22 March 2007

BBC Budget Calculator Needs Fixing

There has been a load of rubbish spouted by the MSM about this budget. Nick Robinson and Evan Davis on the Beeb's "expert blog" are amongst the worst. But the prize for the worst example of kindergarten incompetence is the BBC's budget calculator. Everyone's a winner, baby. They say that their calculator can not yet reflect the proposed changes to the income tax regime (why not?), but type in that you're earning £7k (in other words you will be paying tax at 20% instead of 10%) and it shows you as being £20 better off due to income tax!!! BBC lies or BBC incompetence. You decide.

22 comments:

Shotgun said...

The NIC issue will be the clincher in the coming weeks when people on 40k plus realise how they've been shafted.

Man in a shed said...

Looking at the source code for the page it seems kpmg were involved - I haven't been able to find the actual calculations yet.

Every year I'm supposed to be better of under Gordon Brown - so why do i have less money ?

Given the complexity of the budget and Gordon Brown famous disingenuous talents its , how can I put this, very brave of the BBC to put any form of calculation forward.

mutleythedog said...

Its quite incredible that the lowest income earners have been targetted - how is this supposed to encourage people back to work?

mutleythedog said...

A particularly nasty attack has been launched on my none-political blog by a blogger called Baby jesus b-jesus.blogspot.com - they are posting huge spams into my comments and effectively spoiling the blog. The nonce claims it is because I comment on The Hitch. Any ideas anyone?

Bel said...

Plain incompetence by the BBC, nothing less. And perhaps a willingness to believe whatever spin the Government puts on its figures.

mutleythedog said...

Fat lot of good you were!

Miles said...

Last night (Wed) and all day today (Thur) BBC Radio 5 Live have been pointing out that the low paid have been skewered.
It's a disgracefully regressive budget.
But I dion't see why people on £40k plus are whining about paying a bit more NI.
£40k is plenty.

Matt Dean said...

This latest BBC cock up reminds me of the BBC 1992 election coverage that was predicting a Labour government even as the Tory seats were rolling in. I prefer to think they tend to be more inept than biased most of the time.
www.mattdeansoton.blogspot.com

james higham said...

The upsetting thing for me in this budget was the attitude towards the small businessman.

Praguetory said...

Believe it or not, I agree Miles. It actually makes sense to me to align top rate tax and the NI threshold. As long as they are not small businessmen, high earners didn't do badly out of this budget.

Radders said...

I suspect its because the modeller is based on 07/08 tax year. The major changes are occuring in 08/09 (10p abolition, drop to 20p main rate etc).
07/08 mainly just has NI changes and 3.9% growth on the personal allowances.

Praguetory said...

As at yesterday, it was plain wrong no matter what way you cut it. Also, I must reiterate that the model says that it doesn't take into account proposed changes to income tax (so there should be no income tax effect in the model). Radders - aren't you involved with running Birmingham council finances?

Radders said...

Providing oversight, scrutinising and asking awkward questions of the finances and accts, rather than "running them".
As to the optimum income, I believe it is just above the revised NI max (so about 36k).
I still return to my point that this budget was largely about 08/09. The next chancellor of the exq has effectively had his hands tied by Gordon delivering his last budget.

Praguetory said...

Only joshing. The BBC "calculator" is a dog's breakfast and the fact that some people will have relied upon it irritates. I take your point re Brown not trusting his successor.

tory boys never grow up said...

Read what the label says - it calculates tax for 2007/08 - before the 10% band goes (it says that as well). Believe it or not - real people rather than political anoraks are probably interested in what happens to their tax bills in the immediate future.

Another example of paranoia about the BBC - didn't notice you complaining when the BBC News showed Stalin morphing into Gordon Brown - but I suppose that is balanced reporting in your eyes!

Praguetory said...

A budget tax calculator should reflect changes made in the budget. This didn't. I don't watch terrestrial TV, but I wouldn't have complained.

tory boys never grow up said...

The attack on the BBC on this is just plain silly - they do something that provides people with useful info about what will happen to their tax bills in 2007-08 - they make clear that the calculator does not cover subsequent years and you can hardly accuse them of hiding the 10% rate. To provide a calculator for 2008 and beyond would be meaningless since not all the tax details are known for that year - I can predict with some confidence there will be changes in next years budget.

I suppose that you wouldn't object to the BBC showing a picture of Thatcher morphing into a turd - in light of John Biffen's comment about Ingham being the sewer not the sewage. In fact, I suspect the good people of Prague would probably find that image far less offensive than Stalin.

Praguetory said...

Substitute useful for incorrect. If nothing has changed how come I am £320 up on income tax. It's incompetent. If you're going to do something, do it properly.

tory boys never grow up said...

Just noticed that you are in favour of scrapping tax credits - this puts your concern about the abolition of the 10% band into real perspective. So while you are giving back c£200 to nearly everyone by reinstating the 10% band - you take back literally thousands in tax credits from the lower paid.



You might also want to explain how you would pay for the increase in the tax threshold to c£10,000 (i.e around the minimum wage level) for everyone (and it has to be everyone since you've abolished tax credits) which would either mean cutting total public expenditure by c£60bn (c10% in total)or increasing the deficit to a level which would just about destroy £ and increase interest rates by 3 or 4%.

For someone who says they studied economics your sums just don't add up - even Osborne/Cameron aren't that dumb!

tory boys never grow up said...

You are c£320 up on income tax - because that is the correct figure if you are a higher rate tax payer (working in Prague??) - it's the combined effect of the higher personal allowance and wider basic rate band in 2007/08 arising from normal indexation. Should note that some of this is eaten up by higher NI.

It isn't the calculator thats wrong!

tory boys never grow up said...

Nothing like a bit of Tory baiting to set you up for the weekend.

On a more serious level you should note that there is more than a whiff of Gordon Brown picking up some of the flat tax ideas (remember how I said earlier how it wasn't all bad) - we shall have in effect 3 personal tax rates (0%,31% and 41%) replacing the previous 5 bands (0/21/33/22/41) - a lot simpler to integrate with a tax credit system. The next move might be to integrate NI and Income tax with a lower overall rate - paid by extending that rate to unearned income (notice how protection was improved for pensioners who are the only none well off group who live on unearned income)- always struck me as a bit unfair that there shoudl be a tax surcharge on earned income.

mens sana said...

How much does it cost to collect tax on the low earners, then repay money through the tax credit system?

Although I accept that tax credits are potentially more responsive to changes in circumstance that also has caused huge problems with overpayments, which then have to be reclaimed, so the same pound goes from employer to employee to gordon to employee to gordon.

I can't believe there isn't a better way to manage it and taking the lowest earners out of tax altogether has to be a sensible way to start, both in terms of making the system easier and cheaper to administer and less prone to fraud as well as giving pople independence.

But the advantage of tax credits is that people are dependent on Gordon's largesse-considering 40% are employed by the state and 40% are eligible for some kind of tax credit (not to mention those on disability benefit etc) that is a huge number of people who are largely dependent on the government for their income. Surely this couldn't be part of the plan..