Picking Losers

More for the taxman (and less for the rest of us)

The Times reports that tax inspectors are being offered bonuses related to the amount of money collected.

It seems that job satisfaction isn't enough - the respect of your fellow man, the pleasure of a job well done, the happiness brought to your customers. Nor is a decent wage. To do their job properly, they need to be incentivised to collect as much as possible. After all, we don't want tax collectors collecting only what is reasonable, do we? We want them trying to screw every penny they can out of businesses. And recent experience of tax inspectors has shown what a slack job they have been doing - almost throwing money at businesses in their generosity.

Just Wages

The tensions of excess, both in private and public sectors, are starting to display themselves in debates over the just level of wages for various occupations. These debates occur every now and then, usually provoked by a sense of disparity related to imbalances in the economy, themselves created by lopsided government intervention. Not surprisingly, given Gordon's predilections for the City, big corporates and micro-management by an overweening bureaucracy, the focus at the moment is on the remuneration of bankers, business leaders, management consultants, politicians and senior civil servants.

Following the recent announcement of record profits and record bonuses at many of the leading Wall Street and City banks, the Telegraph reports today that the number of public sector staff on six-figure salaries (i.e. > £100,000) has trebled in the past five years, whilst Brendan Barber (general secretary of the TUC, but usually a measured critic of business) has called for a "debate" about "how big and how justified" the rewards of directors of FTSE 100 companies should be, given that they have increased 105% in real terms since 2000, while average wages have increased only 6%. Put another way, these bosses now earn 98 times more than their employees. Bosses of AIM-listed businesses haven't been doing too bad either, some of them being paid over £1m for the first time. MPs' recent claims that they deserve an increase in their basic salary from around £60,000 to £100,000 received mixed press - some people feeling that it was worth paying to get a better quality of politician, others feeling that they didn't deserve a pay increase given their supposedly poor levels of performance and the pay squeeze on other public servants. There was further criticism of the high levels of pay for many public-sector executives (i.e. quangocrats), whose average pay awards are now second only to bosses in the City financial sector. Quangocrats' pay levels have been causing concern for a while now, without any sign of a retreat.

These debates are always characterised by an absence of intellectual consistency. Most participants argue that those they favour should be paid as much as is necessary to get "the best person for the job", whilst those they do not favour should be paid no more than is necessary to fill the post. Some eschew these generalisations for even greater simplicities - people should be paid according to the amount of work they put in, according to their performance / the results of their efforts, or, for the unreformed socialists, according to their needs. Whatever system is used, what unites almost all commentators is that they seem determined to invent their own personal scale of worth, as though it would be possible to devise a just scale of wages that could be imposed from above if only people would recognise the truth of the commentator's personal value system.

What is the truth? How are we to know whether people are being paid enough or too much?

Spending priorities - bureaucrats or soldiers?

Major General Richard Shirreff, commander of the British forces in Southern Iraq, has called for a renewal of the "military covenant between the nation and its soldiers", to provide proper support for the military in terms of "training, infrastructure, barracks, accommodation". Though he scrupulously avoided pointing the finger at the Government or any individual group (and rightly so, as financial support for the military was no more forthcoming from the previous Conservative government than from the current administration), the Ministry of Defence (MoD) clearly understood who the message was aimed at. They tried to excuse themselves by pointing out that the defence budget had "steadily risen" by £3.7bn over the past three years.

The magic of levitation

The Tories are trying to work out the best way to develop our transport network, including consideration of the installation of a magnetic levitation (MagLev) railway line, or the extension of the Channel Tunnel rail link as a British equivalent of the French TGV high-speed rail link. The businessmen who will fund, develop, and operate any new rail services will doubtless be delighted that the politicians have removed from them the necessity of making a commercial assessment of the best solution. After all, politicians are so much better at this sort of thing.

How to improve standards - don't test them

The Institute for Public Policy Research, the Government's favourite think-tank of the "Third Way" (by their own lights, the "UK’s leading progressive think tank", using "progressive" in the sense that has been coopted by the soft-left to imply that solutions other than their own are regressive), has suggested in a report published today that the way to stem the rising tide of illiteracy is to stop testing for it. Instead, teachers would make their own assessments. Limited tests would still be run, but not in all areas of all subjects, and the results would be used only to moderate the teachers' assessments, not to assess individual students' performance.

Government-inflicted pain

Mark and Lezley Gibson and Marcus Davies were convicted on 15 December of distributing cannabis-laced chocolate bars to multiple sclerosis (MS) sufferers. They await sentencing on 26 January.

Lezley is herself a MS-sufferer, who was told at the age of 21 that she would be incontinent and wheel-chair bound within a few years. Conventional treatment (steroid injections) had such unpleasant side-effects that she could not continue. In her search for alternatives, she came across comments on the benefits of cannabis, which she discovered worked for her. She is now 42 and living a quality of life that the medical profession had considered improbable when she was first diagnosed.

Baby farming

Pregnant Germans are trying to delay the birth of their babies until 1 January, the BBC report, because parents of babies born after that date will receive 25,200 euros (£16,911, $33,300 at current exchange rates) to "ease the financial burden of parenthood".

The handout is part of German plans to increase the national birthrate, which, at 1.37 children per woman, is well below the 2.1 children per woman needed to maintain the population level (assuming that immigration is not an acceptable alternative way to maintain the population level).

Pie-in-the-sky planning

The Financial Times reported on Wednesday on the progress of two projects - Sigma Scan and Delta Scan - commissioned by the Horizon Scanning Centre within the Foresight Programme of the Parliamentary Office of Science and Technology (POST). You may not have realised that the POST (if you knew it existed) had a Foresight Programme, nor that that programme included a Horizon Scanning Centre, and probably not that that centre had commissioned Strategic Horizon Scans from The Institute for the Future in California on the future of science and technology (Delta Scan) and from Outsights (a management consultancy, surprise, surprise) and Ipsos Mori (the pollsters) on future social, political, economic and environmental issues (Sigma Scan). But rest assured, those civil servants are busy beavering away, working out how we'll all be living our lives in 50 years' time. How else would we know what to plan for and what to throw our taxes at?


Oliver Heald, the Shadow Constitutional Affairs Secretary, uncovered through a Parliamentary Question (PQ) that John Prescott has spent almost £650 on replacing a sign on his door from the Office of the Deputy Prime Minister (ODPM) by one saying the Deputy Prime Minister's Office (DPMO). Mr Prescott no longer has thousands of staff working for him, but "only" 18 and a budget of £2m a year for his important duties. The DPMO counter-attack was that it cost them £140 to answer Mr Heald's PQ. It cannot be that bad to spend some money on the things they are supposed to do? Instead they are more willing to splash out on those all important signs and business cards.

ID cards

The Home Secretary announced yesterday that its ID card scheme will be linked to existing Whitehall databases. This is a complete U-turn from the plans the government has been pushing through for years to build a new clean system from scratch.

Also, there is a huge number of companies that are interested in bidding for the new ID database and that have prepared and spent money to take part in the procurement process. But now it appears that this has been done in vain and our data will be stored on 3 different and inaccurant computer systems.

Equipment and war

The inquest into the death of Sgt Steven Roberts found that he was killed because of delays by the government to supply body armour to the troops. Shortage of such basic kit was already known before the Iraq war broke out but more was not procured as not the appear to support the US. A cowardly move to cover its plan to join the war at the expense of necessary equipment for its troops?   

Meeting targets

National Audit Office's report has found that information on whether 12 out of the 14 Department for Education's key targets set by the PM and Chancellor will be met is likely to be unreliable. The monitoring of only 2 targets was approved. The report highlights the fact that the government's announcements regarding improved standard should be questioned, especially when they point out how they have met all their important targets.

Renewable fix

Renewable electricity in the UK is supported primarily by the Renewables Obligation (RO), an obligation on licenced electricity suppliers to purchase a proportion of their electricity from renewable sources. Most types of renewable electricity are eligible, and every unit from every eligible project is treated as having an equal value to the environment. Until now, that is....


It has emerged from a leaked proposal that the EU Commission is admitting its Emissions Trading Scheme (ETS) would only delay aviation emissions three to six months by 2050.  ETS would only reduce the growth of airtravel by less than 3% over a 15-year period. This shows that quotas will not deliver necessary results in tackling climate change. Airlines will be making huge profits enabling them to buy as many carbon permits as they require. ETS only promotes "business as usual" with more profits to "dirty" industries.

Benefit system

According to the Telegraph, couples who pretend they are living apart to claim bigger benefit payments are costing the taxpayer more than £400m a year. It is estimated that up to 200,000 people were declaring themselves lone parents "fraudulently". This is the result of Gordon Brown's dysfunctional benefit system.  

Green grants

The Department of Trade and Industry has released £50m over the next 18 months to support the Low Carbon Buildings Programme. It has chosen seven companies to receive its funding. There is an increasing number of companies that operate in the renewable energy field and that was clearly demonstrated by the fact that 53 companies expressed interest in the DTI grant.

Spending on consultants

A National Audit Office (NAO) report found that the public sector paid £2.8bn to external consultants and it is a rise of 33% over three years. According to the report, departments are spending huge sums with no major returns and Whitehall fails to look at their own staff to do the same job for almost half the cost.  

Home Office mess

Home Office, the deprtment declared "not fit for purpose" is still struggling to make any improvements. Today's papers are reporting that the two terror suspects who went on the run in August are still at large. According to the National Audit Office (NAO) there is a lack of financial management and the accounts are still in a mess. The NAO found that the Home Office does not know exactly how many staff it employs and is £240m in the red. Sounds like a department fit to secure law and order....