For all the heat generated by the debate over income tax, not many people know precisely where their money goes. The British public buy a lot with that part of their pay packet that is forcibly taken, but few of us know what we get in return.
To make the flow of public money more transparent is a desirable objective and if the rumours are true, and the Chancellor of the Exchequer does indeed decide to send 20 million people a detailed breakdown of where their taxes go, this is a change to be welcomed. The argument about tax, which is now and almost always has been the centre of political debate, will be a better informed argument for an increase in public knowledge.
It has to be said that the proposed measure is not especially sophisticated. It will not include the impact of indirect taxes such as VAT and fuel duty. As consumption taxes fall more heavily on the poor than on the rich, the published information will therefore overstate the extent to which the tax system redistributes income.
The letter that households receive will also be misleading in the sense that the overall pool of revenue is filled with corporation tax and capital gains tax, plus a host of other corporate imposts. Companies might reasonably object that their substantial contribution to the common wealth is left out of the published account.
Cost is, in any case, only one side of the equation. The benefits of public services are difficult to quantify and it will rarely be obvious whether the bill for the service rendered is too much or too little, not least because the quality of services varies substantially in different regions. There are also crooked lines between services. Extra spending on literacy programmes very probably diminishes expenditure on prisons. Social care spending can deflate the bill for the NHS. These dynamic relationships will not be captured in a cost calculation.
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Care will also need to be taken with the descriptions in the letter. Expenditure on benefits sounds rather unappealing, for example, whereas care for the sick and support for the disabled are harder to stand against. Advocates of a generous State should quickly lobby for it to be renamed as support for children and families.
However, these are all pleas for better information, not a defence of no information. An intelligent argument about the raising and spending of tax can only be helped by putting the data into the public domain. Quite what the superior knowledge will do to the shape of the arguments about tax policy is imponderable. It is possible that the case for welfare may be harder to mount — but perhaps not when people realise the largest single item they are buying is their pension liability.
A person who earns £25,500 pays tax of £5,979. More than £1,000 of this goes on the NHS and £824 on education. It might be a surprise to learn that as much is spent on defence (£339) as on the police, prisons, roads and railways combined. The tone of disputes about overseas aid (£59) and Europe (£28) might change when taxpayers learn that these irritations are at least cheap. Will they also worry less about debt if they are told that repayments are 6 per cent of the household budget?
The course of this debate is unpredictable, but that is one reason that information should be published. The other is that the money is ours and Government should tell us what it is spending it on so that we can decide if it is doing so wisely and well.