TaxPayers’ Alliance welfare proposals save little money, but add to misery

The Taxpayers Alliance has released a new report on welfare dependency, but the proposed solutions do little to save costs and only adds to hardship.

workfare

The right wing organisation the TaxPayers’ Alliance has released a new report on welfare dependency, arguing that the amount the country spends on benefits is too high and it is necessary to implement a ‘Work for Dole’ scheme.

The report’s proposed Work for Dole scheme will do little to solve the costs it moans about and only add to the hardships of the poorest in society.

The report begins:

“Over the past 50 years, welfare spending has relentlessly grown and now consumes 28 per cent of all government spending. 57 per cent of this goes on benefits for working age people.”

At first glance the TaxPayers’ Alliance’s picture of a Britain suffering the costs of paying for benefit claimants seems shocking, but the statistics reeled off here – similar stats often emblazoned in Daily Mail articles – are not so shocking when you take a look at the detail.

So, where has the 28% figure come from?

Yes 28% of government spending goes on welfare, but welfare isn’t just made up of the benefits this report attacks. A huge amount of welfare spending, 43%, actually goes on pensions. So the author could have simply started off with the less startling fact that 16% of all government spending goes on ‘benefits for working age people’, but I guess this is a less eye-catching figure. It’s good that in the second line the TaxPayers’ Alliance does admit that only 57% of this goes on the type of benefits it focuses on, but it really makes you wonder what was the necessity of the first line…

Anyway, 16% of total government spending is still a vast figure so it’s worth investigating what exactly all this money goes on.

Are taxpayers funnelling money to the lazy?

What do these ‘benefits for working age people’ involve?

The list of benefits that the welfare budget goes to (excluding pensions) includes:

  • housing benefit
  • child tax credit
  • disability living allowance
  • child benefit
  • income support
  • working tax credit
  • job seekers allowance
  • employment support allowance

The largest amount of money on this list goes on housing benefit and child tax credit, which are both benefits that are open to people who are in work. This somewhat detracts from the picture of a Britain that can’t help giving money to the workless.

It is also not as though these benefits are lining the pockets of the idle. For example, housing benefit goes straight to landlords. Over the years spending on housing benefit has risen by a lot but this is more a result of successive governments failure to build new houses rather than any upshot in people happily revelling in welfare dependency. The housing crisis in this country has contributed to a great many social and economic problems and one of these is the huge growth in spending on housing benefit.

So what is the Taxpayers Alliance’s solution?

Their solution is ‘Work for the Dole’. This scheme involves anyone who has been claiming Universal Credit for a certain period of time to undertake activity like clearing parks or graffiti, working for a charity, participating in a training programme or work experience. The amount of work you are expected to do depends on whether you are in a job, how many hours you work or whether you have childcare commitments. The report says that

“the programme shall continue indefinitely, until either (i) the person is working more than 30 hours per week (or their benchmark if lower) or (ii) until they stop claiming Universal Credit benefits entirely.”

Work for the Dole is very similar to the government’s own much despised Workfare policy. Both schemes involve people working without receiving a wage. And it is fair to say that both schemes have major drawbacks. For example, jobs like clearing parks or cleaning graffiti are that – jobs. People who do these socially valuable activities deserve proper pay. To force unemployed people to do them is not only punitive and unnecessary, but is patronising to people whose job it actually is to clear parks or clean off graffiti. It also ignores the fact that most jobseekers are actively seeking jobs. It is not their fault, and they should not be penalised, for an atrocious job market.

The Taxpayers Alliance’s proposals also includes the brutal specification that anyone who ‘is not compliant with Work for the Dole activity requirements’ will ‘have all of their Universal Credit payments suspended.’ It even goes onto admit that there might have to be changes to, or an opt out from EU laws to achieve such a punitive policy.

We have seen a huge rise in the number of food banks in the UK in recent years, and there is strong evidence that this is connected to the government’s welfare reforms. This means that we are already seeing the disastrous effects of a more severe benefits system. Another round of even harsher benefits reforms – as proposed here by the Taxpayers Alliance – is likely to drive even more people to use food banks.

Will the Work for the Dole save money?

The report boldly claims that its proposed ‘Work for Dole’ scheme will make annual savings of £3.51 billion a year . When you look a bit closer you realise that this is a saving of 4.7% of expenditure on benefits included in the Universal Credit umbrella and also housing benefit and child tax credit. So this means it is not even a saving of 4.7% of the non-pensions welfare budget, let alone 4.7% of the welfare budget as a whole. If you are seriously looking to save costs, is piling on the pressure on a very vulnerable group of society a sensible solution? Evidence shows that big companies avoid paying taxes to the tune of £5.5 billion, but we don’t hear the Taxpayers Alliance harping on about this.

After all we read from the Taxpayers Alliance about the horrors of our bulging welfare state it is a little disappointing that their solutions amount to relatively little in financial savings for the taxpayer, but contribute so much more to the hardship faced by the poorest members of society.

47 Responses to “TaxPayers’ Alliance welfare proposals save little money, but add to misery”

  1. OldLb

    So why do you owe 6,500 bn for pensions?

    Why have you hidden that off the books?

    For a median wage earner, if they had invested their NI, they would have a fund of 627,000 pounds. State pension costs 152,000. Even allowing for the 10% of NI that goes on the insurance elements of NI, that’s a loss of over 400,000 pounds.

    Then what about charges? Evil if a pension company charges 1%. So what are the costs of the DWP? 5% each and every year.

    Face up to it. By running a Ponzi welfare system, you have made people poor. What you see now is just the start. That’s the evil part. Running a Ponzi fraud has made the poor destitute.

  2. Mason Dixon, Autistic

    How many people have you persuaded with this nonsense since you started posting it here? Just a ballpark figure.

  3. Mason Dixon, Autistic

    One annoying niggle I need to mention: the report only considers the state pension when referring to pension-age spending. Pension-age spending taken together is higher, it makes up the majority of all spending: £110 billion compared to £90 billion(including tax credits) for working-age expenditure.

  4. OldLb

    Lots. Obviously I haven’t persuded you, but then again, you haven’t posted any numbers.

    So either you believe the state pension is optional, in which case you are evil. Depriving people of their retirement and making them destitute is evil. So is that your plan?

    Or you are ignorant. If you admit that people are owed a pension for their contribution, then by claiming there is no such debt, you’re ignorant.

    Which one is it?

    They won’t pay because they can’t pay. They’ve spent all the contributions, and a huge wack has gone in charges, far worse than any private pension. The rest has been siphoned off.

    10% – Insurance (per year)
    5% – Charges (per year!!!!!)
    The rest – gone.

  5. OldLb

    Correct. A huge percentage of the NHS spending is on age related conditions. So what happens when they have to decide between the NHS, and say civil service pensions.

    Who wins?

  6. John

    Hmmm, I seem to have seen this before. I suspect you’ll recognise this too.

    Nicely summarised, but what do you suggest?

    1) Leave the EU: Economic collapse (you can debate this one, I’ll admit, but with the protectionist policies in place for outside EU countries trading into the EU it would, in the short term, stifle our UK to the brink of collapse since we actually export a large amount to the EU. A fact arising from us being IN the EU)

    2)Stop the pension: Well that seems pretty evil to, if you want to use such terms. People work their whole life, trusting that the government will do what it promised (something my generation may well learn to NEVER do from now on. I certainly won’t) and then a government turns round and steals the money

    Except it isn’t theft; it can’t be if a government does it, any more than a government can commit murder.

    3) Partially cut services. Which is what they are doing. Bit by bit chipping away at ‘the welfare bill’. Except they can’t cut the bits which actually COST as that’d be political suicide and no-one has the political balls for it.

    4)??? Seriously; I genuinely want a credible alternative.

  7. OldLb

    Leave the EU? How does that affect the amount of debt the state has run up? It doesn’t. It’s an irrelevance when it comes to pensions.

    Protectionism doesn’t work.

    Control of migration? Partially it helps. The state is spending 12K per person per year. That needs a salary of 40K just to break even. Even that ignores the increase in pension debts. Should migrants pay a fair share of that? That pushes the income needs up. Remember too that migrants earn pension rights. If they leave, they still get the pension, but they don’t pay tax to offset it. Control low wage migration has to be a must. High wage migration, the more the merrier.

    Stop the pension? well If you can’t pay you can’t pay. It’s what’s going to happen.

    1. Means test.
    2. Lower the means testing threshold.
    3. Huge cuts to civil service pensions.

    Even that isn’t enough. The pension debts are going up at 734 bn a year. Borrowing is going up, on top at 120 bn a year. Total taxes, 600 bn. Even Mason Dixon can do that bit of maths.

    So that leaves the evil choice. Deprive people of their retirement.

    I don’t think their is a credible alternative. It’s gone too far. What’s needed is something to cushion the blow.

    My suggestion is this and lets start with the evidence. 26K a year is median wage. We can back test NI to see what would have happened if the state hadn’t looted the cash. 40 years ago, median wage was 800 a year. Put the same proportion of NI now, for historical wages into the FTSE. End of the year, add on dividends, take away charges, and from the change in the index make or lose. Repeat 40 years. It’s the direct comparison to say if NI is a cost effective system.

    End result, 627K in a fund. The state pension costs 152K. That’s a whopping difference.

    Now NI does provide more than just pensions, but if you read the article, its not a big percentage. In fact if you look at the DWP income and expenditure accounts (asset/liability – state secret), 10% goes on insurance, 5% (!!!!) on charges, 85% on pensions. So that 63K out of 627K that should cover the insurance part.

    That gives an income way in excess of the state pension. You are well out of the benefit regime.

    So lets do this. Abolish state pension. In its place you get a guarantee that if your fund runs out, the state will cover it with a state pension payout funded by tax. However, you have to save your NI in a fund. Then on retirement you go into drawdown, and only if the money runs out do we all help.

    Initially, that could be expensive. People have to build up funds, and since most comes compound growth it takes a while. However, its still cheaper than the current system.

    Then on death, the remainder of the fund goes to your heirs. This helps the poor. They die young, so their money isn’t wasted.

    Now look at the secondary effects. All that money being invested. So long as you don’t drag in low skilled migrants the poor get jobs.

    So a possible solution. Think what would happen if governments decided to tax your pension? So I think it also needs a referenda lock in place. Would people vote for being taxed?

    You’re correct on 3. It’s the direct result and its going to carry on drip drip drip hitting at the poor. They will of course be expected to carry on paying tax.

  8. Mason Dixon, Autistic

    You haven’t gone far enough off-topic.

  9. Mason Dixon, Autistic

    Well I have tried explaining it to you before but you seem content to invent opinions for others rather than listen.

  10. OldLb

    Put some numbers up and then we can discuss.

    Otherwise its just waffle from you.

    My guess, you’re on the public payroll and shitting bricks. Forced to pay in all that extra cash, and when it comes to your turn to be paid out, its going to be a choice.

    Your gold plated pension or welfare for those with no pensions?

    Hmmm, let me think. … PS workers 0, welfare 3.

  11. Mason Dixon, Autistic

    What numbers are you even asking for? You appear to be having an entirely different conversation with someone else, regardless of anything I’ve actually said.

  12. John

    Debt is a symptom of income being outweighed by expenditure. Cut government income by reducing profits of companies and, obviously, debt increases. A fact this government seems to have missed. You seemed intelligent however.

    I agree. Yet there it is. Shall we tell the EU commission together?

    Sorry, what? You argue based on pension and then go on about migration while attempting to wave away the impact of the EU? Either deal with only the issue or deal with the whole. You can’t pick and choose. Migration is a fraction of the welfare bill directly. Indirectly the short-term benefits of working-age migrants, skilled or not, outweigh the long-term problems. Frankly the pension is such a huge issue a couple of hundred, even thousand, immigrants won’t make a huge difference at this point. Unless they help plug the huge skills gap we have at the bottom end of the scale. We desperately need more plumbers, electricians, teachers and welders etc. It seems british people aren’t willing.

    Yes. We’re trying to avoid that, remember?

    1. Since the government is attempting to squeeze every last penny from people means testing will still include a HUGE whack of people, as it already allows working people to claim on housing benefit & other means tested benefits. And thats with councils ignoring the ACTUAL rent paid, and simply assuming people are paying a ‘fair’ rent.

    2. To include more people? see above, just more so.

    3. How many groups are going to be squeezed before the whole things collapses? This may work in the short-term, but it’s the underlying issues which are the problem.

    Indeed. Solution?

    This is your solution? ‘The evil choice’. Well morally mine is little better but at least neither of us are under any illusions.

    Not credible? If you can’t pay you can’t pay. What you mean is you doubt any government will do this unless they absolutely have to. Well I agree. No party has the balls. It would be suicide, and wouldn’t pass through parliament anyway.

    So… lets see if I understand this. Lets pretend we didn’t loot the money and calculate from there. Not sure if a fictional ideal is a good place to find practical solutions, but fair enough.

    OK. Assuming a government didn’t touch that whopping pile of cash… optimistic to say the least (which is how we got IN this mess) you can operate a hedge fund from the pot. Fine. Paying out only when people run out of pension. Except… if people knew the money was there why save? Mandatory? Then why budget once they DO start getting a pension. You’re relying on the basic sense of the average persons. Call me a cynic, but since the basis of all Conservative rhetoric is that poor people are immoral money-grubbing leeches I’m not sure this is a plan they would embrace.

    Labour, by comparison, wouldn’t abolish the state pension.

    Furthermore if one party or another, or maybe a coalition again, which I suspect will be a more present force in out political future for a while (I hope I’m wrong), actually DOES pass it through parliament I can’t imagine they wouldn’t pillage this pot they way they did the last one.

    Actually under the welfare state the age gap on death between rich and poor is fairly narrow here less than 10%. A triumph of our welfare system. Everyone is abused or ignored equally. And you think the poor would have savings left over? I really hope you’re right.

    Again with the migrants thing. Do a little research and get back to here. Here are three places to start.

    http://www.independent.co.uk/news/uk/politics/halting-immigration-would-cost-uk-18bn-in-five-years-8555344.html

    http://migrationobservatory.ox.ac.uk/briefings/fiscal-impact-immigration-uk

    http://www.migrationwatchuk.co.uk/briefingPaper/document/235

    Then stop picking on some of the most vulnerable in the world.

    I remain unconvinced about this as a solution, especcially since one of your core assumptions is no further plundering by the government.

    Indeed; the ones least able to bear the burden while the rest of us have our income chipped away by inflation outstriping wages, which affects everyone equally. It’s like the ultimate poll tax. Meanwhile more and more will fall into the exemption bands for tax, cutting tax income while multinationals continue to engage in tax avoidance so aggresivelly they pay nothing.

    Oh! There’s a solution! Why don’t we simply get the tax businesses owe!

  13. OldLb

    Very simple.

    I’ve said that the state pension won’t be paid because they cannot tax enough to pay for it.

    You’ve said that isn’t the case.

    So you need put up the numbers that justify it being affordable.

    So we need to know some basic information.

    1. How much does the state owe for the state pension?

    2. By how much is it changing year on year? It could be going up, or it could be going down.

    For both of those, the current value is the number that’s needed. There is no point in totalling up future payouts, since they are affected by inflation.

    Then we have to look at spending and income to see if its affordable.

    3. What’s current spending?

    4. What’s current taxes?

    Remember the state treats pensions as welfare That’s why its relevant to the post.

    Let me help you with two of the answers.

    3 Current spending is 722 bn a year

    4. Current taxes are 600 bn a year.

    It’s questions 1 and 2 I would like you to answer, with some evidence to back them up.

    http://www.ons.gov.uk/ons/dcp171766_263808.pdf is out of date, but it will give you some hints.

  14. OldLb

    Debt is a symptom of income being outweighed by expenditure.

    ==============

    That is just part of the debts. That part of the debt, the accumulation of deficits over time is borrowing.

    There are lots of other debts, not related to income and expenditure.

    For example, the civil service pensions. Services received in the past, but to be paid for in the future. That is a debt or a liability (same meaning), just as much as borrowing.

    Similarly if you take payment up front for services to be delivered in the future, that’s also a debt/liability.

    Sorry, what? You argue based on pension and then go on about migration while attempting to wave away the impact of the EU?

    In or out of the EU, the pensions debt doesn’t change.

    Where migration matters, is whether or not migrants make that debt problem worse or better. If you are low paid, you make it worse. If you are high paid, you make it better. Pure and simple economics.

    Migration is a fraction of the welfare bill directly.

    So what? If the average person consumes 12K of state money, then welfare is an irrelevance. We should get rid of overseas welfare claimants. That saves some money. Why just consider welfare as your criteria. There are overseas workers in Starbucks paying a couple of hundred a year in tax and NI. The NHS costs 2K per person per year. They are not an economic benefit. Add on top they are building up pension rights, and its even worse.

    By restricting the measure to being on benefits or not, you’ve omitted huge swathes of the cost of those migrants being here to inflate the case for migration.

    High paid migrants, let them come. Low skilled migrants, no way.

    Except… if people knew the money was there why save? Mandatory?

    Yep. Mandatory. You are forced to save.

    A triumph of our welfare system. Same has happened elsewhere without a welfare state. However, what’s the cost? Tell us how much the welfare state owes in pensions for past contributions. You can’t say its a triumph if you ignore the bad.

    I remain unconvinced about this as a solution,

    You asked me for a solution, I provided one option.

    So over to you.

    1. How much do they owe?

    2. How are they going to pay it?

    That’s the solution you need to provide. With some numbers please not waffle.

    I’ll give you a starter for 1.

    Total debt, is 8,000 bn rising at 850 bn a year. [Interest, inflation,, and growth in the liabilities]. Taxes raise 600 bn, and spending is 722 bn.

    Doesn’t take a rocket scientist to work out the consequences.

    Labour, by comparison, wouldn’t abolish the state pension.

    Yes they will. They can’t pay it.

  15. John

    That is just part of the debts. That part of the debt, the accumulation of deficits over time is borrowing.

    There are lots of other debts, not related to income and expenditure.

    For example, the civil service pensions. Services received in the
    past, but to be paid for in the future. That is a debt or a liability
    (same meaning), just as much as borrowing.

    Similarly if you take payment up front for services to be delivered in the future, that’s also a debt/liability.

    =======================================================

    You are making a distinction between short-term and long-term debts. It’s fine, but be clear about it. I had thought we were discussing possible ways of mitigating the long-term debt using revenue (that seemed to be your immediate solution; use revenue to create a fund paying the debt on an as-and-when basis if people ran out of their mandatory pensions savings)

    Also payment up-front for services in the future isn’t a debt; it’s a prepayment. Or are you talking about from the position of a service provider? In which case yes; it’s a balance sheet item on the credits side.

    =======================================================

    In or out of the EU, the pensions debt doesn’t change.

    Where migration matters, is whether or not migrants make that debt
    problem worse or better. If you are low paid, you make it worse. If you
    are high paid, you make it better. Pure and simple economics.

    =======================================================

    Except… things are never that simple.

    Studies have shown (which I linked you to; please read them) that even low-skilled migrants have a positive net [i]NET[i] effect. Not gross; net. That means AFTER payments and deductions. It may be small; but it’s positive.

    The problem comes when low-skilled migrants come in who can’t find work. They’re in the exact same position as many of OUR low-skilled workers; suggesting the problem isn’t lazy poor people, as many would have you believe, but a dearth of jobs in the market. THAT would be the problem to solve in that instance. Not migration as that would still leave over 75,000 long-term unemployed 18-24 year olds, never mind those who aren’t even IN that age band.

    And no; stopping net migration will not magically award them jobs.

    =======================================================
    Same has happened elsewhere
    without a welfare state. However, what’s the cost? Tell us how much the
    welfare state owes in pensions for past contributions. You can’t say its
    a triumph if you ignore the bad.

    =======================================================

    A triumph of our welfare system. Same has happened elsewhere
    without a welfare state. However, what’s the cost? Tell us how much the
    welfare state owes in pensions for past contributions. You can’t say its
    a triumph if you ignore the bad.

    ========================================================

    http://www.worldlifeexpectancy.com/

    See the red? All have a form of welfare state. Drill down and the lack of a welfare state becomes more damning. Try again; with figures next time.

    ========================================================

    You asked me for a solution, I provided one option.

    So over to you.

    1. How much do they owe?

    2. How are they going to pay it?

    ========================================================

    You did. Forgive me for critiquing it.

    1. It’s more or less immaterial. However it’s calculated the money isn’t there

    2. Abolish mandatory retirement. There is alraedy a lot of people working in their ‘retirement’ to make ends meet; so let them. They keep earning, without paying NI I suspect, though that may change, and their pension (which is pretty poor already anyway) doesn’t become an issue.

    ========================================================

    Yes they will. They can’t pay it.
    =========================================================
    Alright, allow me to refind my statement; they would cut anything else except the NHS first (doing incalculable damage to the country)

  16. OldLb

    You are making a distinction between short-term and long-term debts.

    ==========

    Where? I’ve made no such distinction. There are perpetual Gilts with no maturity dates on the borrowing side. There are pension liabilities being accrued that will be paid in 100 years time (well should be, because they won’t be)

    On the solution front, you challenged me to provide a solution. Lets look at yours.

    =======

    Also payment up-front for services in the future isn’t a debt; it’s a prepayment.

    =======

    And its creates a debt. If you don’t believe me, pay me up front for your pension. When you want it paid, I’ll just point out I don’t owe you anything, its not a debt because you’ve told me.

    Please go away and read up on GAAP (generally agreed accounting principles) and FRS (financial reporting standards). Perfectly clear. If you take a prepayment for a pension (or anything else) it has to go down in the books as a liability (debt) Except the government says, we will adhere to the standards, ah, but not for pensions. We can’t tell people they are up the swannee.

    In the books or not in the books, it doesn’t change it. They won’t pay because they can’t. To work that out you need to know what they owe.

    ====
    Abolish mandatory retirement.

    ====

    So are you planning not to pay the pension, and to force people to work longer?

    Probably. Lets put some numbers to it.
    26K a year worker.

    2 years extra until retirement means 5K a year extra in total NI contributions, plus a loss of two years pension at 5K.

    20K a year lost for a 26K a year worker. Ho hum, what was that about the nasty party?

    They have to cut, or they do incalculable damage to the people of this country.

    Eg. Taking 20K off people who are poor. Nasty business when ponzi’s go wrong.

    So back to the basic question.

    How much does the state owe for its pension debts? Must be a simple question to answer.

    For without that number, you can’t really tell what the consequences are.

    Hint 6,500 bn for the pensions. ONS figures.

  17. Mason Dixon, Autistic

    Except that I haven’t said anything you claim I have, you don’t appear capable of arguing against what anyone genuinely believes so you seem to prefer making stuff up to argue against.

    Let the rest of us know when you are prepared to discuss this in a manner befitting the non-gibbering community, rather than simply claiming that you have come here and convinced ‘lots’ of your nonsense. You’ve attracted nothing but ridicule in the whole time you’ve been trolling LFF.

  18. OldLb

    Yes you have.

    1. The article is about the welfare state.

    2. The welfare state is bankrupt because it owes 6.5 trillion for pensions with no assets, and insufficient cash flow.

    3. The consequences are dire for those in need.

    Robbed by the state, to pay for the likes of you to have a good time, they are going to be destitute.

    So you won’t post any numbers to back up your opinion that it isn’t bankrupt.

    Back to the reasons why.

    1. You know, but are on the take. Living off people’s pension contributions. The longer you string them along like Maddoff, the richer you become.

    2. Maybe your on the potential receiver side. The consequences of realising that your going to be destitute in your old age is too much to take in, so you’re in denial.

    I can’t think of anything else.

    You can disprove me quite easily.

    Produce some evidence like this from the Office for National statistics. Its out of date, the problem is far worse, and you can see why when you look at the rate of growth of the debt

    http://www.ons.gov.uk/ons/dcp171766_263808.pdf

    Easy for you to show I’m wrong isn’t it?

    Just post evidence that the debt is smaller than 6.5 trillion, and that its affordable on 600 bn a year. Or your plan to make it affordable.

    Easy to show. If you think its a troll, post the evidence to the contrary.

    You never have posted any numbers, so I’m pretty certain points 1 and 2 are correct.

  19. blarg1987

    How do you actually know the DWP charges 5%?

    Also of note you are making an assunption that a large investment in the stock market will generate continuous returns when that is not guarenteed otheriwse endowment mortgages which worked in the same principle (investing on the stock market) would not have caused as many problems as they have would they?

  20. blarg1987

    P.S Didn;t Fullfacts answer your query about it and you accuse them of being left wing even though they provided data and analysis to back up their counter argument?

  21. Mason Dixon, Autistic

    The article is about the Taxpayer’s Alliance report, which regurgitates the policy proposals the Tory party have already made for Universal Credit. That you think it is a general welfare state topic is just reflective of your insular self-obsession.

    Keep inventing opinions for others. Just don’t expect us to listen.

  22. OldLb

    Very easy. You look at their cash accounts. Bit hard on the debt front because that’s not reported on.

    Wikipedia has it for you.Amazing thing google.

    http://en.wikipedia.org/wiki/National_Insurance_(United_Kingdom)

    Administrative costs & Transfers = 4.693 (bn)

    Income = 84.263 (bn)

    Annual percentage costs = 5.6%

    So how’s the numbers from your side?

    Managed to find how much is owed for pensions yet?

  23. OldLb

    Whose Full facts?

    Where’s the amount owed for the state pensions? That’s the bit of data you’ve never provided.

    How many billions do they owe?

    Simple question, one number. Post it with the evidence.

    So far you’ve failed to do so every time I’ve asked. So I’ll keep on about it.

    The reason you won’t post it is because if you do you have to admit the welfare state is bust.

  24. OldLb

    I’m listening. I’m asking you a simple question.

    How much does the state owe for its pensions?

    Now I know the answer, but you don’t acknowledge it. Let me repeat it.

    6,500 bn rising at 734 bn a year. Another 120 bn on top for the deficit. Since taxes only raise 600 bn, its clear that they can’t pay.

    They can’t even tax their way out, so they will be forced to cut their way out.

    Given 30% of the UK population have less than 1 months spending saved, its clear that the consequences are that they will be destitute.

    Universal credit is irelevant. No welfare is the result. None. No pensions, no housing benefit, nothing.

    All as a result of the Ponzi.

    You can waffle on all you like about X being dire, Y being awful, until you face up to what is owed its just political masturbation.

  25. John

    That is just part of the debts. That part of the debt, the accumulation of deficits over time is borrowing.

    *There are lots of other debts, not related to income and expenditure.*

    ========================================================

    And they are split between short-term debts and long-term liabilities. These are the technical accounting differences.

    ========================================================

    And its creates a debt.

    =========================================================

    No, it creates an OBLIGATION. Again this is a technical difference, but a debt is when you have a monetary obligation only. If you are talking about someone providing a service (which a pension doesn’t) then you prepay them and they posses an obligation. If they didn’t provide it and you took them to court they would STILL be under an obligation, and THAT is the most likely form of settlement. Any money would be for DAMAGES, not in reflection to the obligation itself.

    Seriously; do some research yourself for once! (FYI: http://fullfact.org/ amazing what google can do isn’t it)
    ========================================================

    Please go away and read up on GAAP (generally agreed accounting
    principles) and FRS (financial reporting standards). Perfectly clear. If
    you take a prepayment for a pension (or anything else) it has to go
    down in the books as a liability (debt) Except the government says, we
    will adhere to the standards, ah, but not for pensions. We can’t tell
    people they are up the swannee.

    ========================================================

    I’m sorry; I just laughed at you. Very rude of me. Please read GAAP and look at the difference between liability, obligation and debt. It’s there under fundamental accounting principles.

    Although you’re more likely to need to know about IFRS’s since that’s the standard most people are working on these days; even some of my clients and they’re all SME’s, with no NEED to comply with them yet.

    ========================================================

    So are you planning not to pay the pension, and to force people to work longer?

    Probably. Lets put some numbers to it.

    ========================================================

    Wow, yeah, talk about nasty party! I don’t know if that assumption is a reflection of you or just your opinion of me.

    I made no such assumption, and didn’t imply or even mention it.

    By all means pay them a pension! It just will be a fraction of what they would should get given how much they put in. It’s unavoidable as you have also pointed out. All I want to do is allow those who WANT or NEED to work to do just that. It means that old age isn’t enforced poverty or boredom.

    =========================================================

    How much does the state owe for its pension debts? Must be a simple question to answer.
    =========================================================
    Really? Why? For that matter why try? The amount is going to be more than any government can afford and it’s not going to get paid so it’s a bit immaterial. When a company goes insolvent people don’t go around trying to figure out how much they owe, it’s pointless. They can’t pay. They figure out how much the company is WORTH and then try to give their creditors some money. Since creditors is quite low down the list of people to pay, they usually get nothing

    Which is what most pensioners may get if a solution isn’t found and why I point out worrying about the debt is pointless.

  26. OldLb

    No difference between obligation, debt or liability. Follow the accounting rules, and they all appear on the liability side of the books.

    What you are doing is saying that the state doesn’t have to pay the pensions because it owes no-one a penny.

    Take a bank as an example. Deposit money (pension contributions) with them for future withdrawal (pension payout). Does the bank owe you the money? Does it have to record that as a liability?

    ======

    Really? Why? For that matter why try? The amount is going to be more than any government can afford and it’s not going to get paid so it’s a bit immaterial.

    ======

    Because it shows up the problem.

    Quite rightly you say, those who want to work, and who can find an employer willing to employ them, its not the states business to be involved.

    However, 30% of people can’t last more than one month out of savings. Since you admit they aren’t going to pay the pension because they can’t afford it, it also means they can’t pay welfare. It doesn’t matter if you label it pension or welfare, its cash they can’t pay.

    Why matter about the debt and reporting it? For simple reasons,

    1. Publicity puts pressure on stopping it growing.
    2. It gives people time to make alternative arrangements.
    3. The crooks get done now. [Section 1-5, 2006 Fraud Act]

    You can’t get a solution until people face up to the level of debt.

    PS, True government debt is 8,000 bn rising at 850 bn a year.

    We’re going to find out quite quickly what the consequences are of hiding the debt.

    The first signs of this will be with NI. There is an NI fund. Bit of a joke really because its the government owing itself money and claiming that’s an asset. However, within 4 years at the current rate, that’s gone. That’s the first canary in the current set up.

  27. OldLb

    Let me add one thing John. Unlike most on this board, you do admit they won’t pay the pensions. The rest are in denial because their argument is that there isn’t a debt, so its not a problem. No debt means it will be paid.

    Now the question is what are the consequences of that debt. It’s dire. Truly dire. The welfare state as its grown, has hidden the bad side, which is not paying out on pensions and paying only 20% of the value.

    You can say all you want about the benefits, but by omitting the dire nature of the eventual consequences, you delude yourself and harm people.

  28. OldLb

    I’ve been to the full fact web site. I can’t see anything saying how man pounds the state owes.

    I’ve done that in the past, and I’ve done it again now.

    http://fullfact.org/finder/economy/welfare_pensions#3 is the link from searching on their site.

    Nothing there.

    So lets try debt

    http://fullfact.org/finder/economy/debt_deficit#1

    Yep, debt is equated with borrowing and the pensions are omitted.

    Come on, try harder. Where are the numbers for the pension debts?

    The only link I have is this.

    http://www.ons.gov.uk/ons/dcp171766_263808.pdf

    ONS figures, that back up the 6.5 trillion number.

    So where on the full fact website is the size of the government’s liability for pensions?

    You’ve quoted full fact finder as your reference. Got a link to the correct page? [PS its not there. They ignore the pensions]

    You can check too. They link to the DMO, and that just the Gilt borrowing .Now the DMO site is a bit naff, and you have to download the date for Gilts in issuance and add the numbers up to get that part of the debt. Its around the 1.2 trillion mark. Ho hum, its the same as the debt figure. In other words, clear evidence that the numbers reported by full fact check aren’t complete, they have omitted the pensions.

    Debt is not the same as borrowing,.

  29. OldLb

    Getting closer. So why does full facts ignore the ONS number that in 2010 (same date as their report) ignore the 5,010 trillion unfunded pensions debts.

    Notice that there are no assumptions in the ONS number bar those that the government expects pension funds to follow.

    Note that none of these involve the dubious assumptions followed by some on the right that want to inflate the debt. There they assume that the state is responsible for all the banking debts, but ignore the banking assets. ie. The resposibility is for the guarantee, not for the debts. The difference is marked.

    So Full facts are wrong. The debt is the current pension debts, 6.5 trillion, plus borrowing, 1.2 trillion, plus other debts such as the debt part of PFI, and any expected losses on guarantees.

    On the asset side, any premiums from guarantees can be included. That’s it.

    Very simply – bankrupt, and as John has agreed, they will never pay the pensions as promised because they can’t.

    That screws the poor, because the poor have been forced to pay the state for a pension they won’t get.

    They have been forced to pay, but only get 20% of the value back.

  30. OldLb

    Richard Murphy, Director of Tax Research, said: “The national debt is not £4.8 trillion. To construct any number near that amount ignores the fact that state pension liabilities might be paid over the next sixty years. Few are due now: all those that are can be afforded.”

    ==========

    That’s bollocks. See the ONS numbers for the increase in pension debts.

    Here are the bits from the ONS

    =======
    (the debt) as at 31 March 2005, at £1.347 trillion
    (the debt) end of December 2010, of £5.01 trillion

    =======

    Do the maths just over 5 years and a 3,663 billion increase.

    Taxes now run at 600 bn a year.

    The increase in the debt is outstripping total taxation.

    Justify why its affordable?

  31. OldLb

    To construct any number near that amount ignores the fact that state pension liabilities might be paid over the next sixty years. Few are due now: all those that are can be afforded.”

    ===============

    Ho hum.

    Triple pensions now. Because they are paid over 60 year (actually 100+), they are affordable.

    Why stop at tripling? Why not pay 50K a year per pensioner? Its paid over 60 years so it must be affordable.

    Spot the flaw in Richard Murphy’s logic. It’s not hard.

    Unless you quantify the debt and how fast its rising (its not falling), you cannot tell if you can meet those liabilities.

  32. blarg1987

    SO why don’t you write and complain to fullfacts then?

  33. blarg1987

    So the debte magically inclreade by nearly £4billion in 5 years? SO where did this new figure come from, we all turned into OAP’s overnight?

  34. John

    So does Sales. Why? Because it’s a P&L item, not balance-sheet. Want to stick to just the balance-sheet? Then there ARE differences, as obligation is analysed under short-term liabilities, while loans and long-term debts are analysed under the long-term liabilities. The distinction is important when calculating a businesses (or governments) capital which, in turn, is important for those working out whether this entity is worth loaning money to

    I suspect very few governments would get loans if they had to follow the accounting rules others do.

    “What you are doing is saying that the state doesn’t have to pay the pensions because it owes no-one a penny.”

    Simplistic, but essentially correct. A government’s main property which distinguishes it from all other regulatory entity is the fact that it is ungoverned. Which is why democracy came about; so the actions of a government could at least be held to account.

    However

    If a government has no choice on an issue it will take the only option available and will likely spend some time, before or after, shifting blame. Given that, and given the huge size of the pension debt I reiterate; it’s immaterial. It won’t get paid in full.

    “Take a bank as an example. Deposit money (pension contributions) with
    them for future withdrawal (pension payout). Does the bank owe you the
    money? Does it have to record that as a liability?”

    Except most pensions are invested on the stock market. However, even where they simply put in a bank account, and then said bank goes bust they would absolutely owe you the money. You just wouldn’t get it. Tough titty.

    “Because it shows up the problem.”

    People who are refusing to acknowledge the problem are as capable of ignoring lots of zero’s as none. For those who DO acknowledge the problem, most admit it’s a problem that won’t get solved by snipping at the budget a little here and there. A new solution is required.

  35. OldLb

    Yep – official figures.

    Remember there are 4 numbers involved. The two dates on which they are measured, and the two debt figures.

    Each debt figure could be right, under valued, or over valued.

    However, I can tell you that each figure is an under valuation.

    For the explanation you will have to understand annuities.

    So back to the questions which I’m still waiting for an answer, even from all your references.

    1. If the criteria put forward by full facts is that because the debts are paid over 60 years, they must be affordable, why not quadruple pensions. Still paid over 60 years, that must be affordable. We can pick any number for the pensions and increase them.

    Sensible argument for affordability or not?

    2. For you or full facts.

    If you disagree with the ONS number, you must have a number you think is right in order to say that the ONS are wrong. (they have low balled it by the way, its bigger).

    What’s your number for the pensions debts?

    If you want to go through how to calculate the debt in detail, I’m always willing to go through it. It shows the flaws in the ONS numbers and why they are too low. It’s also interesting from a purely curiosity angle. How do you calculate what you are supposed to pay out when you don’t know when Fred Bloggs will die.

  36. blarg1987

    So how did the debt increase by £4 trillion in 5 years? You keeep bleating on about pensions being the big source of this, how did generations suddenly age overnight? Either things were added to the source figures in which case it should be based on like for like or we are building a death star in space in secret.

  37. OldLb

    Aging.

    It’s part of the increase, but not a big part.

    Every 8 years life expectancy goes up by 1 year. That’s the current increase.

    Given the life expectancy of well over 85 years if you make it to 65 that’s less than a 5% change.

    So what’s going on?

    It’s that the opening figure is way too low. Remember the assumption used, which is that they are running a pension scheme that has invested the money, rather than a pension scheme with no assets [1] [2]

    They had to change the assumption of how much money they were making on their ‘assets’

    However with no assets, the correct rate is inflation. They are still assuming inflation busting returns, and no defaults. The later doesn’t matter. No assets means no defaults.

    So the increase is caused by the discount rate going down, resulting in a increase.

    Now before you jump to any conclusion, that must mean the debt is smaller, you need to work out if their discount rate is above or below the correct rate, which is inflation. Its above, so that means the debt is underestimated.

    The true debt is bigger than the ONS reports. The increase is partly due to the 2005 being a bigger underestimate that the 2010 underestimate.

    The growth in the pension debts are due to to several factors.

    1. Longevity.

    The number of years you expect to pay out pensions, against the number of people you have to pay it out too. 5% increase in every 8 years, roughly.

    2. Rectangularisation

    http://www.med.uottawa.ca/sim/data/Rectangularization_of_mortality_e.htm

    For Canada, but the same thing is happening here. Here more people survive for longer, increasing payouts.

    3. Population increase.

    More people accruing rights to pensions, means a bigger debt.

    Migration, youngsters.

    4. Change of terms.

    Triple lock increased the debt.

    Decreases

    5. RPI to CPI took 15% off the civil servants pensions.

    A default on the contract unilaterally imposed.

    6. Increases in retirement age.

    10K off for 2 years for everyone. A default on the promise

    [1] You cannot loan money to yourself, to make an asset. The NI fund, covers a few months payouts, and is a loan from the state to the state.

    [2] At current rates of depletion, the fund is gone in 3-4 years.

    So back to the question you seem to have a problem in answering.

    What’s your figure for the pensions debt?

  38. OldLb

    So why don’t you provide a number for what the state owes for pensions?

    You don’t like the ONS number, so you must have a number to compare it against when you claim the number is too high in order to make the claim the ONS is wrong. [It is, their number is too low]

  39. blarg1987

    Still does not make up for 4 Trillion, so are we building a death star or are the origional 2005 figures not actually comparing like for like?

  40. ed

    Benefit Sanctions Must Be Stopped Without Exceptions in UK?
    Petition Calling For Benefit Sanctions To Be Scrapped Hits Nearly 2000 Signatures In First Few Hours
    http://you.38degrees.org.uk/petitions/benefit-sanctions-must-be-stopped-without-exceptions-in-uk

  41. billy_liar

    You say ” So the author could have simply started off with the less startling fact …. “, but then you go on to say “Work for the Dole is very similar to the government’s own much despised
    Workfare policy. Both schemes involve people working without receiving a
    wage.”

    So, you should be more accurate too; Work for the Dole, is work for the DOLE – the welfare recipient will not be working for nothing! Take into account, JSA, housing benefit, possible expenses and if they have children, all the accompanying benefits and the welfare recipient will have a pot of money which they can live on – thats NOT working for nothing, thats working for a living – like the rest of us have to.

  42. billy_liar

    Additionally, food bank usage increase is not due to more people not getting enough food. It is due to various agencies stepping up their activities in order to “prove” that people are getting less food. All the people I know who are accessing food banks are the very same people who get everything for nothing already, they don’t miss a trick – “on the way back from the bookies, nipped into the food bank and got something for the kids dinner, then I had a little extra to go to the pub.” A quote from a food bank user. However, if someone “in authority” asks the same question ; “I am finding it more and more difficult to make ends meet, its either pay the bills and go hungry or eat and not pay the bills” boo hoo

  43. tinamac

    “The right wing organisation the TaxPayers’ Alliance”

    I question whether the TaxPayers Alliance is right wing, surely working for the state is a communist ideology.

    Either the TPA is left wing, or they have been infiltrated – we have very little freedom in the UK and this is the icing on the cake.

    The only way to get freedom back is to lower taxes and let people be responsible for their own lives – obviously we have come too far down the socialist/welfare route to simply pull the rug as most British people wouldn’t have a clue how to look after themselves and provide for their family in the future – we need to phase personal responsibility back into our society e.g. start giving the message in schools and in the media that “to be self supporting is something to be proud of, an achievement. To live off others and lean on them for support is wrong, very wrong, unless you have absolutely no alternative. To help the truly needy is good for societies soul, but the needy should seek to be helped by their family first, their friends second and the state (i.e. their fellow citizens) only as a last resort.

    Too many people (that I know) are perfectly happy for the state to keep them, they dismiss the idea that it is their fellow citizen is keeping them. However, taxes are so high as to preclude them from looking after themselves. I propose that politicians seek to enable “the needy” by lowering taxes for all. This would allow everyone capable of fending for themselves to do so and allow families of those who can’t to make the necessary arrangements to look after those who can’t because they will have enough money left in their own pockets to do so. A side effect of this would be that those unable to look after themselves can still be a contributing member of a family unit instead of being isolated by the state.

  44. tinamac

    2000 signatures is not enough to show anything

  45. Rickie B. Ballenger

    Taxpayers rightly expect something back for the enormous amount they pay for out-of-work benefits, at the very least a real commitment to find a job as soon as possible.

    Rickie@IRStaxreliefannarbor

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