George Osborne has prompted Her Majesty’s Revenue and Customs to write to taxpayers, with a statement of account, specifying how much they stump up for each service. And who could be against letting the light in, so that individual citizens can finally see where their taxes go? Pet projects and pork-barrel schemes make way for the people’s priorities! No taxation without elucidation!
The slogans sound unanswerable – until, that is, one scrutinises what is being done. For this most shamelessly political of chancellors is essentially distributing election literature with the public’s money in order not to enhance but to distort understanding.
When the mechanic on £30,000 discovers that he is spending £892 a year on education, or the senior teacher on £45,000 reads that she has coughed up £836 on national debt interest, the very precision of these numbers suggests that these are hard, Gradgrindesque facts. Precision, however, is not the same thing as accuracy – still less objectivity. It is an entirely subjective decision to focus the statements on taxes on income – charges which, it just so happens, the coalition has cut – and to exclude indirect levies like VAT, which the coalition has raised. But the most serious distortions concern the way in which spending is classified.
In particular, a great undifferentiated statistical slab of something called “welfare” is shown gobbling up a quarter of those hard-earned tax pounds. It is not hard to grasp why Mr Osborne wishes to create this impression. He is in the midst of a zealous campaign to follow the historic cuts to social security benefits he has already announced with a zealous campaign for a further £12bn of retrenchment. Monday’s newspaper reports that the “average worker pays more than £1,100 a year towards Britain’s bloated welfare bill” were, therefore, exactly what he wanted. They further the divisive lie that the (real) long squeeze on living standards in middle England is the fault of a layabout, subsidised underclass.
The starkest distortion is linguistic. The parlance of “welfare cheques” is an American import, signalling entirely unearned handouts to the poor, as opposed to payments made as of right because of family or medical circumstance, or indeed a record of national insurance contributions. As an important new book by Sir John Hills demonstrates, only the smallest sliver of social security is the preserve of the permanently penurious; most helps with costs that weigh heavily on the great majority of families at times on the journey through life. Disregard for that reality – as well as for the growing chunk of the budget that goes on topping up exploitative wages and subsidising rip-off rents for those working hard for low pay – is a dismaying if familiar rightwing tactic.
Less familiar, and harder to spot, is the bizarre way spending is classified. The calculations begin with an internationally used, but poorly understood and somewhat anachronistic, “social protection” category that includes not only social security but also personal care services, which nobody from any quarter in the debate has been referring to as “welfare” until now. The gold-plated pensions of retired mandarins and colonels are included as social protection, as are those by many lowlier public servants who will be appalled to hear their hard-earned retirement provision re-labelled as “welfare”. But that is what the government is doing in the name of transparency, although only after subtracting a definition of state pensions from an entirely different source, to separate out that one chunk of “welfare” spending on the grey vote that Mr Osborne wishes to protect.
Changing definitions and categories at the same time is the analytical equivalent of rebuilding a boat while you stand in it: the result can only be to drown taxpayers in confusion. But then the intention is not to enlighten, only to invoke outrage about an outsize welfare bill. If these were party leaflets, that would be one thing, but official correspondence is being misused. At a time when Michael Gove has taken to elbowing in on the permanent secretaries’ meeting, civil service neutrality is under pressure. It is time for somebody trusted, perhaps the statistics watchdog, Sir Andrew Dilnot, to tell Mr Osborne that his number’s up.
