rate’ (50p) broken down by region.

The relevant spreadsheets start on page 16.

Based on those stats, I’ve put together the table below showing the proportion of people in each region paying each rate of tax for 2011-12. All these numbers are in thousands.

Income Tax Liability Statistics December 2011

Region All 20p (basic rate) 40p (higher rate) 50p (additional rate) 20p% 40p% 50p%
North East 1210 1080 101 5 89.26% 9.35% 0.41%
North West 3200 2770 318 18 86.56% 11.48% 0.56%
Yorkshire & Humberside 2370 2050 230 13 86.50% 11.22% 0.55%
East Midlands 2160 1850 232 12 85.65% 12.54% 0.56%
West Midlands 2530 2190 253 15 86.56% 11.55% 0.59%
East England 2850 2290 420 34 80.35% 18.34% 1.19%
London 3700 2840 670 94 76.76% 23.59% 2.54%
South East 4340 3390 720 67 78.11% 21.24% 1.54%
South West 2640 2220 295 17 84.09% 13.29% 0.64%
Wales 1380 1220 118 4 88.41% 9.67% 0.29%
Scotland 2570 2200 288 16 85.60% 13.09% 0.62%
Northern Ireland 737 652 64 4 88.47% 9.82% 0.54%
TOTAL 29687 24752 3709 299 83.38% 14.98% 1.01%