Winter of disco'n'tent

Straw man attack of the day

From a Metro article headed Cost of red tape up £10bn in year, a figure which I am perfectly happy to accept as being in the right ballpark and probably an underestimate:

But TUC general secretary Brendan Barber said: "This tired stunt is well past its sell-by date... Their biggest complaint is working time rules. That might sound bureaucratic but in plain English this is the right for everyone at work to have four weeks paid holiday a year. What business calls red tape, the rest of us call a well-earned rest.

... I suppose we should be grateful that the BCC haven't added in the cumulative costs of the abolition of slavery and stopping children cleaning chimneys."

"1.5m cheated out of minimum wage"

From The Metro:

More than 1.5 million workers are being "cheated" out of the national minimum wage by dishonest employers, with hairdressers, hotel and bar staff most likely to suffer, according to new research.

The TUC said workers across the country are still taking home less than the legal minimum wage because of rogue employers who were paying below the adult rate of £5.73 an hour...

Woah! Hold it right there!

People on income support or jobseeker's allowance who work a few hours a week have a "take home pay" of precisely £0.00 as their benefits are reduced by £1 for every £1 earned.

If they work enough hours at £5.73 an hour to qualify for Working Tax Credits, their "take home pay" is £1.72, because 31% gets taken away as tax and 39% in WTC withdrawal.

Why do the lefties never mention this?

The DWP's TBMT (Table 1.1 b) shows that a single person over 25 who earns £185 per week pays roughly the same in PAYE as he or she can claim in WTC.

What is the point?*

Here's an idea: how about reducing the income withdrawal rate for income support to the same as the basic rate of PAYE (31%). It then wouldn't be tapered to nil until you reached weekly earnings of £194. There'd be no need for a separate system of means-testing either, as claimants would just be given a BR tax code, i.e. no personal allowance. That way we wouldn't need all the faff of WTC - it could just be scrapped. And for those not claiming benefits, why not give them a personal allowance of £185 or £194 a week as well, which is just under £10,000 a year?

So even if their boss cut a few corners and paid only £4 an hour, the true "take home pay" for income support claimants would be £2.76 per hour (better than what they've got now and without the faff) and for non-claimants, take home pay would be £4 an hour, a shade more than £5.73 minus PAYE.

* BQ answers that in the comments.

The Tories are to blame for everything (Part 94)

Brendan Barber, in The Metro:

"This year we have celebrated the centenary of the state pension. It remains a key achievement, but its value has melted away since the link with earnings was ended by the last Conservative government."

On a more serious note, for a given level of total spending, we could easily have a Citizen's Pension of £151 for each pensioner at current spending levels (about 6% of GDP). All we'd have to do is increase the Citizen's Pension age to 66.5 years (and that can go for the public sector workers that Brendan B claims to represent as well, thank you very much) and Bob's your uncle!

There's a simple trade-off between tax burden on working population, retirement age and the level of the Citizen's Pension. Fast forward to 2038, using the ONS population pyramid and assuming level prices etc, we'd need a CP age of 74.5, which could be achieved by shuffling up the CP age by 3.2 months every year, which is pretty much in line with the increase in average life expectancy over the past century.

Brendan Barber calls for tax cuts!!

Brendan was on Channel 4 News just now, rambling on about how wicked and evil the government's plans to slim down the bloated public sector were, yadda yadda, when out of the blue, he said something along the lines of "We have to think radically. We should look to America where they have reduced taxes to stimulate the economy"

This transcript unfortunately stops just short of these utterances. Crikey, the Records Department are quick nowadays!

Of course, tax cuts by themselves are fairly meaningless unless accompanied by spending cuts, but hey, one step at a time, one step at a time...

"Council workers vote for strike"

Brendan Barber really is a bit of a twat:

TUC general secretary Brendan Barber argued: "Our economic difficulties are caused by reckless lending by bankers and current inflation comes from higher oil, food and commodity prices. "Asking low-paid and average earners in public or private sector jobs to make sacrifices when those who caused the difficulties continue to draw record bonuses breaches any test of fairness."

1. You can make up your own minds who's to blame for oil and food price rises, nobody's really sure. But, assuming that these rises result from global demand, we collectively have to accept that our standard of living will fall; the value of our labour, expressed in barrels of oil or bushels of wheat, has fallen and that is the end of that. Which is not to say that people aren't perfectly entitled to haggle up their own wages, but it is ultimately a zero sum game.

2. Now, I agree that "reckless lending" has contributed to our "economic difficulties", but not on the topic of "record bonuses"; if UK Bank plc has made £1m profit and keeps it as retained earnings, £300,000 corporation tax is due. If the bank pays it out as a bonus, then £476,950 income tax and NI is due, so in terms of filling the public coffers, these City chaps taking outrageous bonuses is A Good Thing, surely? Even better, those tax liabilities are being paid out of thin air - if UK Bank plc had done their accounts properly for the past couple of years, they would have noticed that there were no profits to pay out as bonuses!

3. An increase in public sector wages is paid via the taxes of private sector workers, so although he gives a nod to "average earners in private sector jobs", the majority of your pay rises will be borne by them.

4. And if he really felt for "average earners in private sector jobs", why are the unions threatening that "Everything from local government will stop - we are talking about bins, schools, council offices, environmental health inspectors - all those important services that local communities rely on". Isn't that demanding a disproportionate sacrifice from aforementioned "average earners in private sector jobs"?
- Posh people have big front gardens so they can live without weekly collections for a while, certainly a lot longer than people in flats.
- Posh people send their kids to private school anyway.
- Who gives a shit if council offices are closed? A bit of a bummer for yer welfare claimants, maybe?
- Threatening that "environmental health inspectors" will stop - oooh! I'm really scared now!

Twat.

Economic illiterate of the day (4)

There'll be fairly stiff competition at this seminar.

Also ideal for people who enjoy stabbing themselves with forks etc.

Twat of the day (3)

Definitely Brendan Barber, who is on record as saying:

'Low pay for public sector workers could also cause "simmering resentment"'

Er, Brendan, firstly, average pay for public sector workers is now around 14% higher than in the private sector, and secondly, if there weren't so bloody many of them* we'd be able to pay a bit more to those that are left, wouldn't we?

If you're wondering why the TUC emphasises the public sector, it's because Trade Unions and the public sector are virtually synonymous - 59% of public sector workers are in a union, as opposed to only 16% of private sector employees.

* New Year's Resolution No. 1.