Figure Skating

The scourge of the earning classes, Polly Toynbee, is back with her latest full-frontal assault on wealth-creators and wealth-receivers.

The scourge of the earning classes, Polly Toynbee, is back with her latest full-frontal assault on wealth-creators and wealth-receivers. Her new book, Unjust Rewards, decries the ‘ignorance’ of high-earners and their lack of grounding in the ‘real world’. They ‘pontificate’ and threaten and rage and err and in one case bear ‘a distinct resemblance to Mr Scrooge,’ a fine and original simile. Lay on, Polly.

Her method (with co-author David Walker, another Guardianista commentator) was to gather a panel of partners from a major law firm and senior merchant bankers, then ask them questions about economic figures the Chancellor probably doesn’t even know. A professional statistician was on hand to provide authoritative figures. This develops — after the bankers and lawyers have apparently humiliated themselves — into discussions about the morality of earning and the use of public funds.

One of the chief points on which the panels were criticised was their (lack of) knowledge of the benefits system and the management of government funds. One banker believed that a family of four got £3,000 a month in benefits, when the true figure was £1,328. Another said that ‘the big debate is about how effectively all that money-raising has been applied.’ The riposte of the authors is to say that ‘we heard this get-out time and again,’ as if just because it is repeated often, it is not necessarily true.

If Ms Toynbee and Mr Walker are interested in playing a game of questions, let us ask some questions. Which government department has not had its accounts approved by the National Audit Office for the past 18 years? That’s right: the Department of Work and Pensions, which is responsible for the administration of benefits.

What did the National Audit Office’s latest statement on the Department of Work and Pensions say about its ability to control its supply of benefits? ‘Losses due to fraud are still a significant drain on the public purse and the high levels of fraud and error are one reason for the qualification of the Department’s accounts over the last 18 years.’

And on the question of figures, how much did benefit fraud cost the Department in 2006/7? £800 million. No one would deny that this is an improvement from £2 billion in 2000/1, but certainly no one would praise the loss of the best part of £1 billion just because it is not two. Our government appears to put its money into a sieve and be surprised when it cannot catch all of it.

The bankers are not allowed to be right even when they are right. During a discussion of tax rebalancing (‘redistribution’ is not a popular word in case the lawyers and bankers took fright and headed for the window), the bankers defended the fact that they don’t hand over most of their income in tax by saying that “they contributed more in cash.” This is not the point! scream the authors. Tax should be taxing!

It is this attitude which threatens to drive out those who bring substantial wealth into the City, into London and into the country as a whole. Would Ms Toynbee and Mr Walker prefer their income reaches the Treasury without filtering through the economy?

High-earners cannot win. They are criticised if they put money into the system because it does not come through the taxman. They are criticised because they do not know how much money the Department of Work and Pensions gives out. (Nor does the Department for that matter.)

They are not allowed rewards for success when CEOs earn 75 times their average employee’s wage, as if this inherently means that the average employee does not earn enough. Let Ms Toynbee and Mr Walker publish and be damned: the City’s high-fliers will continue to help London turn even if they cannot win the authors’ game of ‘name-that-figure’.