[urlhttp://www.telegraph.co.uk/news/politics/10106437/Revealed-how-much-you-pay-towards-benefit-bill.html[/url

The calculations by The Telegraph (above) are an attempt to replicate what HMRC are going to do next year, that is prepare personal statements to each taxpayer to show where their direct income taxation was spent in the previous 12 months.

Its not definitive, its the newspaper's best guess based on what HMRC have told them but it'll do as a rough guide to what the income tax and NIS deductions on your payslip are used for - unfortunately accompanied by the typical desire for every newspaper editor to put their own slant on things and in the process make massive assumptions and mis-report what could be a useful item.

For instance the headline uses the extrapolated figure of £200,000 over a lifetime of work that an individual on £50k would have contributed to "the welfare bill" and keeps emphasising this figure throughout in what you can only presume is some sort of shock tactic to support the current trend of demonising anyone who has the audacity to use any form of welfare, "they" being the "shirkers" in the current governments way of thinking.

What the newspaper doesn't go to great lengths to point out is that the Welfare item also includes pensions and so their example "middle class earner" who contributes £200k over 43 years will, unless they manage to die before 65 years of age (at the moment), start to draw on that welfare contribution.

By extrapolating the annual contribution into a career contribution they not only exaggerate the figure but seem to forget the point that a middle class £50k earner is highly unlikely to have earned the equivalent of £50k all of their life, will possibly have taken career breaks, or worked internships or apprenticeships, may have had years out during child raising, etc, etc, etc - there won't be too many who started work at 16 years of age on £50k or its equivalent figure in 1970 - the lifetime contributions are sensationalist rubbish and hopefully HMRC won't be going down this path, if they do then we know that they are being massively politically controlled.

Another point that The Telegraph seem to miss, or avoid, is the relatively small amount that the average earner pays towards a pension, a state pension without get-out clauses, one that does not rely on an insurance company to bid on your end-of-career pension pot in a sort of auction of generosity where you have to read the small print to make sure that your annuity is exactly what it seems at first reading - a state pension pays out until the day you die regardless of what you have paid in, and frankly at those annual contributions you would not receive anything like the figure in the state pension if you are on an average wage making those levels of contribution, nor would your "Welfare and Benefits" contribution pay for unlimited private health insurance either.

EU contributions come bottom of the list if you're on National Minimum Wage you could probably pay your annual EU contribution out of the change in your pocket right now, your next round in the pub will certainly be more than your annual EU contribution, your next pint in some pubs will be more in fact - will this take the focus away from the EU at the next election, is it really such a huge topic that at least one political party make it their total focus for power ?

If it makes interesting reading then you'll be getting your own personal one from next year, just in time for the next general election, will it make a difference to how you view the political parties manifesto's ?

When this idea was first mooted, I thought it was simplified, sensationalised bollards. I've not seen anything since to suggest differently.

Presumably the tax paid will simply be multiplied by the estimated percentage of UK public expenditure in each area to give the figures. How those are then categorised is open to political exploitation. Do you separate out benefits and pensions, or do you lump them together to exaggerate the figure, for example?

Presumably the breakdown for the NHS won't show what percentage of your "contribution" is ending up in the hands of private sector shareholders as dividends?

Well they haven't done it officially yet but this is what is already happening when the press try to replicate it, The Telegraph quoting the "Welfare" figure as a lifetime contribution and then suggesting that the "average" person will not get that money back in retirement is proof of the ultimate target market for this particular line of propaganda - its another way of blaming five years of recession and slow/no growth on a perceived underclass of "shirkers".

What they don't explain in quite so much details is that their lifetime contribution number is pure invention, that it includes pensions and is not just for benefit payments, and that the "average" salary that they used in inventing that figure was £50k, yep, thats pretty much an average salary around these parts - thats a 155 hour week for someone on minimum wage.

I'm happy to pay whatever I'm asked to so long as it goes to the front-line of need. I am not happy to pay for political ego trips like weapons sysyems and fancy trains.

I'd pay as much as was asked if I knew that everyone was paying their fair whack to ensure that health, housing and education were available to all and that those in need were being fairly treated in my estimation.
I'd pay more than now to achieve that.

Tax is a civilising fund.

Perhaps there is an opportunity here to "reverse engineer" this to show how little some things do actually cost us?

I already did this kind of thing some time ago when looking into the cost to the taxpayer of funding University tuition. People paid a very small amount of their tax toward that so the low paid actually paid next to nothing per year (and the government spin implied they were virtually paying all the students fees).

So in a similar way perhaps the Labour party could, when being taken to task on spending use a similar mechanism to point out just how little some things actually cost.

With more realistic figures they could also point out how little some of the cuts will actually save and so use that to point out they are politically rather than economically motivated.

Unfortunately I doubt they will because at the moment they seem to let the Tories set the agenda and so it's all about who can cut the most rather than using figures like these to argue against them.

One thing that is not clear to me on glancing the article. Tax income for the government doesn't just come from income tax. So it would be interesting to know how things like reducing corporation tax down to 21% affects how much more personal income tax is required to fund the welfare state.

I wonder what percentage of the UK's weekly Jobseekers Allowance costs would have been covered by the interest and penalties that Dave Hartnett unilaterally decided to waive for Goldman Sachs?

... or Vodafone, whose tax bill he arbitrarily slashed, even after the court judgement that they should pay up the full £6bn.

Vodafone's auditors were Deloitte.
Dave Hartnett now works for Deloitte.
Pure coincidence, obviously.

Clearly Ed Balls isn't prepared to pay much. He's talking about capping state pensions. Clearly, 2 Eds are scared stiff of getting into power and are intent on ensuring Labour are wiped out in 2015.

Is he?
I heard him say they'd cap the total welfare bill within which pensions would be included.
He might cap pensions, I don't know, he hasn't said... has he?

Well, they said they wouldn't be able to cap unemployment related benefits, they allegedly are not going to cap welfare for the most vulnerable / disabled and so I am struggling to see who that leaves given scroungers are apparently such a miniscule proprtion of the whole? Could it be pensioners?

I read that the Tories reckon only 1 in 17 of current claimants if "sickness" benefits will be not be considered fit for work within a couple of years. Bad backs, asthma, many disabilities, etc won't count. The daft thing is that just because someone can be "fit for work" does not mean they are "employable". People with autism for example don't tend to last long in jobs. People with chronic sickness will get sacked for taking too much time off. When the unemployment figures start going through the roof, I wonder whether the government of the day will come up with another one of their ideas to massage them - like allowing people to claim some form of disability / sickness benefit rather than being classed as unemployed? Or, is the proposal to allow people to become so desperate they have nothing to lose and so start rioting?

I have no objection to paying more tax as long as it is used for the common good, such as new schools and hospital (as labour did). I find it abhorrent that they are now funding job losses and cuts in tax for millionaires.

Labour has said they will keep the year on year increase in basic state pension which is 2.5% or one of the measures of inflation (whichever is higher).

What they have said they will cut is winter fuel allowance and free TV licences for the top 5% of pensioners whatever that means. The coalition is considering this anyway so you are damned who you vote for in that sense if you are one of the affected pensioners. As with any means tested benefit those on the boundary will be hit hardest but all he is suggesting is these specific benefits are capped not the basic state pension itself.

Politically Balls screwed up because this is not how its being trailed by the Tories. In fact I think it was a tweet from the treasury that claimed Balls was going to cap pensions. So much for our impartial civil service!

He is basically saying pensioners should not be immune from austerity and certain specific benefits will be the target not pension themselves but all that does is mean yet more ordinary people who didn't cause the crisis are going to pay for it. So actually coming clean and saying what cuts he will make won't win Balls any votes because people will think he will cap pensions and also because he will be seen as getting ordinary folk to pay for the bankers follies. He should have learned by now it is better to spring those on the electorate after you have conned your way into power.

He is also wrong IMO to include pensions in the mix anyway. Yes they are a huge cost but unlike welfare the state pension is for most people [icontributory[/i either directly when earning on via credits when not for various reasons.

All putting pensions in to the mix will do, given they are committed to the yearly increase, is set the bar higher if you see what I mean. So if the welfare budget minus pensions was £100bn and he wanted to cap it at £80bn then if adding pensions in made the grand total £200bn then he'd be capping it at £180bn.

I read the other day that since the onset of the financial crisis the better off elements of society have paid disproportionately more of the costs than others and been the hardest hit. We have just reached the turning ppoint and the less well off will pick up the tab over the next 5+ years as austerity starts to take hold.

Depends what you mean by "better off".
Depends what you mean by "hardest hit".
Biggest payment doesn't mean "hurts most".
Especially when your tax goes down from 50% to 45%.

And I the last 30-plus years, the incomes of the majority have declined and only those of the financial elite have increased - and increased considerably.

I asked, a week or so ago, what, if [iThe Spirit Level[/i is correct, and the wider the income gap, the greater the social problems (which therefore detrimentally impact on us all), should be done? And if [iThe Spirit Level [/i is NOT circa, then can people provide the concrete data to show that.

Nobody, that I recall, responded. So the questions remains open and is entirely relevant here too.

Actually, one of the biggest contributors to income inequality is working women. c. 80% are still doing jobs that they do at home and don't get paid for at low wages - care, catering, etc. The others are in well-paid professional jobs and they tend to marry men in similar jobs. So we end up with a society in which the better paid jobs and professions support well-off dual income families and at the other end of the scale working single parents in low-paid jobs. As I have said many times, so many things that are wrong in our society could be solved if women got married, stayed married and stayed at home.

Even better if they married other women, eh?

And as has been explained to you before, working-class households have long – LONG! – had women working as well as men.

It wasn't blokes who manned those 19th century cotton and wool mills, for instance.

So get down off your misogynist horse and try harder.

A totally meaningless statement when you don't define what is meant by "better off".

My view is the top 1% who earn more than £150K have not been affected at all given the cut in income tax to 45%.

Take small amount away from the less well off and some will be plunged into poverty or face real hardship. Take a large amount off the wealthy and they are still wealthy. You'd have to be talking punitive levels of tax and cuts to hit the better off to the extent it would hit them that hard, not giving them a tax break.

They may lose child benefit and other things but they won't really notice.



It is certainly true austerity is just starting to take hold but it isn't a turning point. It was the plan all along that the plebs pay.

The simple way to get the better-off to contribute more without the need for increasing basic tax rates, is to introduce tax-debits. Gordon Brown wasn't stupid when he introduced the tax credit system, simply because it targeted those most in need.

The LimpDems keep crowing about how it was they who forced their coalition partners into raising personal allowances. The problem with that is, the greatest number of beneficiaries are those who need it least.

I am in favour of a multi-rate tax system but not one that is based on so-called simple rates. Tax rates of 20, 40 and 45%, with a "personal allowance" are stupid. I would charge 1% on even the lowest paid - even benefit recipients, that way no one could ever accuse them of not contributing at all. I would then levy 5 or 6 rates, rising according to remuneration to a top rate of 45%. I would also raise the top rate by 1% every 1/4 until we see evidence of the so-called tipping point, then simply ratchet it back one point.