This week UK taxpayers are starting to receive letters which detail where their money goes. It is a George Osborne initiative designed, supposedly, to increase transparency about how taxes are spent. Here is what taxpayers will see.
It shows that a quarter of state spending (including debt interest) goes on welfare. And everyone knows what welfare involves - welfare payments to the unemployed, the poor and disabled etc.
Except that this is not how welfare is defined here. As the IFS point out, welfare in this figure includes pension payments for those employed by the state, like nurses and teachers. Why the welfare total should include these pension payments, while the state pension itself is separated out, is inexplicable. The IFS also point out that this welfare total includes spending on social care, which is not a cash transfer, and which would be more logically included under health. The IFS also show how it would be quite easy to break this welfare total down into more meaningful parts.
So the way the chart aggregates welfare spending appears not only wrong, but also strange if the idea is to inform the public. But of course that is not the aim. This presentation is part of the Chancellor’s election campaign to convince voters that there is plenty of scope to cut public spending further by reducing this huge welfare bill. The idea is that many of those receiving this information will assume welfare involves all those state handouts to scroungers that their newspapers are always providing examples of.
The background to all this is straightforward. When people are asked whether they want higher, the same or lower taxes and government spending, about 35% say they want higher taxes and spending, while about 7% want lower taxes and spending. For a Conservative party committed to reducing the size of the state, this is a serious problem. The solution is two-fold. First suggest, mainly through a constant stream of newspaper articles but occasionally backed up by TV and the Chancellor himself, that some part of public spending is wasted on transfers to the undeserving poor. Second, label that ‘welfare’ and exaggerate its size as much as possible, using in this case public funds to do so. This is not about transparency, and it is not even about spin. It is about giving a distorted view of reality to produce a political outcome that only a small minority of people appear to actually want.
Postscript (6/11/14) A number of people have written about how misleading the government's presentation is, although most do not put the background in quite as stark a way as I do. To see why this matters, here is a nice poll from YouGov, which shows how opinions are influenced by better information. Which, of course, George Osborne knows full well.
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