We had the Autumn Statement last year by the Chancellor together with the last budget on 18th March 2015. Now in the televised question sessions on 26 March more information was revealed by the Prime Minister under the expert questioning by Jeremy Paxman.
For those of us who have studied these things we know the track record from 2010 to 2014 and are close to defining the numbers to April 2015. This is what has been found;-
- The Gross Domestic Product (GDP), in effect goods sold throughout the UK, has risen by an average of 1.9% per annum.
- Tax revenue has remained fairly constant at 34% of GDP.
- Contribution to the EU increased at about 10% per annum as its expenditure spirals out of control.
- Pension payments by the government have risen by 5.3% per annum as the baby-boom generation are retiring.
- Healthcare spending rose by 2.5% per annum.
- Welfare stayed fairly constant till 2015, which was a cut in real terms.
- All other departments averaged at around 1% per annum increase.
According to the Prime Minister the Welfare budget is to be cut by £12b, a further £13b to be cut from other departments and £5b to be raised by ending tax avoidance. Total savings £30b. So for those who say the numbers don’t add up, here is how to do it for 2015 and 2020, with quantities in £billions.
2015 Where we are now | 2020 With the Conservative plan | |||
Pensions | £150 | Pensions | £192 | |
Healthcare | £133 | Healthcare | £150 | |
Welfare | £112 | Welfare | £100 | |
Education | £90 | Education | £95 | |
EU net contribution | £8.70 | EU net contribution | £14 | |
Energy & Climate Change | £18 | Energy & Climate Change | £18 | |
HS2 | £0 | HS2 | £10 | |
Sum of other departments | £144 | Sum of other departments | £131 | |
Overseas aid | £11.80 | Overseas aid | £13 | |
Interest of total debt | £53.50 | Interest of total debt | £81 | |
TOTAL OUTGOINGS | £721 | TOTAL OUTGOINGS | £804 | |
TAX & OTHER INCOME | £630 | TAX & OTHER INCOME | £683 | |
Overspend (or Deficit) | £91 | Overspend (or Deficit) | £121 | |
TOTAL DEBT | £1,389 | TOTAL DEBT | £1,993 |
To get the income and expenditure to balance and clear the deficit needs tax to rise to 40% of GDP from its present level of 34% of GDP.What you should notice is that the deficit has NOT gone away. The other years 2016 to 2019 are on my spreadsheets but to show them here would be too much information.
Ed Miliband was repeatedly questioned by Jeremy Paxman on the economy but did not answer the question and was even accused of making up a new question. He and Ed Balls will not say how they intend to cut the deficit at the same time as increasing borrowing and spending more on the public finances.
They are trying to make us believe that by some magic, increased spending on public service stimulates the economy and generates wealth. When they tried that before it caused the £158b deficit that was inherited by the Coalition. They do not understand that public services are wealth consumers not wealth generators.
It is only the private sector that produces goods consumed at home and exported to other countries, thereby generating wealth and improving the balance of trade. With no cuts declared and only increased expenditure the finances under Labour will look like the left hand table.
UKIP is the only party that says it will actually cut out serious expenditure, which is not benefiting the nation as well continuing the prudent approach to public service expenditure. Various measures we propose (such as exiting the EU, worldwide trade deals, reducing regulation, lowering energy costs) should enable the economy to grow and the tax-take to rise.
2015 With the known Labour plan | 2020 UKIP plan and higher tax take | |||
Pensions | £192 | Pensions | £192 | |
Healthcare | £150 | Healthcare | £150 | |
Welfare | £127 | Welfare | £97 | |
Education | £95 | Education | £95 | |
EU net contribution | £14 | EU net contribution | £0 | |
Energy & Climate Change | £18 | Energy & Climate Change | £0 | |
HS2 | £10 | HS2 | £0 | |
Sum of other departments | £148 | Sum of other departments | £157 | |
Overseas aid | £13 | Overseas aid | £2 | |
Interest of total debt | £80 | Interest of total debt | £58 | |
TOTAL OUTGOINGS | £848 | TOTAL OUTGOINGS | £751 | |
TAX & OTHER INCOME | £673 | TAX & OTHER INCOME | £759 | |
Overspend (or Deficit) | £175 | Surplus | £8 | |
TOTAL DEBT | £2,137 | TOTAL DEBT | £1,398 |
The Conservatives and Labour will continue to give away our money to the EU, in foreign aid and waste it on green subsidies that will drive up energy costs, hurting consumers and manufacturing.Here are the likely options for 2020 that the electors have to choose from on 7th May 2015.
The cuts in public expenditure by the Conservatives will hurt services but still leave us with a deficit more than today and a total debt of nearly £2000b. Expenditure by Labour will not necessarily improve services but will keep down the protests against prudence. The deficit will have nearly doubled from where it is today and the total debt will be 115% of GDP.
Neither the Conservatives nor Labour can get rid of the deficit and balance the books. It is not even worth considering what damage the Greens or the Liberals could do to the economy. Only UKIP financial prudence will seriously reduce the deficit. Unfortunately even that does not go far enough and tax revenue will need to increase through having a truly successful economy to get rid of the deficit and start paying down the debt.
Could ask this anywhere : Is the UKIP manifesto out yet?
MODERATOR. Why do you not allow me to reply to the questions put by Roger?
Perhaps because I have been contaminated by the old Forum
“The Conservatives and Labour will continue to give away our money to the EU…”
Our money indeed. They all fail to grasp the idea that government has no money of its own.
Thank you for a common sense article.
Dear Roger,
Thank you for your contribution. The points you make are valid and I will contact you direct with further details so you can see I have included the additional £3b spending proposed by UKIP towards defense over the next parliament.
As it is the tables include lots of sections and you will see from my spreadsheet (to be sent separately) that all major departments have been itemised.
The amount of detail included in this article is about the limit that many activists will be interested in absorbing and way over the heads of non-activists.
The tax taken as a perccentage of GDP is correct according to the figures from the ONS, which I have right back from 2014 to 1997. What normally is quoted though is tax as a proportion of take- home pay, when your figure in the 40-50% mark is much more like it.
That is another concern that the government always considers expenditure in relation to GDP rather than in relation to tax and other revenue income. No sane person or business would budget in relation to turnover or income but in terms of net profit or disposable income.
The politicians always talk in terms of percentages, or billions in addition, or cuts in billions, which are incomprehensible to the majority of the electorate.
When you quote figures they say they don’t add up. If you don’t quote figures they claim the result is not properly costed. It is just so difficult to explain the economy to the ordinary folk in believable terms.
Regards,
Tony
Take home pay – yes got you
£3billion Defence extra spending – what basis has that been calculated on?
Percentage, educated guess or proper revue?
For instance if we BRexit, I would assume “shared Costs” if we needed to keep the equipment, presumably we`d have to pay for it etc.
Many thanks for spreadsheets
Are your calculations official UKIP, or if not have they produced any?
Regards Roger
I don`t suppose I am qualified to make a critique of this praiseworthy effort in depth and perhaps I am misreading the situation regarding the % Govt “Take” extracts from “them who earned it” in fact I thought it was somewhere nearer 44% (when VAT and other stealth taxes are included)34% certainly shoots my fox.
Behind the figures there is obviously a political story which UKIP can go to town on, if this analysis gets out in sufficient circulation in time to all the voters. Obviously the sums for Climate Change, EU contributions, welfare and overall interest stand out as a stark political message, but I was looking for a separate item for Defence (which I assume comes under other Dept sums) as overall I believe UKIP has an overriding National Interest in a properly constituted defence policy, not one based on the percentage made available, even if it only gets to 2%.
What I am getting at is that I believe ALL the other parties are committed to a woeful path of disarmament and appeasement, based on shirking domestic and international commitments and if UKIP is not to join them then I believe suitable sums, if necessary, must be shown separately in the analysis., even if it makes the figures worse – UKIP is supposed to be the only ones telling the truth.
Dear Brian,
Thank you for giving my article serious examination. The figure is actually an increase in total taxation of 3.5% and is hoped to come mainly from the UKIP proposed ‘turnover tax’ to prevent multinational companies avoiding tax within the UK whilst having enormous sales here.
The equivalent for the Tories would be an eye watering 6% increase in overall taxation to balance the books. I haven’t done it for Labour because they refuse to give figures for how much they intend to throw a public services and if they are going to do any serious cuts apart from means testing winter fuel allowances.
The truth is that we already have more expensive public services than we have the ability to pay for. There are three options to solve this and I am presently thinking through another article to put this is an understandable format for those whose eyes glaze over when you talk money and percentages.
Regards,
Tony.
Glad to see you’ve got a plan, but the Magic Asterisk is hovering here. You’re either saying that UKIP will increase taxes by about 3% of GDP or that you’ll increase GDP growth by about 2% per year above current levels. Both of those options will require further explanation.
Still, even this plan is a distinct improvement on the Tories and Labour.