It is vital that councils look at their own spending before cutting back on services that are of importance to taxpayers. This advice could be no more apt than at Brent Council which has recently placed an advert for an artist to create ‘outdoor sculptural pieces’ for the local Chalkhill Park. The sculpture will cost taxpayers £20,000 as part of the Brent Culture, Sport and Learning Forum.
But this isn’t the first time that taxpayers’ money has been squandered at the Council. Plans to give every councillor an iPad costing £46,000 were recently announced and the Council has continued to spend £100,000 a year on a magazine that loses £1,000 every month. With expensive hotel suppers for councillors and officials, it is clear that Brent Council has got its priorities wrong.
This will be a bitter pill to swallow for local taxpayers. Those who protested against the closure some of its libraries last year should also be concerned about priorities. Councils can’t plead poverty when there is plenty of fat left to trim.
Last Friday we named Cllr David Parsons, the Conservative leader of Leicestershire County Council, as May’s Pinhead of the Month. He had been censured for keeping hold of thousands of pounds of taxpayers’ money paid to him for trips to Europe which should have been reimbursed to the council, and also wasted tens of thousands of pounds by using a chauffeur-driven council car to take him to hundreds of meetings in London when the train would have been far cheaper.
Let’s hope whoever succeeds him is more prudent when it comes to deciding how – or whether – to spend taxpayers’ money.
Four weeks ago, we launched our StopFundingArgentina.org campaign, urging the Government to follow the lead of President Obama’s administration in the US and to oppose any further World Bank loans to Argentina (which are, of course, partly underwritten by the British taxpayer).
And it would appear that the campaign is already having an impact.
At the first meeting since our campaign began of one of the institutions of the World Bank – the Inter-American Development Bank – the UK did indeed withhold its support for a new loan to Argentina.
Here’s what International Development minister Alan Duncan states in an answer to a parliamentary question from David Ruffley MP which appears in today’s Hansard:
“A loan however was discussed on 21 June. The UK representative at the Inter-American Development did not support this loan.”
Whilst there has not yet been an explicit change of policy, this is extremely welcome news and underlines the need for us to keep up the pressure on this issue.
Many column inches have been taken up in the papers today considering David Cameron’s speech on the welfare system, in which he proposes further ways to reduce the burgeoning benefits bill.
Today’s Independent (not a fan of the proposals, by the way) summarises them thus:
- Removing or restricting some benefits from out-of-work families with large numbers of children. This could include cuts to child benefit;
- Scrapping housing-benefit payments to 380,000 under-25s, worth an average of £90 a week, forcing them to support themselves or live with their parents and saving the Government £2 bn a year;
- Making the long-term unemployed carry out full-time community work or lose all their benefits.
The nation’s welfare bill currently comes in at about £165 billion per year, accounting for a massive chunk of the money we each annually hand over to the Treasury in tax.
No-one would dispute that the most vulnerable and least well-off people in society should be afforded support through the benefits system. But any sense of cohesion is in danger of breaking down when net contributors to the system feel they are subsiding a lifestyle for those on benefits which they cannot afford for themselves.
Various commentators have hit upon that idea of scrapping housing benefit for the under-25s as “nasty” or “uncompassionate”; yet the reality is that thousands of young adults these days are staying on living in their parental home after college or university as they enter the world of work, until they can afford to rent or buy a property of their own.
Is it really that unreasonable to suggest that their hard-earned tax pounds should not be spent subsidising homes for their contemporaries which they cannot afford for themselves?
Broadly, David Cameron’s proposals are to be welcomed, although progress in implementing changes to the welfare system is notoriously slow: the measures announced in the Coalition agreement of May 2010, which finally passed into law earlier this year, will not take effect until October 2013 – three and a half years after they were first announced.
So, if anything, the Government needs to be urged to act faster in addressing these issues.
Click the video above for a brief excerpt of the interview I did on Sky News this morning on the plans.
Writing for the Daily Telegraph Comment Matthew Sinclair argues that simplifying the tax system is the answer to restoring the legitimacy of the tax system.
For a long time Anglo-Saxons have had a stereotype of the feckless southern European who doesn’t pay his taxes. But with fresh stories of British tax avoidance cropping up almost every day, how long before those jokes start to sound hollow?
This week we have seen three different examples of tax avoidance: Jimmy Carr was benefiting from a scheme called K2 based on loans from an offshore trust. Take That singer Gary Barlow was using a music investment scheme which a tax adviser claimed was a big tax avoidance opportunity. And investors are reported to have been exploiting special reliefs put in place to help the British film industry.
Today doctors are out on strike for the first time in over 35 years, protesting against proposed reforms to their generous pensions. It appears though that many of them are having second thoughts about the impact of the strike and the reasons behind it. Many more GP surgeries are expected to stay open than was predicted. It’s no wonder they are thinking twice, this strike action is in unjustified in the face of necessary and moderate changes. The retirement deals doctors are seeking to preserve are on average worth far more than the average pay packet so it’s unsurprising that there is little support for the BMA’s decision to call a strike. The action will disrupt patient care and result in the cancellation of planned operations and non-emergency appointments. Doctors will still be paid though, as they will be providing emergency treatment.
There is a battle underway to decide who will pay for the increasing costs of the public sector workforce as they grow old and retire. We’re all living longer which means retirement will cost everyone more, someone has to pay. Should those who benefit from the generous retirement deals pay more towards the cost of them, or should it be ordinary taxpayers, most of whom can only dream of such great deals? As our previous research has shown, there is a £4 billion black hole in the amount of money paid into unfunded public sector pensions compared to what what they are paying out and that is only going to get worse. It should be down to those who benefit from the scheme to pick up a greater share of the cost of it.
The BMA has been quick to claim that their pension scheme is sustainable as more money is currently paid in than is being claimed by its members. Taxpayers cannot afford to buy into that spin. They argue that these measures are simply a way of putting more money into the Treasury’s coffers but this ignores the fact that while more money might be going to the Chancellor today, he will have to pay out much more in the years to come. Yes, thanks to an NHS recruitment drive there are currently more people paying into the scheme than claiming their pensions but that is going change, estimates suggesting by just after 2016. A National Audit Office (NAO) report into public sector pensions points out:
Payments out of the NHS scheme can be expected to exceed contributions in future as this is the natural position for mature schemes in which employers and employees are changed at a level reflecting future pensions being earned
The current estimated cost of paying pension benefits to doctors totals £83 billion. Of that £67 billion is likely to have to come from the taxpayer according to figures from the Government Actuaries Department. This is why doctors, many of whom who have had staggering pay rises in recent years, must accept changes. Otherwise taxpayers will have to pick up a disproportionate share of the bill.
Doctors do challenging and important work that is held in high regard. They are considered pillars of our communities yet this strike action will severely undermine their standing and credibility. Patient care will be affected while some of the best paid public servants will be out trying to preserve pensions that are out of reach of all but a select few. The strike is bad news for patients, bad news for taxpayers and bad news for doctors’ reputations. The BMA should take the lead and accept these reforms instead of associating themselves with the head in the sand approach to public sector pensions taken by unions such as Unite and PCS.
Our friends at the National Taxpayers Union in the US have this week published a paper considering the legitimacy of the current membership of the G20, which is of course meeting in Mexico at the moment.
The authors, Alex M. Brill and James K. Glassman, assert that the G20 currently “lacks the necessary will and authority to deal with the immense problems at hand” and that it needs to introduce new membership criteria in order to regain a sense of legitimacy. They set three appropriate membership criteria as follows:
- A country’s economic size and global economic importance,
- A country’s adherence to rule of law and other principles consistent with market-based economies, and
- The size of a country’s financial-services sector and the magnitude of inbound and outbound cross-border banking activity (financial interconnectedness).
They propose, on the basis of these critieria, that Indonesia, Russia, Mexico and Argentina should be booted out of the G20 (and replaced with Malaysia, Norway, Singapore, and Switzerland).
The appearance of Argentina there is particularly interesting, and here’s a flavour of why the authors say it is “clearly… ill-suited” for G20 membership:
“Given Argentina’s record over the last decade, it is unsurprising that the country would fail to qualify for the G20 based on the proposed criteria. In the largest sovereign default in history, Argentina renounced its debt in 2001, just two years after acceding to the G20. Displeasure over Argentina’s actions has increased notably in recent months. In March, President Obama denied Argentina trade preferences because the Argentine government refused to pay a settlement to two U.S. investors awarded by the World Bank’s International Centre for the Settlement of Investment Disputes.”
This comes in the wake of the StopFundingArgentina.org campaign we recently launched, calling on the British Government to use its votes at the World Bank to oppose any further loans to Argentina. As we have noted, the Obama Administration in the United States currently has a policy of voting against any new loans, in response to Argentina’s treatment of existing creditors, so we believe British representatives should also be instructed to support that policy.
If you haven’t done so already, click here to sign the click here to sign the StopFundingArgentina.org e-petition.
Matthew Sinclair writes for the Spectator’s Coffee House blog on the campaign to end fossil fuel subsidies.
The environmental movement hasn’t responded well to the setbacks it has suffered seen since the failure of the Copenhagen climate conference. The #endfossilfuelsubsidies campaign — trending worldwide on Twitter this morning — is the latest example of their descent.
To be clear, fossil fuel subsidies are not a good idea; that is why governments like ours don’t offer them. Fossil fuels are huge cash cows for every western government. When someone fills up their car with petrol, around sixty per cent of the pump price goes to the Exchequer. When an oil company drills in the North Sea and extracts a barrel the amount that the Treasury gets varies but it is invariably a substantial share of the price, and the sector was raided again at Budget 2011. The idea that fossil fuels are subsidised by the British government is silly. To the extent that there is support, it is for things like carbon capture and storage designed with environmental objectives in mind.
With the recent pasty tax, caravan tax and charity tax u-turns you would think that there were no more ill-advised tax alterations set to implement from this year’s Budget. Unfortunately there is still one left: the levy of VAT on improvement, alteration and restoration works to listed buildings; aptly dubbed the ‘Heritage Tax’.
The proposal to add 20 per cent to the cost of alterations will force individuals, charities and community groups to pay tens if not hundreds of thousands of pounds extra to look after historic buildings. This will make it much harder to improve listed buildings, which a great number of people enjoy.
Worse still, the tax rise is justified on insufficient evidence and fatuous claims. According to the Government this tax rise is right because the majority of the improvement work covered by the relief is not necessary for heritage purposes. They want you to believe that this tax alteration will stop millionaires installing tax-free swimming pools in their Jacobean mansions.
However the argument that the majority of improvement, alteration and restoration works are not for heritage purposes is based on just 105 cases the Treasury studied, despite the fact there are almost 30,000 Listed Building Consent applications made during the course of a year. A closer inspection by the Listed Property Owners Club found that, of 12,049 recent applications for listed building consent from across the UK, only 34 applications were for swimming pools.
There are almost 400,000 historic buildings in this country and while some are grand Palladian mansions, there are also small country cottages or barns, which are homes, community centres and places of work for people from all income brackets. Indeed half of people who live in listed buildings are in socio-economic groups C1, C2, D and E. This won’t just hit the rich.
The Government has already conceded that this tax rise will have a negative impact on some of the nation’s finest and most treasured buildings and great numbers of people, who enjoy, rely on and care for them, by offering additional compensation to listed places of worship. But yet they offer nothing to community centres, town halls, village halls, businesses and privately owned listed buildings.
There is already evidence of projects that have been cancelled or put on hold as people worry about the cost of the additional 20 per cent. Cancelling building projects will also have a negative impact on the construction industry, at a time when weak demand in this sector is a major factor holding back wider economic recovery.
By dis-incentivising listed property owners from improving, altering or restoring their properties, there is a great risk these buildings will fall into a state of continual decline and will eventually be lost. Once they are lost, they are gone forever. This will not, as the Government would like you to believe, only affect millionaires in mansions; it will affect the very fabric of our Heritage, which is something that is treasured by the majority.
Several organisations, including the Countryside Alliance and the Federation of Master Builders signed a letter in today’s Times (£) urging the Chancellor to review the proposed implementation of the heritage tax before it is too late. If you agree with them, then you can show your support by signing this petition against VAT on alterations to listed buildings. Send the Chancellor a message that this is another ill-thought out tax rise to consider a U-turn on.
In a speech this week the boss of IATA – the organisation that represents most of the world’s airlines – confirmed that the UK has the highest air passenger taxes in the world . Tony Tyler, the IATA’s director general, said the fact that it had been cut in Northern Ireland showed the government there recognised its negative economic effects. By contrast, at the last Budget George Osborne increased Air Passenger Duty (APD) by a staggering 8 per cent. A typical family flying economy class from the UK now pays almost 400 per cent more in tax than if they were making the trip from another country in Europe.
Not only do we pay more in air passenger taxes leaving a British airport than in any other country in the world, but only five other countries in Europe even levy a passenger tax. If you and your family want to get away for a well-earned break and decide to go to Florida this year, four of you flying in economy class will pay a whopping £260 in air taxes alone. All that despite the fact that, as far back as 2007, the Government’s own research found it was excessive compared to the environmental costs created by flights and a whole new tax has since been imposed on air travel with its inclusion in the EU Emissions Trading System.
It’s not just ordinary families that are being affected by this regressive tax. Inbound tourism, which supports thousands of jobs in the UK, is taking a huge hit too. Last year three million Chinese tourists came to Europe, yet a paltry 127,000 of them visited the UK. Why? Probably because a family of four from China will pay nearly £600 more than most other EU countries to visit the UK (a result of both our exorbitant air taxes and higher visa costs). We’re losing out on a huge growth market precisely at a time when our struggling economy would benefit from the inbound investment tourism brings. That’s why the final report of the 2020 Tax Commission recommended abolishing APD entirely.
In the meantime the very least the Government could do is reduce it. A new campaign has been launched to raise awareness about the impact of APD, not just among ordinary holidaymakers, but amongst policy-makers, many of whom seem oblivious to its damaging impact. A Fair Tax on Flying is asking the public to write an email to their MP as possible to oppose the current levels of APD.
Air Passenger Duty is having a damaging impact on the ability of ordinary families to take a well-earned holiday and it’s having a damaging impact on our economy, at the worst possible time. It’s time for, at the very least, a fair tax on flying ; add your name to the list to get politicians listening.
Argentine politicians have been scathing in their contempt for Falkland Islanders’ opinions about their future and their right to self-determination. Despite this, and repeated other violations of international law, Britain still does not use its votes at the World Bank to block our money backing loans to Argentina, explains Rory Meakin at ConservativeHome.
The Falkland Islands Government has announced an historic referendum on the future of the islands’ sovereignty, which David Cameron welcomed during Prime Minister’s Questions this afternoon following a question from Nigel Adams MP about British Government support for World Bank lending to Argentina. Although few are in any doubt that Falklanders will vote overwhelmingly in favour of remaining a British Overseas Territory, the move is expected to help repel attempts by Argentina to colonise the territory, either diplomatically or militarily.
Over 6,000 members of the public have already signed our e-petition demanding that the Government oppose new World Bank loans to Argentina since it launched last Friday. If you haven’t already done so, simply go to www.StopFundingArgentina.org to add your support – and please encourage friends to do the same.
Meanwhile, the campaign has now reached Parliament, with Romford MP Andrew Rosindell having tabled an Early Day Motion (EDM) yesterday on the subject. EDMs are effectively akin to e-petitions for MPs, which allow our representatives to show where they stand on an issue and demonstrate support for particular measures.
EDM 185 is entitled World Bank Loans to Argentina and the text of it is virtually identical to that of the e-petition which anyone can sign.
In order to rally support for EDM 185, please contact your MP via writetothem.com and encourage them to sign it. That way, you can help pile the pressure on the Government to change its policy on these loans to Argentina.