An Alternative to Public Sector Cuts?

There was an interesting article on the Politics Show yesterday, in which Profesor Greg Philo of Glasgow University (about 1hr:29 mins into the programme) argued that the state deficit could be abolished by a one-off tax on the wealthiest 10% of the population, rather than through the cuts agenda that almost all politicians of all stripes seem to be seeing as inevitable. The Profs' ideas are promulgated on the Glasgow Media Group's website.

Because I believe that government interferes too much in the life of the individual, I would support some state spending being reduced even if the government had zero deficits or even if it made a healthy profit.

I have some doubts about the practicality of taxing the best tax avoiders in order to raise revenues! There would have to be a series of preliminary laws to tighten tax avoidance and the donations made to political parties by massive tax avoiders, before any collection of such a tax could be practical – something that neither Labour or Conservative recipients of tax avoiders largess will support!

And there is the perennial problem of taxing success. Untaxed money can go back into business and wealth creation, creating better businesses and more wealth (and more taxes in its wake). Taxes tend to get swallowed up in bureaucracy and bumf and administration rather than in economic growth.

On the other hand I don't want to see my local school close, fewer police on the beat; monthly bin collection, or my aged parents' old age pensions slashed either. If a one off tax on the super rich can avoid those then I'm all for it!

Whatever the merits or the faults of Prof Philo's proposals, it is good to see an alternative to the cuts agenda offered by most parties in the last election. The Glasgow Media proposal should have been offered as an alternative to voters during the election by a major party. Agree or disagree a party proposing and another party opposing would have given the electorate a real choice!


  1. I agree that cuts would be necessary even if there was no deficit. Anyone who has worked in the public service for any length of time knows that you could cut staff numbers by 25% or more without any impact on services. Of course the easy and obvious thing for bureaucrats to do is to cut services rather than their own jobs. We need to see staff cuts forced through from the centre especially amongst middle-managers who usually have little to do except get in the way of doing the frontline job.

    Wales especially would benefit from sacking thousands of these middle managers who are wasting their lives in pointless jobs. They are often talented people and forced to stand on their own feet away from the sheltered workshop would create new businesses.

    It's a joke to hear these selfish public servants twitter on about the poor. Look at how many roadmen, care workers, canteen staff etc there were 40 years ago and compare that with the white collar workers. The blue collar jobs have all but disappeared while the white collar jobs have grown and grown.

    Wales needs a successful economy not parasites feeding on a corpse. I'm afraid the modern day unions are just creatures of the bureaucracy - do they organize amongst the low paid workers of the private health care sector for example,do they hell.

  2. good idea. Their is a seedy side of richness, very much brought forth in modern times...long are the days an industrialist opened a plant and made hinself well off ad his workers prosperous, today its hedge-bet richness

  3. Alwyn - I see two problems with Prof. Philo's proposal:

    1. It is incumbent on the State to create a predictable and stable tax system. If following a specific economic crisis a government starts to impose unpredictable and ad-hoc windfall taxes on (for example) the richest 10%, it will send out a signal to the world that it does not have a stable or predictable tax regime. The consequences of this would be threefold: (a) not just the richest 10%, but all those people who aspire to be in the richest 10%, will decide that they would be better off either living elsewhere or ordering their finances in such ways as to avoid having to pay tax; (b) international firms will recognise that investing in that country carries greater risk as the tax system is subject to sudden and unpredictable changes; (c) Once the precedent is set, it is likely that the introduction of windfall taxes will become habit-forming for the government.

    2. Ree your suggestion "The Glasgow Media proposal should have been offered as an alternative to voters during the election by a major party. Agree or disagree a party proposing and another party opposing would have given the electorate a real choice!" Taxation has to be bourn by the whole population (except those at the very bottom). If people think someone else other than themselves will pay for the services they and their families use, then they will always vote for increased taxation. I think you can see that this is a very slippery slope to go down.

    The fact is that according to Treasury figures the richest 1% in this country already pay 24.1% of all income tax; the richest 5% pay 43.1% of all income tax. Although a one off tax on the super rich may superficially sound like a simple and pain-free solution to our problems, the reality is that to introduce such a scheme would seriously compromise this country's economic growth in the future.