Thoughts on politics and life from a liberal perspective

Thursday, 30 June 2011

51p per person per year vs 1000+ nurses

Featured on Liberal Democrat Voice

Paul Waugh from Politics Home has just tweeted the following:

Osborne says Royals cost us 51p per person per year.

I have no doubt that George Osborne's figures are accurate for the direct cost of the Royals*.

But isn't it interesting how when Osborne is talking about something that he wants to spend money on (and you can't get much more Royalist than true blue Tories like our beloved Chancellor) it's presented in a way that tries to make it look miniscule? Almost as if it would be churlish to disagree that the Royals are worth every darn penny and anyway it's less than the cost of a mars bar don't you know and didn't she look radiant on the wedding day and sure the Duke occasionally says the wrong thing but he's been such a good consort for her etc. etc. etc.?

For example, I don't remember the (made up) figures for the cost of switching to AV being presented by the Chancellor in the format of cost per person per year (the real figures for this would have been less than 51p per person per year). Oh no, it was how many sick babies will suffer and how many soldiers will (implicitly) die because of lack of the millions that were supposedly going to be spent.

What what does this figure of 51p per person per year actually mean? Well the figures have just been released for the UK population last year. It was 62,262,000 (see here). I am assuming he is using the most up to date figures so this would be a total of £31,753,620. Or if you want to look at it another way, and a way that politicians like Osborne usually love to do it is approximately 6 new primary schools every year at a cost of just over £5m per school (source).

But the currency politicians simply adore using regarding public spending is nurses. How many extra nurses could we employ each year for the cost of the Royal family? Well according to salarytrack.co.uk the current average salary for a nurse in the UK is £26,123 per year. Let's add on 13.8% for employers' NI and that gives us a total salary cost of £29,728. So we could get around 1068 extra nurses each year. Imagine how many more lives each year could be saved and how much more comfort and care could be provided for that amount of money.

Suddenly that 51p per person per year seems a lot bigger doesn't it?

I know what I would rather spend the money on.


*I say "direct cost" because this does not include the cost of things like security and civic receptions etc. It's hard to know what the total cost is but I have seen estimates previously (e.g. here) of around £100m. So maybe the real cost is more like 3000 nurses.


UPDATE: Millennium Dome in the comments has correctly highlighted the following which I thought was worthy of putting the main post:

I agree with you, but actually I'd say you can get even more nurses for your Royal Family buck!

You've ADDED the employers NI cost - and fair enough that IS a cost to the Dept. of Health... but not to government spending overall because the Treasury, obviously, gets that money back. The actual cost to the exchequer of a nurse (or ANY public sector worker) is their salary NET of tax, so in the case of a nurse on £26,123 that's c£20,150 net of tax and NI.

So I reckon the government could afford 1575 extra nurses a year for £31,753,620 :)

17 comments:

Robin said...

Yes. But we would still need a Head of State with all the costs associated with that. So it is not a case of one or the other. We need both.

Mark Thompson said...

@Robin: We already have a Prime Minister who in many ways already acts like a President and is almost treated as such so I would imagine much of the cost of an elected head of state could be subsumed into the existing government budget.

teekblog said...

nice work - putting in these terms brings it home!

@Robin - I'm willing to wager that an able statesman/woman would emerge that is able to do the job for significantly less than the current set-up costs.

In fact, in the spirit of choice and competition - so beloved of Osborne, Lansley, Cameron and their ilk - I hereby offer my services for the cost of, shall we say, a round 100 nurses per annum?!

:-)

Millennium Dome said...

I agree with you, but actually I'd say you can get even more nurses for your Royal Family buck!

You've ADDED the employers NI cost - and fair enough that IS a cost to the Dept. of Health... but not to government spending overall because the Treasury, obviously, gets that money back. The actual cost to the exchequer of a nurse (or ANY public sector worker) is their salary NET of tax, so in the case of a nurse on £26,123 that's c£20,150 net of tax and NI.

So I reckon the government could afford 1575 extra nurses a year for £31,753,620 :)

Mark Thompson said...

@FluffyOne: You're right of course! I'm so used to factoring in tax and NI that I forgot it's actually the other way round here!

I'll update the main post with your comments as it makes quite a bit difference.

Simon Wright said...

There are a number of issues to take into account:

1) The money given by the taxpayer in the form of the civil list (and in future the Sovereign support grant) is given in exchange for the treasury being given the revenues from the Crown Estate. That is the arrangement that has existed for centuries.

Last year the treasury made over 200 million from that Crown Estate revenue, yet the official cost of monarchy is around 40 million a year. Even if we factor in some additional costs.... the tax payer is still getting a good deal.


2) You try to compare this cost to 1000+ nurses. Yet if we did away with the monarchy that money would have to be spent on what replaces it too. You suggest the PM acts like a president and is treated as such, but that is just not the case. I suggest you take a look at the way the American press treat the American president and compare it to the way the our press treat our PM.

In this country whilst the government controlled by the PM may decide where our troops get deployed... they are Her Majesty's Armed Forces, they take an oath to the Queen, not the government of the day. Which is a much safer settlement.

If we adopted the American model of a single person as both head of state/head of government it is a very very dangerous path.

It is far more likely we would get a separate head of state and head of government, both have important duties to carry out, but that means costs would remain.

15 million of the 40 million cost of monarchy is spent on maintaining royal palaces, which would have to be maintained for the nation even if we became a republic. So that cost would always remain.

The president would need staff, security still. Also there would be atleast 80 million every few years for an election.


3) We have by far the best system. It is absolutely better to have a neutral head of state above party politics with the support of people from all different political parties and viewpoints. A president would be so very divisive.

Mark Thompson said...

@Simon:

1) Crown Estate revenues are not owned by the monarch but The Crown. If the monarchy was disbanded this would surely revert to the State rather than be given to Elizabeth Windsor (or whoever is King/Queen at that point)? So the revenues from this would be secure.

2) I disagree. We already virtually have a President now and I fully expect much of the cost of actually having one would not need to be additional but could be found from existing government revenues. Comparisons with the US are not very helpful because they are a much larger and much wealthier country than us with a totally different structure underpinning everything.

As for Royal Palaces, why could they not be maintained from revenues from visitors? Just because we no longer had a monarchy, that would not abolish all the history associated with our country and there would still be plenty of visitors queueing up to visit them.

3) That's a matter of opinion (of course I disagree) and does not really have anything to do with the costs anyway.

Simon Wright said...

1) Its a lot more complex than that im afraid. If we became a republic then that republic would be able to pass any laws it wants, if that means its first act will be the make a massive land grab then it could (although the european court may have a view on it), but that sort of lawless revolution does not sound very liberal or democratic to me.

You can presume it would be handed over, but the legal position is far more complex. You can not simply state everything that at present is held by the crown in trust for the nation, belongs to the nation itself if the Crown is abolished.

Take Buckingham Palace for example (although not part of the Crown Estate) Republicans say that will go into government control. Yet looking at the history of Buckingham palace, im not quite sure where the justification for seizing that would come from. You would be creating an extremely dangerous precedent.

When something is bought or obtained by a member of the Royal Family centuries ago, u put into question peoples rights to inherit property and assets, passing them on from generation to generation.

Im not a lawyer, a couple of the MPs in our parliament who have far more experience than me judging by their speeches also view it as an estate that would not just transfer over to government control.

The law at present is clear, revenue from the Crown estate goes to the treasury in exchange for the treasury providing annual funding for the monarchy to carry out its duties. If the parliament is no longer prepared to make that funding available, then why should the sovereign be expected to continue to hand over the revenues?

2) Sorry but the PMs power is very different to that of a president. The PM through use of the Royal prerogative may be able to send the UK to war with another country, but he ONLY has that power if he maintains the confidence of the House of Commons. A simple majority can bring the government down taking away the power he has to act. Thats rather different to the situation with a president like in the USA, ironically he is able to violate American law by pretending America isnt really involved in a war in Libya, where as our PM despite not needing to, secured a clear mandate from the House of Commons for Libya.

The PM is not head of state. He is not commander in chief of the Armed Forces. He simply forms Her Majesty's Government which ensures he knows someone is still above him.

I think comparisons with the USA are very fair, when you are suggesting we should just have one person as both head of state/head of government. That is the American model, which has been exported to Latin America with pretty disastrous results i might add.

Having just one person as both positions puts too much power in one persons hands. It causes a conflict of interest often seen where people feel they have to have some loyalty/respect to the head of state or its office.

Far better to have a separate individual for that. And it is certainly the case that a neutral monarch is better than a politician.

On the Royal Palaces, revenue from the palaces is already used for things like maintaining the Royal Collection. I accept the palace could be open for longer each year, but the same argument could be made about Westminster. Should we remove the MPs from the Palace of Westminster and turn it into a 24/7 tourist site?

Buckingham palace alas is not the grandest building in the world, part of the whole attraction to it is that its a real royal palace and the heart of the British Monarchy.

The royal wedding demonstrated how having a royal family is able to attract huge international interest, which means our heritage is being broadcast to the world and helps boost tourism. An empty palace isnt going to get the same media attention.

Simon Wright said...

3) Well the issue of it being the better system does matter. I believe monarchy is absolutely the best system available, and there for id have no problem if we were actually paying 200 million a year for it with no financial benefit.

We should happily pay for the best, but its just not the case the royals cost us a huge amount of money.. Its very good value.

willcookson said...

Of course the problem is that it is that things are always compared to nurses. It's a silly comparison. It assumes that money saved in one area will go on nurses and of course it won't. If you really want more nurses why not reduce the high cost of doctor's salaries?

S Reader said...

But if you want to count in the tax and NI paid by nurses etc. - treated as recovered by the exchequer; shouldn't you also reclaim the tax paid by security guards, and all of the other people employed to look after the head of state? That's on the other side of the equation. You could spend that tax on nurses though, if you wanted.

How much does Sarkozy cost, by the way?

martijn said...

I see the Royal Family as some kind of entertainment. Not my kind of entertainment really but still, it's a rather cheap one at that.

I agree with your arguments in theory and I would have been the last one to suggest this (or any) country should become a monarchy, but now that it is one, I think there are far more important things that need changing in this country. And I actually agree with Osborne that it is rather cheap.

Do you know how much children in Africa one could feed from one nurse's salary?

Bolivia Newton-John said...

Bit late to the table on this post, but I'd like to point out to Simon that France has no trouble being the top tourist destination in the world, and presumably profits commensurately from the pageantry of its despotic violent past, without actually continuing to fund/celebrate the individuals involved (in the pageantry I mean, not the violence, obviously!)

I certainly agree, however, that having the prime minister as head of state would be a nightmare. But my ideal model of any future rationalised government system would involve either a president who is elected, and has some powers, but is mainly ceremonial (think Ireland, Israel, or maybe Turkey) or a proposal to have the speaker of the house as the head of state (leave aside any feelings you may have about Bercow!) How much does Mary McAleese cost to keep in official residences and ceremonial dinners? Loads of nurses less than Elizabeth Windsor, I would wager.

David Weber said...

You're missing out an important part of the equation, though, and that's how much a replacement form of head of state would cost.

It's possible to reduce the cost as much as possible by combining the role of Prime Minister with head of state, but that probably does bring up other issues, such as whether the ceremonial head of state should be a politician.

It's a good argument, but I think it needs to be better. I think the best argument against a royal family is that living your whole life in the public eye isn't really a humane way to treat any family.

David Weber said...

"If we adopted the American model of a single person as both head of state/head of government it is a very very dangerous path."

I'm not sure I'm convinced that this is the sole, or even a major cause of the USA's problems. "Very very dangerous"? I doubt it, given that the US has stronger checks and balances on the executive than we do.

I agree that it's unhealthy to have a combined head of state/head of government due to the possibility of a less critical relationship between executive and people. However, when it comes to the armed forces, the government in this country has de facto control, and I challenge you to come up with an example of military action taken by the US government that would have been vetoed by a British monarch. Even more unlikely would be an example of a British monarch successfully attempting such an action.

Shibley Rahman said...

Fascinating post Mark. Human beings are notoriously bad at making relativistic judgments involving probability, and there are ways of presenting data in such a way that you can get a particular verdict from a respondent. Thanks for this analysis which is helpful, although when you first presented it I thought you meant 'Royals' as in that well known cigarette brand.

Similarly, I have often thought about how much money cumulatively is made from the TV licence; and it's often said that a night at the Ritz is cheaper than a NHS bed.

On a different note, great blog btw! My own blog would appreciate any votes for the Total Politics Blog Award 2011; for details, please see http://shibleyrahman.com/latest-news/total-politics-blog-awards-2011-vote-shibley-rahman I am definitely voting for this one.

Mark from Manchester said...

Your arguement is seriously flawed. Without the monarchy, we would have far less visitors to the country, so less revenue from taxing them.

Foreign visitors spend £16bn per year in the UK, so if less than 1% decide not to come because of this, then it will cost us money in lost VAT alone (probably more as they will spend a high % of tis on duty rich booze.

So the real question is - how many nurses are you prepared to throw out of a job because you want to disband the monarchy?