Pay rises for teachers and the NHS will pay for themselves
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- čas přidán 8. 09. 2024
- The government will agonise over the cost of paying NHS workers and teachers the above inflation pay rises that have been recommended for them, but doing so is absurd. Once tax is taken in to account a large part of any payment due heads straight back to the government, quite quickly. So why does no politician ever talk about that?
#uk #money #economic #politics #bank #nhs #health #teaching #education
ABOUT RICHARD MURPHY
Richard Murphy is Professor of Accounting Practice at Sheffield University Management School. He is director of Tax Research LLP and the author of the Funding the Future blog. His best known book is ‘The Joy of Tax’.
This video was edited by Thomas Murphy.
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Clearly, accurately explained, thanks
Why do NHS workers and teachers require 24% and 28% employer pension contributions? Who in the private sector receives anything near this?
Who in the private sector receives anything near this? Execs mainly, but in the real world very few in one go. But over a decade and more a lot of the private sector got this.
Why do NHS workers and teachers require 24% and 28% employer pension contributions? Because their pay hasn't been keeping up with inflation for more than a decade and other health care industries around the world will pay them more which will lead to us not having enough skilled people to do the job in an ageing society.
Giving good wages, to those, that provide state services, is a good way of redistributing wealth and attracting talent. And of course; Richard you are right, but for one thing. Giving the Bees some of the honey; goes against the political grain of many politicians, Labour politicians there among!
The money is being redistributed from the masses to a small group in the state.
Its looting
The man with his own special tax bill, passed by parliament, just so he can dodge taxes.
The Pensions Increase (Pension Scheme for Keir Starmer QC) Regulations 2013
It would be of the money was coming from people that don’t need it like the Duke of Westminster or the Elon musks of this world but since you want be able to tax them without a very unpopular legislation change which will be blocked by those very people, the money will come from the next in the queue. That is the middle class. Why should people that have strived and worked their arses off to get where they are pay for public sector waste. I’ve worked in both the public and private sector and see the vast amount of waste and incompetence in the public sector to know it isn’t efficient.
It’s essential to keep some thing in public control, for example land registry, but other things are not well suited to public ownership like the trains. Imagine the strikes we would have seen if the train unions were let loose on a nationalise industry. Or if we still had British layland draining billions of pounds from the taxpayer to produce shit cars that no one will buy assuming they aren’t out on strike because the management asked them to do their jobs.
Some of the figures Richard quotes here are pretty big assumptions and the issue is that the bill needs to be paid between settling and getting any of the taxes he states.
The real issue is the funnelling of general workers pay away from the workers and onto the CEOs and other senior execs. Even some millionaires are recognising that under paying the people who create their wealth is causing their long term collapse.
@@davideyres955
"I’ve worked in both the public and private sector and see the vast amount of waste and incompetence in the public sector to know it isn’t efficient."
The old myth "that the private sector is more efficient that the public sector" Lament.
The trains run on time under public ownership and there was always a qualified gas fitter on call.
" very unpopular legislation change" Unpopular for whom?
"Why should people that have strived and worked their arses off to get"
More conjecture!!
"Imagine the strikes we would have seen" More conjecture; seeing ghosts that are not there and have no basis in reality or trade-union history!!
"pretty big assumptions" they aren't assumption!!
" funnelling of general workers pay away from the workers"
The trade-unions are labouring under the yoke, of anti trade-union legislation. It's time to bin all anti trade union legislation and let the trade unions get on with the job, of collectively negotiating wage and working condition, without being hindered by parliament!!
There is very little " public waste" as you call it, nowadays. Austerity has stripped out, not just any " fat" but a lot of essential muscle as well. That's why everything is crumbling, from literal buildings and roads to hospital service levels and the profits of companies, as their customer base ( whether public or privately employed) tries to keep itself fed, and a roof over its head, in a time of massive inflation. There is only so far that the belt can be tightened before it starts to choke you. And in the case of public bodies, those cutbacks result in genuine hardship for people needing the service they provide, and also results in a loss of efficiency for private firms.( for example, wear and tear plus delivery speeds due to them potholes)
@@davideyres955 "I’ve worked in both the public and private sector and see the vast amount of waste and incompetence in the public sector to know it isn’t efficient."
The old myth "that the private sector is more efficient that the public sector" Lament.
The trains run on time under public ownership and there was always a qualified gas fitter on call.
" very unpopular legislation change" Unpopular for whom?
"Why should people that have strived and worked their arses off to get"
More conjecture!!
"Imagine the strikes we would have seen" More conjecture; seeing ghosts that are not there and have no basis in reality or trade-union history!!
Joined up thinking. I wonder where the newspapers have been in explaining this to the public over the past half century.
Don't rely on newspapers tell you thr whole story
Get rid of % rises. £1k a month rise for a doctor, £ 60 a month for support staff. How does that cover cost of living? Give everyone £200 a month.
Public sector workers need above inflation pay rises for some years to come.
You have clearly demonstrated the weight of the tax burden we are living with.
why should public sector workers (who are already paid significantly higher than the wealth creators in the private sector) get an even bigger slice of the pie. If any money is spent it could be targetted at the lower paid using tax cuts to benefit both private and public sector low paid employees
@@Mike-lb1hx aren’t wealth creators in a different pie from public sector workers?
Lot of the nhs staff porters cleaners and so forth are doing two jobs to make ends meet it won’t take much for them to give up and move to retail
Loads of people knew about this before the election, from Martin Lewis, john McDonnell, even Owen Jones FFS, Believing Labour didn't know this is beyond stupid
Trickle up economics❤
@@dennismccarthy7032 More creamed off.
All productivity gains since 2008 have gone to the richest 5%.
Well said.
Another thing to take into account is the recruitment cost to replace nurses etc. that simply give up or go abroad.
They aren't training them. The NHS business model is import workers.
@@adenwellsmith6908 Sad but true and contrary to limiting immigration. Having said that, the best treatment I ever got in a UK hospital was from an Indian consultant, he really stood up for me in the face of UK medical staff.
@@nickbarton3191 Look there are lots of people who have come to the UK, who are great to have here.
The problem is that they aren't a large percentage.
If we take the Manchester airport thugs. Turns out one has been claiming disability from the UK, but living in Pakistan for the past 2 years. For every one like your consultant, there are huge numbers of the other sort.
That's the symptoms. What's the solution?
In my view its easy.
1. No criminals.
2. No discrimination
3. Net contributors only - a simple minimum tax code solves that combined with a zero welfare policy.
@@adenwellsmith6908 Can't see fault with your solution except it would involve the Home Office actually doing their job to vet them, patently they haven't been. Just a string of failed ministers in post.
@@nickbarton3191 Why vet? You want to come here, produce the criminal record evidence. For your country, they can get access by opening up their CRDB.
The rest is nothing to do with the Home Office. It's a very simple minimum tax code of 40K a year, and that's HMRC.
Or do you mean asylum?
The government possibly don't understand? Are they still under the sway of neoliberal ideology? Who knows. This explanation helped me anyway.
It is blindingly obvious when it is pointed out that the economy that most of us are a part of works much better the more the money goes round. It needs to circulate to provide the activity that pays the wages to make stuff that is then bought and sustains the production of goods and the jobs that rely on that production. Your excellent explanation makes it clear that government also benefits from this activity and that it has a role in both promoting and facilitating this circulation. Paying public sector workers is no different to paying private sector workers - it's just money circulating. The 'product' is our ability to learn skills and knowledge to use in all sectors and healthcare that keeps us healthy enough to keeping working. This is real world economics ;-)
Great start by labour government. Putting public services first andvthe people who work in it
It is like throwing a loaf of bread and asking for more productivity- when we already work understaffed and in a stressful environment for in my case more then 9 years . Who will pay for my 9 years of sacrifice working understaffed and providing quality of care at the spent of my health because believe me my health went down !!!!
Would love to see a debate with you , Gary (from Gary's economics) and Martin Lewis.... That would be super informative!
I would say if you listen and understand all three, you have a much better understanding of what really needs to be done.
@@daves_channel1491 agreed 👍. .... However.... I'd still love to see all three of them in a room with Rachel Reeves.... That would really get things fixed fast!
Unions have used this same multiplier effect argument for decades.
Great news, school support staff however will only get 2.5%, just as important that they get a decent rise, can't run the school without them
My tiny little mind is blown🤪
Awarding public sector employees above inflation pay rises puts pressure on private sector employers to increase their pay offering in line with public sector. However, the govt will not benefit from the multiplier effect to the same extent as it would not be able to claim PAYE and NI back on the first cycle of pay. However, for private sector employers, costs will increase .So I think an argument for the govt to hold back public pay is to protect the private sector. This demonstrates how modern politics prioritise the needs of the private sector over the needs of it's citizens.
The needs of its Citizens can ONLY be met by a successful Private Sector. Government get money from 3 sources, Borrow, Print and Tax - there is nothing else. The UK Government of the past 20 years has done so much of the first two, that they can now only go for Option 3 - as Labour will prove. I know it doesn't sit well with most Left-leaners, but without the Private Sector, there is nothing - other than a poor country with unhappy citizens.
@rjw4762 I think weather the govt borrow, print or spend its citizens will always end up paying as there simply is no such thing as something for nothing. Borrowing we end paying interest, printing money we end up with devaluation and inflation. What are the effects of high taxation? Reduced private investment, however it's a neoliberalist dream to believe in trickle down.
You're way optimistic, mate. The right-wing press will claim correlation does not mean causation.
Just like they're against crime protection programs. Because no-one sees it when you've prevented 12 kids from going criminal. But locking 12 kHz up, that is being hard on crime. That the prevention program would have been cheaper, both financially and I terms of social cohesion, not their problem.
Liquidity is the beneficial outcome which they probably don’t realise but hey ho at least we will get our country back into growth!
It's basic Keynes/Galbraith economics. It does have flaws but its application in the 1950s and 1960s let to the biggest and fastest rise in living standards in human history - much of it reversed over the last 45 years by Thatcherism, of course. The beauty of it is that money paid out to the lower paid flows immediately back into the economy because they spend it immediately. Thatcherite trickle down does not do this. A lot of it will leave the country and go into tax havens. With the rest, the rich buy assets such as rental housing which forces up house prices and allows them to soak up even more of the economy. It's a no brainer really. Keeping the lid on wages has led to stagnation and decline. Pay increases for the public sector, especially the lower paid sector, are win-win for everyone except the clients of the Tufton Street trolls who pay so much attention to this site.
Do you really think they are Tufton street trolls? They don’t seem bright enough.
I'm unemployed and if I was given a £2000 no strings payment I'd use it to upgrade a few essentials like clothes plus possibly buy some specific training. That money would go back into the economy very quickly
@@Redf322 You think think that there might be bright people in Tufton Street? Why would they be there?
@@charliemoore2551they can afford to pay decent wages. But i get it.
@@keithparker1346true. I have been unemployed and if you fall below the line it is hard to get back up.
For the people who are moaning NHS and teachers never got a pay increase with inflation when it was 10 % and above
This Labour only knows one effect: the Holy Trickle Down Effect. Proven to be as bollocks as any other religion.
So money spent by one person doesn't end up in the pocket of someone else. It just disappears into the ether?
@Benzknees that presumes it gets spent, and not stashed in tax havens or rentier assets
@@markwelch3564 - Any income from offshore assets coming to a UK resident gets taxed & spent here. 'Rentiers' pay others for their investments, which others then spend, whilst the investments support enterprises & the property markets, creating employment.
@Benzknees I am not seeing any evidence that this cycle is actually happening - all I see is consolidation and monopolisation as capital concentrates in the hands of a tiny minority
@@markwelch3564 - The UK is at the lower end of the GINI "wealth inequality" index.
And if the government says that the additional salaries have to be met by departmental efficiencies (ie no extra money from central government). It defacto means that the government gets a dividend because it is in effect cutting departmental budgets. It gets the money back from the teachers and health staff through taxation.
Small state gives us inferior health and education. Since when has society prospered with that? We need change, and your explanation is poignant.
Good point but I suspect the government may well demand increased productivity in return for a pay rise this may well mean more bureaucracy and increased micro management which will actually make workers less productive and less happy.
Apparently not 😮😮😮😢😢😢
@@doriangray6985 ?
5.5% is pittance.
And while it might be above this year's inflation rate, inflation last year peaked at over 20%.
No English public sector or military pay rises over the past 3 years even sum close to half of the total inflation over the same period.
The pay review bodies should grow a pair and ask for 50%.
😂try working in the private sector and getting nothing for 2 years
@@user-fv1576 That's not a badge of honour, go and join a union and then vote on strike action.
I wonder if you’ll say 5.5% is pittance when you get your bill from the builder
@@jamie81010 Builders don't charge percentages. The analogy doesn't really work.
Not sure if I've misunderstood Richard's point at around 2.30 where he takes the employer's NIC off the £100 or if Richard has made a mistake in his presentation. Employers NIC is an employers cost so wouldn't be included in the 5% increase. Employers NIC is usually paid by the employer so doesn't affect the 5% so can't be taken off.
A really important thing about the multiplier effect I wished you had covered is the savings rate.
People on higher incomes dont spend the additional money they get. For example, I already save a decent chunk of my monthly pay and live comfortably (just not extravagantly). If i had £100 more i would just save it towards my pension and retire a few days earlier.
The pay rises go more towards lower income public sectoe workers so they will likely spend all of the additional money.
Taxing from rich and giving to poorer people is very good at stimulating growth in the economy. Tax cuts for rhe rich are not for the reasons above
Well the new government are now showing that they DO seem to understand the benefits of giving decent pay rises to public sector workers ! Let's hope Richard and the gov. are right and it feeds through to help the economy and people's health and education.Certainly austerity hasn't done it.
Such wisdom and commonsense! Probably why you are not a politician!
You omitted to mention that a teacher on the lowest pay scale has to contribute 8.4% of gross earnings into their pension scheme but the employer has to contribute 28.8% into the pension scheme.
Therefore irrespective of teachers pay scales the employer ie: Joe and Josephine Public via taxes will always be in debt to fund the pensions of teachers. Consequently in this instance pay rises will not pay for themselves nor cover costs.
Well Colin I’m Joe Public and I have no problem with funding teachers,NHS etc,people who enrich society. If they receive a good pension and you don’t,it doesn’t mean they shouldn’t.We should all be given a decent pension.
@@johnmulligan912i like the French system a bit more tax but you get three times the UK amount and retire at 60.
@@johnmulligan912
I did not say nor infer teachers and NHS staff should not receive a pay rise. The central thrust of my post is that public sector pay rises cannot pay for themselves.
What I do find disappointing is that the first duty of government is the defence and welfare of the people. ( Note the order of wording ) Why are our armed forces personnel being excluded from this round of pay rises? Is a soldier on front line duty or being exposed to serious harm less worthy than a teacher or a nurse?
You seem to have forgot; in your example, you make no mention the fact, that well educated people, make a very large contributions to the state purse. The product that a teacher provides is education. And the result of that product; is many fold. So your argument is a bit thin. If a teacher, in the course of his/hers teaching career, produce 200 well-educated persons, of which; all are in well paid employment, then the pensions pay to teachers by the state, is negligible. And the same goes for the NHS, the quicker they treat patients, the quicker they can retune to employment.
@@johnmulligan912 I regret to say that we have to wonder to what extent our Teaching System and NHS DOES 'enrich' our society . The NHS has some of the worst 'outcomes' in the Western World (despite being the biggest Employer in the whole of Europe), and our Education system now teaches teenagers how to FEEL, not how to THINK. The young adults coming out of the British Education system are unprepared for the outside world, emotionally or cerebrally. Both need wholesale reform.
I have been saying this for years… conflating public and private sector pay rises is like comparing apples to pears. Could I also suggest that, as all these employees also pay into pensions (actually superannuation) the government gains even more… as this will delay the point when the government has to make up the shortfall caused by the demographic balance shifting further and further towards retired public sector workers.
yebbut, unfortunately the pay increase 'money' will be borrowed from the banks with interest added. Unless you accept the fact that governments can create as much new money as they need. Then it actually all makes sense.
Good news for workers in important areas which we all benefit from. However, can someone explain to me why the £22 billion 'black hole in public finances is, erm, 'black'? Can they not list the areas where this cash went to because it certainly didn't seem to end up in areas that Reeves is going to apply cuts to such as public infrastructure. How is it possible for a government to create a 'black hole' in finances. Is there no concept of fiduciary duty, transparency and oversight by government regulators to prevent this seedy state of affairs? Is it made possible by the very politicians who play with our public purse making sure legislation means they have cash-spend mechanisms in place that allows them to hide where large amounts of money go?
This will increase inflation.
The same logic applies to tax cuts especially to the low paid, in that they go out and spend it generating economic activity and taxes
Tax cuts for the low paid both private & public sector would seem a more equitable use of the money
(public sector wages are already higher than private sector ones especially when the generous pensions are considered)
Hi Richard Murphy, thank you for doing this but there is one issue that I feel I must take with your statements. A pay increase of five percent is very far below the total inflation of the last ten years, even if the correct amount was offered it would not have any adverse effect on the real economy, pretty much all of the increased pay would all go straight back into the economy where nearly every transaction embodies some level of taxation all well as the direct income tax. This significant part of indirect taxation, VAT in particular is that it is levied on every transaction in the economic cycle, all the cash spent by workers changes hands several times each week.
The fact that much of this is not included in the current economic model while all the money wasted on speculative gambling is counted as 'productivity', speaks only to the systemic corruption embedded in the current economic modelling.
Cheers, Richard.
I’ve always thought that everything is tax ;)
You cannot expect a bunch of Bon Hayek’s devotees to be Abe to even conceive how the multiplier works…
5.5% rise .
Half of which is immediately clawed back in tax ,Nics and pension contributions.
Plus another 9% clawed back if they are repaying a student loan.
@@roberthuntley1090 Good point.
My son has an MSc and pays 51% in deductions on every £ earned over £27,295.
I never quite understand that if the average wage is £33k why student loans are repayable on salaries less than average. It's effectively saying get educated to get in debt for a below average pay job@@stephfoxwell4620
It's obscene the wages the CEOs get compared to the workers who actually do the work.
The pension cost to use your example is working life 46 years times two thirds times £100 = £3,067 so far from paying for itself it loads the state with huge off balance sheet liabilities
(It is only beneficial if you use the childlike cash accounting that governments use which is like saying I am better off as I didn't pay the credit card bill)
I wonder how their extra spending will contribute to inflation.
There are none so blind as those that do not wish to see, none so deaf as…. Politicians.
The top people in the NHS are paid very well it is nice to see some of the workers getting a raise. I retired 8 years ago a skilled worker on 13 pounds an hour Amazon pay that these days for packing boxes. Salary you have lost won't come back to you.
Clearly, accurately explained. Thanks
( I had to watch it twice though!)
Well why give it to them if they won’t be better off?
Just to put a couple of things into perspective...
And i agree with what you're saying, don't get me wrong.. but for most people £100 pay increase is £100 of extra gross pay. That's what most ppl would understand. Not the total cost to the employer.
You're coming at it from the employer's POV.
Most ppl don't really think about the employer's national insurance - which is not actually a cost to the employee.
So it does look a bit worse than it is - not much, but a bit.
The VAT bit - well .... VAT is a can of worms... so some things will have VAT going back to the government... others won't. So assuming the remainder goes to VATable expenses is optimistic considering most ppl have some debt and you'd hope that they buy the odd vegetable as opposed to ultra processed foods only.
So public service pay rises is like an economy stimulus package.
This is all convoluted. Taxes are purely inflation control, so aggregate tax levels need only to work to keep prices relatively stable. VAT needs to be scrapped for all things but luxury goods, it's a regressive tax. This is how you end up with 900000 page tax codes.
The multiplier effect, effectively....
Should have waited: 8.11 says it all. (1968 Economics A level)
Because public sector pensions are based on final salary, or average salary over the last few years, every time you give them an inflation-busting pay rise, that adds to the future liability for these pensions which is currently immense. Your calculations are ludicrous, and the same would apply if private sector workers were given similar pay rises. What is this unwritten rule that public sector pay should keep pace with inflation? Why doesn't it apply to everyone?
If you accept below inflation pay, you're accepting getting poorer. Why should anyone accept that?
I wish I had paid more attention to all this when I was younger Richard, I'm going to find my old pay slips.and look at them , all the double shifts I did ,and my pension is crap 😂 that's being a thicko .
So why didn’t the Tory’s do this??
They have just cancelled our new hospital. Disgusting labour.
What hospital is that? When was it cancelled?
What is the point of an economy that favours and serves only a few. I've a relatively stable job in the NHS , so i am in work and guess what I'm struggling to meet my commitments on a crappy salary . Decade upon decade of stagnation austerity... it really is pointless working to stand still. £100 pay rise is pathetic.
Upskill and get a better job.
How depressing 🙁
Teachers are already overworked and underpaid, so it's not only the pay rise required, it's a lot of new teachers required as well to share the workload.
Measuring teacher "productivity" is basically impossible. How does an inspectorate determine the "effectiveness" of a teacher when the learner's entire sociohistorical world contributes to their outcomes, i.e. not just _a_ teacher, but _all_ their teachers, their peers, their home environment, their this their that, even their parents' backgrounds and so on - including teacher factors, learner factors, and contextual factors?
To get any sort of valid measure of how effective a teacher is requires a lot of resources and will never be a straightforward accounting of student test scores - if any measure amounts to outcomes achieved in standardised tests, then we can safely say it's a meaningless number.
... thus inadvertantly proving we're being taxed far,far too much!
Most of the money will go towards rents and mortgages.
This moves money out of the system. Same as any money put in an ISA or saved.
If this logoc worked, nobody would object to pay rises.
If it gives in to pay rise to nurses and junior doctors, everyone else goes straight on strike.
Brilliant video
5% IS THE LEAST THEY CAN DO, it should be at least double! They have fallen behind on important pay rises and it would more than pay for itself as u say - in a myriad of ways it would uplift many minor unrecognised aspects of many ppls lives & the economy! Fuck trickle down economics qe for the poor not the banksters!
Next week, the perpetual motion machine...
The one they've got hooked-up the printing press? ; )
@@Nick3DvB Hold on tightly to your wheelbarrow ; )
And when it doesn't we revoke the increase. We cut pay, and use that money to employ and train more staff.
There are tens of thousands of vacant posts, if you cut pay you will not employ anyone.
Money,money,money. Slush fund money sent overseas would more than solve these problems.
Didn't you know there's this thing known as money trees but, and there is a but. It only exists to politicians. In reality we know it as tax payers in short US.
@@geoffwright9570And didn’t you know,Tax is theft.
@@Ozman676tax is paying your fair share. Are you American?
If the private sector sees the public sector getting pay rise, then they will also ask for the rises. This closes businesses and leads to redundancies.
Why would the first happen?
@keithparker1346 Envy. Keeping up with the Jones. Private sector would not wish to fall behind.
Why would they accept below inflation wages while the public sector are getting their demands met. Tik always follows Tok.
@@paulgibbons2320 similar private sector employees are typically paid more than public sector it's why doctors and nurses leave
@keithparker1346 These people are motivated by money they like been paid more. They don't want to see the gap closing, or they would be better off in the public sector.
Never under estimate greed. It's a universal constant.
@@paulgibbons2320 so they'd want OTHER people earning less money?
An interesting take, but there are some flaws in the argument. Let's take an NHS nurse as an example. Although employer's NI and employer's pension contributions are paid by the Trust employer, unless they are funded by increased govt payments to the trust, the cash-strapped Trust will need to fund these payments and potentially employ fewer staff as a result. Employers NI is 13.8% and the Trust's pension contribution is currently 14.38%. So each £100 pay increase effectively costs £128.18.
Also, the 20% VAT paid on goods and services is not wholly passed to the Government. VAT paid by the retailer/service provider on, for example, the cost of buying in the goods to be sold, or the raw materials used to manufacture the goods, is netted off first.
So the general point re a NHS payrise of £100 not costing the Government £100 is sound, but the calculations used in this video are flawed.
Great. We should give everyone a pay rise then. Wonder what the long term effect would be on inflation, mortgages etc.
Yeah , but giving away £600 billions to rich mates didn't cause inflation.. it's only when working class gets £100 extra, that's causing inflation...
@@Stefano-o5f it was just a question Steven. Back you go in your box.
Giving state employed; a pay rise, doesn't cause inflation - because their services are free at the point of use.
Remember these people providing vital public services have not had a decent rise in years. Some are using food banks
@@dominic8218 the answer is this: giving away to the rich cause inflation because they don't spend it on physical goods, they just send it offshore to tax havens. Giving money to working class doesn't increase inflation because they will spend it which will translate to more business, more jobs. Stop watching GB news mate even if that's all you can understand.
It all makes sense. But to reduce productivity to a simple matter of students per teacher or patients per nurse is crazy. We all know every organisation has unnecessary activity or functions that could be improved.
And the pensions, which you deliberately didn't mention, take over 30% in money paid back to the government to pay for teachers pensions. As private schools are also included in the teachers pensions scheme, some of the extra pay private school teachers will get to compensate their wages in relation to public sector teachers, will also go to the government!
It won't
You were wrong thankfully
Surprised as this is a bit flawed. Employers NIC, (E'rs), is a cost to the employer not the employee. So add that E'rs NIC of £12.13 back to the £87.87 and give it back to the employee. Ironically, this, infamous, tax on jobs, will in the case of public sector pay rises, not come from commercial profits made in the private sector, but paradoxically, straight from the government to fund yet again. Surely? So a straight forward government tax, imposed on government jobs, (public sector) requiring a budget for additional funding. Obviously whatever consumer spending goes on after basic rate income tax will be subject to both value added and indirect taxes on utilities & vehicles, enriching the government's coffers, I agree. Stimulating the economy. However I take issue that E'rs NIC will pay for itself in the public sector. Private yes.
Leaving out the future pensions liabilities makes this overly simplistic video even more laughable. Why not use your undoubted economic acuity to examine the effects of public sector pensions apartheid over the last 25 years. Take, for example, how much a nurse working in the private sector would have to contribute to their DC pension pot to achieve the same index-linked future retirement income as a nurse doing the same job on the same pay, but in the public sector gold plated DB scheme. (Last time I tried the calculation it was about 4 times as much) The difference is iniquitous and equally applies to the majority suffering in the private sector. Also the idea of general pay rises to keep wages up with inflation, without some sort of promotion or productivity increase hasn’t been seen in the private sector since just after the millennium. How are these still justified in the public sector, and how is it justifiable that my taxes (on the wealth I have had to create to fund the pensions apartheid gap) will be increased to pay for these?
Not fully correct. You suggest the employers NI is for free. The Govt could forego this so it stays in the hospitals, schools etc for investment. However it collects this. Though the staff get a pay rise, the hospitals, schools are worse off as they have to pay it without any increase in budget. It is going to be spanked on Ukraine, Illegal migrants, and the economically (some may call them layabouts).
Perhaps we should have the govt actively helping people claim the £19billion in unclaimed benefits
Yes and No. A lot of the NHS workers are foreign nationals/dual foreign nationals/former foreign nationals who send money to foreign countries and the minute that money leaves the UK that is the end of any UK taxation on that money. Annual foreign remittances are not small. The also consider that part of the NHS problem is not enough Doctors and Nurses so the higher salaries increase the cost of trying to employ more staff.
The logic of income tax is so that the Government has it's finger at every point in the financial transfer chain. If you want to get economic growth then scrap income tax altogether and increase VAT and close VAT loopholes. Scrapping income tax will save the Government a large amount on an inefficient Income Tax department and people will feel like that have more money without having given anybody a a pay rise and "parasite tax" schemes wealthy people "legally" use to "avoid" income tax will disappear because there will be no benefit to using them. No Income Tax.....I promise that a lot of the currently unemployed will suddenly start working.
We know how you like full financial disclosure. When are you going to make a video criticising Labour for failing to disclose the identities of the secretive “West Midlands Breakfast Club”, that contributed £130,530to the Labour Party prior to the election? Should we know who is making huge contributions and buying influence?
Except it is fully funded. So learn to stop spreading misinformation
The government understands this but by not giving the pay raise they can inflict more misery on the workers that’s the goal.Billions for the Ukraine hundreds of billions for pandemic not a problem