By: Callum McGoldrick, researcher at the TaxPayers' Alliance
The UK has a record high tax burden, harming growth and hitting household budgets. But to sustainably bring down this tax burden, there needs to be a serious conversation about what the state should do, and what it shouldn't.
This is the first of a three-part series of blogs featuring 12 things the government shouldn't be doing, starting with the institutions that taxpayers fund unnecessarily.
Institutions
The state performs a range of essential tasks, including national defence, enforcing the law, and providing for the needy. Institutions like the police, army, and the Department for Work and Pensions are necessary to discharge these responsibilities, however the government also funds many institutions which are not essential.
The BBC and Channel 4
The BBC is funded by a de facto tax in the license fee, as anyone in the UK who wishes to watch anything broadcast on TV from any channel must pay it. There are many proposals to change the funding of the BBC from a subscription-based model to fully privatising it. What is critical is that the BBC does change, particularly to stop charging those who do not use the BBC to watch other TV channels. Removing the BBC from public ownership will also help make the BBC more competitive with other channels and streaming services, guaranteeing its long-term future.
Channel 4 is a state-owned organisation, funded primarily by selling TV advertising in the shows it broadcasts. As a result, Channel 4 is subject to following narrow and restrictive guidelines, particularly surrounding advertising where common methods for private companies, such as product placement, are prohibited, preventing Channel 4 from being able to raise the same amount of money as competitors. For comparison, in October 2023 ITV had a total reach of 46.4 million compared to Channel 4’s 45.9 million, yet for 2022 ITV had close to double Channel 4’s advertising revenues., Additionally, as Channel 4 is required to reinvest all profits back into itself, taxpayers gain no more from ownership than they would from any other TV company, yet still would have the responsibility to bail out Channel 4 in the case of any financial failings. For this reason, Channel 4 should be sold.
Funding for football
The football association (FA) received over £100 million from various government departments and government funded bodies in 2021-22 in the form of deferred grants. In the same period, the revenues of the 20 premier league clubs totalled £5.5 billion, with the premier league itself also raising millions., It should not be the job of taxpayers to fund the most popular sport in the world. Rather, the largest organisations of the sport should take responsibility for the grassroots of the sport.
A new UK football regulator - provisionally named the Independent Regulator for Football (IREF) - will facilitate cooperation between existing bodies, such as the FA. It will also aim to prevent football clubs from falling into administration by using the revenues of successful clubs to cover losses of unsuccessful clubs. While being planned for 2024, the prospected regulator has no confirmed scope or enforcement methods. Based on the government's white paper and subsequent releases, much of the proposed body’s role will significantly overlap with the role of the FA. Given that the FA receive significant public funding, it is redundant for another body to be founded to perform a similar function, it is also redundant for the FA to receive public money because other sports, such as tennis and formula one, can fund their governing bodies with smaller total revenues than the premier league.
Committee on Climate Change (CCC)
The CCC was established by the Climate Change Act in 2008 and advises the government of the UK as well as other nations on how to achieve emission targets. The CCC received £4.9 million from UK government departments and devolved administrations in 2021-22, and during 2022, successfully lobbied for climate change bills in Nigeria, Brazil, South Africa, Columbia and Malaysia. The Climate Act in Nigeria will see already limited public funds repurposed to achieve the goals set out in the bill. A year before receiving the 2021-22 funds, the CCC used economic modelling to imply that net zero measures would make money – even if there was no climate change.
In the UK, the CCC works by releasing reports and making recommendations for specific policy areas. Some of these recommendations include increasing the “capacity to process funding applications and advice for farmers to transition to woodland management approaches”, as well as banning gas boilers by 2026. The CCC have also suggested that UK businesses must adhere to their rules. One of their recommendations to government is that ‘net zero’ should be a statutory definition with specific requirements, as defined by the CCC, with punitive measures for those that disobey. Given that many of the CCC’s objectives are harmful to the UK and the economy, as with the demand to reduce farming output, the government should not be funding them.