One of this mornings news items is on government plans to limit benefit to a family to the average wage, apparently regardless of the size of the family. This seems to be built around the idea that there are families out there with vast numbers of children who are milking the system to the cost of the rest of us. We can check this idea with numbers. The graph below shows the number of claimants broken down by number of children in the household, the final category is for families containing 8 or more children.
The heights of the columns are a lower bound on the fraction of benefit going to each group, an upper bound would be to multiply each column by the number of children but this would be an over-estimate since benefits don’t increase linearly with number of children. There are a little under 1000 families with 8 children or more. 90% of claimant families have less than four children.
These data tell us nothing about the circumstances of each of the families represented which will include the loss of parents, illness, job loss and all the other small disasters which can befall a family.
The data shown here are from Department of Work and Pensions via The Spectator (here).
Tag: politics
Oct 07 2010
Children and numbers
Aug 18 2010
100 days later: A Lib Dem view
I woke this morning to the sound of a bandwagon rolling past, grabbing my keyboard I jumped aboard. It is 100 days since the Coalition formed following the General Election. For people wedded to the decimal system of counting 100 is a nice round number, for programmers of a certain generation 128 is preferable. Perversely the Marquis de Sade chose 120 days, but I can’t wait 20 days.
As a member of the Liberal Democrats for 20 years, I thought my opinions on a 100 days of partly Liberal Democrat government might be interesting to at least a few people. You can see my previous political postings here, to get a bit more context.
Things I’m pleased about:
Pupil premium; a rising lower tax threshold; increased capital gains tax; Ken Clarke sounding like a liberal on prison policy, an end to ID cards and over-enthusiastic lawmaking for every occasion; some hope of constitutional reform both in the Lords and for general elections; no changes to the married tax allowance;
I’m also pleased by the very existence of a coalition government, it seems far more healthy to me that government is composed of members from two parties representing a majority of voters in the country, rather than one party who through a quirk of the electoral system has scraped in with a majority of seats based on a minority of votes. Far better coalition than more opposition where our influence is minimal.
I see my vote as delegating my views to the Liberal Democrats based on their manifesto, if they were in government alone I’d expect them to attempt to implement the entire manifesto (even if I didn’t like all of it). In coalition I expect them to negotiate using that manifesto as a basis, the fact that the entire manifesto is not being implemented is a result of them not achieving an overall majority. The inability to implement the entire manifesto is a fact of electoral arithmetic.
Things I’m not so pleased about:
fatuous comparisons of civil servant pay with the Prime Ministers pay; ostentatious “dipping of hands in blood” following the Budget, at times it felt like the only people cabinet ministers defending it were Liberal Democrats; David Laws’ rapid exit from government; Trident – I’m not particularly anti-nuclear but now was the perfect time to get shot of a piece of Cold War willy-waving.
As far as the economy is concerned, I believe we’d be in approximately the same place as we are now regardless of which party was in government prior to the election. The logic of this is also that regardless of who would have won the election they would have ended up doing approximately the same thing now (or in the near future): cutting government spending fairly dramatically. Arguments about timing are largely political; economics, it seems to me, is a “science” too imprecise to tell us much about the future and the fervent calls for cuts now, or cuts later are largely political. There is some marginal argument about the scale of the cuts, but given a Labour government we would be facing cuts of broadly the same magnitude.
I suspect there is a lot of departmental spinning going on at the moment: they’ve been asked to make fairly large cuts and they’re leaking the ideas for cuts that they know will be politically the most unpalatable in order to give themselves some leverage for the spending review.
There’s much enthusiasm about the LibDem’s apparent problems in the polls, however they’re generally at levels comparable with the last 10 years or so (see the Guardian Datablog). They are only low if you compare them to the heady heights of the election campaign which were quite evidently wildly inaccurate – the only accurate poll was the exit poll. I suspect a LibDem party in coalition with Labour would find itself in very much the same position.
It’s worth highlighting again the inequity of first past the post system: plug the latest opinion poll into the BBC’s calculator: (Lab:37% Con: 37% LibDem: 18%) and you get (Lab: 336 Con: 244 LibDem: 42). Labour get a 92 seat advantage over the Tories for an identical percentage of the vote and they get 8 times the number of seats as the Liberal Democrats for twice the vote. The Electoral Reform Society did a report for “Conservative Action for Electoral Reform”, on this subject – interesting conclusion is that equalising constituency size doesn’t really address the problem.
After the General Election the Liberal Democrats had three options: one it seems was unworkable, one was simply lazy, we chose to do the other thing. The only principle the Liberal Democrats have given up is the principle of not being a party of government.
Aug 15 2010
Journalists unable to cope with the conditional?
A short rant on the newspapers today. Is there something in the style guides that says either something must happen or something is not happening? I take as an example, this piece in the Observer:
In its first few months in government, the coalition has delivered one major housing reform after another – from plans to cut down on “garden-grabbing” to crackdowns on housing benefit and the unexpected announcement by the prime minister that council tenants would no longer be guaranteed a right to lifetime occupancy.
This (emphasised) statement is simply not correct. Or it’s only correct if you believe it’s an accurate reflection of this reply the prime minister made to a question at a PM Direct event:
At the moment we have a system very much where, if you get a council house or an affordable house, it is yours forever and in some cases people actually hand them down to their children. And actually it ought to be about need. Your need has got greater … and yet there isn’t really the opportunity to move.”
“There is a question mark about whether, in future, should we be asking, actually, when you are given a council home, is it for a fixed period, because maybe in five or 10 years you will be doing a different job and be better paid and you won’t need that home, you will be able to go into the private sector….
“So I think a more flexible system – that not everyone will support and will lead to quite a big argument… looking at a more flexible system, I think makes sense.
I’m a simple scientist not trained in the intricacies of the English language (particularly the apostrophe), but even I can tell the difference between asking a question and making a definite statement of policy. It seems important to me that events should be reported accurately and not simply re-worded to suit your prejudices. The article I quoted here is actually quite good, and interesting, but given this example of a deviation between what was said and what was written, how can I trust the rest of it?
*Preparation for this blog post hindered by @HappyMouffetard’s Tourette’s Syndrome breaking out whenever she hears the voice of David Cameron.
Aug 06 2010
An Englishman’s Home is his Castle
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| Corfe Castle* |
Back to rant for the blog post, this time on housing.
A house is like a millstone around your neck, once you’re in it the reluctance to do anything that might cause you to move out is massive.
I’ve been somewhat itinerant since leaving university after my degree, I lived in Durham, in Cambridge and then in Poynton and now in Chester. It goes with the job, I’m sufficiently specialised that I need to travel to find work. For families containing two academics this leads to an even greater “two-body” problem; not every town or village needs a research scientist of my ilk. The downside of this is a degree of rootlessness and a lack of a handy family network. I’m not sure how common this rootlessness is across the population as a whole, it’s true for many of the people I know.
It was when I was house hunting in 2000 that I got some hint of the credit crunch, I’d gone off to see the financial advisor upstairs from my estate agent to ask about offset mortgages (having been mildly burnt on payment protection insurance, I was trying to work out the hitch on offset mortgages). We had a bit of a chat; after some reassurance on what I was trying to get he pointed out that I was ultra-cautious and if I wanted he could get me a x4 joint salary mortgage. I’d done the sums on this, and frankly it was scary but clearly a lot of people were doing this.
People often have a go at estate agents but personally I think it’s the other punters that really fuck you up. Estate agents at least have to make some pretence of professionalism whilst the punter is free to do as they see fit and since they’re unlikely to have bought and sold more than a couple of houses they can either by malice or ignorance make your life miserable. The bank and the solicitor’s ability to find another little fee to slice off you on the way irritated me too. “Searches” caused me particular ire – it’s not like they actually went and “searched”, they got someone else to do an indexed retrieval, it’s not like they went rummaging anywhere for something lost. Searching for documents these days takes bugger all time and effort. It’s perhaps for this reason that I thought HIPS were a good idea, because I was pretty unimpressed by the system currently in place.
House price inflation is apparently the only good sort of inflation: no one is pleased if cars, carrots, or computers get more expensive every year but for houses it’s different. For those of us on the housing ladder this inflation is no problem, for those not on the ladder it is the sight of the bottom rung being wound up beyond reach. Compared to the 1950’s houses are about x4 more expensive in real terms today, they’re about twice as expensive in real terms as when we bought our first house, about 12 years ago.
The real point of this post was a mild bit of ranting about care for the elderly and the sale of houses. Houses appear to be sacrosanct, you can be sitting on a house worth half a million pounds but rather than sell that to pay for your care the expectation is that the State should provide. Personally I’m hoping for my parents to piss away the inheritance in their twilight years and leave nothing to me – this includes the house. This attitude to housing and inheritance seems to affect every strata of society:
The move towards mass ownership of housing is relatively recent – mainly post-war in the UK (see page 12 here), and around Europe home ownership rates are broadly comparable, there are a couple of anomalies. I guess the reason for this is that home ownership fulfils a deep need for security, and literature and recent history reveal plenty of evil landlords.
I suppose the general point I’m making here is that we all want to pass on an inheritance, this is a very natural feeling but the effect of this desire impacts those that are still living and don’t benefit from an inheritance. I actually quite like Billy-Gotta-Jobs proposal on taxing all houses as capital gains on death, as a way of cooling house price inflation.
Update: as supergoonybird points out in the comments, BillyGottaJob’s proposal is actually for capital gains tax on *all* house sales – not just on death. This is a radical idea – but certainly one that strikes in the right place.
*Corfe castle because it’s close to where I was born and lived until I was 18. Image from here.
Jul 01 2010
A brief return to politics – the Budget
Following on from my pre-Budget “Sceptical look at the economy“, I thought I’d return to politics and the Budget.
The financial position seems to be largely what was expected before the election and the size of the proposed cuts seems consistent with the scale of cuts in Spain, Greece and Ireland.
What I would have done? I suppose I prevaricated in my last post on what I would have done in the recent Budget. To be a bit more explicit: I would have put probably something like 3p on basic rate tax, lifted the lower threshold of basic rate and brought down the threshold to the higher rate. And looked to cutting something like 15% across government spending with no ring-fencing. I may have put up capital gains tax a bit more at the higher rate and not reduced corporation tax – but to be honest these measures don’t bring in much cash anyway. As for benefit cuts, I’d probably have gone for means-testing things such as child benefit, winter fuel allowance and so forth. My impression is this would approximately fill the appropriate gaps (but I haven’t done any calculation).
But then nobody voted for me, and the Liberal Democrat experience is if you offer the voting public an increase in income tax they say how great this is, and how they’d really love you to spend the money where you’ve said you’ll spend it, and then vote for someone else who has promised not to raise income tax. Of the national parties the Green Party manifesto was the only one to imply they would not make any cuts, but increase overall taxation to cover the structural deficit; electorally the Green Party didn’t do that well in the General Election with about 1.0% of the vote.
As it stands the Budget was somewhat different from my preferred option. There are a few mitigating factors but I’m not convinced that VAT rises are a good way to raise tax (it has been suggested that they are better than income tax rises because they do not fall on essentials and they are “voluntary” to a degree, which income tax rises most definitely are not). It seems rather notable that there was much symbolic “dipping of the hands in the blood” by Nick Clegg, Danny Alexander and Vince Cable, you’d have though the Tories would have been a bit more forthcoming about defending a budget in which they were the majority partner and which largely matched their electoral commitments.
The Labour Party has started pointing out that this is a very political Budget, that’s true, and so was their idea of defering cuts into next year. For the Opposition this has the positive political benefit of not needing to be clear about what you would do until well after the General Election (and not even then) and allows you free-reign to criticise cuts by the incoming government without proferring an alternative because obviously you’d be doing this next year when things would have become magically better.
I’ve come to the conclusion that macroeconomics is almost entirely about politics, and the vehemence with which economic opinions are presented leads me to believe that everyone realises they don’t actually know what they’re talking about and that by shouting loudly they can get away with it. Presumably MP’s and ministers feel they have learnt to run the economy through the odd lecture course on the infamous Politics, Philosophy and Economics undergraduate degree course at Oxford. It seems notable that prior to the election the global consensus appears to have been for “economic stimulus” and after it is for “deficit reduction” (with the exception of the US). I’m not clear how this has happened, because I can’t believe it’s entirely driven by the UK election.
The Office of Budget Responsibility is pretty upfront in saying it’s estimates for GDP growth are subject to large uncertainty (see p10 of this report, and also Annex A on how figures are derived – hat-tip to Christopher Cook for that). The biggest problem seems to be that recession are utterly unpredictable. I’d be interested to see similar analysis for unemployment figures – can’t help thinking they’re not going to be good.
My useful pieces of contextual information for the day: UK employed population is about 30million, of which about 5million are in the public sector.