Monday, April 17, 2006

Spare Those Nurses!

Politicians are forever telling us we can't have lower taxes because we'd have to sack thousands of nurses and teachers, or watch OAPs freeze to death. We all know it's self-serving rubbish of course, but the facts aren't always readily to hand. So as a special Easter treat, here are a few of them to commit to memory.

This year the government plans to spend £559bn of our money- no less than 43.7% of our incomes (Budget Report, chapter C, tables C4 and C5).

How much of that actually goes on nurses? According to the Department of Health, the NHS employs approximately 400,000 nurses of all kinds, and Gordo says their average salary is going up this year to £28,400. Obviously that will be wildly spun exaggeration, but even taken at face value, it implies a pay bill of only £11bn pa. A mere 2% of total public spending.

Teachers? According to the ONS there are about 500,000 teachers in UK state schools, each earning about £30,000 pa. Which implies an annual salary bill of about £15bn...3% of total public spending.

So even if we took all our nurses and all our teachers off the table, that would still leave 95% of public spending open for cuts.

Ah you say, what about those freezing OAPs? The Turner Commission reckoned that including everything from the basic state pension to all those Gordo means tested credits, we're currently spending about £75bn on OAP incomes. Clearly a bigger ticket item, but still only some 13% of total public spending.

The truth is that, when you actually go through the numbers, even if you add together all the headline items politicians always wave around to explain why we can't have lower taxes, they still don't come to anything like the whole of public spending. Maybe a third at most.

So if it's not nurses, teachers, or OAPs, what's in the other two-thirds? And how can we cut it?

Tomorrow we'll look at the one-third of spending the government splashes around among its chosen commercial suppliers.

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