It was certainly a less than pleasant week for taxpayers. As the government’s efforts to get a handle on inflation stuttered, a new report from the Institute for Fiscal Studies suggested that the chancellor’s freezing of income tax thresholds will add the equivalent of six pence to both the basic and higher rate!
Naturally, we were less than impressed by these latest revelations. John O’Connell, our chief executive, pulled no punches when he called out Hunt’s hikes: “Struggling taxpayers are being squeezed by this stealth raid on their pay rises. The government is draining every last drop from ordinary households in order to fuel Whitehall’s insatiable spending addiction.”
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The bad news didn’t stop there. The Tax Foundation published its latest International Tax Competitiveness Index showing the UK dropped four places since last year, but more on that later.
With the seventy year high tax burden, and Britain’s declining competitiveness, you might be forgiven for wondering where we begin to change things for the better. There are clearly systemic problems with the tax system hitting individuals and businesses alike. Indeed, one of the most frequently cited problems is business rates.
TPA research published on Saturday in the Daily Express looks at exactly this issue, with a whole host of voices from across industry chipping in to give their views on options for business rates reform. As John explained: “The current system punishes businesses that bolster high streets and add value to their local areas. Ministers can give bricks and mortar enterprises a much needed boost by reforming rates to take the pressure off Britain’s vital businesses and allow high streets to once again thrive.” You can read the paper in full here.
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Despite what Jeremy Hunt may claim, there are plenty of things he could be doing to ease the pressure on high streets and households alike. From the options outlined in our paper to putting some of that fiscal headroom to use through targeted tax cuts. Jeremy, if you’re reading, the choice is yours.
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Council tax policy win (at least for some)
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In slightly better news, for part of the country anyway, after years of campaigning and thousands of you signing our petition, Humza Yousaf, first minister of Scotland, used his speech to the SNP conference on Tuesday to announce a council tax freeze for Scottish residents.
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Our media campaign manager, Conor Holohan, captured the mood saying: “Scottish taxpayers will breathe a sigh of relief at this announcement. Council tax rises across the UK are compounding misery on households already grappling with the cost of living crisis.”
Of course there’s plenty still to be done. Taxpayers north of the border will want to see the spending restraint needed to ensure this isn’t just a one-off. And of course the rest of the country is crying out for the same kind of relief. You can sign our petition calling for an end to council tax rises by clicking here.
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TaxPayers' Alliance in the news
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Princely public sector pensions
The news that inflation remained stubbornly high in September means yet another cost for taxpayers: public sector pensions. These gold-plated schemes increase each year by September’s inflation rate, meaning a pay rise for public sector retirees, just as wage growth is expected to slow for private sector workers.
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As I summed up in the Telegraph: “Inflation is driving up gilt-edged retirement packages that many in the private sector can only dream of. The Government must ensure that new public sector pensions are sustainably funded and don’t heap pressure on future generations.”
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Migrant housing
The TPA team were shocked to learn that Waltham Forest council plan to borrow £38 million to purchase two blocks of flats in order to house migrants in the heart of London.
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Speaking live from the GB News studio, our head of campaigns, Elliot Keck told viewers across the country: “There’s a real question about whether this is the best way to manage refugees that come into the country… Giving them prime real estate in one of the most expensive areas in the country where they’ll find it quite difficult to live in, we probably do need to look again at whether this is the best way to do things.”
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You don’t need to know ULEZ costs…
We all know that Sadiq Khan’s ULEZ expansion has been less than popular. So much so that groups like the Blade Runners have sprung up to disrupt its implementation.
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Sadly for the capital’s ratepayers, city hall is refusing to spill the beans on how much they are having to spend replacing or repairing damaged cameras, claiming that revealing the cost might encourage “copycat vandalism”. Speaking for Londoners, Conor told Mail readers: “Taxpayers deserve to know the full cost of Ulez.” Time for Khan to come clean!
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The UK slides down the tax rankings
In this week’s blog, TPA intern Joanna Marchong has reviewed the latest updates from the Tax Foundation’s Tax Competitiveness Report and what it uncovers about the state of the UK’s economy. It didn’t make for pretty reading.
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The UK has fallen four places from last year, now standing at 30th place. What’s the relevance of this? Well, as Joanna points out, while many are more concerned with inflation today, the UK’s tumble in tax competitiveness will impact growth and investment “leaving us more open to inflation shocks in the future.”
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As regular readers will know, the TPA are no fans of big payouts for taxpayer funded staff, particularly for dubious, and potentially unlawful, reasons.
The ‘woke’ National Museum Wales, a charity which last year received £28 million from the Welsh government, may have broken the law when it doled out a £325,000 settlement, including £50,000 for “ hurt feelings” to its former director.
Taxpayers expect their money to be spent providing services, not funding massive payouts for moaning museum bosses!
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Benjamin Elks
Operations Manager
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