Taxpayer manifesto: which TPA policies have been picked up?

By Jeremy Hutton, Policy Analyst 

The TaxPayers’ Alliance is non-partisan, aiming to spread our core messages of lower taxes, better services and improved accountability across the political spectrum. We believe that people spend their money far better than politicians and bureaucrats, and tax and spending policies should reflect that. 

We work with as wide a variety of political parties as possible to make that case, and aim to persuade all of them. That means general elections are important to our work, but we will never pick a side or tell our supporters who to vote for. Instead, we focus on helping the public understand the policies on offer.

As we near polling day, every party has now launched their manifesto. We’ve looked at the manifestos of the main parties currently in the Commons. So which TPA-friendly policies are written across the pages of each party’s pledges?  

 

On the public finances

Virtually every main party seems to be making big spending commitments. With the tax burden already at a 50 year high, spending is rising once again and is likely to head back towards the heights of the 1970s over the coming years.

Based on the manifestos, Labour are working towards a German-sized state, while the Tories’ plan looks more Dutch. Either way, the size of government is set to increase.

The Lib Dems should be applauded for at least attempting to balance the books, with the commitment to reducing our national debt a very sensible move in an election marked by spending promises.

 

On tax simplification 

The British tax system is dauntingly complex - over 22,000 pages, which is more than fifteen editions of ‘War and Peace’. It needs simplifying, as our ‘Single Income Tax’ explains. Unfortunately, simplification is not in fashion at this election.

The Conservatives recognise that the tax system needs to be made fairer but have opted to paper over the cracks by focusing on relatively short-term measures to tackle tax avoidance. But the best way to ensure everyone pays their taxes is to close the loopholes by making the system clearer and simpler.

The Greens have the strongest simplification policy, promising to create a single ‘Consolidated Income Tax’. Disappointingly, the policy is undermined by the suggestion that capital gains and inheritance ought to be included. The inclusion of capital gains tax would mean the sale of businesses becoming substantially less attractive and could lead to distortions in mergers and acquisitions. Including inheritance tax would push more middle and working class people into a higher tax bracket, without overly affecting those on the highest incomes.

 

On tax rates 

Alongside cuts to employers national insurance, the Conservatives’ advocacy of a “triple lock” on income tax, national insurance and VAT rates is welcome. The “ambition” to bring the national insurance threshold in line with the personal allowance is very positive, and is one important step towards our single income tax - though would be far better as a clear commitment than a rather woolly politicians’ promise.  

Most of Labour’s tax plans are terrible. Hiking taxes and seizing property would be a disaster - if some of these plans are implemented, we can kiss goodbye to the investment we need for post-Brexit prosperity. This may be the highest taxing manifesto in living memory.

However, Labour do have an interesting take on business rates. A review of the system is long overdue, and replacing them with a land value tax has to be on the menu of options - it’s good to see that the Labour manifesto recognises this urgency and has identified a viable alternative.

The Brexit party have heeded the TPA’s call for both the outdated BBC licence fee and the unfair inheritance tax to be scrapped. Unfortunately, they also commit to a digital sales tax, which would push up prices on everything from online shopping, to food deliveries and app-based taxi services.

The DUP have also joined our calls for the abolition of the licence fee, with welcome proposals for a 21st century subscription model, as we have suggested. They also commit to a reduction in the insurance premium tax, which would lower bills for millions of families.

The DUP also suggest scrapping the domestic version of air passenger duty, which would cut taxes but also complicate the system. The Lib Dems make the same mistake, complicating the tax with government involvement in family travel planning when it would be much easier to simply halve the rate or abolish this hated holiday tax altogether.

 

On HS2

High-Speed 2 is a waste of taxpayers’ money. Last year, the TPA launched the Great British Transport Competition, which came up with a series of alternative transport proposals that would be far better value. 

The Brexit party advocate for the scrapping of HS2, as do the DUP and the Greens. All suggest alternative transport projects around the country would be a better use of public funds. The Brexit party’s proposals are very sensible, reflecting those laid out in the Great British Transport Competition. 

The Conservatives are disappointingly vague regarding HS2, having recently launched an inquiry into its future which seems to have reached a position of supporting the project even before it even reports. However, there is still plenty of opportunity for scrapping it and Conservative MPs have made some positive noises on pursuing some of the recommendations made by the Great British Transport Competition. 

 

On public sector accountability

The TaxPayers’ Alliance has long made the case against unfair, expensive and excessive golden goodbyes to public sector staff, regardless of their performances or the circumstances of their departure.

For that reason, it is good news to see that the Conservatives have said that ridiculous redundancy payments will be clawed back from highly paid public servants when they move between jobs.

 

On better public services

The Conservatives support for increased automation in the NHS is also positive and is in keeping with the policy paper we launched alongside the health secretary earlier this year which found that a genuine commitment to automation could save the NHS £12.5 billion a year. 

However, both Labour and the Conservatives have committed to big cash injections for government departments, which is likely to see money wasted in Whitehall rather than reaching frontline services.

Labour’s plans to bring services back into public ownership is completely wide of the mark. “Nationalisation would come at a staggering cost to taxpayers, both upfront and in the future with large-scale borrowing having to be paid off. Where there is poor performance in existing services, we should be looking at more competition, not less, as that is what will bring down costs and improve outcomes without forcing taxpayers to step in.

 

Conclusion 

This election is a big-spending election, meaning there is rare good news for lovers of liberty and advocates of lower taxes and restrained public spending.

Nonetheless, there are more than enough sensible, TPA-backed policies across the different manifestos to highlight how important campaigns like Scrap HS2 and Axe the TV tax can be – no matter who wins this election.