The rocketing cost of council pensions in Waltham Forest
Mar 2013 26

In July last year, we revealed the substantial rise in council staff drawing pensions compared to those paying in. We also revealed in April last year the enormous black hole in the Local Government Pension Scheme (LGPS) – a gaping pensions deficit of £54 billion for which taxpayers are ultimately liable.

These figures were brought into sharp focus in Waltham Forest earlier this month at a full council meeting. In a report authored by John Turnbull, Director of Finance and Procurement, the following was brought to the attention of councillors: Continue Reading

DWP is helping to burden the taxpayer and business
Mar 2013 25

Small business owners believe it’s crucial to get the right mix of individuals with the skills needed to develop and expand a business. With a lot of small businesses starting to see some shoots of recovery, they find themselves in the fortunate position of being able to recruit. They syphon off some of their valuable time advertising, filtering and selecting candidates, some of whom have been unemployed for prolonged periods of time.

However, business owners like myself are facing fresh frustrations when individuals who apply for a job simply don’t report for interview. After reading countless CV’s, calling what seems to be an even greater pool of filtered candidates, and for these apparent candidates not the show up for an interview, would beg to question their original intention. Continue Reading

Nottingham’s Workplace Parking Levy – One Year On
Mar 2013 21

If you are a business in Nottingham, and provide 11 or more car parking spaces for your employees, your existing Workplace Parking Levy (WPL) licence will expire on 31 March. This means you are legally required to obtain a new licence covering the period 1 April 2013 – 31 March 2014. At a time when businesses are struggling, the council will also increase the cost of permits from the current £288 a year for every workplace parking space provided, to £334 – an increase of around 16 per cent.

Businesses of course can pass on the WPL costs, but as I have previously reported, this has not always gone down well. Many businesses therefore pay the levy themselves, and others have decided to no longer provide workplace parking spaces. For many people, driving to work is the only viable option, and neither them nor their employers are willing to hand over extra cash to the council for the ‘privilege’ of parking in a private car park. Continue Reading

Budget 2013 takes total number of Coalition tax rises to over 400
Mar 2013 21

We have published our post-Budget briefing this morning, complete with graphical illustrations to complement its analysis of the Chancellor’s announcements.

The key findings are as follows:

TAXES

  • The new allowance for Employers’ National Insurance, the cut in Corporation Tax, the freeze in Fuel Duty and cut in Beer Duty are all to be welcomed
  • Many of the tax changes are sadly adding to the complexity and instability of the tax system, which the Government has thus far failed to reform and simplify
  • In January 2013, the TaxPayers’ Alliance revealed that the Coalition Government had implemented or planned 299 separate tax rises and 119 separate tax cuts since it came to power; after yesterday’s Budget, our preliminary estimate is that at least 413 separate tax rises have already been implemented or are planned before May 2015 compared to just 166 separate tax cuts.

SPENDING

  • Government departments have been significantly underspending against their original budget allocations but, crucially, the Chancellor failed to address the continuing overspend against the government’s revenue base
  • Relative to our economy and its capacity to bear taxation, government overspending is worse than it appeared when the Coalition came to power
  • Despite the substantial shortfall in economic growth and revenue below what had been expected, the Coalition Government has not cut spending below its original trajectory
  • Given recent growth performance, the continuing problems in Europe, our broken banks, and high energy prices, the convergence of spending and revenue which the Government predicts may not happen at all
  • Without new controls on pay increases, there is a serious risk that public sector pay will not be contained to a 1% rise since the total public sector pay bill has continued to rise over the last three years, despite a supposed pay freeze and a fall in public sector headcount

DEBT

  • By 2017-18, even on the OBR’s optimistic forecasts, the Coalition Government will have more than doubled the official national debt it inherited
  • According to the Office for National Statistics, the government’s overall liabilities amount to well over £7 trillion, equivalent to five times GDP
  • All of the government’s liabilities require servicing, and if we add in pension payments and PFI, total debt servicing is already around £170 billion a year, and is set to increase to £220 billion a year by 2017-18. By then, over 30 per cent of government revenues will be earmarked to service past liabilities rather than to pay for current services

CONTINGENT LIABILITIES

  • There are enormous economic risks with the Government’s new £12 billion policy of guaranteeing mortgage loans on a substantial scale through “Help to Buy”, in a manner reminiscent of the arrangements in the United States which are thought to have contributed to the build-up of subprime debt that triggered the financial crisis
  • Between “Help to Buy” and the National Loan Guarantee scheme announced in last year’s Budget, nearly 14 per cent is being added to total guarantees
  • The Government should be far more open and transparent about the contingent liabilities it is taking on so that such commitments – which take a significant risk with taxpayers’ money – are subject to proper scrutiny


Our reaction to Budget 2013
Mar 2013 20

The Chancellor of the Exchequer, George Osborne, announced a number of welcome measures to relieve the tax burden on struggling families in today’s Budget, including:

  • Cut in beer duty, and the abolition of the beer duty escalator. A major victory for the MashBeerTax campaign organised by the TaxPayers’ Alliance (TPA), working with other campaigners for lower beer duty.
  • Another freeze in fuel duty, following the freeze last year after the TPA FreezeFuelTax campaign.
  • An increase in the Personal Allowance.
  • A cut in Employers’ National Insurance.
  • A cut in Corporation Tax to 20 per cent, which will be passed on to workers in higher wages.

However, the TPA has warned that the Chancellor is still relying too much on complicated measures to help specific industries, rather than making fairer and simpler changes to the overall tax structure.

Reacting to today’s Budget, Matthew Sinclair, Chief Executive of the TaxPayers’ Alliance, said:

“George Osborne has announced welcome relief for people struggling with the high cost of living. The cut in beer tax, the freeze in fuel duty and the higher personal allowance will all ease the pressure on family budgets. Lower Employers’ National Insurance and Corporation Tax will also be passed on to workers in higher wages.”Unfortunately, the great limitation of this budget was that it relied far too much on complicated targeted reliefs instead of tax cuts across the board. Simpler, strategic tax reforms that reduce the overall burden would be fairer and do more to produce the stronger economy Britain needs.”

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