Tax but don't spend

Last February I wrote a post in which I peevishly listed various experiences of organizations not working very well. One item on the list concerned the problems of getting through the HMRC (the British tax office) on the telephone. So I was interested to see that this week the National Audit Office (NAO) published a report on HMRC’s quality of service. This identified a “collapse” in customer service over 18 months in 2014-15 with call waiting times tripling and some customers being kept on hold for up to an hour.

What lay behind this were massive cuts in staffing levels, which in personal tax fell from 26,000 to 15,000 between 2010-11 and 2014-15. This of course is just one of the many consequences emerging across all parts of the public sector as ‘austerity economics’ bites deep under the ideology that eliminating the government’s budget deficit is the sole aim of policy (what Nobel economist Joseph Stiglitz calls “deficit fetishism”). But there is more to it than that: associated with the cuts was the technocratic fantasy of paperless (on line) tax returns and automated telephony.

We’ll break here for another oldster rant: why does everything have to be done online, with endless passwords and usernames in hundreds of different formats? How I long for the days when you could just fill in a form and send a cheque in the post. There are still a few places you can do this and I would single out from my own experiences the insurance company NFU Mutual as particularly good not just for this but for that fact that they have an ordinary phone number that goes to the local office where I talk to a person I have met and who has been in post through all the years I have dealt with them. And, on the one occasion I’ve had to make a claim, they are excellent to deal with. Is it because they are a mutual organization?

Back to the HMRC and what is interesting is to note how this story illustrates some of the recurring – and linked - themes of my book, namely those of unintended consequences and of the ambiguity of efficiency. In terms of unintended consequences the issue is how cost savings in one budget show up as new costs somewhere else. This is especially obvious in relation to HMRC because an effective tax gathering system is vital to meet the costs of government spending departments. So to impinge on the first inevitably has consequences for the second.

The issue of efficiency is linked in that what may be efficient for the HMRC maybe inefficient for other departments but, beyond that, inefficient for the user – in this case the taxpayer or, as they are now called, with tragic inevitability, customers. And let’s just have another break here to remind ourselves how crass, how nonsensical, it is to describe people paying taxes as ‘customers’. The NAO Report is helpful in quantifying this by reference to the HMRC’s own costings of people’s time (£17 per hour, apparently). On this basis, the time spent waiting and talking, and the cost of the call, added up to £97M (of which £66M was the cost of waiting to be answered) in 2015-16. So HMRC’s efficiency savings become its “customers’” costs. According to the NAO and the HMRC things are now getting better, though I must say that this is not my personal experience and, anyway, we have been here before. A damning 2012 NAO Report on phone call waits was also met with promises of improved performance and assurances that this was beginning to happen.

There’s a bigger organizational story here. The HMRC is the result of a merger, in 2005, between what were previously the Inland Revenue and the Customs and Excise office. Culturally very different, many date the problems at HMRC from this archetypical example of reform through reorganization. Subsequently, there have been repeated high-profile scandals. Dave Hartnett, its boss until 2012 when he joined global accountancy firm Deloitte as a consultant, was accused of cutting lax ‘sweetheart deals’ with big corporates like Vodafone and Goldman Sachs, and called “a liar” by the chair of the Public Accounts Committee. His successor, Lin Homer – dubbed ‘Dame Disaster’ by satirists – was criticised for failures in relation to the HSBC tax scandal and also for claiming the HMRC to have had its best year ever in 2015 despite – yet again – massive problems with phone systems. She stood down in April 2016.

As for the future, who knows? HMRC have taken on more staff, but the ongoing closure of 137 local tax offices in favour of 13 regional centres does not bode well, and the latest NAO Report says that HMRC’s capacity to sustain planned cost reductions rest upon its Making Tax Digital initiative, another techno-fantasy, which has already been met with scepticism, if not outright derision, by tax accountants.

It’s tempting to ascribe all this to the well-attested failures of neo-liberal ideology in general and the effects of its application to the public sector in particular. But it’s more complex, and worse, than that. Even the most assiduous neo-liberal assumes, accepts and expects that the State will act as a ‘nightwatchman’, undertaking the basic functions of tax collection, law and policing. But cuts have “brought the court system close to breaking point” and are causing a crisis in policing and in the prison system. It used to be the leitmotif of anti-state ideologues that cuts could be achieved by getting rid of ‘five-a-say Czars’, ‘diversity officers’ and, of course, that perennial favourite ‘faceless bureaucrats’. Now it turns out that even the most basic functions of the state are up for grabs. If proof of that were needed, look no further than current plans to privatise the Land Registry, the body that administers that most basic feature of any capitalist economy, property ownership.

Turkeys and Christmas

Before the virtual ink had dried on my last post, the campaign for the UK to leave the EU produced their biggest and, so far, most pernicious, lie with the launch of a poster stating: “Turkey (population 76 million) is joining the EU”. The idea – signalled in the population figure – is to whip up fears of Turkish – meaning Muslim – immigration to the UK.

The lie is that Turkey is not joining the EU. They applied to do so in 1987 but negotiations did not start until 2005. Joining requires the opening and closing of 35 ‘chapters’ or areas of agreement, of which so far only 15 have been opened and just one closed. Turkey is nowhere near to joining the EU and in any case its joining could be vetoed by any member state and almost certainly would be. In some ways it is further than ever from joining because of its deteriorating human rights and democracy record. And, for that matter, Turkey itself is far less interested in EU membership than in the past: its longstanding failure to join has led it to reposition itself strategically away from Europe and towards being a middle-eastern regional power.

I don’t pretend to be an expert on Turkey or its EU negotiations, but the expert opinion is clear, as in this recent summary:

“To infer that Turkey may one day soon join the EU is to reveal a fundamental ignorance of the political and procedural realities of the EU and of its enlargement process. Turkish membership of the EU is at best a distant prospect.”

Reading – as, sadly, I do – many internet discussion forums about the EU Referendum it was interesting and depressing to see how the lie that ‘Turkey is joining the EU’ was defended. One line was to say – mendaciously – that the recent deal by ‘Germany’ to give Turks visa-free access to the Schengen zone meant that they had ‘free movement rights’. It doesn’t (three month visa-free travel is not the same as free movement) and, anyway, the deal may not go ahead because it is not ‘Germany’ that decides but the democratically elected EU Parliament which is blocking or at least modifying the deal which, for that matter, Turkey may not accept. And even if this were to happen then, of course, it would not mean that Turkish membership of the EU was any closer.

Another line of defence was downright peculiar. It was that ‘joining’ is the present continuous tense and therefore the poster was true since Turkey was ‘in the process’ of joining. This kind of sophistry gives sophistry a bad name. If I say that ‘I am joining the campaign to leave the EU’ any reasonable person would think that means that it is going to happen, not that I am in a process that might or might not end in the future in me becoming a member of the campaign.

The wider context for this anti-immigrant sentiment associated with a supposedly anti-elitist movement is the well-worn theme of how the consequences of economic crisis play out. It never has a happy ending, not least for the ‘ordinary, salt of the earth folk’ that the anti-elite elitists play for fools in the way that the Brexit advocates are currently trying to do. For their goal is not to help, sustain and support ‘ordinary people’ in the face of global capitalism, but to expose them to the most extreme form of unregulated global capitalism. Those who fall for it are voting, like the proverbial Turkeys, for Christmas.

Lies, damned lies, and statistics

The expression “there are lies, damned lies, and statistics” has never been definitively attributed but it has become a political cliché. And in some ways an unfair one, since it is a way of discrediting any and every statistic. Even so, there are some statistics which are palpably lies, and the campaign for Britain to leave the EU is replete with them.

The most egregious lie is the statistic used as the headline claim of the Leave campaign (appearing on the side of the campaign ‘battle bus’ and on all its leaflets and web sites) that “the EU costs us £350 million a week”.  This has been debunked numerous times, not least by the Office for National Statistics. It arises from the fact that in 2014, the last year for which full figures are available, the UK gross contribution to the EU was £18.8 billion. Divided by 52 this gives the figure of £350M per week. But stated as a cost to the UK it is a lie. Why?

Because it is the gross contribution. The net contribution is reduced by the UK’s budget rebate, which in 2014 was £4.4 billion, and payments received back in grants to for example agriculture and science funding which in 2014 were £6 billion. So the net contribution in 2014 was £8.4 billion – less than half what is claimed. And there is also the lie that this is what the UK pays ‘each year’. In fact, the figure varies each year and 2014 was the second highest contribution on record. Nor is the figure rising – the 2015 predicted out turn is lower than 2014.

In the face of this (although they have never acknowledged the fact that this was an unusually high year) the Leave campaign have made two defences. First, they say, that is the amount that we actually hand over, so it is what the EU costs, even if we get some back. That is a crazy logic in itself, of course. It is like saying that if I go into a shop and buy something priced at £5 and give a £10 note and get £5 change, then my visit to the shop has cost me £10. But it isn’t even true in this crazy sense: the rebate part is never even handed over.

Their second defence is that it is justified to quote the gross figure because, outside the EU, all this would be available to spend on what the UK wanted, whereas the £6 billion that comes back has to be spent on what the EU determines. The problem with that, though, is that Brexit campaigners have, whenever challenged that leaving would reduce UK agricultural subsidies or science funding, said that these payments would continue to be made by the UK government, and some have even said they would be increased. So if that is true, then only the net figure would be available to the UK.

But let’s look at that. First, it assumes that nothing else whatsoever changes in the economy on Brexit, which no analyst, even pro-Brexit, thinks. Second, it neglects how that contribution benefits the UK by, for example, boosting the economies of less developed members of the EU which in turn leads to demand for UK exports. Third, in 2014 it was about 1% of UK government expenditure anyway – almost a rounding error in the public accounts. And, fourth, the impact of the rebate (negotiated by Margaret Thatcher in 1984) is that the UK is exempt from the general rule of contributing 1% of GDP. The consequence is that in every single year the UK is the lowest contributing EU member as a percentage of GDP.

The zombie statistic of £350M a week refuses to die, no matter how often it is discredited, but it is not the only offender. This week, the Leave campaign produced what became a widely reported statistic supposedly showing that UK exports to the EU had dropped by over 18% in the last decade. The idea was to try to counter the argument that the single market is important to the UK economy. Buried in what they said was that this didn’t take account of exchange rate fluctuations between the pound and the Euro, which sounds rather boring and technical. But of course it is crucial. If a UK firm sells a good for £1 and the exchange rate is £1=2Euros and next month sells the same good at £1=1.5Euros then the value of exports has fallen by 25% - in Euros – but not at all in sterling. And in the period 2006-2016 the £-Euro exchange rate has fluctuated considerably.  So I checked and - surprise, surprise – the value of UK exports to the EU actually rose in sterling over the last decade. And that was a decade no doubt carefully chosen to encompass the global financial crisis – if one took the 20 years from 1996 the growth would be larger.

These two examples are taken from many that could be chosen, and this week several more were pulled apart by InFacts. The other headline lie, apart from the budget contribution, is that 65% of UK law is made in the EU when in fact is 13%. Of course in all political debates statistics are bandied about, and they are often dodgy, and the Remain campaign are surely guilty of cherry picking statistics to suit their cause. But that is not the same as lying and what I find extraordinary about the Leave campaign is not that they present figures that support their case, which would be one thing, but that every statistic I have seen them produce has been palpably – often absurdly – dishonest. Maybe I am biased – but if you think so watch Vote Leave’s Dominic Cummings being questioned by the Treasury Committee about the £350M a week claim, and judge for yourself.

Ageing badly

There is plenty of public discussion of the complex issues involved in being a parent, but far less about having parents. What I mean is the issues arising for people in middle-age having to care for and cope with their ageing parents. Those issues are made more complex by the way that families tend now to be dispersed geographically and the much longer live spans that are now common. The consequence is the necessity of engaging with the organization of care for the elderly. In the UK, at least, that organization is woefully inadequate and in crisis.

Longer live expectancy is both a consequence of medical care and a cause of the need for medical care. This in turn requires increased health expenditure, but in 2015 the UK health expenditure as a percentage of GDP was 8.5%: lower than Greece, lower than most west European countries, and far lower than the US. Against this, it has to be recognized that the UK system is far more efficient than others in translating expenditure into health outcomes. Maybe more important, though, is that increases in UK health expenditure don’t match increased costs (healthcare cost inflation is much higher than general price inflation) and increased demand (driven primarily by ageing).

But healthcare is only one part, and not necessarily the most important part, of the organization of ageing. Most health expenditure arises in the last two years of life; whether that life ends at 70 or 90. No, the real issue is the organization of care, and this is in complete crisis. Whereas it used to be provided mainly by local authorities, now there is a hybrid system of private care homes part-funded by local authorities. Budget cutbacks mean that the part-funding is increasingly inadequate; whilst the crazy financial engineering of some private home owners like the collapsed Southern Cross (discussed on p.115 of the book) exacerbates the problem.

The two aspects of health care and care homes are closely related. Both emergency and routine care departments of hospitals can’t discharge elderly patients because there is nowhere for them to go, especially if they are ‘unprofitable’ from a care home perspective. On the other hand, as a report this week highlights, in other cases the elderly are being discharged back to their own homes when they are incapable of coping, with horrific consequences.

All of this is absolutely to do with failures in the way that we organize. The privatized, often private equity firm-owned care home system is simply absurd, and passes on its inefficiencies to the public sector NHS. But beyond that is the obvious absurdity of dividing health and social care at all. There has been much talk of overcoming it, and some areas in England have made progress in doing so but overall the separation remains stubbornly in place.

As is often – perhaps always – the case, the issues relate to both organizations in the institutional sense (the structures of, in this case, health and social care) and to ideational organization (the construction of ‘health’ and ‘care’ as categories). Underlying the latter is perhaps also the more profound division of the public and private realms, so that health care is something that happens in the public domain of the hospital ward and social care something that happens in the private domain of the home (even if the home is an institutional ‘care home’). This in turn means that much suffering remains hidden (‘at home’) and experienced by both the elderly and their families as a ‘private’ problem, and possibly a stigma.

The psychology of this is undoubtedly very complex, since the relations between (adult, ageing) children and (aged) parents has the capacity to engender guilt, frustration, anger, fear and much else besides. Psychology has been much concerned with the relationships of children and parents in infancy, but perhaps much less so (at least, that’s my impression) with those in adulthood. The dynamics of the latter are surely taking new forms as extended old age and associated dependency become the norm rather than the exception.

In 1911 in the UK life expectancy was 51 years; by 2013 it was 81 years. In 1911 there were 107 people in Britain aged 100 or over; in 2013 there were 13,780. A similar pattern can be found across the developed world. Organizationally, and emotionally, we have not really caught up with these profound demographic changes.

Talking Turkey

Almost all news stories in the UK at the moment seem to have some relationship to, or are filtered through, the EU Referendum debate. I don’t want to use this blog simply to talk about that debate but for those who may be interested I will start this post with some links to various things I have written on other sites on the topic (some are syndicated re-issues of the same pieces).

So on the New Europeans site there are four articles (and do look at the rest of this excellent site); two pieces on The Conversation (again, there’s loads on this site worth looking at) both of which are listed on the House of Commons Library Referendum Research Briefing; another on the Wake Up Europe site; another on the EU Movement site; and another on the Reasons2Remain site. Finally, there is also the transcript and audio of a radio broadcast I took part in on the Australian Broadcasting Corporation’s Rear Vision programme. Oh, and a short letter in the Financial Times (pay walled link but free access to up to a monthly limit). I’m also giving numerous talks in town and village halls on the kinds of issues covered in these posts but of course I can’t give links for these.

Anyway, on to today’s related topic, the news this week that the EU Commission has conditionally agreed to Turkey having visa-free access to the Schengen area. The anti-EU press and campaign to leave the EU spun this in predictably, but depressingly, dishonest ways, speaking of the EU ‘opening the door to 79 million Turks’. What such formulations imply (and get taken to mean) is a mix of downright lies, confusions and paranoia: that Turks will now have the same free movement rights as EU citizens (they won’t; the deal will apply to short term visits); that this will apply to the UK (it won’t; the UK isn’t in the Schengen area); that the entire population would move wholesale to the EU and the UK if it could (a nonsense, both obviously and as was shown when exactly the same claims were made about Bulgaria and Rumania when those countries gained free movement rights).

The wider issue is that this is part of a deal under which Turkey will control the flow of refugees into the EU, and more particularly Greece by taking back all such refugees with an equivalent number then being taken directly from the Turkey by the EU. That deal is controversial, not for the ludicrous reasons given above but because the UN has pointed out that it may be illegal and other bodies that it may be immoral. Yet one has to recognize that, shabby as it may be, it is primarily a response to the claims (not least from anti-EU groups in Britain) that the EU has failed to deal with the so-called migration crisis (more correctly, the refugee crisis).

One of the reasons this deal is, indeed, shabby is because Turkey has recently become markedly more authoritarian and repressive, as I have written about elsewhere on this blog and as events just this week underscore, events which may yet scupper the EU deal. In fact, if the EU is to be criticised, the real criticism is that in the years that Turkey was reforming and improving its human rights record its desire to join the EU was discouraged, contributing to the downward path it has since followed. Especially in the light of what has since happened in Syria, this now looks like a major strategic blunder by the EU. Even so, the relentless hostility to Turkey’s membership by Eurosceptics and worse in many EU countries since it applied to join (as long ago as 1987!) bears much of the blame for this.

Why does any of this matter for organization studies? One reason is the general point that I always make about the inseparability of politics and organizations. The EU is the biggest single economic entity in the world, after all. Another, narrower, reason is that Turkey has an organization studies community of some significance and within that a fragile critical management studies community. This is discussed by Beyza Oba and Mehmet Gençer in their chapter (‘The Ghost in the System: Critical Management Studies in Turkey’) in the recent book I co-edited (Critical Management Studies. Global Voices, Local Accents). It may be too grandiose, or alternatively too Eurocentric, but one reading of CMS is as the promulgation of the critical strand of European Enlightenment thought within the imperialist, or anyway dominant, strand of that thought.

I think that is a defensible reading. It’s well-established that there is a direct line of thought from Kant to Weber from whom there is an indirect line to Foucault; and a less direct line, via Hegel, to Marx from whom there is a direct line to the Frankfurt School. And although it is less well-established there is, I increasingly think, a direct line from the Descartes-Spinoza bifurcation of Enlightenment thought to the bifurcation between modernist and postmodernist thought; dogmatic and sceptical rationality; positivism and constructivism.

Whatever the truth of that, it is an obvious political reality that Turkey now stands at the pivot between the EU and not just Syria but the wider Middle-East tragedy; and perhaps between Muslim and non-Muslim worlds. What happens there matters enormously. It therefore becomes important to approach Turkey not, to finish where I began, through the narrow prism of the EU Referendum but as a conflicted boundary across which we – we Europeans, and more narrowly we students of organizations – must reach to support progressive, liberal and critical movements and people in Turkey.