Wednesday, October 10, 2012


I was going to post this yesterday, but so profound was a facepalm moment that I needed a day for both my hand and my face to recover. Dear oh dear...

Ruth Davidson, the leader of the Tories in Scotland, addresses the party conference this week, and declared that only 12% of households in Scotland are net contributors to the economy. Her 'logic', if it can be called that, is that anyone on benefits, and anyone employed in the public sector, is not contributing, as they are costing more than they bring in.

Now, the first thing to say about her statement is that it is factually incorrect. In a rare example of coherency, the Guardian's comment site has pointed out numerous instances where the figures used are out of date, and based on flawed estimates, or are otherwise incorrect. Perhaps unfortunately, the article doesn't redo the calculation to get the 'correct' figure. But then, on the other hand...

Perhaps more important that Ms Davidson's mere arithmetic errors is the flawed mindset behind her making the calculation at all.

The problem is this: if you look at, say, a teacher, such a person does indeed make no direct contribution to the economy - he or she draws a wage from the public sector, but generates no wealth.

Of course, what our hypothetical teacher does is equips large numbers of other people with the skills they need to gain employment, whereupon they proceed to go out and find work, pay taxes, and potentially generate all sorts of wealth. Remove the teacher and you remove the skills from those young people, and so you remove their 'contributions'.

But it's worse than that. See, Ms Davidson used a simple criterion for dividing people: if you're employed in the public sector, you're not 'contributing'; if you're employed in the private sector then you are. Fair enough. Except that if you're employed by a private firm that only exists to service public sector contracts then you're counted as 'contributing' when in fact they're still being paid with public money.

So, for example, our binmen are currently counted as "not contributing". However, if we privitised the service, and proceeded to give the contract to a private company employing the same people, using the same equipment, and performing the same service, they would suddenly become "contributing" - and that despite being paid using the same public money, albeit indirectly.

And the third flaw in Ms Davidson's 'logic' lies in the failure to recognise that the overwhelming majority of public sector jobs exist because we need them to be done. We need teachers, and nurses, and binmen, and someone to process passport applications, and a police service, and firefighters, and, and, and...

It's just utterly, spectacularly, and fundamentally wrong. And really quite offensive, to boot.

Can we have Annabel Goldie back, please? I disagreed with much of what she said, but at least I could respect her.

(Oh, and regarding the title of the post - yes, we are currently part of that glorious 12%. The tax I pay vastly outweighs LC's student fees, making us net 'contributors'. Yay, don't I feel special.)


Chris Brind said...

Another flaw is that a lot of folk in the private sector use *legal* tax avoidance schemes. Do they contribute? Hardly!

Chris Brind said...

Also, you might enjoy this new tax avoidance loop hole that Osborne has dreamt up:

Aside from the human rights aspect, it means some people will be able to benefit from a larger tax free buffer zone on their dividend payments. And while I don't like it, I have to admit that if it's available, I intend to use it.

I don't think these people are in touch with any kind of reality at all.

Steph/ven said...

Re: tax avoidance - in theory, her 12% calculation should have discounted anyone whose tax avoidance was enough to move them from "contributor" to "non-contributor". I rather bet that it didn't, though...

Anyway, as I've posted before, I don't have a particular problem with people making use of tax avoidance. My issue is with successive governments that fail to close the loopholes even when they know they exist (and especially if they then themselves complain about them).

Re: the employment law thing...

As I read through that, I thought to myself that a person would have to be insane to sign up for a contract of that sort. That said, I didn't have an objection to the option being offered. I have no great problems with employers and employees being able to negotiate contracts accordingly.

But then I got to the clause stating that employers could choose to offer only contracts of this sort to new hires, and that's where it moved from borderline-acceptable to utterly repugnant. That's not negotiation - that's just moving yet more power into the hands of employers (who already hold the whip hand, their bleating to the contrary notwithstanding).

Wow. That really is absolutely horrendous.

I wonder: is George Osborne an utter idiot, or is he actively evil? Either way, he needs to be removed.