Pensions?

[CliveH]

"Did the article say just how many 'civil servants' are anticipated to receive this bonus ? Not very many I would suggest and those that do will be hand selected and in a very selective job band so not fair to put all civil servants under this banner"

 

How very very true.

 

By the same token stating that the entire private sector earns huge bonuses just because a wunch of bankers do so is equally wrong and equally unfair.

 

 

:-S

[Big Momma]

I think that there are more private sector businesses that pay annual bonuses to their staff than just the banking fraternity ? But I do take your point and agree that there must be some businesses that have not made as big a profit as in previous years during the recession period and had to forego the annual bonus payments to its staff :D :D

[GJH]

CliveH - 2010-03-16 8:01 PM

 

 

Hi Graham

 

"Hmm. That seems to be rather different from your earlier post where you said "So exactly why should I have my pension fund taxed when the public sector does not? " Rightly or wrongly, I read that as saying that the public sector should be taxed more so that they suffer the same as the private sector. "

 

No I have never said that - you (and most other Civil Servants always assume the only way to solve a problem is to tax everything!!!

(lol)

Somewhat over-generalised in my view - especially as a former business analyst trained to look at a range of solutions :-D But that's another subject :-D

 

No what I want is for the tax raid on funded pensions to stop because it IS SELCTIVE! - I would find a tax reduction on Tax Free Cash or some kind of limit to higher rate tax relief on ALL pensions - both Private AND Public sector to be the only way forward.

 

And yes you are correct in the audit trail of this pernicious tax. Tho' what Lamont did was for a good reason but like all such disasters the road is paved with good intentions. What was happening during Lamonts time was incredible growth within investments and pensions. A real boom time.

 

This had the unfortunate effect of making some companies vulnerable to aggressive takeovers where the company is broken up and sold off in bits but the pension fund is left as a huge profit.

 

Now Lamont in his wisdom decided that the way to tackle this was to tax the excess funds in pensions (this is where I hold head in hands, put head between knees and hop about like a frog al la Basil Fawlty) - and it worked of course - the assets were taken by the tax man so that when the downturn came there was the start of the pension deficit culture.

 

Then when things got a little better again, Gordon was in charge and his Civil Servants convinced him that the past raid on pensions was so good, that he should make it and annual event!

 

So - looks like we are in agreement ;-

 

" I would always advocate the latter approach. That is not the same as defending the creation of the problem and I can't see anywhere in my previous postings where I have mounted such a defence. "

 

I did infer from your words that you were basically saying "so what" and am delighted if once again we find that in reality we think pretty much the same but from a differing viewpoint :-D

 

Whether the fault lies with senior civil servants, politicians or a combination is not totally clear. It is, sometimes, difficult for an officer to dissuade a politician from following a path which has, apparently, led to success previously - but that is also another big subject for another time :-D

 

It often seems that any thread where public sector pensions are mentioned turns into a "bash the public sector" fest (possibly me being over-sensitive) because some people do not realise that (looking back several decades to well before Lamont/Brown) the decent pension and job security etc compensated for lower salary. That is certainly so in my own case and I make no apology to anyone for now enjoying a decent pension which I have earned, as I have nothing to aologise for. If that came across as "so what" it was not intended to.

 

Graham

[CliveH]

I think there is a genuine "bash the public sector" mentality out there. Mainly because of the huge numbers of public sector jobs that have been "created" by this administration. In some areas it seems that “the only job in town” is public sector working! - That and the fact that the private sector has been hit hard and is genuinely hurting but still has to pay for a very large section of the working population that is entirely funded via taxation.

 

On average the figure is 20% or 1 in 5 workers are public sector. Which does not take a great deal of figuring out that if their salaries, benefits, pensions, places of work etc are all paid for out of taxes then the tax hit on the remaining 80% of private sector workers has to be a very hard hit indeed!

 

The range of percentage public sector employment varies from region to region. For example the NSO reports that the South East is lowest with c. 17% whilst Northern Ireland is top with 30%.

 

Scotland has 24% employment in the public sector and so does the North East.

 

Wales has 23%.

 

I do feel these figures are too high and represent a burden on the tax paying public that is unsustainable. There will be cuts. There has to be. No other way round it.

 

That is why I post little snippets such as “How our tax £’s are spent”. Because to look at some of the things that our tax £’s are spent on you would think those spending them are of the opinion there is a bottomless pit of money!

 

Most recent example was where Ed Millibands department of Energy and Climate Change were taken to task by the Advertising Standards Authority and were forced to withdraw two expensive adds because of the Alarmist lies portrayed in the adverts :-

 

http://www.outandaboutlive.co.uk/forums/forums/thread-view.asp?tid=19000&posts=4

 

On a similar topic – the worst one brought to my attention was this one;-

 

“The British Council in the space of two years has spent more that £3.5 million of British taxpayers’ money on climate change propaganda – according to information released under the Freedom of Information Act.

 

It has been spent on recruiting young people in 60 countries to pressurise world leaders to “to take action on climate change”. This included funding groups to attend the December Copenhagen summit in order to take part in demonstrations.

 

The £3.5 million expenditure has been incurred on two initiatives. The first, and most expensive, costing £2.5 million, is the

 

“International Climate Champions” programme. which

 

“engages young people around the world as communicators who will help to influence and educate their peers and the general public on the urgency of climate change”.

 

More at:-

 

http://www.outandaboutlive.co.uk/forums/forums/thread-view.asp?tid=18605&posts=7

 

8-) 8-) 8-) 8-) 8-) 8-)

 

So is it fair that the UK tax payer funds £3.5M to pay young people from OTHER COUNTRIES to lobby their people and governments on Climate Change?

 

Is that sort of spending of UK tax payers money acceptable? I do not think that it is.

 

And even more unacceptable the fact that those Civil Servants actually organising all this have salaries and benefits packages and offices etc – all paid for from that bottomless pit of money that is the good old UK taxpayer.

 

[GJH]

Various topics there Clive but concentrating just on the number of public sector jobs.

 

The relatively high percentage in the North East has been highlighted recently in local TV politics shows because of the impending cuts. What has also been highlighted is the reason for the relatively high percentage - the disproportionate effects (compared to other areas of the country) in the last three decades of the reduction of "traditional" industries like coal mining, steel and chemical production.

 

Governments have responded by locating public sector offices in the area. Would the alternative of leaving people jobless (and on benefit) be better?

 

Let's also not forget that public sector workers pay taxes as well - and they also pay the prices of goods and services in shops, which are made up of the costs of salaries, benefits, pensions, places of work etc of those who produce/provide/sell them.

 

Let's also not forget that the only reason we have a public sector in the first place is because the private sector (i.e. all of us as individuals) is either

a) unwilling to provide public services (just like people who decided that they would rather pay someone else than perform the duties of village constable/headbarrow when it was their turn) or

b) is incapable of doing so (not all of us have the ability to be doctors, nurses or teachers for instance).

 

Whether any particular service provided by the public sector is actually required - and the extent to which it is required - is a matter which comes down to politics. We will all have the opportunity, over the next few weeks, to quiz those who wish to make those decisions for us for the next few years. I bet few will take up that opportunity.

 

Simple bashing of those in public sector jobs just for the sake of it is as unjustified as (for instance) criticising a bus driver who is running late because the road was blocked by an accident.

 

Graham

[CliveH]

 

Too simplistic Graham. Of course we all want effective police force and effective NHS etc. And I for one am prepared to pay my taxes for that. No issue there.

 

But once again all you do is cite the emotional bits that everyone wants to see working well.

 

What the groundswell of public opinion is about is the waste and excess in the public sector and I quote a couple of examples. The funding by the UK tax payer of other nationals to lobby on Climate Change.

 

There are many others - just one article in the Express last year seemed to sum it up rather well

 

http://www.express.co.uk/posts/view/97381/Public-sector-waste-is-driving-us-to-the-brink-of-disaster

 

A few snippets:-

 

"The public sector has become a vast job creation racket for armies of penpushers who meet no genuine need but swallow a fortune in their generous salaries, working conditions and pensions."

 

"It is ironic that a Government which bangs on so much about the dangers of obesity should have presided over the remorseless expansion of an obese structure whose layers of bureaucratic fat now threaten the financial health of the nation."

 

"This shocking waste of funds extends to Scotland, where civil servants and quango chiefs are spending £114million a year hiring private consultants to tell them how to do their jobs."

 

This last point is one of the most damning! - As someone who has been in business all their working life and still runs two businesses today I am appalled at the way managers in the public sector cannot make decisions! They defer constantly and pass the buck to expensive consultants who could (quoting again from Fawlty Towers) "Win Mastermind with their specialist subject being the Bleeding Obvious".

 

Why has the public sector in Scotland spent £114 Million a year on getting other people to make decisions they, in the public sector, are already paid to make?

 

Why is it that UK Civil Servants think it a good idea to give money to the youth of other nations so that they can lobby the UK Government and the EU on climate change?

 

 

So please do not get me wrong, and please understand the feeling in which I am saying this, but I really have no wish to see a reduction in policing, the NHS or any other of what I suspect most would see as the essential services. In fact I want to see MORE money and resources ploughed into these services.

 

So trolling out the same old diatribe about public spending just does not cut it Graham. People are waking up to the opportunity cost of the waste, dodgy programmes, poor management and the siphoning off of taxpayers money to support a flawed political agenda.

 

To quote only the good bits within the Public Sector and ignore the abuse of taxpayers money in the other highly suspect areas does your position no favours whatsoever Graham.

 

Just think how GOOD the important bits could be, if we tackled the huge waste within the Public Sector.

 

Because say what you like about the bad bits of the Private Sector (and there are some!) the bottom line is that if the Firm or the Company makes a loss - it goes bust.

 

That does not happen in the Public Sector - the taxpayer just has to dig yet deeper into their pockets. Well those pockets have paid out enough. There is not much left.

 

[GJH]

In the interests of brevity I won't quote what you said Clive but I will point out that I said

Whether any particular service provided by the public sector is actually required - and the extent to which it is required - is a matter which comes down to politics. We will all have the opportunity, over the next few weeks, to quiz those who wish to make those decisions for us for the next few years. I bet few will take up that opportunity.

 

Obviously, because it is happening, there are those in our society who believe that it is a laudable objective to fund other nationals to lobby on Climate Change. Those who think it is wrong have the solution in their own hands - harangue the politicians who make those decisions.

 

As for the Express. No, I won't say it (lol)

 

I take it you don't believe that the bad bits of the private sector include the behaviour of the banks etc. Isn't stopping them going bust one of the major reasons why those pockets have paid out enough and there isn't much left?

 

We all have our opinions of what is value for money and what is not and we have a democratic system which allows us to express those opinions. The system is flawed, admittedly, but a lot better than some countries. Any such system, though, produces results which some people do not like. That's a fact of life that people either live with, do something about changing or find somewhere else to live which has a system more to their liking.

 

Graham

 

In Edit - also worth bearing in mind that those consultants who convince the public sector of their usefulness are all examples of private sector businesses :-)

[CliveH]

I to am not a fan of the tabloid press but I believe the public sector ignores the sentiment expressed (no pun intended ) at their peril.

 

As for the banks – then yes I agree – we should have done what the USA did and let one go bust. What happened to Lehman Bros in the US had a sobering effect on what they now do. In contrast there is the UK banks feeling that they are so important that they can do what they want.

 

And PLEASE do not forget that it was the Civil Servants of the FSA that were and still are (for a while at least) regulating the banks. The FSA was asleep at the wheel over Northern Rock and had given this deeply flawed bank a clean bill of health just 6 months before we had investors queuing round the block desperate to get their money out.

 

The idiot Civil Servant in charge of regulatory oversight of Northern Rock was fired – but he was given a £640,000 golden goodbye. All at the expense of the taxpayer.

 

So whilst I will allow the cheap shots you continue to make at the Private Sector and its obvious failings – forgive me for pointing out and having a chuckle at your tunnel vision when it comes to the obvious failings of the Public Sector. The obvious examples being the regulation of the Banks in that had we had competent people doing that job instead of highly paid numpties who do not have a clue, such speculative lending would have been seen to be the danger that it was.

 

We in Financial Services all knew that Northern Rock was geared to lend 80% more than it held on deposit, whereas Nationwide is geared to just 20%. So if this info was in the public domain, why did the FSA allow the wool to be pulled over their eyes?

 

Perhaps the answer goes a bit further back in that Equitable Life was known to be financially weak to the point of bankruptcy and yet the FSA allowed them to carry on trading even though they were not just technically bust but reality as well. Policyholders lost £’000’s. And now we have the Parliamentary Ombudsman producing a report on the Equitable debacle entitled “A Decade of Regulatory Failure”.

 

A failure that underlines just how badly the tasks given to the Civil Servants in the Public Sector often get done and the order of magnitude of that failure.

 

Graham I am sure that from where you stand – you see my comments as unfair. But from where I stand and from my day to day contact with Civil Servants I find myself dealing with people that do not seem to care, have little sense of costs and are arrogant with what they do with other people money.

 

It has to stop.

 

[GJH]

I thought we had agreed in a previous thread that the regulatory failure was not specifically of the FSA but of the gaps in the tripartite system (which was a political decision) but lets not rake over those coals again. :-)

 

Whilst accepting that regulatory failure did occur (for whatever reason) in the cases of both the banks and Equitable Life let us not forget that regulation by the public sector would not have even been necessary if the companies involved had behaved with proper integrity and with adequate business acumen. Might I suggest that they had little sense of the potential costs and were arrogant with what they did with other people's money? :D

 

I have known people working in the public sector who were not up to the job and I have also known private sector companies selling services to the public sector who were nothing but out and out liars, taking as much money as possible for providing as little as possible. In both cases, though, I firmly believe that they are the minority and that the vast majority of people in both sectors are working hard to do difficult jobs which, overall, benefit society as a whole.

 

We can each point to failings in both sectors - be they cheap shots or not - but in neither case can we justifiably claim that such failings mean that the whole sector is a failure. That is the main point I have been trying to make over the last couple of days. A "bash the public sector" mentality which can not be justified has no validity.

 

Graham

[CliveH]

To which I can only reply that with 80% of the working public being in the private sector why is it that the rules as laid down by those within the 20% minority of the public sector have caused the dramatic demise of the defined benefit pension schemes whilst making sure of course that their own pension, pension paid for by the taxpayer (because regardless of what the individual pays, the salaries are paid for out of tax revenue!) is not affected.

 

I would also say that the cheap shots continue because it is unfair to say that "if the private sector acted properly then there would be no need for regulation"

 

By the same token if we all stayed healthy we would need no NHS.

 

If we all were 100% honest we would need no police force.

 

Therefore the fact remains that despite being given offices in one of the most expensive parts of London and having large numbers of well paid Civil Servants within it, the FSA screwed up over Equitable Life and Northern Rock as well as Split caps and the Banks.

 

The only reason why the FSA still exists is because it was Gordon Brown that set it up from the tripartite functions of the old PIA, the Treasurery and the DTI and so he will not admit to its failure.

 

But fail it has - but to be fair to Gordon - it SHOULD have worked! - It is the people within the FSA that caused it to fail, NOT the design. Dismantling it and separating its constituent parts may improve things. I did at one time think this would be a good idea.

 

But now I have my doubts because it would be the same numpties, just in three different places.

 

[GypsyTom]

This thread is becoming even more riveting than the 'Global Warming' one! :-D :-D

[Guest Tracker]

My thoughts exactly GT!

 

Let's try a change of tack?

 

I would like to see the income tax personal allowance tax payable threshold increased to at least £10,000 with a starting rate of 10% reintroduced for the first £3,000 of taxable income to encourage lower paid jobs and lower pay increases.

 

This could be funded by a corresponding increase in the basic rate so that those on 'average' earnings are no worse off and higher rates of tax to whatever they would need to be to retain the whole income tax revenue at it's current level so that only above average earners would be affected.

 

Think of the savings that taking several millions of people out of income tax altogether would bring in the need for less HMRC employees - or a redistribution of employees into fraud and evasion control, smaller computer systems, less 'big brother' data to be 'lost' and best of all less control for the control freaks in power?

 

Any thoughts anyone?

 

 

[CliveH]

Yes tracker - I pretty much agree. But we do have a problem in that Gordon has saddled us all with huge debt. Debt that actually threatens reduce the UK debt rating.

 

 

“U.K. Debt Service

 

The U.K. is likely to spend 7 percent of revenue servicing debt this year and 9 percent in 2013, rising to almost 12 percent under the adverse scenario, Moody’s said.

 

Financing costs above 10 percent put countries outside of the AAA category into a so-called debt reversibility band, the size of which depends on the ability and willingness of nations to reduce their debt burden by raising taxes or reducing spending. The U.S. has a 4 percentage-point band, while the U.K. has a 3 percentage-point band.

 

“Those economies have been caught in a crisis while they are highly leveraged,” Cailleteau said, referring to the level of private and public debt as a percentage of gross domestic product. “They have to make the required adjustment to stabilize markets without choking off growth.” “

 

Full report @ -

 

http://www.bloomberg.com/apps/news?pid=20601068&sid=a0a8xAghPS8I

 

This would be the first time ever the UK lost its AAA rating and would mean that the UK credibility would falter. Such credibility is like virginity. Impossible to regain once it is lost. If it happens it WILL be very serious.

 

So any tax reductions will be very hard to produce whoever gets into power after May this year. But by far and away the most debilitating tax that is stopping the recovery is the fuel taxes. This will start to cost people more to get to work, so they will want more pay.

 

Transport of goods will cost more so the prices in the shops will go up. All when the tax payer is being asked to pay more because the banks screwed up and the Regulator, the FSA was once again asleep at the wheel.

 

So whilst I think we all deserve the tax breaks that you put forward and that in doing so more money would be freed up to stimulate the economy, all of that will be wasted if fuel costs increase to £1.20 in the next few months and possibly £1.40 ish later in the year.

 

It would come back to that old hobby horse of mine that this 80% tax on fuel via the double taxation of Fuel duty then VAT on top of that means that the low paid in particular end up paying far more tax this way than they do in income tax!

 

Still - At least it will please the Global Warming Alarmists when the whole country is unable to work because it is cheaper to stay at home on benefits than travel to work. They can then sit back and pat themselves on the back for a job well done. They would have halted the economy in the name of saving the planet (lol)