Reacting to reports that IPSA are to propose an 11 per cent pay increase for MPs, Matthew Sinclair, Chief Executive of the TaxPayers’ Alliance, said:
“It is totally unacceptable to hike politicians pay just as families across the UK struggle with stagnant wages and rising prices.
Taxpayers will be furious that the pay rise comes at a time when MPs urge public pay restraint and the Chancellor tells us he can’t afford to ease the burden of taxes on hard-pressed households and businesses.
IPSA’s own polling and research shows that the current level of pay to be broadly fair and that the public simply do not back the increase. This
announcement amounts to an unaccountable quango putting up two fingers to taxpayers. The rise must be rejected.”
At the TaxPayers’ Alliance, we strongly oppose the big increase in MPs’ pay proposed by the “IPSA” quango. We have set up a petition which you can sign below to support action to scrap the proposed pay hike and ensure that there is proper accountability for future decisions over MPs’ pay. We will send the petition to MPs and IPSA, as part of our response to their consultation.
On 5 November 2012, we launched our ‘Freeze Business Rates’ campaign with the British Retail Consortium, and since then thousands of our supporters have written to their MPs urging them to support a freeze in business rates. It was disappointing to say the least that in his Budget earlier this year, George Osborne didn’t listen to not only us and our supporters, but also to people like Ian Shaw from Rochdale. Mr Shaw was forced to close his Fish and Chip shop a few months ago and cited the cripplingly high business rates he had to pay as the main contributory factor. If the Government genuinely wants small businesses in particular to thrive (at the weekend, George Osborne said “small firms are the lifeblood of our economy”) it cannot continue to punish people like Mr Shaw.
It has been widely reported that the Chancellor is going to announce in his Autumn Statement tomorrow that the rise in business rates next year will be capped at 2 per cent. Although a cap is better than a 3.2 per cent increase, it does not go far enough. Business rates went up 4.6 per cent in 2011, 5.6 per cent in 2012 and 2.6 per cent this year, and the very least George Osborne could do is freeze them next year.
Businesses cannot pay tax, no more than a car, a television, or a house can. Just because Council Tax is levied on your home doesn’t mean your home pays the bill. You do, and business taxes are either passed on to consumers through higher prices; employees through lower wages; or, as in the example I gave earlier, businesses may not be able to survive the crippling costs of business taxes. They may be forced to close their doors for good, and have to make their staff redundant.
So come on George, give businesses a break and commit to a freeze in business rates for at least the next two years.
Hammersmith and Fulham Council will cut Council Tax for an impressive seventh year out of eight next year. This represents a cut of 20% since 2006, and a return to a low level of tax last seen in 1999. Whilst the average cost to UK households in Council Tax has doubled to £1,439 per year, Hammersmith and Fulham plans to reduce its Band D rate by 3% to £735.
The cost of housing and energy has put more and more pressure on households in recent years, and with 75% of county councils reportedly planning to hike Council Tax, the cost of living is only set to keep going up. So it is great to see a council granting its residents a real reprieve from the cost of living crisis.
Hammersmith and Fulham shares £300 million of its public services with the Royal Borough of Kensington and Chelsea and Westminster City Council. Together they will have saved £43 million a year by 2015/16.
They have reformed the way services are delivered – less as a direct provider and more as a commissioner of services. This has included outsourcing street cleaning, parks maintenance, human resources and finance support. It has also encouraged its staff, and other local voluntary groups providing services, to set up staff mutual and social enterprises to improve efficiency.
They have reduced their debt by £100 million since 2004 by selling unused council buildings, like Fulham Town Hall, Hammersmith Irish Centre and Shepherd’s Bush Village Hall. This represents a nearly 60% reduction in debt, which has further eased the burden on taxpayers by cutting back on debt repayment.
Cutting Council Tax represents a real saving for hard-pressed families. Too often, advocates of higher government spending ignore those who are squeezed by an oppressive tax burden.
The government will have cut central grant funding for councils by 43% by 2015. Profligate councils and the anti-cuts brigade have fiercely opposed spending reductions. They claimed that local services would suffer, communities would be left poorer, care for the vulnerable would be slashed, and jobs would be lost. All that has been missing from the critics’ rhetoric are the four horsemen of the apocalypse.
Local Government Association Chairman Sir Merrick Cockell recently said “uncertainty and risk which will put even more stress on vital local services and push councils toward failure.”
But as the cuts have been implemented, the critics have been increasingly proved wrong. Six out of ten people in the UK feel that the quality of their local public services has either not worsened or actually improved, according to a recent ICM poll.
The message is clear: spending cuts work. Sensible spending reductions, paired with significant tax cuts, are popular as well as the right thing to do. And the public know this.
Our ‘201 Ways to Save’ report, authored by Cllr Harry Phibbs of Hammersmith and Fulham, highlighted a number of ways councils can save money. They can share services with neighbouring councils, freeze recruitment, combine executive staff roles and publish corporate credit card use. They can buy supplies in bulk rather than at various prices for the same product.
Other councils must follow the example of Hammersmith and Fulham. Hiking Council Tax while many families are still struggling to get by is an insult and should not be tolerated.
The Daily Telegraph has today called on the Chancellor to freeze business rates at the forthcoming Autumn Statement. They’re absolutely right to do so: further pressure is needed on George Osborne to prevent the disastrous consequences that a business rate hike would entail. Last year we joined forces with the British Retail Consortium to call for a freeze in business rates. The compelling argument to ease the pressure on struggling businesses has not gone away. If anything it is stronger today than ever before.
Business rates went up 4.6 per cent in 2011, 5.6 per cent in 2012 and 2.6 per cent this year. It is a tax that must be paid in the good times and the bad. They are based on a property’s rateable value and increases are based on September’s Retail Price Index (RPI) figure. That means a further increase of 3.2 per cent is due next April. Another substantial rates hike would be bad news for all businesses.
Politicians are keen to talk about how they want to help hard-working families or tackle the cost of living crisis. But hiking business rates is a perfect example of how too often politicians are only making it tougher on those that are already struggling. Tax increases have to be paid for by someone, whether they are levied on individuals or a collection of individuals who form a business. A business doesn’t pay tax any more than a toaster does. Rate hikes will in part be passed on to consumers and employees, either through higher prices, lower wages, fewer jobs or a combination of all of the above. These are all things that politicians tell us they want to avoid so the pressure is on them to live up to the rhetoric and not increase business rates.
Labour has promised to cut business rates, but unfortunately they’ve said they will do so by increasing Corporation Tax. Not only is this an ugly attempt to create false dividing lines between firms, it would damage a UK economy that is benefiting enormously from a lower, more competitive Corporation Tax rate. You don’t rob Peter to pay Paul: instead it’s time to get serious about cutting spending.
So when the Chancellor stands up to deliver his Autumn Statement he should announce a freeze in the rates. A 3.2 per cent rise would pile pressure on employers and further damage the British high street. It would mean more empty shops and fewer jobs, especially for young people. The Telegraph is right, freeze the rates George!
The TaxPayers’ Alliance (TPA) has today challenged Culture Secretary, Maria Miller, not to waste a penny of taxpayers’ money establishing a “Recognition Panel” to which a self-governing press regulator is extremely unlikely ever to submit itself. The campaign group has also demanded to know whether any taxpayers’ money has already been spent setting up a body that even Mrs Miller herself seems to admit would be entirely redundant.
Mrs Miller indicated to Andrew Marr on television yesterday that nothing else would need to happen if the press’s own proposed regulator (IPSO) works, yet a Royal Charter has now been approved which dictates that both the infrastructure surrounding, and process of establishing, a so-called “Recognition Panel” must begin regardless. Yet with IPSO not expected to seek recognition and Mrs Miller herself talking about the importance of a “self-regulatory approach”, there is a danger that hard-earned taxpayers’ money is going to be – and may already have been – wasted setting up a totally unnecessary piece of bureaucracy.
Jonathan Isaby, Political Director of the TaxPayers’ Alliance, has written to Mrs Miller asking the following questions:
Can you tell us:
Mr Isaby added:
“Far too often we see politicians and bureaucrats wasting hard-earned taxpayers’ cash, either by getting bad value for money on necessary expenditure or by spending it when they needn’t be doing so at all.
“Leaving aside our very serious opposition to government and politicians being involved in the regulation of newspapers, our fear in this case is that the DCMS could be about to waste taxpayers’ money setting up what may well already be an entirely redundant body. I hope that the Secretary of State can set our minds at rest and guarantee that she will not allow such unacceptable waste to occur.”
Yesterday the “independent” growth taskforce (hint: it’s anything but independent) urged cities across the UK that they needed to be “HS2 ready”. This announcement by the taskforce was accompanied by a glossy document talking of a “once in a generation chance” and full of soundbites and spin, but not much else. Alas, there was no mention of the soaring bill for the project, the opportunity cost of spending £80 billion on it or the worse service that vast swathes of the country would receive through the existing rail network if HS2 goes ahead. It’s no surprise that HS2’s cheerleaders are trying to generate some good headlines, however, since the project really has failed to stand up to scrutiny after a few days in the media spotlight.
Over the weekend, HS2 Ltd came under renewed scrutiny over its cynical decision to omit negative data from a recent KPMG report that boldly claimed the project would deliver £15 billion worth of benefits to the UK economy. Thanks to a Freedom of Information request, we now know that this data - which detailed the areas in the UK that would lose out under HS2, according to that KPMG analysis - was intentionally left out of the final report. While the report’s overall methodology has already been widely questioned, the decision to suppress the parts of it that don’t fit HS2’s own cherry-picked narrative is downright deceitful. It shows the report’s purpose was never a serious attempt to assess the viability of the scheme, but was instead a piece of taxpayer-funded propaganda designed to grab headlines and shore up support for the flagging project.
Sadly this is not the first time that those in charge of HS2 have been found spending taxpayers’ money on PR and spin. HS2 and the Department for Transport have spent nearly £200,000 on a lobbying firm working on the promotion of the line. HS2 Ltd has also spent tens of thousands of pounds on media training and communications advice while the KPMG report itself cost £250,000 of taxpayers’ money. These superficial efforts will not change the fact that HS2 is a white elephant, based on flawed assumptions and dodgy numbers, that will end up costing every family in the UK well over £2,500.
If you are going to spend such a monumental amount of money on one project, it’s vital that you get it right. Using people’s own money trying to convince them HS2 is a wise way to spend their cash won’t make the deep flaws of the project disappear.
In the meantime we wait for another wheel to fall off the case for the high-speed line: the update of HS2’s business case is long overdue, after the current version was shown to be full of ridiculous assumptions (such as the notion that nobody ever does any work on the train) and panned by the likes of the National Audit Office and the Public Accounts Committee. Will the update provide a more realistic version of the costs and benefits of the line, leading to a rethink? Or will we be treated to more propaganda paid for by, you guessed it, you and me? We will certainly continue to make the case for scrapping the entire project before any more of our money can be squandered.
At the Conservative Party Conference, we held a session looking at practical ways councils can reduce spending and cut Council Tax. This took place in the Freedom Zone, which was open for all to visit. Some great ideas were discussed, such as sharing services and never accepting the first offer on contract negotiations.
Carl Thomson, a Councillor from Woking, discusses his experiences of delivering value for taxpayers’ money below.
If you are a Councillor and would like to share your experiences, please email [email protected]
Carl Thomson is the Conservative Councillor for Mount Hermon East on Woking Borough Council, where he has been a member of the executive and is chairman of the licensing committee.
Residents in Woking believe the Council is delivering real improvements through redevelopment of a tired and dated town centre, provision of modern leisure facilities and new affordable housing. But they also know that we are achieving this by sticking to simple principles like cutting costs, getting rid of unnecessary bureaucracy, keeping Council Tax low and working with private sector partners to give people more efficient services and better value for money.
The financial situation has not been good for councils in the past few years. With the further 10% reduction in local government funding announced during the recent Spending Round, Woking will have seen its central grant cut by 40% over this parliament, and it is unlikely to stop there.
However, prudent local authorities will have seen far in advance that economic conditions were likely to be challenging for some time, and will have thought seriously about how to get more for less long before the Coalition’s first spending review in 2010. As far back as 2007, Woking introduced an ambitious target for a reduction in the number of council employees. As a result the Council has seen the number of Full Time Equivalent staff members fall from 510 in 2006-07 to 350 in 2012-13.
This reduction of the Council’s workforce by one third was achieved through a freeze in recruitment, combined with reducing numbers through natural wastage, terminating temporary and contract staff, considering different work patterns and practices, merging positions and redeploying staff with retraining if necessary.
One of the biggest drivers of efficiency in Woking has been the willingness of the Council to embrace outsourcing and private sector provision where this can be shown to improve services and achieve savings for taxpayers. The Council has outsourced management of a significant proportion of its services, such as environmental maintenance, leisure and housing management. In 2011 the Council transferred the management of its sports and leisure facilities for a period of ten years, sharing the cost of improved services for residents. On housing, we have outsourced income, tenancy and estate management, lettings, asset management, inspections and investment works.
We have also been looking at other ways of getting the best out of the Council’s estate – vacant desk space in offices has been taken up by the neighbourhood police and community groups, giving the police a more visible presence in the town centre, reducing the need for larger grant payments to help meet the accommodation needs of voluntary organisations, and allowing the Council to gain an income from an otherwise unused resource.
It would have been difficult to ask council officers to make sacrifices if councillors were unwilling to do the same – so the executive abolished taxpayer-funded food and refreshments laid on for councillors before meetings, and the Council has rejected proposals for special responsibility allowances to be paid to committee chairmen and portfolio holders. We have also sought to reduce the cost of democracy in the borough. Prompted by the forthcoming review of local government boundaries, last month the Council voted to reduce the number of councillors by 18% from 2016, a move that will save the taxpayer more than £60,000 a year in expenses and allowances.
Those councils which protest about cuts leading to reductions in grants and frontline services need to reflect on the fact that such payments represent only a small proportion of the money local government spends. The biggest amount is on staffing and administrative overheads. Thanks to the approach we have taken, Woking Borough Council has been able to freeze Council Tax in three of the last five years – starting, incidentally, before the Coalition introduced a centrally-funded grant for local authorities which kept rises below 2%. Where the tax has been increased, we have kept this below the rate of inflation, and we have done all this with no reduction to services, and no reductions in grants or funding to voluntary organisations.
There are several lessons Woking has learnt in our efforts to become leaner and more efficient. The first is the need to establish political leadership and priorities early on. Our business plan made clear that we expected to see any increase in Council Tax kept below the CPI rate of inflation; that we wanted to see improved cost efficiency in all the services the Council provides; and that we wanted to restore the Council’s reserves to a position of financial health. By providing these objectives, we gave officers guidance and direction in their work as well as making clear what was expected at the end of the financial year.
The second lesson – and one which might sit uncomfortably with some readers – is that cultural change in large organisations can only happen when there is buy-in and support from those affected. Council officers aren’t the enemy. There is genuine talent and business expertise at all levels of local government. Council bureaucracy can rise to the challenge admirably when it is given purpose and direction, but do not underestimate the time and effort that needs to be put into making the case for change.
Woking is far from perfect – we are in the process of deleveraging our high borrowing against income-generating assets, and the symbolic but important cut in Council Tax has thus far eluded us; but I am confident that we have responded impressively to the new financial climate and the growing desire of our residents to provide services in the most cost-effective way possible, to become more self-reliant and less dependent on central government, and to promote the economic vitality of the borough.
HMRC published new data on Stamp Duty this morning which show increases in all regions. The biggest increase was in the North East, where HMRC took 25 per cent more from home buyers in 2012-13 than they did in the previous year.
The data also showed that a record-breaking amount was taken from home buyers in London, where receipts rose by 23 per cent to over £2 billion.
This confirms previous research by the TaxPayers’ Alliance showing how punitive rates of Stamp Duty are causing real problems for an ever-growing number of taxpayers. We also commissioned research from Walbrook Economics which found that cutting Stamp Duty would have a minimal effect on the revenues raised, due to the nature of the housing market. Lower rates would mean more people would move, increasing revenues not just from Stamp Duty but other taxes, too.
Responding to the publication of the Public Accounts Committee’s report, The rural broadband programme, Dominique Lazanski, Digital Policy Analyst at the TaxPayers’ Alliance, said:
“The Public Accounts Committee is absolutely right that no more taxpayers’ money should be spent on this scheme until the DCMS has delivered meaningful competition for the contracts and ensured that value for money is being achieved.
“There needs to be far more transparency about BT’s costs, take-up rates and roll-out plans to ensure that taxpayers are not being fleeced and so that other broadband suppliers can get on with filling the black spots not being covered by BT.
“Taxpayers should be deeply concerned that the broadband programme in its current form has seen hundreds of millions of pounds of their money wasted as a result of a centralised, one-size-fits-all scheme for fixed-line only internet connections.
“It would have been far better to let the private sector – including mobile and satellite providers – compete in an open market in different areas, each with their own communities and needs.
“Fortunately, a number of private companies and community groups are already addressing the need for internet access in spite of the Government’s bungled programme.”
Writing for The Spectator’s Coffee House, Matthew Sinclair argues that under Labour’s new energy plans, politicians will effectively renationalise the energy sector.
First politicians banned cheap energy. They are creating an affordability crisis by insisting on the rapid deployment of expensive technologies like offshore wind and by imposing endless green taxes. It is simply illegal to generate electricity at an affordable price with a modern, efficient coal and gas power plant, without bearing all of those other costs. Ed Miliband was one of the people who imposed those high costs on consumers, as the Secretary of State for Energy and Climate Change in the last government. Now his plan is to fix the situation by banning expensive energy too.
During a report on BBC News yesterday, it was highlighted just how crippling Business Rates can be.
When Ian Shaw lost his job, he decided to open his own Fish & Chip Shop in Rochdale. Unfortunately, after 18 months, he is being forced to close because of crippling costs. Mr Shaw pays £10,000 in rent for his business premises and a massive £18,722 in Business Rates. He told BBC News:
If I can’t make it work, no-one’s going to make it work. I have literally put my heart and soul into it.
He has the support of his local MP, Simon Danczuk. He told BBC News that property prices have fallen in Rochdale by 40 per cent over recent years, however Business Rates have remained the exactly where they are. This puts people off opening new stores, which leads to vacant properties.
Ian Shaw appears to be paying more in taxes than he makes in profit, which is not only unsustainable, but is clearly wrong. If the Government is truly concerned about the High Street, then it cannot continue to punish people like Mr Shaw who when after losing his job, did something positive, opened a new business, and provided much needed employment in his local community.
You can do something positive by supporting our campaign to freeze Business Rates. Go to FreezeBusinessRates.org and write to your MP. It doesn’t take long and it makes a real difference. People like Ian Shaw need to be encouraged, not beaten into the ground by excessively high taxes.
Responding to the report HS2 Regional Economic Impacts, Matthew Sinclair, Chief Executive of the TaxPayers’ Alliance, said:
“The Government has squandered taxpayers’ money on a cynical attempt to win over the many, many people who think this white elephant is the wrong way to spend tens of billions of pounds of their money.
“If ministers want to develop a new appraisal method for transport projects then they should do that and see how it affects the business case for a range of strategic alternatives. That will help test whether the model is reliable and provide useful evidence about which projects offer the best value for money. Instead they have just decided that this specific project alone will be held to a new standard.
“The report is based on the dodgy assumptions in the Government’s own business case and the additional services they have promised, despite their budget actually relying on cuts to existing services.
“This is not a serious attempt to assess the merits of HS2, just another expensive propaganda exercise. The Government must scrap HS2 and look again at less grandiose, but better value, projects that can deliver the capacity needed on Britain’s rail network.”