For immediate release
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The TaxPayers’ Alliance (TPA) recommends a number of savings to maintain current spending commitments and help us recover from the sharpest economic contraction in history.
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Analysis shows that reorganising government and reforming pensioner benefits could save £43 billion next year.
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Recent reports suggest that £40 billion worth of tax hikes are needed. But instead of imposing taxpayer austerity, ministers should implement the TPA’s Save to Spend plan.
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The government’s Comprehensive Spending Review will take place on Wednesday 25th November, and is expected to pick up some of the paper’s recommendations.
Ahead of Wednesday’s Comprehensive Spending Review, the TaxPayers’ Alliance has recommended £43 billion of savings in its landmark Save To Spend report. The savings are found in 15 policy changes that will allow ministers to retain other spending promises.
The report explains how the impact of the coronavirus crisis on the economy has made it increasingly difficult for the government to retain its manifesto commitments. While long term borrowing is cheap, high levels of spending could lead to complacency with taxpayers’ cash, and no focus on value for money.
Recent tax increases have already created the highest tax burden in over 50 years, meaning that tax rises cannot be an option to balance the books. This has only been sharpened by the pandemic - the private sector has been decimated, so imposing taxpayer austerity on entrepreneurs and innovators would kill off the recovery.
Therefore, in order to keep its spending promises, the government must find savings elsewhere.
The TPA has today proposed a reform package that could deliver total savings of £43 billion next year, rising to £73 billion by 2025-26. These savings can be achieved through reorganising government, reforming pensioner benefits and more, unlocking opportunities for sensible spending commitments elsewhere.
CLICK HERE TO READ THE REPORT
Key Findings:
1. End national pay bargaining
Ending national pay bargaining could help ‘level up’, while saving £1.8 billion in 2021-22, rising to £10.3 billion in 2025-26.
2. Defund the Arts Council
Scrap Arts Council funding to save an estimated £481 million in 2021-22.
3.Raise the state pension age to 68 by 2028 instead of 2046
Raising the state pension age to 66 years and 3 months on 6 April 2021, and another 3 months each year until it reaches 68 in 2028. This could save around £1.6 billion in 2021-22.
4. Scrap the Christmas bonus
Scrapping the Christmas bonus could save £163 million a year in 2021-2
5. Scrap winter fuel payment
Scrapping the winter fuel payment could save £2 billion a year in 2021-22.
6. Scrap older person’s bus passes
Scrapping free bus passes for older people could save £1.2 billion next year.
7. Reform the triple lock
Reform the triple lock by adjusting the 2.5 per cent lock to a 0 per cent lock. Calculations by the Social Market Foundation estimated that this policy would save approximately £4 billion a year.
8. Reform student loan terms
Increase the repayment rate to 15 per cent and simplify interest to a uniform rate of RPI plus 3 per cent. This could save £3 billion next year, as well as encouraging students to select more financially productive courses.
9. Reform the Barnett formula
Trim this excess grant which Scotland receives relative to Wales to save £5.7 billion in 2021-22.
10. Cap annual leave entitlements
Annual leave entitlements should be brought into line with those in the private sector with a 25 day cap, plus bank holidays. This could save £3.1 billion in 2021-22.
11. Scrap foreign development aid
Scrap the arbitrary target of 0.7 per cent of national income, around £16.6 billion, retaining £1.5 billion for humanitarian efforts, to save taxpayers £15.1 billion next year.
12. End union facility time
Taxpayers should not have to fund union activity. Eliminate grants, use of offices and equipment and facility time to save £137 million in 2021-22.
13. Cancel plans to replace farm subsidies with new public good measures
Planned spending on supposed public goods to replace spending on subsidies should be cancelled, which could save £0.7 billion in 2021-22, rising to £3.8 billion by 2025-26.
14. Move government offices out of London
Government offices (except ministers’ private offices) should be moved out of London to save money by using cheaper property and reducing spending on paying London weighting for staff. This could save £104 million annually.
15. Freeze public sector pay
Public sector pay should be frozen for two years. The Centre for Policy Studies has calculated that this could save £3.8 billion in 2021-22.
CLICK HERE TO READ THE REPORT
John O’Connell, chief executive of the TaxPayers' Alliance, said:
“The government’s manifesto commitments and the economic challenges of the coronavirus crisis can only be met with bold action that protects taxpayers.
“Ministers must refuse the tired argument that there is no more fat left to trim. If the government increases outgoings, it’s vital that it simultaneously saves to spend.
“To get the economy moving again, the chancellor’s spending programme must be balanced with big savings and an unapologetic war on waste.”
TPA spokesmen are available for live and pre-recorded broadcast interviews via 07795 084 113 (no texts)
Media contact:
Danielle Boxall
Media Campaign Manager, TaxPayers' Alliance
[email protected]
24-hour media hotline: 07795 084 113 (no texts)
Notes to editors:
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Founded in 2004 by Matthew Elliott and Andrew Allum, the TaxPayers' Alliance (TPA) campaigns to reform taxes and public services, cut waste and speak up for British taxpayers. Find out more at www.taxpayersalliance.com.
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TaxPayers' Alliance's advisory council.
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