From the TUC

Have the Taxpayers’ Alliance messed up?

20 Nov 2009, by Guest in Economics, International, Politics

The Taxpayers’ Alliance may finally have over-reached themselves.  They have just launched a cinema advert claiming the EU costs each UK citizen £2,000 per year.  As Left Foot Forward show, the actual figure is £15 per year according to the EU Budget.  That’s not a typo: the TPA are genuinely claiming that each UK taxpayer pays £1,985 more than the figure stated by the EU. 

Left Foot Forward are asking people to complain to the Advertising Standards Authority here.  It would be great if the TPA’s rather, shall we say, ‘relaxed’ approach to fiscal data got a formal rap but I think hitching themselves so closely and publicly to a cause beloved of the hard right reveals to everyone where they really stand.  It is also worth noting that the advert  (rather subliminally) includes a clip of Gordon Brown stating that the “UK benefits from EU membership” while an anxious taxpayer looks at the bill from the EU.  And there was I believing the TPA didn’t get involved in party politics.

Of course, none of this will make any difference to their high profile in the right wing press but it does make it ever more difficult for reputable and unbiased media sources to use them as a neutral voice.  As the Other Taxpayers’ Alliance pointed-out a couple of weeks ago, the BBC seem to be getting increasingly wary of the TPA.

It all points to a paradox in the TPA strategy: as their profile and their confidence grows, the more people (and journalists) become aware of who they really are.  As a result, it becomes more difficult for them to pull off the trick of claiming to be the disinterested voice of the ordinary taxpayer.  You can fool some of the people some of the time etc…

17 Responses to Have the Taxpayers’ Alliance messed up?

  1. Tax Research UK » The Taxpayer’s Alliance – out by a factor of 133
    Nov 21st 2009, 6:50 pm

    […] this blog originally on the Touchstone blog by Adam Lent but too good to […]

  2. The Taxpayer’s Alliance – out by a factor of 133 | called2account
    Nov 22nd 2009, 12:40 am

    […] this blog originally on the Touchstone blog by Adam Lent but too good to […]

  3. Georges
    Nov 22nd 2009, 2:11 am

    The Taxpayers’ Alliance may finally have over-reached themselves.

    Probably not. Assuming the post above to be correct, it is rather small beer compared to some real whoppers found on-line in the recent past.

    For instance, not long ago there was a tract which proved to be so spectacularly wrong it is amazing it was ever published. The methodology of the tract was the absolute worst pablum to be found. Naturally the report based upon the hyper-flawed methodology was equally wrong on all accounts.

    Still, the publication of this tract did not seem to hamper its authors access to the media. Perhaps TUC is familiar with the tract I am speaking of, “The Missing Billions”.

    Ever heard of it?

    Georges

  4. Tim Worstall
    Nov 22nd 2009, 10:17 am

    “The Taxpayers’ Alliance may finally have over-reached themselves. They have just launched a cinema advert claiming the EU costs each UK citizen £2,000 per year. As Left Foot Forward show, the actual figure is £15 per year according to the EU Budget.”

    Oh come along Adam, even you know that those two figures represent entirely different things.

    EU budget figures are what is paid over, (nett of course) in cash.

    But the true cost of an activity is not what is paid over in cash now, is it? We all agree that this is so: there are externalities. That’s exactly what we’re all screaming about with CO2 for example: the costs of CO2 pollution are not currently included in the cash that people hand over for a specific activity.

    So, we need to look to the economist’s definition of cost: the cost of something is what you have to give up to get it (and yes, you’re an economist, you know about things like opportunity costs).

    Just as one example, CAP raises the cost of food within the EU. The usual number bandied about is £25 per week for a family of four. This does not go through the EU budget of course (only the direct subsidies do) but it is most certainly a cost bourne by the citizenry for the glories of this EU system.

    So clearly the cost of the EU, just from this one example, is higher than the £15 a year per head claimed above.

    Might I make a little suggestion? If you’re going to pose as an economist, even for the TUC, you try to remember what you were taught in those economics classes I assume you must have attended those years ago?

  5. Adam Lent

    Adam Lent
    Nov 22nd 2009, 10:17 am

    Georges, you may not know that Deloitte recently stated:

    “We have reviewed attempts to quantify the UK “tax gap” relating to corporation tax. There have been a number of studies in this area, but few deal with the loss of tax to the UK specifically, and none of those we have identified directly addresses the contribution of the Crown Dependencies and Overseas Territories to the UK corporate “tax gap”. For our assessment, we have built on the approach adopted in the TUC’s 2008 pamphlet “The Missing Billions: the UK tax gap””

    We take that as significant endorsement of the methodology used, especially as Deloitte had previously been a strong critic of the report. However, Deloitte only applied the approach to the recent tumultous period in the financial sector and so came up with results we felt were unrepresentative .

  6. Adam Lent

    Adam Lent
    Nov 22nd 2009, 10:25 am

    Tim,

    I am aware of the extra costs you note and don’t dispute their existence and nor do I deny them in my post. There are, of course, also a whole range of benefits from membership of the EU we need to take into account. But I am afraid the notion that the EU costs each UK taxpayer £1,985 more than the cash contribution seems pretty unlikely when all the costs and benefits are taken into account.

    Anyhow, the TPA advert gives the distinct impression that the £2,000 figure is real money being handed over: after all, it has images of foreigners literally kissing their undeserved Euros. Pretty vulgar stuff.

  7. Tim Worstall
    Nov 22nd 2009, 10:28 am

    “We take that as significant endorsement of the methodology used, ”

    Snigger. The Deloitte report specifically (and accurately) skewers the methodology of the report on exactly the same grounds that I did: Murphy looks at headline rates and rates paid and then assumes (after a bit of hand waving) that all is to do with either avoidance or evasion.

    He completely ignores the way in which some of that gap will come from companies doing exactly what Parliament has asked them to do: take advantage of the R&D tax credit for example, or training credits and all the rest of it.

    Murphy’s methodology has a great gaping hole in it which anyone who actually reads the report notices immediately. He is lumping together those conforming to Parliament’s specific wishes with those trying to dodge those same specific wishes. A point which Murphy gets very touchy about when it’s put to him.

  8. Tim Worstall
    Nov 22nd 2009, 10:32 am

    “I am aware of the extra costs you note and don’t dispute their existence and nor do I deny them in my post. There are, of course, also a whole range of benefits from membership of the EU we need to take into account.”

    Excellent, let’s do it then! Let’s have a proper cost benefit analysis of the UK’s membership of the EU. Not a partial or slanted one, let’s really do it! As all sorts of people, UKIP, Bruges Group, Patrick Minford, Gerard Batten, me, (there is of course some overlap there) Uncle Tom Cobbley and all have been asking for for years.

    If the nett value of belonging is so obvious then it’s really rather hard to understand why no one has been willing to provide and official cba, isn’t it?

    One might even begin to suspect that the result isn’t in fact as favourable as some bluster it is.

  9. Georges
    Nov 22nd 2009, 3:28 pm

    Adam,

    Thanks for the reply. Not much to add to Tim’s prescient reply above. For those interested in what Deloitte actually had to say:

    http://www.hm-treasury.gov.uk/d/foot_review_deloitte.pdf

    The very same Deloitte decried as “international tax avoiders” by the TUCs allies on this issue:

    http://www.taxresearch.org.uk/Blog/2009/10/29/why-ask-deloitte/

    Consistency alert.

    Georges

  10. Adam Lent

    Adam Lent
    Nov 22nd 2009, 5:04 pm

    Georges, Tim,

    I’m sure Richard will reply in his own style when he catches sight of those comments!

    I’m not sure the charge of inconsistency stands. Surely one is allowed to crow when a fierce critic adopts your approach. The political parties do it all the time. Admittedly not the finest guide to honourable behaviour.

    On a CBA on the membership of the EU: I certainly can’t claim to be an expert on the EU debate but isn’t it the case that many of the costs and many of the benefits claimed for the Union by its supporters and detractors are unquantifiable? Can you put a clear figure on issues such as national autonomy or peaceful conflict resolution?

    A CBA could be done but I doubt it would resolve that much or produce a particularly meaningful conclusion.

  11. Tim Worstall
    Nov 22nd 2009, 5:13 pm

    “A CBA could be done but I doubt it would resolve that much or produce a particularly meaningful conclusion.”

    If we cannot do a CBA then of course we have no way of knowing whether we’ve made the right decision, do we?

    As to Richard, I doubt it. He’s known of, read and understood my critique these past 6 months and not a coherent peep from him as yet. Just handwaving that I’m some ghastly right winger who eats babies.

  12. Adam Lent

    Adam Lent
    Nov 22nd 2009, 5:36 pm

    I guess we never will know for sure whether we’ve made the right decision on something as complex as the EU. We fill in the gaps that can’t be covered by a CBA with things like irreducible principles, unverifiable judgements and a little bit of old-fashioned prejudice (on both sides). Unfortunately, those gaps probably matter more than the pure pounds and pence in the end. Lummy, from the TPA to the philosophy of cost benefit analysis in one comment thread! The ridiculous to the sublime (alright, not that sublime).

  13. Georges
    Nov 23rd 2009, 2:15 pm

    Adam,

    Thanks for being a sporting host.

    Do you think we should wait around for Richard to reply -or- is the thread now over?

    Georges

  14. Adam Lent

    Adam Lent
    Nov 23rd 2009, 2:55 pm

    Thanks, Georges. Richard Murphy is definitely planning a reply, he tells me, but I think we’ll either post it on Touchstone as a guest post and/or on his Tax Research blog as this particular thread will be off the front page pretty soon, I think.

  15. Georges
    Nov 23rd 2009, 3:34 pm

    Thanks Adam!

    on his Tax Research blog

    In other words, a one-sided conversation.

    :-)

    Georges

  16. Richard Murphy
    Nov 23rd 2009, 6:41 pm

    Georges

    So unkind of you

    More than 50 comments on one recent thread

    And there is SO much wrong with the Deloittes report, starting from their simple professional failure to disclose their massive conflicts of interest, to wondering why they even chose to comment on The Missing Billions when, as they noted, it made almost no reference to the CDs and Overseas Territories on which they were meant to be reporting to their gross abuse of the methodology and much, much more, a full reply will take a little while

    But it will come – I promise

    Richard

    http://www.taxresearch.org.uk/blog

  17. Georges
    Nov 26th 2009, 6:18 pm

    Richard,

    Of course. Deleting so many comments which disprove your “case” can get quite tiring I am sure.

    Speaking of, one assumes your full reply (odd, one would think the author of a ‘report’ like the Missing Billions would be able to readily and quickly defend their ‘methodology’) will be posted on the TR-UK website? Better to control/censor the debate whence the ‘logic’ is shown as flawed yet again?

    Georges