Joe Innes

A collection of 4 posts

Now for real: The UK Tax System Explained in Beer

An article posted on LinkedIn has been gaining popularity as a simplified explanation of the UK tax system. At first glance, it seems quite interesting and well thought through, so I did some fact checking. This is what it really looks like.

Suppose that once a week, ten men go out for beer. The bill for all ten comes to £288.

If they paid their bill the way we pay our taxes, it would go something like this: -

  • The richest man earns £781 per week.
  • The second richest two men earn about £3.80 each.
  • The next richest three men earn about £2.45 each.
  • The next richest two men earn about £1.75 each.
  • The poorest two men earn about £1.25 each.

The richest man shouts ‘The fairest way is to split it ten ways — everyone pays £2.80!’

He’s outvoted by the other nine men. They decide that the fairest way is to divide the bill proportionately based on income. The combined earnings at the table are about £800. Based on this, they came up with the following:

  • £781/£800 = 98%, so the richest man paid £281.
  • £3.8/£800 = 0.4%, so the next richest two men should paid £1.36 each.
  • £2.45/£800 = 0.3% so the next three richest men paid 88p each
  • £1.75/£800 = 0.2%, so the next richest two men paid 63p each.
  • £1.25/£800 = 0.15%, so the poorest two men paid 45p each.

So, that’s what they decided to do. At the end of the week, each man looked in his wallet.

  • The rich man found he had £500 in his wallet.
  • The second richest two men had £2.44 each left.
  • The next three had £1.57 left each.
  • The second poorest two men each had £1.12.
  • The poorest two men were left with 80p each.

The next time they go to the pub, the poorest 9 guys say to the richest ‘Look, we could barely afford to eat last week — we need to come up with a fairer way to split it.’

The men worked on the back of napkins, and tried to come up with a system that left everyone with enough money to eat. In the end, they settled on the following:

  • The first and second would pay 4p each
  • The third and fourth would pay 14p each.
  • The fifth, sixth and seventh would pay 27p each.
  • The eighth and ninth would pay 52p each.
  • And the tenth man (the richest) would pay £286.

At the end of the week, each man looked in his wallet again.

  • The rich man found he had £495 in his wallet.
  • The second richest two men had £3.28 each left.
  • The next three had £2.18 left each.
  • The second poorest two men each had £1.61.
  • The poorest two men were left with £1.21 each.

The poorest two men were just about able to afford bread and cheese for their families. The second poorest were able to buy eggs. The next three could buy some ham to have with their bread, cheese, and eggs. The second richest two men could also buy some salad items.

The rich man complained about how unfair the tax system was.

And that, ladies and gentlemen, is how the tax system really works.


A Punch in the Teeth for UKIP and the Greens

If you voted for UKIP, I feel sorry for you. Politically, I’m so far way from you, you’d need a telescope to see me. Still, you deserve better representation.

I wrote a little calculator to show how powerful your vote was. Check it out below. Play with it. Go ahead, I’ll wait.

Summary:

Something is fundamentally wrong when one vote is worth 169 times more than another. But, if you voted for the Democratic Unionist Party, and your neighbour voted UKIP, your vote was that much stronger.

Over the coming weeks and months, you will see a whole host of articles with titles like ‘Who would have won under PR?’. They will recalculate votes share to show you a ‘proportional parliament’. I’m not about to do that, because the fact of the matter is that people would not have voted the same way. What I’m hoping to do is illustrate the unfairness in the system we use in the UK.

Who elects the government in the UK?

The UK is a representative democracy. That means that people influence the running of the country indirectly. This is a compromise, but generally speaking a fair one. If every single person had to vote on every single issue, then nothing would ever get done. So we elect people to vote for us, and a single person represents a large number of other people. This representative will vote on their behalf in parliament. There’s nothing particularly bad about this. It makes sense and means that the country can run effectively.

Each of these representatives can choose to give their allegiance to a political party. A party is a group of like-minded people who feel the same way about things. Party members are sometimes asked to vote in a different way to how they feel. They are paid back when others do the same on their behalf. For example, let’s imagine the following two proposals we have to vote on:

  • To remove January from the calendar, because it’s the most depressing month
  • To force the BBC to run a Breaking Bad marathon weekend three times a year

I love Breaking Bad. I think that the marathon idea is great, but I know that not everyone loves it as much as I do. But my birthday is in January, so I don’t find it depressing at all, so would vote to keep it. My friend John thinks Breaking Bad is kind of all right but would probably prefer people buy box sets. He hates January though. He thinks the idea of removing January from the calendar is great. John and I agree that we will both vote yes on both proposals. That way, we both get what we want in exchange for helping someone else get what they want.

A political party is this, on a larger scale. When a political party gets more than half of the representatives in parliament, they can form a government. If a party thinks they can, they can try form a government with fewer than half of the representatives in parliament. This is called a minority government. This is uncommon, but happens. The reason this is uncommon is because other parties will often group together. They can then form a majority. This results in bigger compromises than necessary in a majority government. This is known as a coalition.

All this seems pretty fair. So what’s good about the way the UK runs its elections?

Benefits of First Past The Post

As part of a fair commentary on the system, it is only reasonable to present its benefits. I mean, why would anyone have chosen the First Past The Post system in the first place? It’s in use in most places throughout the former British Empire. It does have some attractive features, a few of which are below.

First, majority governments are much more likely. This is potentially a good thing; coalition governments are often slow in making decisions. It’s also likely to produce a strong opposition, acting as a balancing force in parliament.

FPTP is also easy to understand, explain, and count. A child can understand the system, and results can be delivered quickly. Voters are unlikely to be confused.

Finally, under First Past The Post, extreme parties are much less likely to be able to build momentum.

So given all these positives, what’s the problem?

Local representation

The first problem is that the representatives are chosen based on geographical regions. Each representative (seat) is chosen to represent a group of people from a particular area of the country. This all but guarantees some people will not be represented. For example, Richmond in North Yorkshire was the safest Conservative seat at the 2010 election. They got the most votes by far, and have never lost this seat. At this election, the Tories lost 10% of the vote there to UKIP. They were still able to hold the seat with over 50% of the vote. There are clearly a lot of centre-right voters in Richmond. But, if I am a centre-left voter living in Richmond, who wants someone with similar views to me in parliament, I’m stuck. I can vote Labour in every election my entire life, and my voice will never be heard in parliament.

Additionally, votes from Tory supporters above the minimum level needed don’t matter.

Election methodology

The way that the local representatives are chosen is a unfair too. To win, you only have to have one more vote than the person who came second. While this seems fair, when you dig deeper, it becomes clear that this is not true. For example, lets imagine we have 13 representatives. Candidate 1 was born in January. To celebrate, they want to give everybody January off as paid holiday. Candidate 2 was born in February, and wants to do the same thing, except with February. So on through until December. Candidate 13, however, is a nasty person, and wants to increase the working week to 80 hours minimum.

It’s a constituency of 14 people, so when the election results come in, it’s easy to count. Each of the first twelve candidates get 1 vote each. Candidate 13 got two votes (probably the town’s two factory owners — it was a secret ballot, so we’ll never know for sure). Candidate 13 beat all the other 12 candidates, and so is the winner.

But wait, only 2 people voted to have the working week increased to 80 hours! The other 12 all voted to get a month off work! According to the way elections are run in the UK, tough.

The Inevitable Two Party State

Although First Past The Post encourages majorities and discourages extremists, it simplifies all elections into a left vs right debate. Voters have no way to control the drift of the country, and smaller parties get wiped out.

Lowest Common Denominator

First Past The Post is strongly biased towards the lowest common denominator. Almost no-one gets what they want, they get the most acceptable compromise. This is also known as the most broadly acceptable candidate. This is biased in favour of white men.

So how can we improve the current system? Isn’t this something that we could have fixed five years ago?

Electoral Reform Referendum

Five years ago, we had a referendum on electoral reform, and we voted against it. Many Conservatives and Labour supporters will highlight this as the electoral reform is discussed. But, AV only went a tiny way towards fixing the problems. Under AV, everyone in the example above would have had a week off work. This is clearly an improvement. However, imagine one more candidate standing who wants two months off work. Most people realise this is unsustainable, but would rather this than an 80 hour work week. As a result, they put him down as their last acceptable choice. Because he ends up getting all the ‘last acceptable choice’ votes, he ends up winning. AV is strongly biased towards ‘compromise candidates’, and still encourages tactical voting.

Single Transferable Vote

Many people who voted no in the AV referendum would have voted yes for Single Transferable Vote. STV is a proportional system, which would almost completely end tactical voting. Under STV, the number of representatives would increase, but almost no votes would be wasted. STV is basically the same as AV, except you have more than one winning candidate per constituency.

The way it works is simple: you rank candidates you want to win. You can also choose not to rank candidates if you don’t want them to win. If your first choice candidate has enough votes to win, your vote is reallocated to your second choice candidate. If your candidate has the least number of votes, then the same happens. This process is repeated until all the seats are filled. This still results in a few wasted votes (if you don’t vote for any of the winning candidates), but it is roughly proportional. It also keeps most of the key benefits of FPTP. For example, while majority governments are less likely, it encourages coalitions based on policies. This is more likely to reflect what the population generally think. For example, in a vote on staying in Europe, Conservatives, Labour, and Lib Dems would all want to stay. They would likely agree to work together to stop UKIP from pushing their agenda through.

eDemocracy

The real question that no-one is talking about though is why we are not moving with the times. In today’s world, I can take a quiz that tells me which Disney Princess I am, but I can’t express my opinion on a particular party policy. Given today’s technology it would be simple to build a platform to allow voters to express their opinions. Sensible limits could be set. For example if a million netizens express their disagreement with a Commons vote, it needs to be re-debated. If five million express disagreement, there needs to be a referendum. Parties could use the platform to understand how their voters feel about certain issues.

There are a small number of difficulties to overcome. For example, how can we ensure that each person gets only one vote? Maybe some form of two-factor authentication? A secret code sent via post to the voter’s registered address could work. How can we decide which of parliament’s hundreds of bills are opened up to netizen participation? Maybe bills where the percentage of voting MPs was higher than the most recent election’s voter turnout? This would indicate a heavily whipped vote. Or those on which the winning margin was small? That would indicate a particularly controversial topic.

Regardless, it seems sensible to bring society into the information age. Voters should have a real say on issues that affect them.

Whatever you think is the best way to reform the electoral system, none of the major parties are likely to care. FPTP benefits them, and so they are resistant to change.

If you think the scandal of wasted votes and huge disparity in voter power is a shameful reflection on our society, visit the Electoral Reform Society’s homepage. You can learn more about what alternatives there are and what you can do.


ASBO 2.0 Rejected—But the Problem Remains

The Ipnas were conceived to broaden the powers the police have to prevent annoying behaviour. That’s not a joke, by the way, it’s there in the name. The full name of the Ipnas was “Injunction to Prevent Nuisance and Annoyance”. Fortunately, the proposal was rejected by the House of Lords for being too far-reaching and not specific enough. After all, “nuisance” and “annoyance” are both very subjective terms, and are pretty low barriers.

While breaching an Ipna was not in itself a criminal offence, it carried a maximum prison sentence of two years. So, the current system remains, which everyone should be pleased about, right? Wrong. Asbos, which have made the press repeatedly in their sixteen years of existence, are hardly a fair alternative. There are numerous reasons Asbos represent a massive infringement on human rights. According to the law, an Asbo can be given for:

conduct which caused or was likely to cause harm, harassment, alarm or distress, to one or more persons not of the same household as him or herself and where an ASBO is seen as necessary to protect relevant persons from further anti-social acts by the defendant.

On first reading, this seems to be fair. But when you look at the laundry list of all the different things you can be given an Asbo for, it starts to look a little less reasonable. For example, Asbos have been given out for “loitering”, a useful term that allows anyone who spends any time in a specific place to be accused of some nefarious deed. One boy is forbidden from playing football in his street. An 87-year-old has been told he is no longer allowed to be sarcastic to his neighbours. Children as young as three have been threatened with Asbos for playing in the park near their houses.

Asbos can be given for practically any reason, and may require almost anything of the defendant (although to clarify, the defendant can only be told not to do something). On the other end of the scale, you can be given an Asbo for paedophilia. So why would Asbos be used for things like paedophilia when there are perfectly solid laws already on the books to combat them?

The answer lies in the manner in which they are given. They are issued by magistrates’ courts, and while they are supposed to try to the same standards of proof as a Crown court (ie: beyond reasonable doubt), magistrates are accustomed to hearing civil cases where the balance of probabilities is enough to find in favour of an applicant. It’s also possible to do away with that pesky jury that returns so many “not guilty” verdicts.

In fact, only 3% of Asbo applications are rejected. But the real problem with Asbos is that breaking an Asbo is a criminal offence, independently of what the Asbo was initially given for. For example, if the fifteen year old boy mentioned above decides to go for a kick about in his street, he has clearly and without question broken the law and can be sentenced to prison for breaching the terms of his Asbo. It’s easy to see how the police can use this to create new laws without any judicial oversight. All they need to do is issue an Asbo, and wait for it to be broken.

Which happens about 70% of the time nationally, although the figure reaches 90% in some areas. Asbos are a shortcut to turning otherwise law-abiding citizens into criminals, and a shortcut that needs serious re-examination. Let us not allow the recent rejection of the Ipnas distract us from the injustice and lack of due process Asbos represent.


No Benefits Please, We're British

I am, as are many others my age, in something of a pickle. I have just escaped the 18–25 age bracket, and almost simultaneously have found myself without a job.

Now, I’m not expecting sympathy and I’m not asking you to get out the chequebook. My prospects are relatively good and I’m fortunate enough to have a family who are financially solvent enough to support me. Because the government won’t.

Let me just talk you through my life for a few minutes to illustrate how ludicrous this is. I finished my GCSEs with good grades, and went on to achieve good grades at A-Level. I then went to a good university and earned a good degree. Then, I qualified as a teacher, and taught for a year in the UK, paying UK taxes. I then taught abroad for a year and a half, in Russia and France. Russia isn’t part of the EU, but in France I was paying taxes into the EU coffers. I’m an experienced, qualified professional, and I’m fairly confident I’ll be in work again within a month or two.

But right now, I have no income other than that which I can earn by doing odd jobs here and there. But it’s not like I’ve not paid any taxes. In fact, I’d wager that I’ve paid enough to cover my £71.70 for a good few years, and as soon as I’m back in work, I’ll continue to pay to support others. And yet, I’m not allowed to claim Jobseekers’ Allowance. And before you ask, yes, I am actively seeking employment. I’ve applied for a good fifty or so jobs in the past week, and am waiting to hear back.

What’s the problem then? Those bloody Romanians and Bulgarians coming and stealing our jobs? No, but ironically, it is because of them.

You see, David Cameron and co. at Tory HQ were so against our fellow Europeans coming over that they decided to make it as unattractive as possible, by passing a law saying that they couldn’t claim benefits for the first three months. This was where the problem came in because somebody pointed out to him (quite rightly) that the EU wouldn’t like this very much. So, the lawyers came up with a thinly disguised variation of the same law saying that anybody coming to the UK from an EU member state is not entitled to claim benefits until they have lived in the UK for three months.

While I’m sure the well-meaning Mr. Cameron would have loved to make an exception for those of us born in the UK, EU law is quite clear that you cannot treat EU member citizens any differently to your own citizens. And so the regulations are universal.

Despite being at the most financially vulnerable I have ever been, I am not entitled to claim any of the support that I am more than happy to fund through my tax contributions.

Please do not infer that this is somehow a rant against benefits and how much tax we all pay. I am, broadly speaking, a socialist, and believe in solid progressive taxation to enable us to look after those who need our support. Yet again, the government have opted to throw those who need the most support to the dogs.

Why shouldn’t we support Eastern European migrants who want to make a life for themselves here in the UK, when we have the luxury of outsourcing our manufacturing to them for minimal expense? The EU is an organisation that will only ever work if we are not allowed to pick and choose the bits we like. And yet that is exactly what we seem to be getting away with at the moment. Never mind the referendum on staying in the EU that’s potentially on the horizon following the next elections, if I were France or Germany, I’d be thinking hard about whether they actually want us to stay.

Read this post on Fortitude Magazine