TPA Bulletin - 28th May 2010
New TPA video: "How long do you work for the tax man?"
You'll see that the film calculates just how much tax is paid by an average, single British worker - who earns the average wage, consumes an average amount of alcohol and tobacco and drives a Ford Mondeo but uses public transport to commute - and how long in his working day it takes him to pay that bill. In the case of our worker, Adam, his day is as follows:
10.16am - pays off his income tax for the day (1hr, 16 minutes)
11.39am - pays off his VAT bill (40 minutes)
11.52am - pays off his motoring taxes (13 minutes)
12.20pm - pays off his taxes on alcohol, tobacco and betting (8 minutes)
After 1.21pm he is free to earn for himself. Unbelievably, just 3 hours and 39 minutes of his working day are dedicated to generating his own income before he goes home at 5pm. Why not share this video with other people? If you'd like to get links and html to embed the film on your own website or blog, click here. If you're a Twitter user the abbreviated link is http://bit.ly/cK3zD5.
Last week, we saw many welcome proposals in the coalition’s Programme for Government document. The TPA scored a few victories on some key areas of our campaign, like executive public sector pay and spending transparency. Well, there was more good news this week. We have been campaigning for six years for cuts to public spending to reduce the size of the state and to lower taxes. So it was good to see that on Monday, the new Treasury team announced £6.25 billion in spending cuts – many of which are TPA proposals that have been taken up in full or in part.These include:
• Abolishing the Child Trust Fund: £320 million - proposed in the TPA's How to save £50 billion, September 2009
• Abolishing BECTA: £80 million - proposed in How to save £50 billion, September 2009
• Reducing size of RDAs: £270 million - the TPA proposed scrapping the agencies in The case for abolishing RDAs, August 2008
• Cutting the Business Department by £836 billion - the TPA proposed cutting this department by £930 million in An Affordable Voice for Business, February 2009
• Reduction in grants to local authorities: £1.165 billion - the TPA proposed freezing these grants to save £687 million in How to save £50 billion, September 2009
• Reducing grants to devolved administrations: £704 million - the TPA proposed a freeze in grants, followed by a matching of the cuts in England via the Barnett Formula, in How to save £50 billion, September 2009
• Civil service recruitment freeze: £120 million - we proposed and costed this policy in How to save £3.3 billion a year from the Civil Service, February 2008
• Cutting the consultancy bill - we called for consultancy spending to be cut by £1.1 billion in How to save £50 billion, September 2009
• Cutting the cost of quangos: £600m - the TPA published the most comprehensive survey of the size and extent of the quango sector in October 2009, revealing many bodies that are ripe for cuts. Our full series of quango reports and proposals for savings can be found here.
• Cutting the cost of Ministerial and Whitehall travel: £15m - the TPA identified £10.6 million wasted on first and business class flights in Departmental Use of Air Travel, February 2009. Our report Departmental Use of Taxis and Chauffeured Cars identified over £8m spent on taxis and Government cars in July 2009.
These proposals are welcome but they have to be the beginning of a more extensive programme. Far more work is needed if we are going to close the yawning deficit of £156 billion. In our book How to cut public spending (and still win an election) our proposals go further than those mentioned by the coalition government. For instance, on Monday we heard that a recruitment freeze in the civil service would save £120 million; we outlined a 10 percent cut in our book, which would have saved a whopping £1.2 billion more.
So we know that there is scope for further cuts to spending, to restore our public finances to health. Now that the government has had a look at the books there may even be an opportunity to go further than our recommendations. International evidence shows that when bold steps are taken to correct deficits a period of strong economic growth follows. We hope to see more substance in the upcoming emergency budget and the spending review due this autumn.
Capital Gains Tax
While the coalition government’s spending cuts are very welcome, it’s not all good news for taxpayers coming out of the Treasury. Many of you have been in contact with us expressing your concern at rumours of Government plans to substantially hike Capital Gains Tax from 18% to a damaging 40% or even 50%.
We’ve had a flood of responses from people such as private landlords who will now find themselves with significantly more to pay in tax on some already fairly modest sums. What’s more this increase is also set to hit anyone who has simply attempted to invest their earnings outside low interest pension funds in order to provide for themselves and their families in the future. Indeed, anyone who has had the forethought to purchase shares or a second property is in line to be hammered in this controversial move, and there’s little doubt that it will discourage others from speculating with their savings in the same way. In short, ordinary hard-working people will be heavily penalised for their prudent forward planning whilst the very rich (who we can assume this rise is supposed to squeeze) will employ clever accountants to minimise the damage, if they don’t manage to snake out of it entirely.
We will certainly be opposing any proposed CGT increase, and it is encouraging that as well as vocal opposition from the National Landlords Association and others outside Parliament, there are already prominent figures like David Davis and John Redwood on the backbenches of the Commons speaking out against it. We’ll be lobbying hard and working as closely as possible with the whole range of people opposed to a CGT hike. The TaxPayers’ Alliance are against all tax rises, particularly when there many obvious, sensible cuts that can be made to free up funds instead of resorting to plundering the hard-earned savings and moderate investments of the general public. Watch this space.
Lies, damned lies and speeches by the EU President
n the face of it, it was going to be a brave confession. On Tuesday, Mr van Rompuy was meant to be acknowledging that there are serious problems with the Euro, and that taxpayers right across the continent are furious about the bailout of Greece. However, in the event all he was willing to say was that the public were badly informed and unaware of what Euro membership really involved. Amazingly, he had the cheek to say that “nobody” ever warned the public about the risks of joining the Euro. This is, of course, nonsense – numerous eurosceptic campaigners did exactly that. The real problem was that the EU’s cheerleaders (like Mr van Rompuy) spent a huge amount of effort on claiming the Euro was totally safe, bailouts were impossible and that eurosceptics were sounding a false alarm (these quotes are collected in a new report from Open Europe this week http://www.openeurope.org.uk/research/eurotheysaidit.pdf). We’ve all known for a very long time how dodgy the Euro is and how expensive the EU is for ordinary taxpayers, but Mr van Rompuy still seems incapable of admitting that we were right.
Why not email him to set the record straight, at ec.president@consilium.europa.eu ?
As you may be aware, the coalition government has already made great strides in introducing many of the proposals Direct Democracy supports. Free schools, reformed welfare, devolution of power to local councils, open primaries and the Great Repeal Act are all great ideas which were suggested in The Plan, and though Direct Democracy were pleased to see all of these reforms announced in the Queen’s Speech, they also recognise the need to make sure that the government and Parliament are held accountable and follow through on their promises. That is where this campaign comes in. This new organisation will be keeping tabs on the government and pushing for even more transparency, accountability, and citizen democracy.
Burning Our Money: Taking Arms Against a Sea of Waste
EU: The Euro, symbol of stability
Grassroots: Climate Change Festival makes a comeback
Burning Our Money: Non-job of the week
Better Government: Not everyone supports essential spending cuts
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