Tag: rant

Poor attendance record in the House of Lords?

I know my readers love a chart, and today I found some data I thought was begging for a good graphing. It’s the attendance figures for the House of Lords found in a report entitled “Members Leaving the House” – found at the bottom of this article. The motivation for the report is to explore the idea of retirement for peers, something some peers are seeking regardless of any other changes taking place. A secondary motivation is that there is wider reform of the House of Lords proposed, and one of the issues is that the new House is envisaged, ultimately to have substantially fewer members – this type of discussion informs how that transition might be achieved.

The report contains a set of tables for the last five years indicating the fraction of sessions which peers attended broken down into groups:

  • Attended 75% or more sessions
  • 50% to 74%
  • 25% to 49%
  • 10% to 24%
  • Attended at least once but less than 10%
  • Zero attendance

This is what the data looks like:


To give some idea of scale: across the period shown here the total number of peers decreased from 777 to 741, the average number of sessions in a year was 140, this latter figure means that a peer attending “less than 10% of sessions” was attending less than twice. It compares with the number of working days in the year of approximately 240 (48*5 day weeks). Nearly 20% of peers attend a session in the House of Lords only once or twice a year.

Being a member of the House of Lords isn’t a proper job, it does not attract a salary, although peers may claim a subsistence and office allowance of up to £26,000 per year. In this sense we should not anticipate the levels of attendance achieved by those working “normally”. Some of the peers will be paid as government or opposition working peers. However, peers do have a direct effect on the laws the country makes and turning up twice a year (which is all 20% of them achieve) does suggest a fairly low degree of interest – if I did something twice a year I wouldn’t even consider it a hobby, I go to the dentist more often!

Why the other ways don’t work

In my last blog post I calculated how to raise money for various things (getting rid of tuition fees, avoiding any benefit reductions and so forth) using income tax; originally the more ranty bit to be found in this post was included, but it was getting a bit long so I separated analysis and rant.

Since the election there’s been a great deal of discussion of cuts, largely this has been framed in terms of a cut to X being apocalyptic where X is some area supported by its interest group. There has been rather less focus on what should happen in place of such cuts, proposing an alternative area for increased cuts has generally been tried: “waste, foreigners in the form of international development, benefit scroungers, Trident“ are ever popular – each of these contributes about £1bn or so per annum in spending – the gap we’re trying to match is about £80bn per annum. There have been some proposals for increased taxes to be paid by “someone else”, an increase in VAT met with considerable opposition (VAT is the third biggest element of tax – the change would raise about £13bn per annum), as was an attempt to cut child benefit for higher rate tax payers, raising about £2.5billion per annum.

The favoured targets for increased taxes are “the rich” and “tax avoidance”. “The rich” are normally defined as “richer than me and the people I know”, which is a poor definition. Tax avoidance, according to an HMRC report under the last government the size of the tax gap – the sum of avoidance (legal) and tax evasion (illegal) was around £40bn per annum. This is disputed with Tax Research UK giving a figure three times larger at £120bn. It’s difficult to see exactly how they manage such a high estimate – it’s seems to be based around the size of the “shadow economy” – things like illegal working. Regardless of this actually collecting the money involved in the tax gap would appear to be difficult: as announced by Danny Alexander there’s a hope that spending £200million per year will result in a tax recovery of £7bn per year. There’s an implicit assumption in tax avoidance that again it’s “the rich” who are responsible but it seem clear from reading the HMRC document that successfully addressing the tax gap would probably impact quite broadly. For example, buying wine in Calais is a tax avoidance; as is paying the builder, decorator and so forth in cash; as is purchasing items in Hong Kong via ebay. The company I work for has changed the way it pays some of my pension contributions to reduce the tax paid – presumably this would count as a tax avoidance too.

Vodafone is in the news at the moment for a £6bn tax avoidance. The £6bn figure is as calculated by Private Eye and is described by HMRC as “an urban myth”; Vodafone appears to have made provision of £2.2bn to address this issue and ultimately paid £1.25bn. It’s worth pointing out that the £6bn figure, accrued over 10 years is typically compared by protestors with a *yearly* benefit cut of £7bn. This sort of presentation leads me to believe that the proposer is somewhere on the innumerate-dishonest scale and discount whatever else they are saying. Taking the Private Eye “high” estimate this is £600million per year, taking the difference between the amount actually paid and the “low” estimate it amounts to £100million per year. Vodafone appears to have paid around £1bn tax on profit in 2009 amounting to a rate of 25% in that year, so it is not true that they pay “no tax”. It’s also worth noting that Vodafone appear to have the legal upper hand in the situation, given a judgement in the European Court of Justice.

At one time Trident or its replacement were cited as a source of ready cash – again the presented cost of up to £100bn is for the entire lifetime of the system of up to fifty years or so i.e. between £1bn and £2bn a year, regardless of this the decision on Trident has been pushed into the future (i.e. beyond the next election). A more likely figure for the Trident replacement is £20bn, or at most £34bn. I’ve said previously that I consider Trident to be Cold War willy-waving but scrapping it is not a big impact – particularly if there is any sort of replacement.

A useful rule of thumb for all these situations seems to be:

  1. Check that tax gain and spending are being compared on the same time period.
  2. Divide quoted tax gain by at least three since that will get you back to a more generally accepted figure.

The latest wheeze is chasing George Osborne for a £1.6million tax bill. Referring to our list above, (1) is met admirably this bill would be payable once, on the death of his father. Experience suggests the figure of £1.6million is fanciful. David Mitchell puts this so much better than me here in the Observer. It’s not that I am in favour of tax avoidance I just see efforts to address the problem by individual harassment as pointless. What is needed, as Mitchell points out, are changes in the law so that tax avoidance becomes tax evasion and is then illegal. It’s ridiculous to expect people to pay tax that they don’t legally have to – it’s not what the great majority of the population do – why expect companies and the rich to do any different?

I’ve yet to see any figures on the “cut deficit through growth scheme”, a priori I’m dubious since the ability of government to influence growth seems marginal and any scheme would need to stretch out beyond the 10 years that even Labour were planning to cut the deficit in by which time using my state-of-the-art recession prediction algorithm we will have experienced another recession, and another addition to the deficit.

I’m uncomfortable with the idea that we should demand services (no tuition fees, protected benefits) but rather than seeking a way to contribute to paying for these services personally try to push the payment for them onto a small fraction of the population. If you demand more money for X but don’t expect to pay any more for it then frankly I don’t think you’re committed to the idea.

Children and numbers

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).

Regulation and reward

This post is stimulated by an exchange on twitter as to why we are bothered about bankers being paid stacks, whilst seemingly less worried about football players and entertainers being paid similar amounts. This post fails to address that specific question.

Banks are rich because they handle money and take a little charge at each transaction, also they rent out money which attracts few overheads. Footballers and entertainers are rich because wealthy organisations realise that to sell a football team or a film requires a star. Doctors and lawyers are rich because they have rare skills that people are willing to pay well for, the costs of poor legal advice or poor medical advice are loss of wealth or life, respectively, and their lack becomes rapidly obvious.

Pay does not measure a person’s value. Pay measures how much money an employer believes an employee is worth to them, if the employer is also the employee this judgement may be flawed. In some cases this is easy to determine, in other cases it is not. If I look at the company I work in, higher salary goes with greater responsibility for people and greater budgets. In the case of patent attorneys, who are relatively well paid, then it goes with a marketable skill. Scientists doing science are paid acceptably, the company is clear that they are not paid more because there are not local jobs for scientists which pay better.

We’ve recently gone through repeated rounds of “How much are  you paid compared to the Prime Minister”, exclusively directed at other public sector workers. This is ridiculous. It’s usually inaccurate as well: the typical figure quoted for the Prime Ministers salary is £142,500; however he will also receive an MP’s salary of £65,738. In addition to this he has use of an apartment in central London at Number 10 and a country house, Chequers. As Tony Blair has demonstrated, the Prime Minister can also expect substantial financial rewards on leaving the position, through speaking fees, directorships and so forth that are based largely on their position of former prime minister (see here and here). The Prime Minister is also entitled to receive half of his salary as pension after he has left office, although Gordon Brown waived this payment.

People make the money they can under the situations they find themselves. I’m sure we’ll all argue that that’s not we’d do personally but let’s assume that we’re all special. Do you own up if you’re under-charged or you receive more change than you deserve or if the electrician offers you a lower price for cash? Viewed in this light the MP’s expenses scandal is nothing unexceptional. Looking at what they were up to I can easily imagine that we’d find exactly the same distribution of abuses if the expenses scheme where I work were regulated in the same way. A whole bunch of people would claim to the limit in an entirely “legal” way; a few would claim less through incompetence in milking the system and a few would act in ways that were basically fraudulent.

What’s the message of this post?

In terms of regulation: don’t rely on the goodwill of man to obtain a favourable societal outcome. Although that might work for some chunk of the population it won’t for a substantial fraction and so the scheme will fail.

God and the scientist

Recently I observed that Stephen Hawking* had introduced God into his book “The Grand Design” as a way of gaining sales. Last weeks story on Hawking and God irritated me for two reasons. Firstly, the idea that a new idea that Stephen Hawking has introduced in his forthcoming book either proves or disproves the existence of God is fatuous nonsense. Secondly, revealing some intellectual snobbery on my part, this is a popular science book – such an important idea would have been published in peer-reviewed literature first – most likely Nature! On the first point Mary Warnock covers the philosophical side of this well in a short article in The Observer this week, in summary: proof / not proof of the existence of God is a hoary old chestnut.

As an atheist and scientist, I’m quite clear that my demand for evidence for the existence of God is what makes me an atheist. You don’t need evidence if you have faith. Although many scientists are atheists, this is by no means a pre-requisite. Many scientists in the past have been professed strong religious beliefs, no doubt in large part because of the spirit of the time they lived in. It’s only for particular variants of theism and particular topics that the two things are in direct collision: Creationism and the study of evolutionary biology are not happy bedfellows. The degree of cognitive dissonance required to accommodate a religious view of the world and a scientific view is really rather minor. Many scientists in the past have seen their scientific work as revealing the mechanism that God has created.

A further element to this is the degree to which modern cosmology requires a degree of faith. As an experimental soft condensed matter physicist the world of cosmologists is very far away. The things I study are essentially testable in the lab, you can put your hands on them, prod and poke them. Modern cosmology has a large degree of internal logical consistency and mathematical beauty, but it has close to zero contact with observations. At times it feels like any experimental test is wilfully pushed into timescales, or size scales that are simply impossible to observe (and not just impossible in practice, but impossible in principle). This is not to say they are wrong, but simply that their correctness must be taken on faith.

*Pointless name dropping/anecdotage: I had dinner with Stephen Hawking at Gonville and Caius College, he’s not very dynamic.