Figures recently released by the Office for National Statistics have revealed the devastating impact coronavirus is having on the economy. Last month the government borrowed a record £62 billion.
Taxpayers are the unsung heroes of this crisis. Their hard-earned taxes have kept families and business afloat during this incredibly difficult time. But this is just the tip of the iceberg. It is clear that repairing the economy will be a monumental challenge. The TPA research team has put together some key figures from the report:
- In April 2020 the government repaid more in VAT than it received - VAT cash receipts were minus £0.9 billion
- Income tax revenues and national insurance contributions fell by £3.8 billion and £2.4 billion respectively.
- Receipts for corporation tax fell by £4.1 billion.
- The Coronavirus Job Retention Scheme cost £14 billion in April 2020,
- Government departments spent an extra £7.1 billion on staff and goods compared with April 2019.
- Overall grants to local authorities increased by £14.2 billion compared with April 2019.
In response to these record breaking figures we issued a press release urging the chancellor to steer clear of punishing tax rises to balance the books. Attempting to tax away a fiscal deficit driven by the deepest slump in living memory would be crazy. The priority must be to get the economy back up and running, with tax cuts on jobs and investment being the only way to power us towards growth.
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BBC splashing the cash chasing youth audience
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BBC bosses are planning to plough more of taxpayers' cash into BBC Three whilst simultaneously cutting funds for other services. Some may welcome this and I suspect many others will not.
More importantly, this situation highlights the fundamental problem with the licence fee model. If a provider such as Netflix, Amazon or Sky did this, we as consumers have the option to switch off and stop paying them. Not so with the BBC, we all have to pay £157.50 every year, simply for owning a television.
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Our media team were quick to issue a statement and our comments were picked up in The Sun, Daily Mail and Express to name just a few. Additionally, our media campaign manager Sam Packer was invited onto Dan Wootton's talkRadio show to hammer home the TPA's message.
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He told Dan that BBC bosses should not waste cash chasing a youth audience they have no hope of catching. Auntie is too quick to compete in the commercial market using taxpayers' money, with the help of a mandatory TV tax which is not fit for the 21st century. It should be axing the TV tax and shifting to a subscription model which has proved to be popular with older and younger viewers alike.
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TaxPayers' Alliance in the news
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Comedy of errors
This week we learned that multi-millionaire comedian Steve Coogan furloughed both the gardener and housekeeper at his £4 million country estate. Despite an estimated worth of £10 million the funnyman decided to take advantage of the taxpayer-funded Coronavirus Job Retention Scheme. Commenting on the eye-opening revelation, our chief executive John O'Connell told The Sun newspaper, "support should only be sought if it’s really needed.”
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Mr Coogan is fully entitled to use the scheme but his actions are at odds with comments he made earlier in the year, boasting he didn’t “get anything for free” and “I pay for everything.” Not quite it seems.
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Fat cat controllers
Following on from last week's damning report of HS2 Ltd by the Public Accounts Committee I wrote an in-depth analysis for CityAM. Since day one the project has over-promised and under-delivered. Even now, after more than 10 years there is “huge uncertainty” surrounding the upgrade of Euston station.
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The HS2 minister Andrew Stephenson must act. Chief execs should be properly scrutinised and those that don't make the grade should be shown the door. If the government won't scrap HS2 then the least they can do is get costs under control for the sake of taxpayers.
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We have another excellent set of blogs covering a wide range of taxpayer topics to perfectly round off your bank holiday weekend.
Lords skewer IR35 reforms
The House of Lords Economic Affairs Finance Bill Sub-Committee recently published a report criticising the government on its planned off-payroll reforms (IR35), now due to be introduced in April 2021. Their Lordships described the framework as "flawed" and rightly recommend that plans are completely overhauled. Following the report, a number of MPs including David Davis and Esther McVey, tabled an amendment proposing a further two year delay.
Unfortunately they were not successful but the TPA will continue to campaign on this pressing issue. The lockdown has seen work patterns change and flexibility become more vital than ever before. IR35 shouldn’t have a place in the post-pandemic world. Click here to find out more.
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What can darts tells us about the economic recovery?
It's fair to say that many of us are missing the usual plethora of live sport available at this time of year. However, a combination of ingenuity and modern technology has seen one sport continue to broadcast. As Sam Packer explains, "the Professional Darts Corporation (PDC) set up an alternative in the form of the web-cam based Home Tour, with players competing via a scoring app".
Great for darts fans but it also demonstrates the sort of innovation we need to nurture for a post-virus economic recovery. If we can create the sort of environment which can harness this enterprising spirit, the British economy will have hit the bullseye. Click here to read more.
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Where have all the councils gone?
Many supporters have emailed me during lockdown to express their dismay at how poorly councils have reacted to the pandemic. Writing anonymously for the blog this week, a former long-serving council leader has pinpointed the key areas where local authorities have under performed. On everything from reduced bin collections to the suspension of democratic processes the blog is a must read. As the author says:
"Overall the report card for local councils puts it bottom of the class in the public sector. Slow to respond, failing to use resources properly, failing to pass on cost savings and lacking in creativity. Local authorities must learn from their mistakes to ensure they are prepared for future crises. With confidence in councils already at rock bottom, taxpayers won’t accept more of the same."
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Council clanger costs taxpayers dear
As outlined above, local democracy has recently suffered from a lack of scrutiny. This is aptly demonstrated by Dorset Council who recently rushed through an enormous £800,000 contract without adhering to normal procedures. It is just one of over 100 decisions made since lockdown; many of which without analysis by the relevant committees or full council.
The 12 week contract allows the council to hire rooms from two hotels to free up beds in local hospitals. The ad hoc decision has been met with fierce criticism from community campaigners. They revealed there were already vacant beds in hospitals, which are safer and more appropriate for patients.
This council clanger has resulted in an egregious waste of money. Although we live in unprecedented times, taxpayers still deserve to see their hard-earned council tax spent effectively. Local authorities should not use the current crisis as a get out of jail free card for reckless spending.
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Harry Fone
Grassroots Campaign Manager
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