When Jeremy Hunt stood up at the despatch box to deliver his Budget, the TPA team held their breaths, hoping he might finally show some signs of embracing a proper growth agenda, delivering lower taxes and reining in spending.
Sadly, the chancellor instead chose to pursue the same old tax-and-spend policies that we’ve become all too familiar with. In the Spring Budget, Hunt chose gimmicks and tinkering over addressing the real challenges facing taxpayers.
|
|
Our team pored over the details before issuing our rapid reaction. Only a few hours after the chancellor sat down, we put on a briefing with the Institute of Economic Affairs for journalists and policy makers, exposing the economic realities hidden within the copious Budget documents.
As we discovered, having dodged the big decisions, Hunt risks condemning the UK to a prolonged period of stagnation, spiralling spending, and sky-high taxes.
|
|
|
Spending is spiralling out of control
|
|
|
|
Amongst the host of pet projects the chancellor has chosen to pay for, the scale of the Conservatives’ addiction to spending is laid bare. Every department has been promised budget increases for new programmes, public sector headcount is ballooning, and ministers are making no effort to put a stop to the outrageous levels of waste.
|
|
At our Budget briefing event, our chairman and former HM Treasury economist Mike Denham laid bare the fallacy at the heart of the government’s economic plans. As Mike says: “As taxpayers and people living in this country, we need to be concerned by the fact he has not tackled the big problem that he has in the public finances which is excessive public spending.”
TPA projections, put together as soon as the chancellor finished his speech, see public spending rising towards 60 per cent of GDP by the 2060s!
|
|
|
In a hugely important op-ed for the Daily Mail, which dominated their multi-page Budget spread, our chief executive John O’Connell hit the nail on the head, saying: “It is precisely because the Tories have copied many key, expensive Labour policies that the Government has been forced to push up taxes so much.” As John goes on to conclude: “Amid all this profligacy, the traditional values of restraint, discipline and sound money have been lost. Sadly, as the Budget demonstrated, we will all pay a heavy price for this failure.”
With uncontrolled levels of spending, it is little surprise that Hunt’s plans are set to take Britain to excruciatingly high record tax levels. You can read John’s full analysis here.
|
|
The rays of light for taxpayers that came out of this Budget were few and far between. For every pro-taxpayer move Hunt made, he seemed to claw back even more.Â
On corporation tax, the chancellor pressed ahead with his damaging plan to push it up by six percentage points. While this was coupled with the welcome move towards full investment expensing, the damage will be done. As our digital campaign manager Joe Ventre explained to TalkTV viewers: “We’ve got one of the most complicated tax systems in the world, and this only compounds it. It feels like with a lot of these measures, we take one step forward and two steps back. A headline rate rise to 25 per cent is going to be astronomical for businesses!”
|
|
|
Meanwhile, the stealth freezes in tax thresholds will ensure working households feel the pinch in their pockets, with living standards set to fall. There were a few measures to try and offset this. We certainly welcomed the freeze of fuel duty, maintaining the 5 pence cut introduced last year. This will be a real relief for motorists struggling with the ongoing cost of living crisis.
|
|
|
But the chancellor chose to push up so-called sin taxes, hiking alcohol and tobacco duties. As I told City A.M.: “This duty is long past the point of paying for the costs of smoking, and now acts to punish law-abiding citizens who choose to smoke.”
|
|
|
Perhaps the biggest tax reform measures came for pension savers. At the start of the week, our media campaign manager Conor Holohan wrote an influential op-ed for CapX calling for the abolition of the lifetime saving allowance. When Hunt did just that, Conor was pleased to give our endorsement saying: “It’s right to end the punitive caps on pensions that have served to drive people to an early retirement, stifling growth and taking talented people out of the workforce.”
|
|
Five things you need to know
With our reactions sent out to the media and the briefing event underway, we turned our attention to digesting the details of the Budget for social media.Â
In this week’s snappy blog, which went viral via the Guido Fawkes site, our managing director James Roberts looked at five key takeaways from Wednesday’s budget.
|
|
|
From public spending and welfare, to pensions, stealth taxes, and projections, James takes us through key aspects of the Budget you can’t afford to miss. As James sums up: “With a record tax burden and runaway spending, all of this points to more hardship for taxpayers down the road.”
|
|
|
Will you help us stand up for taxpayers?
|
|
|
We won’t stop pushing for the low tax, high growth economy Britain so desperately needs. We’re one of the few groups in Westminster who stand up for the interests of taxpayers and we’re proud to say we don’t take any taxpayers’ money. But we can’t do it alone. Our work is only made possible by the generosity of people like you. You can back us today by clicking here to donate. |
|
Benjamin Elks
Operations Manager
|
|
|
|
|
