Where are all the tax revenues going?

Apologies the 38% debt figure was 2005 data it is currently running at 85% GDP!!

daphnedill you quoted pensions as a % of GDP, I do understand GDP and know that our national debt accounts for around 38% of GDP, one of the highest in the world.

From a Telegraph article on the history of govt. pensions:
"Second Age: pensions start to grow up

The modern universal compulsory state pension did not arrive with its "shining morning face" until 1948. The 1942 Beveridge Report envisaged a social insurance scheme, designed not to provide a comfortable income in retirement, but a safety net against destitution.

However, as a report from the Institute of Fiscal Studies (IFS) points out, the insurance-based system envisaged by Beveridge was never implemented, because it could not provide for the millions of older workers, many of whom had fought in two world wars. It failed to offer them sufficient time to build up a fund for themselves. "
So the National Insurance contributions that we paid when working weren't really insurance, they went into the govt. coffers and were used for many other things.

I don't think it matters where pensions appear on the government's balance sheet. The figures are still the same. I suspect the government includes them there so it can quote an astronomically high figure for 'social spending', as Stephen Crabb has done just recently.

Before the last election, the Conservatives said they were going to reduce the welfare bill by £12 billion, which looked like a saving of about 6%. However, the actual cuts to non-pension benefits have been more than double that, because the total figure included pensions, which are ring-fenced.

I would be quite interested to know how National Insurance income is actually distributed. NI was originally supposed to cover pensions, health, unemployment and all other benefits such as child benefit/family allowance. Governments have always been very cagey about publishing those figures.

I don't understand this sentence

"Therefore I think that pensions should not be included as a welfare payment and not be charged against GDP as it negatively biases the figures."

GDP doesn't pay for pensions - taxes and NI do. Where do you think the money should come from? Pensions have never been put in a fund like insurance contributions. There is virtually no correlation between what people receive and what they've paid in. There is NO fund apart from what current taxpayers contribute.

I am not trying to be antagonistic daphnedill I do appreciate and am enjoying your informative input.
As you mention pensions have been ring fenced. Do you think that pensions should be included as part of welfare payments?
My thoughts are that they should not as essentially a pension (for those who worked) is the same as an insurance policy (hence National Insurance), that you pay premiums into, others contributing may benefit, but at the end of the day when you need to make a claim it is there for you.
If such as flood victims claims for insurance were rejected on the basis that their premiums had been paid out to previous claimants there would be outrage, I wonder why it seems to be a theme to some that today's pensioners are not entitled?
Therefore I think that pensions should not be included as a welfare payment and not be charged against GDP as it negatively biases the figures.

JN, I don't think I've made any judgements about whether it's right or not to spend more on the elderly, but the fact is that's where much of the money is going.

Here are some facts:

1 Public spending as a % of GDP has remained relatively stable since the end of WW2.

2 Non-pension social spending has fluctuated since 1970, but is now back to the level of the late 1960s/early 1970s. Ironically, it peaked during the Thatcher years.

3 Defence spending has remained relatively stable throughout the 20th century and early 21st century (apart from both world wars) and is declining.

4 Here are some figures for the cost of the state pension as a % of GDP:

1921 - 2.25%
1945 - 2.2%
1961 - 3'1%
1968 '- 3.9%
1973 - 4%
1981 - 5%
1993 - 5.2%
1998 - 6%
2001 - 7%
2010 - 8%
2013 - 8.8%

5 Apart from social care, the other area where public spending has increased dramatically is healthcare. Average spending for retired households is nearly double that for non-retired households: in 2007/08 the average value of NHS services for retired households was £5,200 compared with £2,800 for non-retired. The Department of Health estimates that the average cost of providing hospital and community health services for a person aged 85 years or more is around three times greater than for a person aged 65 to 74 years.

www.ukpublicspending.co.uk/past_spending

The point I'm trying to make is that if we want to spend money on healthcare and pensions, somebody has to pay for it. Either we could increase GDP, but unfortunately the global financial situation and a policy of austerity has killed that or we could tax people more according to their means, but we've seen a policy of taxing wealthier people less. Therefore, the only possible outcome is to cut public services. Pensions have been ring-fenced, so the cuts have had to be made elsewhere - hence all the cuts to libraries, social care, day centres, Sure Start, subsidised leisure centres, etc etc. This, of course, affects poorer pensioners more than wealthier ones, so it's not just a young versus elderly issue, but poor versus rich.

Thank you daphnedill
Yes, I agree to differ and accept your evidence which is probably correct, however in addition to statistical evidence (easily manipulated) I do also look at the indirect benefit to the economy that older people contribute, all the childcare, all of the voluntary work, all of the 'bank of mum and dad' all of the tax on savings the list is almost endless.
All of these contributions are never evaluated in financial terms and factored into statistics, we generally are only made aware of the cost and not the benefit of the ageing population.

We'll have to agree to differ then, but the facts are there. The state pension and benefits for the elderly take a higher percentage of the national income than they ever have. The fact that the elderly are fitter and more active (and not dead) is because they have better healthcare than ever before, but at a cost.

My grandparents died when they got old and ill. Neither of my grandfathers reached pension age. My mother is still alive, but she costs the NHS a fortune, as did my father in the years before his death.

Thanks Daphnedill I agree that those who are/will benefit from privatisation are the ones who are driving policy nowadays.
I still disagree about ageing impact. I am sure that this is political spin. The elderly are healthier, fitter and more contributory to society than ever before. We just have to look at our peers and elders to know we are nothing like our parents in terms of being elderly and burdensome on society (not that my parents were).

I think you'd find your part of your answer if you looked at the distribution of wealth and increasing inequality between 'haves' and 'have nots'. Some people have become very rich from providing the services which were once provided by the state.

The other issue, which I've already mentioned, is that we have an increasing number of elderly, who cost the country a lot. Sorry, but that's a fact and the country needs to pay for social care if that's what it wants. The country is trying to do more with the same amount of money.

Nonnie for many years all students have been indoctrinated with the practice of 'reflection' reviewing what happened, what was good and bad and are told they must always use this to inform their future actions. I am not bemoaning the good old times.
It seems to me that in politics the dogma of reflection is kicked into the waste bin by MPs as soon as they graduate and they adopt a very introspective perspective as we appear as a nation to be barrelling forward into an American styled social and healthcare system where the majority of bankruptcies are as a result of healthcare payments and ambulances ask for proof of insurance before they will transport you.
Additionally many MPs purport to 'send troops in' without reflecting on previous conflicts or even understanding differing global cultural mechanics.
My initial question was why are we still being taxed (directly and indirectly) so heavily when the services that we are paying this tax for are disappearing..

I've just seen in the thread on DJen for PM that we've already got a Gran's cabinet
on here! Dozey.

Never been actively involved but have shouted at the radio a lot! Can we just elect whoever has common sense? Not much of it about.

I would have done 20 - 30 years ago .
When I was actively involved in politics.

Are you volunteering Tricia?

Maybe just a female Chancellor of the Exchequer for a start?

I'm not so sure that women would always make better leaders. However, I do think that what are considered to be 'female' qualities are often underrated as leadership qualities.

Having watched the latest PMQs, I agree with you about addressing issues and not attacking the person.

daphnedill - your last post:
I'm sure we women could make a much better job of running the country than the current lot, or the previous lot come to that. And finances would be in order and the budget would balance.
For a start we wouldn't get drawn into expensive pointless wars, think how much that would save. And I don't think there would be so much time wasted on the oneupmanship that men seem to enjoy so much, attacking the person not the idea. (though it does happen on here occasionally.)
I wonder if it will ever happen?

JN, I know I could never vote for the Conservatives or UKIP, because both believe in a 'small state'. They don't believe that the wealthy should pay for the more vulnerable and poorer people through a nationalised tax and insurance system. They really don't believe in a society.

I have voted in every single election since I was old enough to vote and have never bought into any political party's policies wholesale, which is why (sad person that I am), I've read every manifesto and made a list of pros and cons. I've done the same with the referendum.

The area I know most about is schools and I know that I could deliver a higher quality of education with the same money, but it's not through academies or free schools or any other tinkering around with structures and exams.

I assume by 'poor workshy' you mean the unemployed. I agree. The unemployed actually receive a very small percentage of the nation's income. What's more, most unemployed have at some stage worked and paid tax and NI, so have paid for their unemployment benefits. It wouldn't surprise me if the Work Programme providers receive more than the unemployed themselves. We don't pay a huge percentage for PFI repayments either. The figures have been posted on here. You can see for yourself how the government spends its income.

Is it time for us to start looking forward instead of back? We can't change the past but can have an effect on the future. So many governments have done things which I thought were bad at the time and many more which, in retrospect, were wrong but there is little point in bemoaning what we cannot change, simply learn from it and move on.

One of the reasons we have bad policies is short term thinking which may be inevitable when a government can only be sure of being in power for 5 years. After a while voters believe that a change of government will give them what they want and that is what we get, good or bad.

Started with Thatcher - selling family silver that is

Daphnedill I really don't know how to vote as I am confused about how we have allowed this to happen on our watch. I doubt our grandchildren will have much to thank us for in terms of a decent country to live in.

MOnica I do understand privatisation and the business models that drive this concept, and I do know that this and previous governments have bought heavily into privatisation in terms of buy now pay later. Recent years has brought of flurry of purchases on a similar basis as buying from the shop "Bright House" where you buy on credit and pay three times as much for the item. It is the poor that suffer. Apart from never owning these assets we are now paying tax to fund the exhorbitant repayments, whilst being fed the line that all our taxes are going to the rich pensioners or the poor work shy.
We are paying for privatised services with little accountability that are poorer and cost more and we seem somewhat resigned either by blind faith or apathy or inevitability to this. I have American friends aghast at the nation allowing the destruction of the NHS knowing what a privatised service means to them.

JN, You're quite correct. The country has been asset-stripped and the wealth is in the hands of UK and foreign investors. I trust you won't be voting Conservative or UKIP, because that's what they want to encourage.