Conflating all social security spending as "welfare" is not transparent. Photo: Getty
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Osborne's personal tax summaries are not transparent: they don't break down welfare spending

Why the Chancellor's personal tax summaries are the wrong type of transparency.

At CPAG, we slept on yesterday’s news of George Osborne’s personal tax summaries. This morning, we awoke to find we’re still pretty annoyed. This blog is an attempt to figure out why, exactly.

Now, we’re not against transparency in politics. Indeed, like most people, we’re also partial to motherhood and apple pie. Yet, scratch the surface, and it’s clear that the government have chosen very carefully what information they’re using, and how they’re presenting it. And selective transparency isn’t really transparency at all.

How that information is presented has been critiqued in a number of places. At the top of the government-produced mock-ups of the summaries sits a monolithic block, "welfare" – a term that, unlike social security or social protection, has no commonly-accepted meaning. Others have raised serious concerns about how spending is allocated to that block, and thus the total calculated. Putting that aside, however, it is hard to see this outside the prism of mooted further cuts to "welfare". Why else conflate spending as diverse as unemployment benefit, in-work tax credits, disability living allowance, and pension credit? With the public already confused as to what proportion of the "welfare" bill goes on these conceptually very different things, is transparency served best by dispelling those misconceptions, or by playing into them?

In reality, our social security system is doing a wide range of things at the same time. Support for pensioners is by far the biggest slice of the pie (state pensions, but also pensioner benefits like pension credit), with the continuing falls in pensioner poverty one of the great public policy success stories of our day; housing benefit comes in next – with the proportion of in-work claims increasing rapidly. Other major spends include disability benefits, child benefit and tax credits, in-work tax credits, and a small slither (around 3 per cent) on jobseeker’s allowance. As a society, we’re spending money to support people with extra costs (of disability, or of having children), those with reduced capacity to earn (disabled people, pensioners, parents), topping up low wages, and subsidising high housing costs. By all means, let’s have a debate about the relative priorities of these functions. But rather than shedding light, these summaries are casting shadows.

The personal summaries are selective, too, looking only at direct personal taxation. Direct tax accounts for less than half of all government revenue, with the long-term reduction in that proportion accelerated by increases in both the personal tax allowance and VAT in this Parliament. This matters because increasing numbers of people are earning too little to pay much if any direct tax. In reality, though, those on low incomes pay a higher proportion of their income in tax than those on high incomes, but do so mostly through indirect taxes. That, in turn, matters because statements focusing just on direct taxes promote a false picture of relative contributions to the Exchequer.

Increasing understanding of how public money is spent is a laudable aim, and we would welcome informed public debate on what our social security is for, and how it can be directed most effectively towards those ends. A well-functioning, well-resourced social security system is an essential pillar in achieving a poverty-free society. Part of transparency around the costs of social security has to include the £29bn annual cost of child poverty alone. Sadly, the selectiveness and partiality of the new personal tax summaries are such that they risk having, if anything, the opposite effect. Not so much transparent, then, as transparently political.

Moussa Haddad is senior policy and research officer at the Child Poverty Action Group

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Our new relationship with the EU may be a lot like the old one

For all the tough mood music, Theresa May has left room for concessions.

I'm sad and dismayed, but that's democracy for you.

The Mail is in a cheerier mood. "Freedom!" is their splash. "Dear EU, We're Leaving You" cheers the Express' while "Dear EU, it's time to go" is the Mirror's splash. "Dover & Out!" roars the Sun, who have projected those same words on the white cliffs of, you guessed it, Dover. "May Signs Us Out!" is the Metro's take.

"Brexit begins" is the i's more equivocal splash, "The eyes of history are watching" is the Times' take, while the Guardian opts for "Today Britain steps into the unknown".

The bigger story isn't the letter but its content, which leads the FT: "May signs historic Brexit letter and opens way for compromise". The government is finessing its red line on the competence of the European Court of Justice. (The word in Whitehall is that Theresa May hadn't grasped the importance of the ECJ as an arbitration mechanism after Brexit and for cross-border matters such as flights when she made her conference speech.)  And the PM has done a good job of not ruling out continuing payments to the European Union, her best path to the deal Britain needs.

A lot depends on what happens to the British economy between now and March 2019. The pound is down still further today but whether that's a minor eruption or the start of sustained losses will have significant consequences on how painful Britain's best path to the access we need to the single market - paying over the odds for the parts of membership that the British government wants to keep and swallowing that £50bn divorce bill - is doable or not.

For all the mood music emanating from May, she's quietly done a good job of clearing the obstacles to a deal where Britain controls its own immigration policy, continues to staff Europol and to participate in European-wide research, the bulk of our regulation is set by Brussels de facto if not de jure and we pay, say £250m a week into Brussels.

Our new relationship with the EU may be rather closer to our old one than we currently expect.

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.