The poison pill defence

This headline in Monday's FT caught my eye: "Tories search for cash to fund job cuts".

"Wot?" you may think, "Doesn't sacking superfluous public sector employees save money?"

Not necessarily. The problem is that these cosy and useless buggers are not at all cosy or useless when it comes to lining their own pockets, as the article explains:

... the cost of making civil servants redundant is creating “institutional overstaffing” in some departments, say Tory insiders, with the Treasury reluctant to provide cash for redundancy costs, even where that would produce long- term savings. At present, civil servants aged under 50 can receive up to three years’ pay if made compulsorily redundant, and those who joined before 1987 more than six years’ pay – terms vastly more generous than in the private sector... Even so, the large up-front cash costs are deterring departments from culling jobs, according to Philip Hammond, the shadow chief secretary to the Treasury.

I have heard stories about this, that a civil servant who takes early retirement can actually end up with much the same pay as one who continues working until retirement age (which is probably 60 for most of them), so it takes the taxpayer up to ten years to recover the cost of sacking someone.

So here's my cunning two-point plan:

1. There will always be jobs that need doing. So we can get these people out of the MoD and into the frontline; we can get these people out of the Department of Health and get them cleaning wards etc. That might well involve a pay down-grade, or else it'll be fun having some ex-public schoolboy/Labour luvvie* explaining to another squaddie/cleaning lady exactly why his pay is supposed to be twenty times hers. Hopefully that'll scare a lot of them off.

2. We (still) have a schedular tax system in the UK, and different types of income are taxed at different rates. Although I favour a flat tax system that taxes all income of whatever type - corporate or personal - at a single rate with as few exemptions and tax breaks as possible (not only is that more economically efficient, at least it's honest) but for people like this I'm prepared to make an exception.

So I'll introduce a sixty per cent higher rate tax on any salary, pension or redundancy payment paid by the taxpayer above the amount of £35,000 per year, which will claw back most of the cost, as well as encouraging more to move to the private sector where the flat tax rate will be thirty per cent and hopefully falling. That's probably a lot simpler than renegotiating loads of individual employment contracts and getting bogged down in private law disputes. The tax system is up to legislation and is not open to legal challenges (well, no doubt somebody will go for judicial review but they can f*** off).

If anybody has any more bright ideas, please leave a comment, this is all going in the MW manifesto.

* Delete according to prejudice.