
Does the government have lots of people chasing the relatively small amounts lost to a...
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A
Thank you for downloading More or less from the BBC. This is the version first broadcast on Radio 4. If you're a regular listener to the Shorter World Service podcast of More or Less just letting you know that the final item in this program is one you'll already have heard. Here's Tim Harford.
B
Hello, and welcome to More or Less, the show that does for statistics what Sherlock does for crimes. I'm Tim Harford. This week, the mathematics of Willy Wonka's famous competition. Has global poverty just been halved overnight? The curiosities of the Eurovision voting system? And is it really true that Boris Johnson is mayor of one of France's largest cities?
C
It's rubbish. It's rubbish.
B
But first, The country's leading politicians have been arguing over what's surely the most important issue of the week. Whether Take that's Gary Barlow should hand back his obeisance. A tribunal ruled that he'd participated in a tax avoidance scheme and may have to pay substantial back taxes, along with his manager and two other blokes from Take that whose names nobody can remember.
D
Howard, Donald and Mark Owen.
B
This is Charlotte McDonald. Charlotte, you're not helping your credibility.
D
Well, let's get back to the point. Now, we've been wondering about tax avoidance and its illegal sibling, tax evasion. Do we put enough effort into catching tax dodgers, both outright frauds and those like Gary Barlow who've attempted to find legal loopholes in the tax rules?
B
And funnily enough, Evan Davis has been wondering the same thing. Here he is interviewing Mark Garnier, a Conservative mp, on the Today programme.
E
So we tougher on benefit recipients and cheats and fraud and people who shouldn't claim but do. Are we much tougher on them than we are on people who don't pay their fair share of tax?
A
It's a very interesting question, if you
D
believe a catchy statistic that's been doing the rounds on Facebook and Twitter. We we're far too focused on benefit cheats and don't care about tax fraud at all.
E
3,250.
F
Number of staff at DWP investigating benefit fraud of 1.2 billion pounds.
E
300.
F
Number of staff at HMRC investigating tax evasion of 70 billion plus.
B
In other words, DWP, the Department for Work and Pensions, have lots of people chasing a modest amount of money, while HM Revenue and Customs have a tiny team chasing a vast amount of money. Normally, of course, claims that have gone viral on the Internet are always correct. But I wonder.
D
You're right to wonder, Tim. The social media post is Broadly right about the benefit fraud figures. The DWP says there are 3,250 people investigating benefit fraud. The most recent DWP figures estimate there was £1.1 billion of fraud last year. And the year before that the figure was 1.2 billion.
B
Tell me more.
D
With regard to the figure for tax evasion, £70 billion is a pretty controversial estimate when you think about it. The truth is a bit slippery here. For one thing, there are different flavors of unpaid tax, from outright fraud to honest mistakes to tax avoidance, which HMRC defines as an attempt to bend the law rather than break it, to get an advantage that Parliament did not intend.
B
And Charlotte, you said the figure of £70 billion plus for tax evasion is controversial.
D
Well, one of the problems is that nobody knows how much tax is illegally evaded, because tax frauds don't usually confess to all the details. The 70 billion pound figure comes from a piece of research commissioned by the PCs Union, which. Which represents tax inspectors, amongst others. Now, there is a methodology behind the number, but the purpose of the research was also to make the case that more money should be spent on staff to investigate tax evasion. This number is also popular amongst tax justice campaigners, but it's a lot more than HMRC's own most recent estimate, which is 15.2 billion pounds a year for tax evasion. The hidden economy and criminal acts in. If you include tax avoidance, non payment of taxes, errors and other issues, some of which are also clearly well worth investigating, you get a tax gap of £35 billion, which is well short of 70 billion. If we're comparing official estimates from HMRC and the DWP, outright benefit fraud is 1.1 billion and outright tax fraud is 15.2 billion, around 12 times as much.
B
But the Internet claim is that the DWP has more than 10 times as many people as HMRC investigating fraud. So that seems the wrong way round.
D
Well, in terms of the claim that only 300 people are working on tax evasion, that's just wrong. HMRC says that refers to a dedicated team specifically investigating the rich. But HMRC claim that tax dodgers in general have to reckon with a squadron of 30,000 investigators.
B
Well, that's a lot. Do you believe that number?
D
It is a lot. In fact, it's half the entire workforce at hmrc. But then they told me the whole organisation is set up to collect tax. It's not really surprising that they have a lot of people trying to spot dodgy tax returns. But in reality, not all of these people. We think you'd probably recognise as investigators. We asked a former tax inspector and he reckons that a ballpark figure might be under 8,000, who we might recognise as as full time investigators, although HMRC would not accept that.
B
And I suppose that the definition of investigating fraud is a bit vague too. In a sense, almost anyone who works in a job centre could be regarded as investigating fraud. It's part of the job description, but it's not necessarily the whole job.
D
And that's the crux of the issue here, that it's actually very hard to make a direct comparison.
B
Well, thank you, Charlotte. You're listening to More or Less. We're at more or less. Atbc.co.uk. on a Wednesday morning in late April, the worthy people over at the International Comparison Programme, which is housed at the World bank, published a new set of estimates for purchasing power parity. James Fletcher's here to help me explain why. This is actually a fascinating story.
A
Yes, Tim, it is fascinating, even if it does sound a bit like a tedious piece of geekery. But it's a piece of tedious geekery that's changing the way we understand the world. For example, when these ICP numbers came out, some researchers In a Washington D.C. think tank did what they paid for and started thinking and calculating and pretty soon they produced this headline.
D
Global Absolute Poverty fell by almost half on Tuesday.
A
So what happened there?
G
It's not that anybody was hungry the night before and woke up with food in their belly, or people are any less poor in any real sense, just categorized differently on paper.
A
That's Justin Sandifour. He works for the Centre for Global Development, and he and his colleagues have come up with some rough and ready calculations suggesting that the number of extremely poor people is much lower than previously thought.
B
So how did they do that? First, they took the World Bank's definition of extreme poverty. This is the famous dollar a day poverty line. Although these days the line is set at $1.25 a day.
A
To find out how many people across different countries earn less than $1.25, data on incomes and prices have to be converted to dollars, but not to ordinary dollars. Instead, they're converted to an artificial type of dollar, which reflects the purchasing power of money in any given country.
B
Now, this purchasing power parity business, ppp, it's complicated. Let's try and explain.
A
Imagine there are two friends from the United States. Sarah.
H
Hello.
A
And Jane.
H
Hi. We both go to China to teach English for a week and we are paid 1200 renminbi each at the end of the week. I fly back to the United States with that money. While Jane stays in China, Sarah goes
A
to Bureau de Change in the United States and gets US Dollars.
H
With that money, I go to my local shopping mall and I'm able to buy a new leather jacket.
A
And Sarah is relatively happy with her new purchase. That is, until she hears about Jane.
D
I'm still in China and I was able to buy two of the same leather jackets with the money I earned teaching.
A
This shows you that if you just convert a country's currency using conventional exchange rates, it hides the fact that the same amount of money has different purchasing power. To be able to compare the incomes and prices between countries, you have to create a new currency. This is what the International comparison program does. It creates an artificial dollar.
H
So in the made up world Jane and I inhabit, you could say that the income we earned in China went twice as far in China compared with that in the States.
B
Using the old set of PPP figures, the World bank had estimated that there were more than a billion people in the world living in extreme poverty on less than $1.25 a day. The rough estimates from the think tank suggest that using the new PPP figures, the number of people under that extreme poverty line has almost halved.
A
And this has got development policy wonks hopping around because reducing the number of extremely poor people is one of the Millennium Development Goals agreed by the United Nations. This suggests we've made a lot more progress on that goal than we previously thought.
B
But hang on a second. Are we sure that this quick estimate from a think tank is correct? One issue is that the ICP wasn't specifically looking at the price of goods, but bought by very poor people. Here's the chief economist of the World Bank, Kaushik Basu.
I
When you're looking at the poorest people in a country, they may have a consumption pattern which is very, very different from the average person's consumption in that country. And so the price index constructed by taking the average of what is consumed in the country may not be relevant for the poor, since in poor people's consumption basket, a disproportionate amount is spent on food. If food prices go up, that might mean a lot for the poor. So we cannot use the PPP numbers that we've just got, apply that to the poor, and say, look, poor people are much better off now, and poverty has gone down.
B
But Justin Sandifer of the center for Global Development makes another point. The real story may not be that there are fewer extremely poor people than we thought. It may be that the world's poorest people don't live where we thought they lived. And that's big news.
G
The global allocation of poverty looks very different with these new PPP exchange rates. The share of the global poor living in South Asia fell from about half to about a third, whereas the share of the global poor living in sub Saharan Africa grew from like 28% up to around nearly 40%.
A
Kaushik Basu of the World bank is cautious about that one too. Again, he says we still don't know how prices changing for the poorest people. But the World bank isn't hurrying to produce new poverty estimates. It says it has an ongoing project to consider the new figures and won't rush a new estimate of extreme poverty. Tim as we were researching this item, we kept encountering reports that because of these price revisions, China's economy was about to surpass the economy of the United states.
B
Yes, on November 2nd, if you want to get ridiculously precise. But I. I'm afraid those claims just don't make much sense to me. The point of these PPP conversions is to produce a sense of people's standard of living. If you want to look at the impact of a country on international markets or growth rates of the world economy or the price of oil, or indeed the number of aircraft carriers it can afford, you need the regular unadjusted figure
A
for gross domestic product, and that's one I've checked. At the moment, the United States is still well ahead of China. On that basis, its economy is almost twice as big.
B
Well, thank you, James. The average age of a Radio 4 listener is 55, according to audience listening figures. We're pleased that more or less is attracting a younger audience. Well, at least one young listener from Derbyshire.
J
My name is Isabel and I'm nine years old and we've been reading Charlie and the Chocolate Factory at school.
B
For those who aren't familiar with Roald Dahl's book, we asked a panel of experts to summarise the plot for you.
J
The main character's Charlie.
D
Charlie loves chocolate, who makes chocolate in Charlie's town.
J
His name's Mr. Willy Wonka. He has a big factory to make chocolates. Willy Wonka decides to send out five golden tickets. You have to go get a chocolate bar to find a ticket, and if you get the golden ticket, you'll go to Willy Wonka's factory.
B
So chocolate loving Charlie Bucket was desperate to see inside Willy Wonka's factory. Our loyal listener, Isabel, set us this challenge.
J
My question is, what is the probability of Charlie Bookie? Winning a golden ticket.
B
We sent Rob Eastaway, author of a number of maths books, including Maths for Mums and Dads, to explain to Isabelle's class how you work out the chance of Charlie winning one of the golden tickets.
E
Who knows what probability is? Yeah, the chances of things happening. So how likely do you think it is that Charlie is going to win a golden ticket?
J
Not very likely.
E
What the book doesn't say is how many chocolate bars there were altogether that Willy Wonka had made into which he could have put the golden tickets. Does anyone know how long it took in the book to run the competition between when it started and when Charlie got the last golden ticket? What do you think?
J
Is it something like a month?
E
Yeah, it's about a month's worth of chocolate for this competition and one of the world's biggest selling chocolate bars is called a Kit Kat. Let's say that Wonka bars are the same as Kit Kat.
B
I'm sorry, that's just ridiculous. The KitKat's a perfectly decent chocolate bar, but it's no Whipple scrumptious fudgemallow delight.
E
So, 5 billion Wonka bars per year. We think they sell about 5 billion Kit Kats every year. So how many months are there in a year?
J
12.
E
Excellent. So 5 billion divided by 12, it's about 400 million. So how many golden tickets are there altogether? 5. And there's 400 million chocolate bars altogether. 5 out of 400 million is the same as. Gosh, that's quite difficult.
K
How many fives are in 120?
D
If there are 20 fives in 100,
E
how many are there in 400?
H
80.
E
80. Fantastic. So there's about a 1 in 80 million chance of getting a golden ticket. Charlie didn't just buy one chocolate bar, he got four. So that means he was actually about four times as likely to get a golden ticket. So his chance of getting a golden ticket was actually about 1 out of 20 million. Wow. Does anyone know just how unlikely 1 out of 20 million is? Here's one way of thinking of it. Just imagine you were forming a queue outside the school and you were all standing there, maybe two of you for every metre. So that means you would go for 10, 10,000 kilometres. Where's 10,000 kilometres from here? Yes.
J
Here to Morrisons.
E
Here to Morrisons. It's a bit further than here to Morrisons. Yeah, it's going to be another country.
J
Here to France.
E
Here to France. It's going to be even further than from here to France. Can anyone name me a Second city in South Africa, Johannesburg. So imagine a line of children from outside the classroom here going all the way to Johannesburg and only one of those children gets a golden ticket. That would be pretty unlikely, wouldn't it? Are you surprised?
J
Yes.
E
So, Isabella, what do you think of that answer?
J
It's quite big.
E
Are you happy you've got the answer to that now?
H
Yes.
B
So, using Rob's back of the envelope calculations, he reckons that Charlie had a 1 in 20 million chance of winning the golden ticket. Of course, those are actually the chances that any random individual would win the ticket. In fact, you could argue that Charlie's chances are 100%, otherwise he wouldn't be the main character of the book. It's similar to the National Lottery. If I go out and buy a lottery ticket this weekend, my chances of getting the correct six balls are 1 in 14 million. And those are slim chances, but there's a pretty high chance that someone somewhere in the country will win this week. Thank you to Rob Eastaway and thank you to Isabel and all her classmates. In Derbyshire, loyal listeners will know there's one annual event that generates more statistical queries than any other. No, not the budget or the Autumn Statement. It's the Eurovision Song Contest. Laura gray and Charlotte MacDonald are on the case.
D
Hi, Tim.
K
Really loving the show.
D
This is London calling. Here are the results of the UK
K
jury in last place, Poland.
D
And here are the results of the UK telephone vote in first place, Poland. This year's Eurovision was extra special for Conchita Verst, a beautiful woman with a beard who won the competition for Austria. It was also extra special for all of us statistical nerds, because it was the first time we were able to see a full breakdown of the public and the jury votes for each act in each country. We normally don't know if the jury, made up of five music industry professionals and the public have voted the same way.
K
Turns out, when you look at how the public voted and how the jury voted separately, you get some interesting results, especially for Poland.
A
Still, I've never seen British turning get a reaction like that before.
I
Marvelous.
K
Poland was 14th in the official rankings, but the European public were much more keen on the buxom milkmaids than the juries. The juries put them in 23rd place, but the public put them in 5th. In the UK, the difference was even more pronounced. The jury put them in last position, but the public voted them in first position. Stay classy, United Kingdom.
D
And there were other big discrepancies between how the jury and the public voted in the UK, Azerbaijan was in the jury's top 10, but right down near the bottom of the table in the public vote.
K
And there were other surprises hidden in the results. Although Austria's bearded lady Conchita Verst was a bookie's favorite, there were fears more conservative parts of Eastern Europe might not vote for her.
A
Austria, okay, she needs these twelves because she's not going to get twelves, I think from Ukraine or Georgia or Slovenia.
K
Graham was wrong about Slovenia, who gave Conchita 12 points. But digging into Eastern European votes produces some interesting facts. Take, for instance, Belarus, where the state broadcaster was petitioned to block the transmission in case Conchita turned the country into a hotbed of sodomy. The jury hated the singer and ranked her nearly last, but the public put her in fourth place. And in Russia, the jury would have given Conchita nul point, but the public ranked her third.
D
But come on, these results can't really be seen as an insight into how liberal a country is, as we need to bear in mind that the people who watch Eurovision are not always representative of that country.
K
Okay, fair point.
D
What interests me most about all of this is that changing the voting system so that it was just the public vote wouldn't have had much of an effect on the overall result. Austria would still have won by a huge margin and France, well,
K
They would
D
still have come last.
K
The UK did better in the official results. We came 17th in the current system, but would have come lower if only the public vote had counted.
D
So we shouldn't start a campaign to change the voting system for Eurovision just yet. Back to you, Tim.
B
Laura gray and Charlotte MacDonald reporting. We're always keen to hear from you via more or lessbc.co.uk. and a few weeks ago, loyal listener Sheila got in touch with this question.
F
I'm 60 on Saturday and have a weekend of fun planned. I've been wondering, does everyone get to have a big birthday at the weekend at least once in their lives? If we say 20 is probably the first time one would be aware of such things. How old do you have to get before you can be certain of a big birthday weekend?
B
Well, I hope you had a great birthday, Sheila. And I must confess to using the back of a trusty BBC envelope for this one. Sheila's had to wait a long time for this. Her 10th birthday was on Sunday, May 10, back in 1964, but her 20th, 30th, 40th and 50th birthdays were all stranded on weekends. Now, we think this is unusual. Because your birthday moves a day forward in the week each year or two days. When there's a leap year over a decade, your birthday moves forward 12 or 13 days. Looked at another way, it skips backwards a day or two across the week. We think that everyone will celebrate a weekend round number birthday as an adult by the age of 60 and usually earlier than that. If there are any loyal listeners out there who've had to wait until they're 70, do please get in touch via more or less BBC.co.uk and no 2-29-babies, please. You have enough to worry about already. Now to deal with one of those zombie statistics, and in this case, it's a particularly tenacious zombie from France. Here it was recently on the Today programme. There are so many French people living in Britain these days that London counts
I
as France's sixth biggest city.
F
London being France's sixth biggest city. And the French consulate says 400,000.
B
This idea has been going since at least 2008 in both France and the UK. Boris Johnson also said it last year at party conference, he announced that there were 250,000 French people in London. In a recent interview with the Evening Standard, he upped that estimate even further with a challenge to a French. Tell that guy to come and have a look at what's happening in London to join the exodus of 400,000 French people who've abandoned miserable Paris. The words of Boris Johnson there. I did my best to do the great man justice. But are Boris Johnson and John Humphreys and all the other people who make this claim actually right? Charlotte MacDonald's been talking to Frenchmen.
D
Yes, because the most frequently quoted number is attributed to the French Embassy in London and that's around 300,000.
B
But when have the British ever trusted the French on anything?
D
Quite. I went to the UK's top authority on population matters, the Office for National Statistics, and their figures are very different, depending on which of their sources you look at. They estimate There are between 66,000 and 86,000 French nationals in London, not even
B
close to the 300,000 originally quoted.
D
It is a nice office thing. I went along to the French Embassy in Knightsbridge to meet press spokesperson Xavier Chatel. Very smart, very polite.
B
He seems to have made quite an impression on you, Charlotte.
D
I was only interested in him for his numbers, Tim. He talked me through them.
L
I think there is no single absolute authoritative measure. This is Europe, so people are free to come, they are free to go, and therefore there is a certain degree of uncertainty about the exact number. However, we can try to converge towards a reasonable estimate, we reckon that the number must be roughly in the 270,000. That is 90% of the 300 or so thousand French people present in the UK.
D
And when you say London, what do you mean? Central London?
L
Or it would be the Greater London area, that is London itself, plus the sort of south eastern quadrant of the uk, including Kentucky, Oxfordshire, maybe Sussex too.
B
So hang on a minute, I live in Oxford. That's a city in its own right. This southeast quadrant of England business. That's a much bigger prospect than London itself.
D
Yes, and while this is a very expansive definition of London, the French actually draw a very tight boundary around their own cities. It excludes a lot of the suburbs.
B
Using a figure of 86,000 French nationals, we've worked out London's real ranking. If you look at the top urban areas of France, rather than narrowly defined municipalities, and on that basis, London's ranking
E
is
B
lower than 60th on the list.
D
Even if you use the figures that the French Embassy gave us, London is still only the 23rd biggest French city, which doesn't make for a sexy headline.
B
This zombie statistic is always wheeled out to prove why someone would be better off in London than in France. But is that even true?
D
It's true that the unemployment rate is lower than in France, but are taxes really lower in the uk? Eric Albert of the French newspaper Le Monde has been looking into this.
C
It's rubbish. It's rubbish. Income tax is roughly the same in both countries. Actually, if you have children, you're better off in France because the number of children you have is part of the calculation of your income tax in France. But there is an exception for the very, very rich people. So the famous none dumb. But frankly, if you want to move out of France because of tax, you're not coming to Britain. You're going to some other jurisdiction. It might be Switzerland. London would not be the place for tax evasion.
B
Eric Albert of Le Monde. But perhaps the French are flocking to the UK because of their performance in the Eurovision Song Contest. They placed last, I believe, de point. That's all we have time for today. Please keep your questions and your comments coming. And as always, there's further information and a downloadable edition of the show available@BBC.co.uk more or less. We'll be back next week. Until then, goodbye.
J
Goodbye.
A
More or Less was presented by Tim Harford, the Financial Times undercover economist. The producer was Charlotte MacDonald. And the programs made in association with the Open University. You can download many more programs for free from Radio 4. You can find them at BBC.co.uk radio4.
This episode of More or Less tackles a viral statistic comparing the effort spent on investigating tax dodgers versus benefit cheats. Host Tim Harford, along with contributors including Charlotte McDonald, scrutinizes the figures and explores the nuances behind them, while also addressing quirky questions about international poverty statistics, Eurovision voting oddities, and the statistical likelihood of Charlie Bucket getting a golden ticket. As always, the tone is wry, skeptical, and sharp, with myth-busting at its core.
[00:41–06:16]
The Claim:
Social media suggests the UK government dedicates far more staff to chasing benefit fraud (£1.1bn) than tax evasion (allegedly £70bn):
Benefit Fraud Figures (Charlotte McDonald):
Tax Evasion Figures:
Number of Investigators:
Difficulty of Comparison:
Memorable Line:
[06:16–11:59]
New World Bank PPP Estimates:
Impact:
PPP Explained via Analogy:
Expert Caution:
Redistribution of Poverty:
[12:12–17:02]
Listener Question:
Calculation (with Rob Eastaway):
Lottery Analogy:
[18:02–21:13]
Public vs. Jury Voting:
Political/Cultural Surprises:
Takeaway:
[23:11–27:14]
The Myth:
The Reality:
French vs. UK Taxes for Expats:
Quote:
On Internet Statistics:
“Normally, of course, claims that have gone viral on the Internet are always correct. But I wonder.” — Tim Harford [02:21]
On French Expat Numbers in London:
“When have the British ever trusted the French on anything?” — Tim Harford [24:05]
Eurovision Voting:
“The jury put them in last position, but the public voted them in first position. Stay classy, United Kingdom.” — Laura Gray [19:07]
On Moving to London for Lower Tax:
“It’s rubbish. It’s rubbish. Income tax is roughly the same in both countries. Actually, if you have children, you're better off in France... London would not be the place for tax evasion.” — Eric Albert [26:42]
Probability for Charlie:
"So there's about a 1 in 80 million chance of getting a golden ticket. ... So his chance of getting a golden ticket was actually about 1 out of 20 million. Wow." — Rob Eastaway [15:11–16:11]
The episode is characterized by a lively, slightly irreverent skepticism, with deep dives into statistical nuance, frequent dry humor, and a commitment to myth-busting. Multiple voices (including guests and audience members) provide clarity on technical issues through accessible analogies.
For listeners and data nerds alike, this episode typifies More or Less: debunking viral stats, exposing tricky definitions, and reminding us the story behind the numbers is as important as the numbers themselves.