Tuesday, 9 February 2016

Either they are terrible at maths or they are terrible liars.

Exhibit One

From The Evening Standard:

Zac Goldsmith claims Sadiq Khan would fund fares freeze with 59% rise in council tax

The row between the mayoral candidates over transport fares intensified today as Zac Goldsmith claimed his Labour rival would be forced to increase council tax by £175 a year for families to pay for a freeze.

Woah! Average Council Tax in London is £1,050 a year, slightly lower than the rest of the country (despite rental values and local per capita spending being about twice as high). That looks more like 17% to me…

Tory analysis of the figures suggests Mr Khan would have to increase City Hall’s council tax by 59 per cent — £175 a year for a typical household.

Sneaky! Technically, a London Council Tax bill is split into £850 for the local borough and a precept of £300 for the LGA (not many people notice this). £175 divided by £300 is of course something like 59%.

It's not even clear where the £175 comes from. TfL fare income is £3.8 billion a year (page 118 of their annual report, the other half of their budget is subsidies from the taxpayer), so if the normal price increase is 3% a year, a freeze means that TfL is foregoing £114 million a year, divided by 3.5 million homes = an average increase in Council Tax of £33 for each year that the freeze is in place.

Which seems like a perfectly sensible way of doing it to me, especially if the Council Tax increases were focused on Zones 1 and 2, who benefit most from TfL but pay the least towards it in fares, and especially if this meant that general taxpayer subsidies to TfL were reduced.
Exhibit Two

From The Nuffield Foundation (who are otherwise decent chaps):

Public sector employers, such as the NHS and schools, will need to find more than £3 billion a year from 2016–17 to pay higher National Insurance contributions.

Aren't we always told that National Insurance is there to pay for the NHS?* Total NIC revenues are around £110 billion, the NHS costs a bit more than that, so it's not far off. A tax is not a real cost to the NHS, because the NHS is taxpayer funded (a point which Lola has made about a million times).

* Cognitive dissonance being what it is, pensioners also claim that they have paid for their current state pensions (just under £100 billion a year) with their past NI contributions. When challenged, they refuse to accept that National Insurance is not a magical tax which can be spent four times over (for both the NHS and other people's pensions in the past, as well as the current cost of the NHS with a surplus built up being used to pay current pensions). I have actually seen pensioner propaganda saying that pensions are too low because their past NI contributions were squandered on something else, meaning it is spent five times over or some such accounting bullshit.


Random said...

"pensioners also claim that they have paid for their current state pensions (just under £100 billion a year) with their past NI contributions. "

Bullshit. Retirement is always a current production issue. They are permitted to have it by those *producing* goods and services.

Really retirement is about making sure the young have all they need to make the *stuff* you need. Money only buys bread if there is any spare.

View from the Solent said...

".. so if the normal price increase is 3% a year, a freeze means that TfL is foregoing £114 **billion** a year, "

Typo alert! million

(inevitable when pointing out a failure in someone else's arithmetic)

Lola said...

I promise I will shut up about tax not being paid by taxpayer funded outfits - until the next time that is...

Dinero said...

Well it is a cost to the NHS as whatever the government grants to the NHS that sum will be reduced by the NI payments. However whatever that figure granted to the NHS is, its cost to the non NHS employee tax payer is reduced by the NI costs to the NHS.

Mark Wadsworth said...

R, yup, harsh but fair.

VFTS, oops well spotted thanks I have amended.

L, it's a point worth making until it gets home.

D, that's accounting flim flam. You are assuming that the NHS budget gross of NI paid back to central government is a fixed figure, which is miles from the truth.

Dinero said...

If the Grant to the NHS is fixed and NI goes up then that is am operating cost to the NHS. Its not an assumption. There is no evidence here that the gov adjusts NHS spending for NI.

Lola said...

The strict answer to the headline is 'Both'.

Mark Wadsworth said...

Din, the NHS doesn't just get one grant decided by one person or committee, it's loads and loads of bits and pieces from central government, local councils, univerities and heaven knows what. They don't even really know what total spending it to within +/- 5 per cent.

L, as per usual.