A broadly positive Queen's Speech for taxpayers, but all eyes now on the Budget

May 27, 2015 12:22 PM

Responding to the Queen's Speech, Jonathan Isaby, Chief Executive of the TaxPayers' Alliance, said:

"The Conservatives were elected on a mandate of protecting taxpayers and reducing spending, and the Queen's Speech delivered on the first. We hope that the Chancellor follows through in his forthcoming Budget, ensuring that Britain lives within its means and starting the much-needed simplification of our tax system. There will of course be other issues that demand attention - not least giving the British people a say on our membership of the European Union - but the Prime Minister and the Chancellor must keep their eyes on the prize of a balanced budget and lower taxes for hard-working people, and this legislative programme is a broadly positive step in that direction."

On specific announcements, including the 'tax lock,' union strikes laws, 'free' childcare, the benefit cap and HS2

On the confirmation of legislation guaranteeing a "tax lock" on Income Tax, National Insurance and VAT, he continued:

"The Tax Lock, while a touch on the gimmicky side, offers some welcome protection for hard-pressed taxpayers. It is crucial, however, that the Chancellor doesn't quietly hike other taxes, but rather finds spending reductions to ensure we are still moving towards the goal of a balanced budget."

On the confirmation of legislation tagging tax thresholds to inflation and the increase in the personal allowance, he continued:

"So-called 'fiscal drag' is one of the most pernicious elements of our tax system, and it is absolutely right that the Government is to address it. While this legislation will address that scandal in the future, it is crucial that the Chancellor makes amends for previous, stealthy tax hikes on middle-earners in the upcoming Budget. "Taking people earning the minimum wage out of paying Income Tax is absolutely right, as high taxes on low income earners have hit working people hard for too long. The Chancellor should go further in the Budget and bring National Insurance thresholds in line with Income Tax as a first step towards merging the two taxes."

On the confirmation of legislation to introduce union strike thresholds, he continued:

"The Government is right to limit the influence of a politically-motivated minority at the top of trade unions from holding the country to ransom for their own ends. Even after this legislation, there remain numerous safeguards protecting the right to strike, so this legislation is a reasonable and fair response to ensure taxpayers' lives are not disrupted by poorly supported strikes as they have been in the past.

On the confirmation of the benefit cap being reduced to £23,000 and announcement of legislation to ensure "earning or learning," he continued:

"It is common sense that nobody out of work should be earning more than somebody in work. The £23,000 limit equates to a pre-tax level equal to that of the average income, so it is clear that scaremongering around the reduction is just that. The benefit cap is deeply popular and has encouraged people to get off the benefit roll and into work. Ensuring that young people, in particular, are given a hand-up on to the job ladder is welcome not just for the individuals concerned but for taxpayers."

On the confirmation of legislation to increase the amount of 'free' childcare available, he continued:

"There's no such thing as 'free' childcare and taxpayers will have to pick up the tab. The Government would have been better off amending the regulations around childcare that have increased costs, and by lowering taxes on hard-working parents so they have more of their own money to spend on their own children."

On the confirmation that the Government intends to press ahead with HS2, he continued:

"Politicians need to stop putting headlines and ribbon-cutting ahead of economic sense. HS2 is a vanity project of the worst kind and needs serious review. Rushing ahead with it, while the business case remains so ludicrously shaky, is deeply unwise."

You can read the full press release here

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