Big news this week as chancellor Rishi Sunak announced his plans to kickstart the economy's recovery from coronavirus. It's fair to say there was mixed news for taxpayers. On stamp duty the chancellor was spot on to cut it with immediate effect. More on that later.
His plan to save jobs struck an upbeat tone but it’s tomorrow’s taxpayers who will have to work hard to pay for it all. The new kickstart scheme could turn into a massive own goal for the jobs market. Subsidies for temporary work won’t offer young people the proper opportunities they need to clamber onto the career ladder. Instead they may only postpone painful youth unemployment. Long term measures to boost jobs and investment, such as cutting employers’ National Insurance (effectively a tax on jobs), would be a much better solution.
The comically named "Eat Out to Help Out" measure comes with a sky-high bill that will leave many with a bad taste in their mouths. If the chancellor really wants to get the hospitality sector moving again we need wider long term reform such as ditching bad regulations and ensuring supply chains can get back to normal by making investment easier.
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Of course the best news came on stamp duty land tax and taxpayers could save up to £15,000 on a house move. The TPA has been fighting our Stamp Out Stamp Duty campaign for nearly a decade. Many supporters (and many economists) have written to me expressing their disdain for this truly terrible tax. Raising the threshold will help get Britain moving again.
But before the dust could settle on the economic statement our team worked tirelessly into the evening to sift through reams of economic data and quantify exactly what this cut will mean for taxpayers. Our unique analysis revealed that raising the threshold to £500,000 could unlock 216,000 house moves, equivalent to the total housing stock of Manchester.
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Our rapid post-statement analysis was picked up by hundreds of local and national media outlets. The TaxPayers' Alliance is being heard loud and clear to tens of millions of people across the country.
Writing an opinion piece for the Sunday Telegraph today our chief executive John O'Connell says the cut in stamp duty will be a boon to many. But he argues we must do more on this issue, "tax cuts change lives, not just balance sheets."
Currently the cut is only temporary. We have to continue to explain why it works and why it matters to people. As John told CityAM's Andy Silvester the day before the statement, "If temporary cuts to VAT and stamp duty are good for the economy then why not doing them permanently?"
Rest assured, we will be banging on the door of No. 11 Downing Street to ensure that tax cuts are here to stay and deleterious taxes like stamp duty are ultimately abolished.
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BBC scraps free TV licences for over-75s
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Thursday brought a kick in the teeth for many pensioners after the BBC admitted that millions of over-75s will be forced to pay the dreaded TV tax from August 1st.
Within minutes of the announcement our press team fired off a damning response which featured in the headlines of local and national press. Our comments also hit a nerve online with our social media posts going viral. Just a few hours later I was head-to-head with radio presenter Eddie Nestor on BBC London arguing why this tax must go!
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Eddie was adamant the BBC had little choice in the matter. But I argued he couldn't be more wrong. When the Beeb is wasting money on everything from threatening TV Licensing letters to million pound salaries for its "stars" it can't complain when pensioners say they are getting a rough deal.
The corporation still refuses to accept the fundamental point about freedom of choice. An ever growing number of people are sick and tired of being forced to pay for a service they don't want. The government is already listening to our calls to decriminalise the telly tax and we will continue to fight tooth and nail to abolish it altogether.
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TaxPayers' Alliance in the news
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You can't tax Britain into prosperity
Shadow chancellor Anneliese Dodds recently reignited the debate about whether a "wealth tax" should be introduced to pay for the economic damage inflicted by coronavirus. Ms Dodds was very sketchy on the details with no idea about how to implement this tax raid.
Making the case against wealth taxes I told Robert Perrone of BBC Three Counties Radio that the evidence suggests they are a disaster. Indeed, even former Labour chancellor Denis Healey said it was "impossible to draft" such a policy.
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Both France and Sweden abandoned wealth taxes after billions of pounds of investment left their shores. I concluded by stressing the need for a tax system that encourages entrepreneurs to start and grow businesses. You cannot tax a country into prosperity.
And it seems Labour are getting the message, U-turning on the policy just two days later. I'm delighted they agree with the TPA and are renouncing socialist ideas.
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The UK, Australia, and the Commonwealth in a post-Brexit World
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Our good friends at the Australian TaxPayers' Alliance (ATA) recently hosted their Friedman 8 virtual conference, the world's biggest and best online liberty conference. As part of the festivities TPA chief exec John O'Connell chaired a fascinating discussiong with former MEP Dan Hannan and Amanda Stoker, Senator for Queensland.
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In particular they mused on the benefits that free trade, reducing tariffs and sharing the same political and legal cultures can bring to both countries post-Brexit. You can find out more about the conference here and congratulations to the ATA for putting together such an incredible event.
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Not content with reaching millions of people through traditional media, the TPA team has been busy writing more blogs to reach millions online as well.
Barmy budgeting
Rebuilding the economy isn't just about cutting taxes, it's also about eradicating wasteful spending. Have you ever noticed how all of the roadworks happen around the end of the financial year? Campaign manager Joe Ventre uses this example to highlight the phenomena of public bodies purposefully maximising spending as part of attempts to use up their budgets before coming under review.
As Joe astutely writes, "What they tend to forget however is that this isn’t simply government money they’re scrambling for - it’s taxpayers’ money. It is not their money to waste, especially not to feed an expensive spiral which would see them waste even more the year after." A fundamental rethinking of how budgets are configured must take place across all government levels, with consideration for taxpayers placed at the heart of the discussion. Click here to read the fully story.
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What are Estimates Days?
Despite being relatively unknown beyond the walls of Westminster, the Estimates Day debates are theoretically one of the most important days of the parliamentary calendar for taxpayers. It is in these debates where members of parliament have the opportunity to make meaningful changes to government expenditure plans by voting for reductions in departmental spending estimates. This year's debates have drawn to a close, although if you blinked you might have missed them. Proper scrutiny seems to be sadly lacking. So what can be done about this?
One proposal pushed by the TPA to improve oversight recommends the creation of a new ‘budget committee’, similar to those that already exist in Australia and New Zealand. Our chairman, Mike Denham, made the case in evidence submitted to the procedure committee last year.
Given the current rapid growth of the national debt, this sort of scrutiny will be needed over the coming years, possibly, more than ever before. MPs should rally around our proposals. If they do that, we estimate that taxpayers will thank them for it. Click here to read more.
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Blackburn’s bus blunder
A brilliant scoop for the TPA this week as grassroots assistant Kieran Neild uncovered the true cost of Blackburn's new bus station. The cost to the taxpayer was an eye-popping £8.4 million, nearly £4 million over budget! Determined to root out wasteful spending in his local council, Kieran’s freedom of information request revealed what the local press had failed to spot.
Costs spiralled when Blackburn council sacked a contractor who raised concerns that the bus station was not structurally stable. This caused considerable delay with the dispute going to court. Adding insult to injury, cracks have appeared on the floor of the station raising fears that it is subsiding.
Not only have ratepayers picked up the tab for a late and over budget project but they may also be lumbered with the cost of fixing chronic structural problems. Heads should roll as a result of this costly blunder.
Help the TPA expose wasteful council spending. Send me your examples.
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Harry Fone
Grassroots Campaign Manager
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