With many commentators and policy makers still doubting the need for tax cuts, despite the record tax burden, the TPA’s research and campaigning is more important than ever.Â
Our eggheads have been busy conducting an in-depth analysis of what happens to growth, investment, and wages when the tax burden is too high - and, unsurprisingly, it doesn’t make for happy reading.Â
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The findings show that most experts place the optimal tax burden for boosting growth at between 20 and 30 per cent of GDP. The UK’s stands at 36.3 per cent, a post-war high (and forecast to go higher still). Should we really be surprised by the anaemic growth we’ve been putting up with for years?Â
Of course, others think there are better ways to get the economy going. It was recently reported that treasury mandarins favoured increasing immigration over letting people keep more of their hard-earned money. While other factors do play a part, the evidence is clear that tax is important and any government serious about growth has to include bringing down the burden in its plan. You can read our findings in full here.
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With all this in mind, we’re campaigning for the chancellor to use his upcoming budget to cut income tax. By cutting the headline rates or unfreezing thresholds, Jeremy Hunt can give our economy and household budgets a much needed boost. Our chief executive, John O’Connell, took our call to readers of the Sun: “The Chancellor needs to seize this opportunity and push for an income tax cut, putting more money back where it belongs – in the pockets of hardworking Brits.”
With just over a month to go before Hunt takes to the despatch box, we need as many of you as possible to support our campaign. Be sure to sign our petition and share it with your friends and family here. With your help, we can secure some much needed relief for hard-pressed taxpayers across the country!
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Petition delivered to the treasury
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After tens of thousands of people signed our petition to put a stop to public sector golden goodbyes, we hand delivered it to the treasury this week.Â
In December, our investigation found that civil servants were paid a staggering ÂŁ150 million in exit payments in 2022. Covered in the Daily Mail, these figures show that ministers, despite having the power to cap payments, have failed to get a grip of these mega payouts, including almost ÂŁ400,000 paid to a former treasury official.
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These latest numbers are just the tip of the iceberg. As our Town Hall Rich List shows, the problem is not confined to Whitehall. Amongst the councils that bothered to publish accounts for 2022/23, over ÂŁ3 million was paid out in golden goodbyes.
The government can now be in no doubt about what the British public thinks about these shocking sums. It’s time for ministers to act and take a stand for taxpayers by capping these huge payments!
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TaxPayers' Alliance in the news
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ÂŁ600 million package for councils
As councils received a ÂŁ600 million funding boost, our head of campaigns, Elliot Keck, took to the GB News studio to discuss what this means for local residents and their tax bills.
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Despite this extra funding, as Elliot explained, council taxpayers won’t be celebrating just yet: “You look at the broader picture and council tax has gone up by 79 per cent in real terms since it was introduced. We’ve seen council tax amounting to over 10 per cent of people's salaries in some parts of the country… It looks like it’ll be another year of five per cent increases.”
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Productivity improvements must go hand-in-hand with spending cuts
With the head of the National Audit Office making it clear that the public sector is wasting ÂŁ10 billion a year by failing to boost its productivity, writing for CapX, TPA researcher Jonathan Eida tells us why we need spending cuts alongside any future productivity gains.
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In this important op-ed, Jonathan makes clear: “In order to see the benefits of public sector productivity and economic growth, the government must prioritise cutting spending; not only as a means to reinvest in public services or increase the reach of government, but to ease the burden on taxpayers and put the economy on a stable footing for a sustainable future.” Quite right!
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Town hall salaries
It emerged this week that the new York and North Yorkshire combined authority will be employing 54 staff with an annual cost of ÂŁ4.5 million!Â
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Joanna Marchong, our investigations campaign manager, spoke to the Yorkshire Post telling readers: “Combined authorities often deliver cheaper, more efficient services and York and North Yorkshire combined authority should be no exception. Officials must iron out the details and ensure residents are getting value for money.”Â
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A tale of two councils
In this week’s blog, Jonathan has taken a look at two councils with vastly different council tax bills. Westminster and Rutland councils represent two ends of the council tax spectrum - Westminster with the lowest rates and Rutland with the highest.
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Jonathan has dug beneath the headlines and into the finances of both authorities to work out just why there is such a disparity. Whilst it is not simply a case of a well run council versus a poorly run one, as Jonathan notes: “clearly council bosses in Rutland still have questions to answer. And they even more clearly have a new year’s resolution worth adopting: to try and make council tax bills only the second most expensive in the country. That would be a start.”
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This week, the TPA team bid farewell to two of our longstanding members of staff - policy analyst, Thomas Ryan and digital campaign manager, Joe Ventre.
Tom and Joe have made great contributions to the TPA’s work over recent years, from research papers, to graphics, to broadcast appearances. While we will miss them greatly, we wish them all the best in their new roles.
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Benjamin Elks
Grassroots Development Manager
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