UK competitiveness weakened by rising tax burden

June 06, 2011 2:47 PM

The Centre for Policy Studies have released a competitiveness briefing analysing the UK’s performance on three competitiveness indices since 1997. The CPS say:

“over the past 14 years, our competitiveness has been undermined by excessive regulation, high taxes and mismanagement of government finances.”


“In order to return the UK to its competitive position achieved in the late 1990s, the Coalition will need to open up public services to competitive pressures, deregulate enterprise and lower the tax burden. Our fall down the league tables show that these are steps we cannot afford not to take.”


The reports cited in the CPS’s briefing contain some fascinating detail which highlights the importance and urgency of the task of simplifying and reducing Britain’s burdensome tax code: On a scale where 1 indicates “extremely wasteful” and 7 equates to “highly efficient in providing necessary goods and services”  the UK scores 3.2, at 72nd place out of 139, in the World Economics Forum assessment of wastefulness of government spending. In the burden of government regulation we came 89th, our total tax rate left us at 54th place while we were 95th on the extent and effect of taxation on incentives to work or invest.

Government in Britain is hugely wasteful, which means resources are squandered. But it also means the high tax rates and complex tax rules to fund it all discourage the investment, jobs and growth we need to restore us to economic health. The case for tax cuts and tax simplification is both urgent and overwhelming.The Centre for Policy Studies have released a competitiveness briefing analysing the UK’s performance on three competitiveness indices since 1997. The CPS say:

“over the past 14 years, our competitiveness has been undermined by excessive regulation, high taxes and mismanagement of government finances.”


“In order to return the UK to its competitive position achieved in the late 1990s, the Coalition will need to open up public services to competitive pressures, deregulate enterprise and lower the tax burden. Our fall down the league tables show that these are steps we cannot afford not to take.”


The reports cited in the CPS’s briefing contain some fascinating detail which highlights the importance and urgency of the task of simplifying and reducing Britain’s burdensome tax code: On a scale where 1 indicates “extremely wasteful” and 7 equates to “highly efficient in providing necessary goods and services”  the UK scores 3.2, at 72nd place out of 139, in the World Economics Forum assessment of wastefulness of government spending. In the burden of government regulation we came 89th, our total tax rate left us at 54th place while we were 95th on the extent and effect of taxation on incentives to work or invest.

Government in Britain is hugely wasteful, which means resources are squandered. But it also means the high tax rates and complex tax rules to fund it all discourage the investment, jobs and growth we need to restore us to economic health. The case for tax cuts and tax simplification is both urgent and overwhelming.

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