Our latest research reveals that the Government’s already weak case for High Speed Rail 2 (HS2) is continuing to unravel. The research demonstrates that the line would not address the most pressing capacity issues on the UK rail network, despite the enormous cost.
With official estimates of the cost rising dramatically and many business leaders and politicians calling for it to be scrapped, the proponents of HS2 have stopped arguing for it in terms of faster journeys and instead are claiming HS2 is needed to address a lack of rail capacity. But the new report challenges the Government’s argument that HS2 is required to provide extra capacity on West Coast Main Line (WCML), because:
Meanwhile, the report updates earlier research to identify the extent to which dozens of towns and cities would see a worse service if HS2 goes ahead:
The report also demonstrates that since we last published analysis of HS2 in 2011, there has been a dramatic deterioration in its business case. There have been increases in capital costs and a number of additional costs that would have to be incurred in order to live up to ministers’ promises for the new line.
The Government’s business case remains flawed, since it still assumes that those travelling on trains have zero productivity, which is increasingly unrealistic with advances in information technology. The additional costs over and above the Government’s estimates include:
“As the projected costs have increased dramatically, the already fragile case for HS2 has completely disintegrated. There are far cheaper and better ways of substantially increasing capacity much more quickly on the route, not least by reducing the number of first class carriages and lengthening the trains. And quite apart from the astronomical and unjustifiable cost to millions of families across the country who would never use HS2, the Government’s own plans show how many towns and cities would in fact be left with a worse service if the line goes ahead. The project should be abandoned now before any more taxpayers’ cash is squandered on what risks being the most expensive white elephant of all time.”
There is no such thing as free lunch, especially if it is handed to you by a politician. Nick Clegg, in an announcement during Lib Dem conference, has said all children in reception, year 1 and year 2 – pupils aged between five and seven – will be given hot lunches at school. This is a conference gimmick that is a misleading, but all too typical, attempt from politicians to wade in and pretend they are doing something about the pressure on the finances of struggling families by promising subsidies paid for with other people’s money. Sadly it seems like this policy has already been signed off by the Treasury and will cost taxpayers £600 million a year (you can bet that will rise as the scheme is inevitably expanded).
In the past Nick Clegg has rightly pointed out that universal benefits are both costly and unfair, but that principled opposition to spreading taxpayers’ money around seems to have been forgotten. The problem with schemes like this is that you tax those on low and middle incomes to pay for hand-outs to affluent families. Even when those on modest incomes do receive a universal benefit it’s certainly not free. They’ve paid for it (and all the bureaucracy that comes with it) through higher taxes.
It’s no wonder the Westminster fails to deal with unsustainable levels of Government spending when it is so keen on finding new ways to throw other people’s money at a problem that politicians have created themselves.
If politicians really want to deal with the cost of living crisis then they should stop making life so expensive. That means axing policies that make the family shop more expensive like the Common Agriculture Policy. It means abandoning green energy subsidies that force up energy bills. It means cutting taxes that are too often squandered to pay for misguided programmes like this latest announcement. There are plenty of ways to deal with the cost of living crisis, but churning even more cash into the money-go-round – paying an army of bureaucrats to take the money away and give it back at enormous cost – doesn’t help anyone.
Ensuring pupils eat healthy and exercise regularly is an important way to improve academic attainment. But the responsibility for that lies in the kitchens of parents up and down the country. Nick Clegg is going to waste hundreds of millions of pounds of your money just for a party conference gimmick.
In a major new report, the TaxPayers’ Alliance today outlines the next stage for welfare reform in the UK, Work for the Dole. Despite the creation of over three million jobs between 1997 and 2012, the number of people in the UK out of work has remained stubbornly high, even in times of prosperity. Work for the Dole, a programme of mandatory participation in community work and training in return for the continued payment of benefits, is the next step in getting people off welfare and into work. Based on successful programmes across the world, it is estimated the scheme would lead to annual savings of £3.51 billion and help 345,000 people off benefits over time.
Work for the Dole proposes that, after a certain time, anyone claiming the Universal Credit should undertake compulsory activity or – if claiming Incapacity Benefit or Employment Support Allowance – activity that they are physically able to do. It would address the problem, as described recently by Lord Hutton of Furness, of those “who choose consciously not to work “.
Importantly, the length of time before someone is automatically referred onto the scheme would be dependent on their National Insurance (NI) contributions. Those with a history of paying National Insurance would be referred onto the scheme after up to two years of claiming Universal Credit while those with little or no history of NI contributions would be expected to participate after three months of claiming Universal Credit. This would give more latitude to those who have paid into the system and strengthen the contributory principle in out of work benefits.
The introduction of Work for the Dole would end the ability to subsist on benefits instead of seeking work:
Polling has shown that the public overwhelmingly support the idea (net agreement of +75%) that those who can, should do full-time community service for their benefits. Even59 per cent of benefit claimants themselves now think benefits are too high and discourage work. Current reforms as they stand are not enough to fix welfare dependence. Work for the Dole would eliminate a great deal of fraud and provide a powerful incentive to seek a proper job while at the same time helping participants with the experience and credentials needed to get them onto the job ladder.
Matthew Sinclair, Chief Executive of the TaxPayers’ Alliance, said:
“Welfare should be a safety net for people who fall on hard times, not an alternative to working. The Government is improving the incentive to work but they need to go further and remove the option of sitting at home and claiming benefits entirely. Taxpayers rightly expect something back for the enormous amount they pay for out-of-work benefits, at the very least a real commitment to find a job as soon as possible. You should have to work for the dole.“
Chris Philp, author of Work for the Dole, said:
“Despite the record number of jobs created in the UK economy in the last decade, welfare dependency remains a problem that costs taxpayers a fortune and ruins lives. Politicians of all sides acknowledge that that the current system encourages welfare dependency. Work for the Dole programmes in other countries have shown that this problem can be beaten and dependency dramatically cut. The public resoundingly back the idea that claimants should contribute for the benefits they receive and it’s time politicians caught up. Work for the Dole is an idea whose time has come.”
Frank Field, MP for Birkenhead, former Minister for Welfare Reform, responded to the publication by saying:
“Labour needs seriously to look again at Work for the Dole. The next Labour government must ensure that claimants are not simply left drawing benefit rather than having an offer of work. Benefit payments should help form the pool of resources to fund Labour’s future jobs fund Mark II.”
Matthew Sinclair, Chief Executive of the TaxPayers’ Alliance, said:
“People work hard all year to make ends meet, despite high taxes and rising prices. They look forward to a holiday as a blessed relief but sadly the tax man is waiting even when they try to take a well-earned break. Britain’s exceptionally high taxes on flights in particular make holidays much more expensive, as well as making it harder for Britain to compete as a destination for tourists and business investment. The Government should cut Air Passenger Duty and make flying more affordable.”
Our latest research reveals that 4 out of every 5 homes sold in 2012-13 will be subject to Stamp Duty within five years and that 40 per cent of homes sold will be subject to Stamp Duty of 3 per cent or more, leaving buyers with a bill of at least £7,500.
Property price forecasts by Savills Research imply a huge increase in the number of homes which will be subject to punitive rates of Stamp Duty. The forecast price rises will lead to the liability of nearly 100,000 homes which incurred 1 per cent Stamp Duty in 2012-13 more than tripling as they become subject to the 3 per cent rate of Stamp Duty.
The threat of much higher Stamp Duty rates will increase the pressure for the Chancellor to cut this unfair, double tax as called for by the TaxPayers’ Alliance Stamp Out Stamp Duty campaign.
Matthew Sinclair, Chief Executive of the TaxPayers’ Alliance, said:
“As the property market recovers, more and more people will be sucked into paying punitive rates of Stamp Duty and it will be more expensive to move than ever. High Stamp Duty rates stop young people buying a home and starting a family, discourage elderly people from downsizing and make it harder to move to a new place for a new job. The Government urgently need to cut Stamp Duty and ease the burden before the situation gets even worse.”
Croydon Council has vastly reduced the cost of staff transport, resulting in a substantial saving for taxpayers. It previously spent £1.3 million a year on transport costs, but since reviewing the situation in 2010 the council is now seeing huge benefits.
It formerly relied on a combination of lease vehicles provided to staff and employee-owned vehicles. This combination not only meant that the Council was adding significantly to local congestion, it was also blighted by the fact that the Council had no real understanding of what state all these vehicles were in. Cllr Sara Bashford, Croydon’s cabinet member for corporate and voluntary services, admitted that it was “difficult to evaluate how fit for purpose these vehicles were at any one time”.
Identifying the problem is one thing, but dealing with the issue is an entirely different matter. Thankfully for local taxpayers, the 2010 transport review wasn’t just wasted paper but was actually acted upon. Croydon Council began a pilot scheme with Zipcar, the UK’s largest pay-as-you-go car network.
“The idea is simple”, said Cllr Bashford, “rather than owning a car outright or leasing a fleet, we have exclusive access to 23 vehicles during standard working hours”. By using local transport and having access to the cars when they actually need them, rather than frittering money away on an expensive fleet, the council has reported considerable savings:
These savings are crucial and substantial. The lesson other councils should take from Croydon is that a seemingly small change in behaviour can quickly cut a colossal amount of waste. Councillors and council staff shouldn’t rely on doing things the way they always have because it’s easier and familiar.
Our recent edition of the Bumper Book of Government Waste uncovered other examples of costly transport bills that could be cut:
Croydon announced plans to increase Council Tax this year. Officials defended the added cost to residents by saying it was necessary to “protect frontline services”. But just looking at their transport savings shows how easily and quickly big savings can be made. Indeed, the saving of £544,000 is the equivalent of the Band D Council Tax bill for 464 families in Croydon.
When the Council can reduce just one bill by 42 per cent with some fresh thinking, claims that a Council Tax rise is necessary simply won’t wash with Croydon taxpayers.
Each of these proposals would provide a substantial economic stimulus at little or no cost to the Exchequer. As the economy is finally showing some signs of recovery, this is an ideal time to act and cut Stamp Duty, before it becomes even more onerous.
Matthew Sinclair, Chief Executive of the TaxPayers’ Alliance, said:
“Stamp Duty is an unfair double tax that stops young people buying a home and starting a family, discourages elderly people from downsizing and makes it harder to move to new places for new jobs. The Government could cut Stamp Duty with a limited impact on the amount of money going into the Treasury’s coffers, as lower taxes would encourage more people to move and therefore increase the number of transactions being taxed. Politicians should seize this golden opportunity to reduce the burden and make things easier for the hundreds of thousands of people looking to buy or sell a home each year.”
More than a quarter of home-buyers are now getting hit with a Stamp Duty bill for £7,500 or more, paying the punitive 3 per cent rate.
Stamp Duty is a challenging obstacle in the way of first-time buyers who dream of owning their own home. It also creates problems for anyone with a growing family and anyone who needs to move to take a new job. And it discourages elderly people from downsizing to a smaller property more suitable for their needs.
The structure of the tax is a mess. The two major recent reviews of the tax system – the 2020 Tax Commission, from the TaxPayers’ Alliance and the Institute of Directors, and the Mirrlees Review from the Institute for Fiscal Studies – concluded that it should be abolished.
We are launching a new campaign – Stamp Out Stamp Duty – to do something about it. Our message is simple: the Government should cut Stamp Duty. New TaxPayers’ Alliance research out today shows how many people are affected by punitive rates of Stamp Duty; we are organising grassroots events around the country; and we need your help to put pressure on the politicians:
Once you have done that, there are other ways to help:
1. Please let your friends and family know about the campaign and encourage them to write to their MP, through the StampOutStampDuty.org website.
2. Let us know if you would be interested in organising a grassroots stall letting people know about the campaign in your area.
You can download the full research showing how much people pay at different rates in different areas here.
The Welsh Audit Office (WAO) has referred the sale of taxpayer owned land to the Serious Fraud Office. The Regeneration Investment Fund for Wales (RIFW) which is intended to generate investment in urban development, and is overseen by the Welsh Government, has been accused of selling off land that could have generated tens of millions more for Welsh taxpayers.
The WAO is focusing specifically on the case that the land was compiled into one property portfolio and then sold privately, rather than at a public auction. The Welsh Government has previously defended the sale of land to the Guernsey based company ‘South Wales Land Developments’.
The land which ranged from a brown field site in the South Wales Valleys, a section of a business park in Newport, also included 120 acres of farmland neighbouring the exclusive village of Lisvane in Cardiff where properties can fetch over £2m. The land in Lisvane was initially valued at an agriculture rate of £15,000 per acre but a few months later was included in Cardiff Council’s planning blueprint increasing the land value to a potential £1m per acre. Several other sites throughout Wales having similar figures attached.
There are a number of clawback mechanisms, however the BBC reports that it is no more than 50% of the increase. The Welsh Government has now suspended the joint Welsh Government and European funded RIFW and has launch two internal enquires. This is just another example of politicians burning our money and supports the argument that the Welsh Government is not fit for purpose
On a scorching hot day last Saturday, TPA supporters met in Warrington to talk to local people about our ‘Stop the Energy Swindle’ campaign – people who are sick and tired of paying over the odds for their energy bills. Although the weather may have been glorious, they still remembered the cold winter and the cold spring we had all just endured. Many had just received bills are were surprised just how high they were.
“If all you do is complain to your family and friends and then do nothing about it, don’t be surprised if nothing changes”, said one of the people we spoke to. “I’ll be writing”, said many passers by.
Local TPA supporter, David Hartley, said, “All we can do is present people with the facts and make it easy for them to write to their MP. Ordinary people don’t know what’s going on. It’s great to be in a position to talk to them and also give them something practical to do.”
David’s view is the view of all the people who have helped us run our street stalls. We are in Salisbury tomorrow, and then in Darlington and Swansea on Saturday, and in Birmingham on Wednesday next week. If you would like to help on those stalls, or perhaps run one yourself, please contact National Grassroots Coordinator, Andrew Allison.
If you haven’t done so already, please write to your MP using the website energyswindle.org.
Reacting to the proposals announced by IPSA this morning, Matthew Sinclair, Chief Executive of the TaxPayers’ Alliance, said:
“The idea of hiking MPs’ pay when everyone else has been suffering such a squeeze on their earnings is totally unpalatable. MPs do an important job and work hard, but they already earn nearly three times the national average and more than most of their European counterparts.
“The extensive research commissioned by IPSA has demonstrated that people think the current level of pay to be broadly fair, so this announcement amounts to an unaccountable quango putting up two fingers to the British public.
“IPSA is right to be reforming the gold-plated parliamentary pensions and cutting golden goodbyes for retiring or defeated MPs, but it beggars belief that they have come up with a plan that will increase the cost of our politicians when everyone’s budgets are under such pressure.
“I hope that IPSA will reflect on the reaction to their proposals and come back with fresh plans which will be acceptable to the taxpayers picking up the bill.”
IPSA commissioned ComRes to undertake extensive public opinion research into the issue of MPs’ remuneration, involving two full surveys of more than 2,000 people, four focus groups and two Citizens’ Juries. The 165-page report from ComRes could not have been clearer in its conclusion:
“Most people think that an MP’s salary is broadly fair once they have reflected on the nature of the work and comparative pay scales of other public sector workers… There is very little appetite for increasing the pay of MPs.”
Following the launch of Stop the Energy Swindle, our campaign fighting the taxes pushing up family and business energy bills, we can reveal that £86 million has been handed to environmentalist campaigns in the UK and the rest of the European Union since 1997. British taxpayers have paid for around £8.6 million of this budget.
Taxpayers are paying twice: once for the grants, and again in higher energy bills caused by successful environmentalist campaigns for energy taxes and new regulations.
The key findings of this research are:
This funding is an unfair subsidy at the expense of many people who may not agree with the environmentalist campaigns’ objectives:
It is a disgusting waste for Brussels to spend our money funding their pet environmentalists like Friends of the Earth. This is nothing more than a pathetic attempt to put a democratic gloss on fat subsidies for special interests in favoured industries like wind power. It would be funny if it was not so expensive for families already struggling to pay their bills. Taxpayer subsidies for radical environmentalists need to end. Politicians should be looking to put in place a more affordable energy policy rather than caving in to demands from their sock puppets for ever more onerous taxes and regulations.