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Turning a corner or a false dawn?
Well well well, who’d have thought it eh? The latest GDP figures show the UK economy grew by 0.7 per cent in the first quarter of 2025. Impressive right. It’s the fastest growth since Q1 last year and the chancellor will certainly have been pretty pleased.
And we were pleased to be able to declare an end to the personal recession ([link removed]) Brits have been enduring with GDP per capita up 0.5 per cent - though it still lagged behind overall growth. As John O’Connell explained: “Until now, headline figures showing economic growth were largely meaningless to the millions of households suffering from declining living standards combined with a record high tax burden.”
But Rachel Reeves may want to think twice before she pops open the champagne. While these latest stats are positive, they also cover the last quarter before her barmy, business bashing, tax rises announced in the budget take effect. As economist Julian Jessop ([link removed]) put it: “Most importantly, these figures cover a period before the big jumps in employment costs in April. Surveys of private businesses suggest that these cost increases hit activity hard, especially as many firms are also continuing to struggle with high energy costs and the prospect of even more red tape (including the so-called ‘Employment Rights Bill’).”
We know that tax rises like those pushed through back in October will hammer Brits and businesses will find it much harder to expand or even stay afloat with all that extra national insurance to pay. Growth is good to see but this might just be the calm before the storm.
Labour's impact on business & regulation with Alys Denby
Podcast host Duncan Barkes is joined by TPA researcher Jonathan Eida and Alys Denby, Opinion and Features Editor at City A.M. for this week’s episode of a nation of taxpayers.
Together they discuss the Labour government's current relationship with British business and their position on regulation in the City. They also talk about the lack of business experience in the Cabinet and the ongoing rise of Nigel Farage's Reform UK.
Give the latest episode of a nation of taxpayers a listen on Apple Podcasts ([link removed]) , Spotify ([link removed]) , and YouTube ([link removed]) .
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Town Hall Rich List Roadshow: Castle Point
On Thursday, the TPA team descended on Canvey Island, part of Castle Point district council for the first leg of this year’s Town Hall Rich List Roadshow. Each year we visit some of the worst offending councils from our rich list ([link removed]) and Castle Point definitely earned a visit.
With two council officers making the top ten of our list, including the former strategic director (resources) who took home a whopping £565,000 in 2023-24, we wanted to find out what the residents of Canvey Island thought about it all? We asked people to vote on whether these pay packets were deserved and the result was a resounding “No!” With the council embroiled in a row over unlawful payments to officers ([link removed]) , we shouldn’t really be surprised by the strength of feeling.
Our team will be touring all over the country in the coming weeks and months. Keep your eyes peeled for when we’re visiting a council near you.
Dramatic increase in quango spending
The latest briefing paper ([link removed]) from the TPA researchers, as part of our ongoing Britain’s Quangos Uncovered ([link removed]) campaign, has revealed some shocking statistics. Since 2012-13, spending by Britain’s quangos has increased by an eye-watering 243 per cent to £343.6 billion in 2022-23! Their spending as a percentage of public sector spending more than doubled to 29.6 per cent.
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While the number of quangos fell from 561 to 304, the number of staff working at these bodies actually increased by 63.6 per cent ([link removed]) . Clearly, previous efforts to bring the quango state under control have been a complete failure. For too long ministers have farmed out responsibility and spending power to these unaccountable bodies.
John was spot on when he spoke to the Times ([link removed]) : “While the number of bodies was slashed, the result was simply bigger, better resourced organisations which further siphoned off powers from elected politicians. If Labour ministers want to end the situation of accountability without power, they need to genuinely transform the British state by slashing the size of the quangocracy.” Hear, hear!
Second home surcharges
With councils scrambling around for funds, many have latched on to the idea that the key to solving all of their problems is to go after those who have slogged away and worked hard to own a second home. Like lots of bright ideas from local authorities, this is another ill-thought through mess of a policy. If they bothered to think about it at all.
Our team has done some digging ([link removed]) and found that 8 in 10 councils that introduced second home surcharges on council tax bills failed to undertake impact assessments on the policy. They’re charging ahead with punitive tax increases without a clue about the consequences.
John made it perfectly clear to Telegraph readers just why this policy is such a bad idea: “When designing this policy, ministers anticipated it would only be used in certain cases, and would be accompanied by impact assessments. Yet this has not been the case and in most of the country councils have simply used it as a naked cash grab.”
Council tax is supposed to pay for services used by households that are provided by councils. The system recognises this since single person households, who typically consume fewer services, get a discount. These surcharges are ideological policy making being used to cover for councils who fail to get their spending under control. Time for them to be scrapped!
Delays and deficits: Why is Britain so bad at building?
We’ve all seen ministers make big announcements of some new project with a hefty price tag. And I’m sure many of you put little faith in that claimed cost. We’ve certainly been burned many times in the past (HS2 anyone?). So, in this week’s blog ([link removed]) , Callum McGoldrick asks “Why is Britain so bad at building?”.
Taking us through the ways in which these projects go wrong, Callum has some advice for how to fix it and start delivering value for money for taxpayers: “Using forecasts with greater accuracy, hard deadlines must be placed on key milestones, with penalties given out to those responsible for underdelivery. It is simply unacceptable that, when dealing with sums of billions, poor performance has no consequence. This also means that decision makers must be held to account. Unrealistic projects with astronomical budgets should not be approved.”
Have a read of Callum's full analysis and recommendations here ([link removed]) .
War on Waste
With Scotland’s major cities in the grip of an ongoing gang war over drugs ([link removed]) , you might think Police Scotland would be focussing on tackling this violence with every spare penny. Sadly, you’d be mistaken.
As this gangland war rages, Police Scotland are currently on the look out for an HR Equality, Diversity, and Inclusion Lead ([link removed]) on a hearty £70,003 salary. Not sure that’s quite what Scottish taxpayers would put on their priority list…
Benjamin Elks
Grassroots Development Manager
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