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Monday, October 08, 2012

The 'what do they all do' conundrum - now I have an answer

For as long as I can remember, as I have travelled around the UK and gazed at the rows of houses and the absence of any means of wealth creation, I wondered - 'what do the people who live there do?'

I would think no more about it - and a few weeks later, at a different location, the same question would pop into my mind. What do they do all day - how do they support themselves?

Thanks to the Centre for Policy Studies think tank, the Treasury has over the past 30 years become dependent on a smaller and smaller proportion of taxpayers, with only the wealthiest 20% paying significantly more to the state than they receive in benefits and public services.

In 2011, 53.4% of households received more in benefits and public services — such as health and education — than they paid in taxes. In 1979, the figure was 43.1%. It had grown only to 43.8% by 2001. Needless to say the numbers of people receiving rather than paying accelerated during the period of the past Labour government.

Then another snippet of information hit my desk that helped me understand what was going on. The 31,000 taxpayers who earn over £500,000 contribute more to the Exchequer than the 13.6 million taxpayers earning £20,000 or less. Wow.

Then another factoid came along that showed that the UK has more workless households than even Spain!

I am not making a political point (well I am really) but this collection of facts has profound importance for marketers. In a future when the state will spend less and less and less and less the base of ecomomically active/stable consumers is going to shrink. Maybe you should pose this question at your next marketing meeting and ask 'so what does this mean for us?' Dick Stroud

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