May 2008 23

"LONDON (Reuters) – Blunders in implementing a plan to make big efficiency savings at the Department of Transport through a centralised services system could end up costing it 81 million pounds instead, a report said on Friday.

The department had envisaged saving 57 million pounds by amalgamating support services such as human resources and payroll for bodies such as the Driver and Vehicle Licensing Agency (DVLA) and Driving Standards Agency.

But its plans were over-optimistic, the department could not agree a common set of business practices and the IT system was not properly tested, meaning an "unstable system" was introduced, said the report by financial watchdog the National Audit Office (NAO).

"This project has been a classic case of act in haste, repent at leisure," said Edward Leigh, chairman of parliament’s Public Accounts Committee to which the NAO reports."

Just another day in our politician-managed public services.  There are similarly expensive and delayed IT systems in most of the government departments.  A year ago we identified lots of them in our report (PDF) on big government projects.  What a farce.

(story from Reuters)

May 2008 23

The last seven days have seen a fundamental shift in the political debate – taxes have taken centre stage in politics, finally mirroring politically the importance that they have held domestically for some time in the lives of ordinary taxpayers struggling to make ends meet.

Last Friday, PoliticsHome’s PHI5000 panel registered an important change in people’s priority issues, with the economy taking top place and tax specifically overtaking law and order for the first time.

On Monday , David Cameron recognised the "pain" caused by the heavy burden of taxation and talked about the benefits of lower taxes. By targeting social problems, reducing waste and fundamentally reforming public services, he said, tax cuts could be delivered.

On Tuesday Nick Clegg followed suit, promising lower taxes on low and middle income families, and laying out the ambition of reducing the overall tax take.

That night, the strength of voters’ feeling on the level of fuel duty, for example, was exemplified in the Newsnight debate and the gulf between politicians and the people on the issue was laid bare.

Wednesday saw the final day of a Conservative campaign that was founded on the issue of high taxes – Tory leaflets were replete with mentions of the 10p tax rate abolition and the high level of motoring taxes.

On Thursday night, having chalked up an overwhelming swing from Labour to Conservative, the victorious Edward Timpson MP told BBC News that the key issue in the election was "the 10p tax rate…[which] resonated time and time again on the doorstep".

Today we have a political landscape in which it is clear that people are suffering from the record level of taxation that all strata of society face. What’s more, they are willing to vote for people who promise to reduce that burden and free people to spend their own money. The old idea that tax cuts were toxic because they supposedly meant worse services just isn’t true any more. People have paid huge amounts more tax and have seen services get worse – they know that it’s not the size of the bill, but what you do with it that counts.

The Tories have reaped the results of that change this week, but to continue doing so they have to move on with Cameron’s priorities as laid out on Monday. Voters agree that taxes are too high and they are listening keenly for ways to reduce them. The stage is set for positive proposals for radical public sector reform to be put forward to deliver the lower taxes and better services that we all want and that are perfectly possible.

The really good news for taxpayers is that with Nick Clegg evidently aware of the potency of this issue, too, there is the competition factor to encourage a really radical set of ideas. The Conservatives and the Lib Dems will be jostling to be the most radical, which can only be good in terms of producing better proposals.

This week has fired the starting gun – the crowd are roaring, the engines are screaming and the flag has just gone up. It’ll be a race to remember.

Posted by Matthew Elliott

May 2008 23

Tim Parker, a private equity executive who has run the AA, Boots and Kwik-Fit, has been talking about his new job overseeing large parts of the Mayor of London’s empire, on a salary of £1:

"Mr Parker, who will begin work on June 7, said: "Throughout my business career I have been accountable to exacting shareholders. In my new role, my shareholders will be the taxpayers of London."

That’s exactly the right attitude – focussed on value for taxpayers.  Hopefully he will realise that the best way to make that happen is to return as much control over London’s public services as possible back to Londoners.

Via, CentreRight.Com

May 2008 23

Recently I wrote, for ConservativeHome’s Platform, about Mancur Olson’s The Logic of Collective Action.  That landmark political text set out how minorities could impose their will on a majority in a democracy.  People have an incentive to free ride on the political efforts of others and minorities find it easier to organise and motivate their members.  This is one important reason why the work of the TaxPayers’ Alliance is so vital.  It also explains why some truly ludicrous trade deals can get through – the small number of people in industries that benefit from the tariff can organise while the broad swathes of society who benefit will struggle to.

Still, this case from the Aplia blog, via Marginal Revolution, is exceptional:

"Advocates of trade restrictions often argue that protection will save jobs. Since we can observe price and cost increases associated with trade restrictions, we can estimate how much it costs to save each job in a protected industry. According to the NPR story, there are roughly 30,000 dry cleaners in the U.S., and on average, each pays an additional $4,000 per year due to the hanger tariff. This indicates an average annual cost of 30,000 firms x $4,000 per firm = $120 million. According to the U.S. International Trade Commission’s report, U.S. employment in wire hanger manufacturing was 564 workers in 2004 and fell to 236 workers by 2006. Let’s assume that employment in this sector would have fallen to zero in the absence of the tariff, and that with the tariff, employment will recover to 2004 levels. In other words, assume the tariff "saves" 564 jobs. Dividing the cost of the tariff to U.S. dry cleaners ($120 million year) by the number of jobs saved (564 jobs) indicates that each job saved costs about $212,765 per year. Keep in mind that the typical full-time worker in this sector earns about $30,000 per year. Even if we assume that industry employment doubles, the cost of the tariff is still roughly $120,000 per job."

$4,000 per dry cleaner is well above the £100 per household that I figured it would take to get people to sit up and take notice of a decision that hurt their economic position.  I can see a few possible explanations for why it happened:

1)  The dry cleaners pass the cost on to their customers – that means the $4,000 is spread across hundreds of customers few of whom even know they’re paying let alone care enough to change their vote.

2)  Enough dry cleaners benefit from this measure which prevents new entrants to the market and puts some existing firms out of business – regulatory capture.

3)  This measure won’t last and is just an exceptional moment of madness.

Regardless, this highlights how divorced from basic common sense political decisions can become.  It isn’t just in America.  European trade policy is full of similar lunacies, the Common Agricultural Policy is the biggest example, and there is little accountability for most public spending.  We need to decentralise and hand decisions back to individuals so that powerful special interests cannot take advantage of us.

May 2008 22

They write in to newspapers justifying their own existence, apparently. Guy Attenborough, the Head of Communications for the Agriculture and Horticulture Development Board has got a letter in today’s Daily Express in response to Patrick O’Flynn’s excellent article about our Unseen Government report.

Mr Attenborough correctly points out that the British Potato Council and the Milk Development Council are both funded by levies on their respective industries rather than from central taxpayer funds. That is rather a distinction without a difference, though – if I was a potato processor I would find it hard to take comfort in the knowledge that the BPC is funded not through central taxation but through an industry levy I am forced to pay. A levy that is exactly like a, erm, tax. 

Crinkle_cut Fundamentally these "levies" are taxes on selected industries, as the Government effectively runs a closed shop – pay your subs to the British Potato Council or your crinkle cutting days are over.

Beyond that, it’s important to remember that the point of the report was not just the direct cost to the taxpayer, but the problems caused by the sheer quantity of these unaccountable bodies, and the chaotic structure of government in general. Even if, by some miracle, the British Potato Council was run with no overheads, or its bills were paid voluntarily by a potato-loving benefactor, it would still be a burden both in regulatory terms on its industry and especially in terms of the ministerial department which has to oversee it.

Government ministers are besieged by the range and number of different organisations that report to them on a myriad of different topics. It is not just the Potato Council’s bills that we are concerned with, it is the snowstorm of paperwork, reports, consultations and other documents that they and their 1,161 fellow quangos produce. The essential services of this country are struggling at least in part because their are so many other calls on ministers’ time. No matter what Mr Attenborough says, these quangos are a burden on taxpayers.

It’s also worth noting that the Agriculture and Horticulture Development Board, for which Mr Attenborough works, is a new quango covering the field broadly occupied by the Milk Development Council, British Potato Council etc. Excellent, you might think, they’re scrapping little bodies and consolidating their responsibilities. Sadly, it’s not so; the BPC, MDC and all the other little ones are still there, living inside the AHDB which is in fact just a whole new level of quango. And so it continues.

Page 712 of 886« First...102030...710711712713714...720730740...Last »