NHS Blog Doctor's misleading attack on the Town Hall Rich List

NHS Blog Doctor's attack on the Town Hall Rich List 2008 and the TaxPayers' Alliance is a mix of ignorance and irrelevance.  Little more than a dishonest and misleading smear.

First, he makes the startling discovery that the TaxPayers' Alliance thinks tax is a bad thing.  That with the high rates of tax that we have now no tax rise can be justified.  Why he needed to look at our mission statement to discover this will remain a mystery.  While we only discuss the reasons why we think levels of tax are too high briefly in our mission statement we have produced a wide range of research on the subject.

He then moves on to discuss the Town Hall Rich List 2008.  He accuses us of fraud and "sailing close to the law of defamation", serious charges, without a shred of evidence.  There isn't a single quote from the TPA in this section.  Instead, he makes up a load of over the top arguments that we supposedly "[want] you to infer."

The quote he makes up is "anyone not working in the private sector who earns £100,000 or more is ipso facto an undeserving, lazy, overpaid fat cat". Our actual quotes are very different:

Matthew Elliott, Chief Executive of the TaxPayers’ Alliance, said:

“Taxpayers have a right to know how much senior town hall officials are being paid because only then can we judge whether they deserve their remuneration. Too often, council executives are rewarded handsomely even when they fail. Families and pensioners are struggling with the demands of yet another council tax rise, and councils owe it to them to cut back on executive pay hikes.”

Ben Farrugia, Policy Analyst at the TaxPayers’ Alliance, said:

“Some local government executives still feel that what they’re paid is not the taxpayer’s business. But with council tax bills now tipping many families over the edge, it is more important than ever that councils are open and transparent about their costs. Council employees must be accountable to the local residents who pay them.”

Coming from someone who, so frequently, accuses us of distortion making up "an inflammatory out-of-context quote" is dismal hypocrisy.  With council tax having doubled in the last decade we do need to ask serious questions about the performance of councils and whether they are justifying high remuneration for senior officials.  Trying to paint this as some kind of undifferentiated smear is an ugly response to our study.

After that we get a long and largely irrelevant discussion of the qualities of those working in the City.  This is a pre-amble to the charge that if we think the public are entitled to know how much senior council staff are paid we should also be exposing how much those employed in the private sector earn.  This is the basis of his challenge to us:

"Will the founders of and writers for the TPA make a public declaration of their earnings?"

No.  No one is forced to financially support the TaxPayers' Alliance.  As our organisation is not funded from their taxes there is no legitimate public interest in our earnings.

NHS Blog Doctor almost completely ignores the basic point that we have made repeatedly, including in the quotes above: the public have a right to know what senior officials earn because they are the ones paying the bill.  In order to prevent public sector organisations being run for the benefit of staff rather than the taxpaying public there needs to be accountability.  Not just to decide whether or not staff are being paid "too much" or "too little" but so that they can decide if they are getting the performance that would justify the amounts seen in the Town Hall Rich List.  If that kind of information is not made publicly available then in elections to local councils voters will have less to go on.

NHS Blog Doctor's only nod to the difference between private and public spheres is "in most cases, these [private sector] salaries were paid out of the pension funds to which people on more modest incomes contribute".  That isn't true for those who work for non-profits funded by private donors - like the TaxPayers' Alliance.  That is only accurate to the extent that the remuneration of directors at public limited companies is the business of shareholders who pick up the bill.  Now, there are two ways in which senior staff at those public limited companies are held accountable.

1. Through corporate institutions designed to deliver effective accountability.  These operate both through the potential for shareholders to rebel (as they, on occasion do) and the more mundane business of selling your share in companies that are being run in the interests of staff, rather than shareholders, and in doing so, exposing a company to takeover by other firms with better behaved directors.
2. By the legal requirement to report directors' earnings in their annual accounts.  It is a statutory requirement that the numbers we established for local authorities are published in the annual accounts of companies and public bodies.

In short, the TaxPayers' Alliance absolutely stands by the public's right to know how much senior council staff are paid because they pay the bill.  When the public don't have that, legitimate, interest the earnings can, and often should, remain private.  NHS Blog Doctor's attack on our study is nothing more than a meaningless slur.

Comments

[Steve Robson]

You do love misleading people don't you. NHS Blog Doctor does not make up a quote from you, he says the taxpayers alliance "suggests that anyone not working in the private sector who earns £100,000 or more is ipso facto an undeserving, lazy, overpaid fat cat." That is very clearly what you "suggest" in the sensationalist way you report, your lack of context for the salaries paid and your obsession with how people get paid for failure (unlike in the private sector where the £750K payoff for the Head of the Northern Rock must have been a payment for success).

You also clearly undermine your own argument for lower taxes. If you look closely at London, you may note that those authorities paying the highest salaries (Westminster, K&C) have the lowest tax rates, which I thought is what you wanted!

[Bigskip]

Dr. John Crippen's comments regarding the supporters of TPA are 'shabby' to say the least. He says 'There are no poor people on this list. There are no nurses, no doctors, no police officers, no teachers, and no probation officers.' (all public servants I think, with guaranteed pensions). He rattles on about millionaires and city types, what about the rest of the private employees (like myself) who comment on TPA issues. I would need a 300% pay rise to get into the 100K pa bracket (including perks) and my pension pot is not worth mentioning (single digit and less than ten years to go, even though I've contributed for 20 years), the rate taxes and so called public service charges are going, I and probably many other private employees wonder why we bother to pay into a private pension because it's all going to swallowed up by the time we get it. Dr. Crippen assumes too much, I will now assume he is already a member of the 100K + club?

[Steve Robson]

OK Bigskip, so you earn £25,000 based on your comment. You maybe pay half of that in tax all told, with income tax, NI, vat etc. For that £1000 per month you get:

- free healthcare as required

- free education for for 15 years for all the children you choose to have

- free education for other people's children so they can learn the skills they need to provide you the services you require

- mantained roads to drive on

- footpaths to walk on

- streetlights to see by

- police to protect you

- prisons to keep the bad guys in

- the fire service on standby to put out any fires that effect you or to rescue you if you have an accident

- ambulances

- a reasonably ordered, fairly compassionate society (certainly more sp than the libertarian vision would yield)

- armed forces to protect you

- care when you are old

- care for your children should they have a learning or physical disability

- inspection of all food establishments to help prevent them poisoning you

- trading standards inspection of other traders to stop them diddling you (remember clocking)

- parks to walk in, play in and subsidised leisure facilities

- your rubbish collected and disposed of

etc etc etc

I know these services are not all perfect, but then again what is? You really do need to compare them to some other countries, especially low tax ones.

Do you get as much for your other £1000? Seems to me you get quite a lot of really valuable things for £1000 per month, but I guess the much richer Taxpayers Alliance Supporters feel they get a lot less for a higher cost, especially as they use private schools and health etc. That must be why these self serving characters are prepared to bankroll the undisclosed salaries of people like Mr Elliott, who certainly earns a lot more than £25,000 per year.

[Chris R]

Stevie R
youv'e just written down all the reasons we shouldn't pay tax....oh my dear 1000 smackers a month oh dear....holds back tears of mirth..care when u are old hehe....roads...hehe...police to protect you...stan laurel laughs...rubbish collected ..tears down the face...Ollie joining in..prisons....uncontrollable laughing...and the clincher they check out the local chinese for us.....rofl...its hurting loooooooooooooooooooooooooooooool

[Lola]

I have just been analysing my council tax bill. The police budget is £55m. The contribution to police pensions is £11m. That is 20%. But wait. Only say 75% of the police budget is salary. So 75% of £55m is £41.25m. So £11m of that is 27%. In other words the support cost of the police pension scheme in my area is 27% of salary roll. Or to put it another way no policeman in effect makes any net tax contribution. All the income tax they pay goes straight back in to fund their pension scheme.

Now, as I work in financial services I know that similar ratios apply to every other state or local government pension scheme. In effect no state employee pays any income tax. All the tax they pay simply goes to fund their own over generous and - more importantly - profligately run pension schemes.

So levels of pay are not the only problem. They pay no income tax so every one else has to pay more.

[Steve Robson]

Chrissy R

Its Steve, not Stevie

So you don't want these services, how very strange. You really need to visit somewhere without them, like in Central Africa, then you might change your mind. You people really are moronic in not thinking through what society would be like without these services you laugh at and /or think can be provided for next to nothing. It is a real pity in some ways that you people can't opt out of taxation so that you couldn't drive on the roads or walk on the footpaths, that if your house caught fire, the fire service didn't put it out and that your chinese take-away was the one that was from an uninspected establishment with salmonella and E-coli also on the menu!

[Chris R]

Hi Stevie
its Chris, not Chrissy..

I've just returned from Switzerland where wait for it...tax is LOW...services are HIGH..thats right its called: not ripping off the indiginous population, because you think you have to/or can get away with it.
Switzerland is run for the Swiss, as someone who likes to use brute logic and state the B***8 obvious you may appreciate that.Is the UK run for the Brits...mmmmm

[Steve Robson]

I can't imagine who else its run for unless you swallow all that rubbish about paying for immigrants, mostly made up. In my experience, there would be less services without inward migration; when someone close to me had their life saved by the tax funded NHS (a service you consider comic I believe), many of the Doctors and nurses were migrants.

I do love Switzerland, though its a bit expensive. It does have a lower tax burden than us, though I don't know much about the public services there. Those visible to travellers are certainly good. I'm not sure however that it is a fair comparison as its a very rich country with a relatively small population. The US has a lower tax burden and shocking public services. Scandinavian countries and France have much higher tax burdens and much better services. Generally there seems to be a direct relationship between tax and services.

I'm also not saying we shouldn't seek to reduce the tax burden. I think we need to continue to increase productivity as has been the case over past years and which requires managers who have to be paid, we need to reduce the benefits bill and I personally wouldn't be spending billions on our Iraqui adventure. Others may disagree, thats democracy. My objection is to your and the TPA implication/assertion that the tax burden is high because of waste, its not - its mainly because the services provided cost a lot of money and demand is ever increasing.

[Cookie]

That was an interesting list, Steve Robson. Of course, it wasn't an economic analysis and therefore it's difficult to judge its value without each point being discussed as to how taxpayers get better value by the state providing each of the services mentioned on the list in comparison to their provision by the private sector. My point in this comment is not to imply that the private sector should provide all of the above services, but to point out that the list you have provided is disparate and would benefit from an extended exposition. I invite you so to do :)

[Lola]

Steve R - if you could do all that for 10% of GDP why wouldn't you? Why should it take 50% of our hard earned? And I know that at least 20% of the budget is spent wastefully, so we are getting only 30% value. Governemnts are the worst allocators of capital that you can possibly imagine.

[Steve Robson]

Cookie
Many of the services are provided by the private sector under contract anyway. They can sometimes provide the cheaper, sometimes not, but rarely much different. Private education and health cost considerably more. The question is more who gets them and whether you deny them to those who can't afford it, which the US do to a greater extent than us, but still not fully. Personally I don't want to go back to Dickensian times with workhouses for the poor, but if you do...

Lola's point is just silly. Of course you can't provide these services for 10% of GDP. Our figure is actually less than 50%, about 42% I believe, I was using 50% for ease. Even the US spends about 26% of GDP and that is for minimal services (although admittedly high military spending). Saying 20% of spend is waste is just stupid prejudice. Granted 20% may be on things you don't want, but you have no evidence its wasted. I don't believe the spend on waste is any higher than in the private sector, there is certainly considerably less spend on junkets such as I see when I go to sports events - I pay for the avoidance of doubt.

[Cookie]

To put it very simply, I asked you for a break down as to which services you thought could be provided for cheapest by the state and which by private enterprise. You don't come close to answering this question. You do, however, manage to insult me by suggesting that I wish a return to Dickensian workhouses.

The rest of your response addressing Lola's points is of even less quality than that with which you addressed mine. Of course, Lola did not say that she could provide all of the services that you mentioned for at 10% of GDP and the US spend is certainy higher than 26% of GDP.

Finally, before you start talking about 'waste' and the private vs. state sectors, I auggest you at least look at a variety of sources, and once you have done that, and avoided to your own satisfaction 'confirmation bias', then let me know and we can discuss this further.

[Lola]

Steve R - In regards to 20% is waste let me point you to the state employees pensions schemes. The support costs as a proportion of salary roll for the police budget in my area is about 27%. The officers themselves pay about 11% of salary (from memory). Total cost 38% of salary roll. It actually costs about 12% to 15% of pay to provide a pension of 2/3rds final salary over a working life to an NRA of 65. Therefore the state employees pensions schemes are overgenerous and more importantly profligately run. The wasted proprotion is at least 20%. And as most goverment cost is pay I was using 20% as a reasonable approximation.

And it is not silly to try and do all the state overheads for 10%. It's a reasonable aim. In other words governments should try to run the state to cost us less, not more. I say again, if you could do all the stuff you list for 10% of GDP why wouldn't you? It's an attitude of mind. You either try to control the cost of overhead or you do not. At the moment the biggest costs are transfer payments for social security and the health and education budgets. It is generally accepted that the social security budget is out of control and health and education are wastefully run. They are monopolies and monopolies are guaranteed to do two things. Exploit their employees and overcharge their customers. If individuals were given control over their own spending on health and money followed the patient or pupil there would have to be competition to supply and the price would go down. At the same time pay for the employees would go up and the pension scheme costs would be controlled.

As to the percentages, tax freedom day arrives on June 2 this year. That's into the 6th month of half way through the year. OK Say about 45%. But that's an average. For many people 50% is what they pay.

All organisations should try to control their overheads but governments don't. They use your money to buy themselves votes.

Be very clear that socialism is dead. It's died because it always fails. It's only 'success' is to impoverish everyone everywhere it's been tried. Bye bye cl4.4.

[Steve Robson]

10% is not a reasonable aim, its a silly one. A reasonable aim must be achievable and 10% is not; I repeat its only a third of what the US achieves and that is for poor services. You might as well say that Ford should aim to produce a car for £50, you can't.

Tax freedom day is also stupid. Taxes pay for services that everyone uses. I respect your right to argue about the level of them (though a more reasonable appraisal of what stuff costs would help - look at private school fees if you really believe the state is expensive), but they do have to be paid for as does the stuff you buy privately.

As for your pension argument, that's just nonsense. The pension is part of the pay and the base pay is generally considerably lower in the public sector than the private sector. Public sector staff also do not get the other rewards that private sector staff get - share options, discounts, incentive schemes, bonuses, etc. Yes the pension is generally better, but you have to look at the whole package for both public and private sectors. Lower it if you want, but they struggle to get staff already. When it gets worse and more children die for lack of social workers, crime rises for lack of police and there are lower cancer and post-operative survival rates for lack of doctors and nurses, just rememember that you are the people to blame and hope its not you or people you care about (if you care about anyone other than yourselves) are the victims.

[Lola]

steve r - para 1. Of course it's a reasonable aim. It just depends on what you think taxes are for. If you consider that they are for government supplied 'services' then to pay as little as possible is exactly what you should do. And in fact the civil service do try hard to get value for money. If you think that taxes are about transfer payments - redistribution - you may think differently. (We can discuss redistribution separately if you like).

Para 2 If like me you know that taxes are too high tax freedom day is a very important measure of profligacy and ineffieciency. It also shows how bad Governments are at the allocation of capital.

Para 3. You are talking nonsense. Government pay in many sectors is comparable with non-goverment pay. Some sectors - teachers for example - are relativley poorly paid, but that's because they work for a monopoly and are exploited. But the fact remains that in effect no state employee makes any net contribution from income tax to the national income. It all goes on keeping their profligately run and overgenerous pension schemes going. I repeat (because I know a lot about this subject - that for a typical working life of about 44 years (21 to 65) a contribution of about 12 to 15% of gross pay will get you a pension of 2/3rds of your final salary. So why does the state employees scheme cost 30% and upwards?). Before arguing with me about this go and do some homework.

Oh, and as regards incentives you must have seen the talk about the bonus payments to staff in the IR after losing all those records.

Basically there are minimum levels of state provided stuff that an economy and society needs to function. Some infrastructure, Defence, law and order, a strong currency, the right to private property, Gov't as umpire not player. You can then add health care and eductaion and social security if you wish. The latter three are entirely discretionary as to the success. However health and eductaion could be privatised for provision but still paid for out of taxation by letting the money follow the patient/student. This would remove the huge inefficiencies in both areas and in fact increase the pay of teachers and health professionals.

At the same time it is the absolute duty of governemnt to spend as little of our money as possible to get this stuff, as it is our duty to organise our affairs to pay the minimum tax.

Overall your arguments are specious and full of prejudice.

[Steve Robson]

Lola
You need to do the research. I know about local authority pension schemes. They are not profligately run and in almost all cases, the actual investment is undertaken by private sector firms and performance is as good as the firms selected and the asset allocation strategy. It is in no-ones interest to run a scheme profligately. For funded schemes, there are none that cost the amount you suggest. The reason the figure is in the 20% + range is because of the past service deficit which exists on these funds, which also exist on the equivalent private sector schemes. In the public sector, these deficits are higher because in the early nineties, the government run by the party the TPA love, the Tories, made local authorities underpay contributions to the funds. They did this to extricate themselves from their poll tax mess (itself caused by low tax dogmatists such as yourself) and to keep down Council Tax. This short-termism, which is of the same school of thought as the TPA's current line in attempting to get rid of the higher pay people in local government, costs us today in government pension funds. Some people are trying to do the right thing, the TPA will only lead us to similar disasters to this one.

It is also nonsense to say that the private sector do any better anyway. I'll show you my with profits endowment shortfalls as evidence of that. And the man in charge at the Norwich Union got a nice £2MILLION pay off for delivering me that.

And yes staff should be careful with personal data, though the Daily Mail scaring the s**t out of people about its use is not much help. But please don't tell me the private sector never lose any data, because Capita lost a load of health data only last week. People are human and they make mistakes.

And I know that private sector salaries are much higher than public sector ones. Its hard to get the data from the private sector, but anyone who tries to recruit in the public sector knows it. Its very rare for people to try to cross the divide, but when you do try to, you find that people from the private sector have much lower skills and experience on the same level of pay.

Ciao

[mr duke]

this has got so bad if derek conway was made example of this would help if the taxpayers alliance have got the the guts they could take him to court on a private prosecution for fraud but whos pocket do you work in thios would be tip of the ice burgh town hall mandarins would have to explian what they do for there money michealmartins cant get aw\y with daylight robbery to much longer surely start a war now against these spongers or forever hold your peace

[mr duke]

interesting that the council followed a couple from hampshire for three weeks to check they was telling the truth about there childs right to a school place what would council officers say if they was followed for three weeks to see if there huge salaries was at least put in forty hours 4 or was there position of power abused on the golf course horse racing 15 weeks holidays what is good for the goose is good for the gander you would be surprised what you can unearth 3 weeks folling them remember you have the right to do it dorset council just give every individual that right to follow any council or goverment person to see where your money goes

[Steve Robson]

Mr Duke

Are you illiterate?

They was; folling; there huge salaries etc?

Maybe taxpayers money was wasted on your education as it doesn't seem to have worked.

[Thom]

Steve Robson: "And I know that private sector salaries are much higher than public sector ones. Its hard to get the data from the private sector, but anyone who tries to recruit in the public sector knows it."

Nonsense - it has been proven time and again that public sector pay is better than private sector. Even your beloved Guardian admitted this was the case back in 2006:

http://www.guardian.co.uk/society/2006/jul/13/publicsectorcareers.graduation

"It is also nonsense to say that the private sector do any better anyway"

Erm except for the fact that private enterprise creates every single penny that the public sector ever gets to spend - you moron.

By the way, from your close knowledge of local authority pension schemes (and the fact that you seem so riled by the waste in councils TPA has been pointing out) should we take it you work in local government? Will you declare your interest?

[Steve Robson]

Dear shit for brains Thom

I'd like to see the private sector create "every single penny" without its workforce, who are generally educated in the public sector, cared for in the public sector if they get ill etc etc etc. You people are just so simplistic. The econnomy produces wealth, not a single sector.

So f**k off back to the gutter with your copy of the Daily Mail.

I'm not riled by the TPA pointing out waste, I'd love them to do that. They just assume waste, not quite the same thing. So they imply everyone well paid in the public sector is waste, but they have no evidence for that. A few weeks ago they had a falls prevention officer listed as non - job of the week. Falls by older people cost this country a fortune in health care costs, therefore preventing them will SAVE money (not to mention be better for the people who don't fall). But to idiots like you, this is simply waste. You can't think about it beyond a kneejerk reaction. Fortunately, these savings can be made because you are in the private sector wasting their money instead of taxpayers money.

[Lola]

Steve r. Right we are agreed. The scheme's are underfunded and have support cost of >20% of salary. I am not interested in which parties fault this was. They are run profligately. Their early retirement policies have been over-generous and the NRA is too hgh. The difference between the private and public sectors is that public sector schemes are funded by public money. Private sector schemes are private money. The situatins are not comparable. The investments run by private sector investment companies for the LA are another issue altogether. Again I hold no candle out for the vast majority of these managers, but they are chosen by LA Scheme administrators.

Since you brought up endowment polices I have yet to see a 20 plus year policy from a 'proper' company not achieve its target amount. You've taken in the propaganda. The methodolgy for the shortfall calculations are specious.

Other posters have corrected you on the salary issue.

Low tax works.

[Steve Robson]

ahh, so its propaganda about private sector underperformance (endowments), but for the public sector, all the dimwitted criticism is true, even when its clearly bollocks. Hopefully, you're right about my endowments, but it doesn't seem like propaganda given that I'm basing my view on letters from the Companies themselves (Norwich Union for one!). Frankly when they write and tell me they're shit, I tend to believe them. My Council don't write and tell me themselves that they are shit, I just hear it from you, this site and the Daily Mail.

I actually agree with you on bits, there have been too many early retirements and where the private sector pays off useless people from profits, the public sector, who I acknowlege have an equal number of useless people (you no doubt think they have more, but you're prejudiced), use the pension fund as a get out of jail free card, which just penalises future taxpayers. And past under-funding is a reality, and the fact that Thatcherites caused it is relevant in the context of this Thatcherite website.

Nobody has corrected me on salaries. Clearly I dispute your untested implied view that people in the private sector are better, but the top earners in the private sector wouldn't get out of bed for the earnings of the top people on the so called public sector rich list. Mr Diamond at Barclays, whose share price has halved in the last year and who lend money to all sorts of risky borrowers, earns more in a week than the top person on that list. Even if I agreed he was better, I wouldn't agree that he was 60 times better. Salaries are just not comparable and if you want public money spent wisely, you should support proper salaries being paid. Then they may pick the best investment managers, though the reality is that the record of public sector funds in this regard is just as good and bad and variable as is that for private sector funds.

Just try and open your mind a little, Lola!!!! But do keep in touch, its good to talk to someone and disagree so much.

[Matthew Sinclair]

Steve,

Median pay is higher in the public sector. See the Annual Survey of Hours and Earnings.

Matt

[Tom P]

One correction to Steve's comments about pensions. According to some WM Company research I saw recently the best performing local government pension funds are the ones that carry out investment management in-house! This is apparently primarily because their staff costs are a lot lower and they churn their portfolios less (ie less trading costs).

Presumably the TPA will therefore support a call for local authorities to employ in-house investment managers and stop burning our money by employing external asset managers...

[Steve Robson]

Matthew

Matthew, you may be right about median pay, but I was addressing the issue of senior managers pay because the TPA seems to have a thing about that, what with its rich list etc. Of course, though calling it a rich list is a good publicity wheeze and all that, the proper rich list this weekend exposes what a wheeze it it. I remember your article about Darra Singh and how rich Indians are in the public sector as well as private. The fact that Darra earns around £200K while Lakshmi Mittal, the British Indian at the top of the real rich list is worth £27.7 billion exposes the nonsense of your statement and your concept. Before you tory boys staryt going on about how he generated that wealth and Darra didn't etc, I'm not commenting on whether either is worth it, just exposing the fact that the comparison is stupid.

Having said this, just to be clear for all you tories, I do happen to think that £28billion is rather a lot for one person to have in a world of starving people and as you point out families struggling to make ends meet. Is it just possible that the TPA have the wrong target and that its Mr Mittal, Mr Abramovich and their chums that are taking more than there fair share rather than local government officers earning £50K pa.

I entirely agree with Tom P's point as well. He highlights why local authorities need to pay proper wages and there are many more examples. It is quite clear that lowering pay as the TPA want would lead to higher taxes as well as worse services, but maybe we should give it a go, see what happens and the put the TPA leaders on trial if it all goes wrong. I'd go for that.

[εξωσωματική γονιμοποίηση στην Ελλάδα]

Hi

I think it is a great attack on this country.