A Modest Proposal


Sean Gabb

Since 1997, Gordon Brown has presided over an explosion of state spending – and of the taxes needed to fund this. He has also more than doubled the British national debt. Most of the money has been spent on salaries and pensions for the ruling class and for its various clients. One of the main issues in British politics is how to stop this haemorrhage of our money into their pockets, and also how to get some of it back to help pay off the principal of the debt.

Here’s a proposal for quick and easy spending cuts.

No one in the public sector should be allowed to earn more than £40,000. No one in the public sector should be allowed to collect a pension of more than £20,000. This should include everyone from dustmen all the way down to Cabinet Ministers. Well, it should include everyone but those tax eaters – Trevor Phillips, Peter Mandelson, et al – who would just be sacked and deprived of all pension expectations.

This is a proposal that might allow cuts to some of the grosser salaries, but doesn’t, in itself, touch those pensions already granted. Everyone in politics seems agreed that the “public faith” shouldn’t be broken by arbitrary changes to contractual rights and obligations - as if the tax payers have an obligation to pay every bill run up by our tribe of hand-in-till politicians! Indeed, as if faith had ever been kept in more than the formal sense with the rights and expectations of those targeted by the State.

However, we could achieve the proposed reductions for everyone in the public sector by using the tax system. We don’t need to unpick contracts and tear up old pension agreements. The Government simply needs to impose a supplemental tax on everyone whose income is derived from the State. Therefore, Rupert Snottleigh, former Chair of the Lifestyle and Social Engineering Directorate for the South West Region, may feel snug with his £120,000 a year pension. My proposed supplemental income tax would take that straight down to £20,000. In the same way, the salary of the Prime Minister would be cut from £194,250 to £40,000 – would that cause any shortage of candidates for the job? Could it possibly reduce the quality of candidates? Of course, “Dame” Betty Woad, Head of the England Walking! Initiative at DEFRA, would see her salary cut from £247,000 to zero. She could also go sing for her pension.

These people have spent the past few decades talking rapturously about what high taxes can enable in the way of state solutions. Well, here are some taxes that certainly enable a few solutions. It would cut public spending by billions upon billions of pounds. It would also make me very happy!

Why should these people have pensions when ours have been made worthless by the burden of paying theirs? Or when our pensions have been made worthless by their regulatory efforts?

It might be worth imposing the same kind of tax on the management of all the banks we were forced to bail out the year before last. Certainly, my proposal is not restricted to those directly and wholly employed by the State. It also applies to everyone in the various quangos and executive agencies set up over the past quarter century. The test should not be formal corporate status, but the origin of an organisation’s budget. Therefore, the proposal also covers the BBC and the Church of England.

Bearing in mind how utterly useless she has been at remembering her Coronation Oath, it might also cover the Queen and her various hangers on.

So come on, Mr Dave – give us a reason for voting Tory!

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18 responses to “A Modest Proposal

  1. Atlas shrugged

    You never know Sean something like this may very well happen anyway. Neither Cameron, Clegg, nor Brown need or wish to propose such a thing.

    This because they only have 2 choices. Devalue that already forever more toilet paper like £ in our pocket to fire place status or go running ragged cap in hand yet again to the establishments very own IMF.

    As far as all pensions are concerned the result will be the same. Forget index linked, because you can be sure whoever is in power will certainly be required to.

    Perhaps it is best at times such as these to remember that our parents survived through possibly worse times then those we are about to receive. It could indeed turn out to be almost infinitely worse, time will tell. Perhaps out rulers will have a little more mercy then they have shown before, perhaps they won’t have any where near as much.

    As history is only ever written by the winners, the next History of The English Speaking People will likely be written in Chinese. As well as even more dishonestly as the last one.

  2. Without defending the statist crap that the Public Sector get up to the vast majority of their pensions are already below those figures.

  3. The the vast majority of tax eaters have nothing to fear. I’ve added some illustrations that might help express the sort of solution I have in mind for these people.

  4. Actually, I am not sure, Sean, that many of the people now in “public service” would be considered “suitable” for future public service under a liberal state.

    We would have to have a “public offenders’ register”, administered by the LAA (the “liberalism assurance agency”), which would check up on the credentials and socialist-state-employment-history of all applicants.

    Failures would be forced to wear yellow high-vis-jackets at all times and even in bed and in the shower, on the back of which would say “public employee under New-Labour 1997-2476″.

  5. Quite a few years ago I wrote a paper, based on C Northcote Parkinson’s “Parkinson’s Law” which posited that the Civil Service was completely impervious to reform. In order to get public expenditure to manageable levels (this was only a couple of years after Blair got in) it would be necessary to scrap the whole Civil Service, department by department, and start again. I sent this paper to UKIP and to Charles Hendry, a Conservative whip at the time, and got absolutely no response whatsoever. I calculated that just by replacing the Civil Service we could bring income tax down to under 20p in the pound for everyone – without what would be saved by going through the same exercise at Town Hall level. No guts these poiticians.

  6. Yes, well, as a worker in a “public sector employer” (a university) I think they get jolly good value for your money (except of course when I am writing comments on the LA Blog).

    If this “modest proposal” were to be adopted by anyone it would not directly affect me, except maybe in a couple of years’ time if I get a promotion. However, in the case of organisations such as mine, which purport to deliver and economically useful good – higher education – would you accept an amendment in the spirit of Murray Rothbard’s prescription of turning us into staff and customer owned mutuals and getting us out of the state sector completely?

    I was going to suggest this to a certain current candidate for Wokingham when I see him, and hope he will no longer be a candidate at that stage, but a successful one, when he visits All Souls to lead a seminar on the credit crunch on May 7th. But it wold probably do no harm to air it up front. I can even resurrect my proposal of a decade ago “Manifesto for a Mutual University” if required.

  7. Absolutely wonderful! I love it! If only….!
    And the way people will NOT accept it shows how far gone they are!I keep asking Gove to close down the DCSF completely and get nowhere. Itg has controlled 50 years of decline and still they clihng to it!

  8. Oh yes – disclaim all state funding and state *protection*, and Lord Protector Gabb wouldn’t send in his tax getherers. However, I should also have specified all workers in “education” funded by the State.

  9. In previous elections it has been a policy of the Lib Dems to abolish what was then the DTI. I don’t know if it is still there (we shall see soon I suppose), and/or which bits of the Mandelsonian empire that would now mean, but potentially, presumably, everything to do with business, universities, enterprise, “innovation” and “skills” perhaps…

    Huhne did say he stood by that policy during the leadership campaign, despite Mrs Huhne being the DTI’s chief economist (and Greek born anti-Euro economist at that).

  10. Kudos, Sean. Internet petitions in the U.S. A. recently appeared promoting the following: 1. Constitutional limits on pay and pension for public employees; 2. Law requiring members of Congress to be subject to each regulation and each law imposed on the general public. I like your proposal for change, but it has little chance of being implemented. Human greed often trumps the work ethic. Yet, most persons do value individual freedom. Socialism restricts individual freedom and must do so, because human nature resists restrictions. The collapse of the Soviet Union ought to be evidence enough to persuade us of this fact. Our job then is to defend individualism and to discredit collectivism, a thesis supported by facts.

    Individualism leads to broad increases in material well-being, while collectivism leads to misery, discontent and contention. Let the battle resume.

  11. As a practical matter, this could be better achieved by introducing an additional schedule to the income taxes arrangements. As you know, schedule E is for employment income, D1 for self-employment, etc.

    A new schedule (I think we are up to about G) would be for all defined benefit pensions. I see no reason why private sector db pensions should be exempted from what follows. I am not persuaded that salaries should be arbitrarily capped as you suggest, although the number of higher paid in the state sector should be reduced.

    My proposal is less draconian than yours. I propose that the tax bands applicable to schedule G would be tighter together than for all other income. For instance, using UKIP’s flat tax ideas as a basis, £11,500 would be tax free; whereas UKIP would take 31% above that (20% for pensions) I propose it should be 31% for db pensions over £11,500 and rising to sever rates above (say) £100k.

    I do not agree with confiscatory tax arrangements nor with tearing up private commercial contracts. However, we cannot afford what has already been promised, so something has to be changed.

    Naturally, future pensions accrual should be on a dc basis or else self-funded out of net income.

  12. I would call the Public Offenders’ Register “the Bureaucratic Parasites’ Register”

  13. On reflection, I do think we’d have to have some get-out clauses for certain people in the education/university spheres who had – perforce – been “paid” by the State previously, simply because what they did was “the way things were done in those times.”

    Of course! The UEA CRU would not really qualify here.

  14. Sean,

    Magnificent piece! Do you not feel though, that you’re being overly generous? £40,000 does still pay for rather a large number of copies of the Guardian.

    Rgds,
    AndyD

  15. Obviously, the details of the proposal are up for debate. And, on reflection, I can’t think of many of these sub-Gestapo pen pushers who are worth even £10,000 a year in salary terms.

    But surely, it would be a blow for the true cause of socialist egalitarianism for the British State to send out this signal to the world.

  16. Wouldn’t it be cheaper to just stop thinking up stupid ways to “modernize” the system that cost more and make state functions into big, less efficient schemes that expand to involve more people and soak up more cash in a non-productive (really, counterproductive) fashion? I’m thinking of blatantly improprer ideas like privatization in the security area and tax collection.

    Isn’t it obvious that your tax records should not be in the hands of private companies? And aren’t the manifest problems of privatizing any part of the police/prison fuction enough to scare anyone who cares about civil liberties? That’s just leaving aside the problem of how such private organizations will maximize their profits at the price of your civil liberties.

    I think you will find that many of the problems with expanding costs have more to do with promises private industry makes to officials than the mere fact that our officials collect a public salary and pension.

  17. A very nice piece, Sean – as always!

  18. Well I was with you up to the appeal to ‘call me dave’… no reason to support him or his party, he has no belief in freedom (or indeed democracy).
    Cut the fees of the state fat-cats by all means. But also recognise the ‘forgotten heroes’, working for minimum wage or just above, who keep this country together.
    Vote UKIP. In fact just don’t vote for us, join us. That is my message.