Copy

STRICTLY EMBARGOED UNTIL 00.01, WEDS 11 MARCH

TaxPayers' Alliance calls on all parties to come clean about the cuts to come

  • Landmark research details the savings which the government formed after the general election will need to make
  • Savings include scrapping a variety of universal benefits for those who don’t need them, abolishing three Whitehall departments and cutting Scotland’s grant from central government
  • TPA demands honesty from politicians on spending intentions and challenges them to back our plan or offer an alternative
  • The Spending Plan lays the ground for tax simplification by complementing the findings of the final report of the 2020 Tax Commission
     

Read The Spending Plan in full

Read the summary and our full list of
costed policy recommendations

 

The TaxPayers' Alliance today calls on all political leaders to inject a dose of honesty into the pre-election debate about future spending cuts, with the publication of The Spending Plan.

Despite the improving economic situation, the government is this year still spending more than £90 billion than it raises in revenue. The TPA's rigorously researched report identifies the billions of pounds of savings which must be made by whoever forms the government after May's election if the nation’s books are to be balanced so that we can start reducing the colossal national debt.

With the 2015 Budget now just one week away, the time has surely come for politicians to be candid about their spending plans for the year ahead and the coming five-year parliament.

The Spending Plan sets out comprehensive proposals for savings and reforms that would reduce public spending by 2020 to 35.2 per cent of GDP, the level forecast by the Office for Budget Responsibility. To reach that level, we will need to save £50 billion a year by 2019-20.

The TPA proposes the following savings, among others. 
  • Abolish BIS, DECC and DCMS, saving £7,465 million
  • Abolish the pensions 'triple lock' and link the state pension to CPI, saving £6,800 million
  • Saving £4,385 million by cutting Scotland's grant to match its relative prosperity compared to Wales
  • Freeze benefits for two years, then uprate with inflation, saving £1,962 million
  • Scrapping national pay bargaining in the public sector, saving £5,800 million
  • Means test Winter Fuel Payments (£1,443 million) and target free bus passes at those who really need them (£560 million)
  • The full list is available in the Notes to Editors
The Spending Plan also lists the further changes that would bring spending down to 31.7 per cent of GDP - the level recommended in The Single Income Tax, the final report of the 2020 Tax Commission which was convened by the TPA in association with the Institute of Directors. To reach that level, we will need to save £117 billion a year by 2020-21.

Public spending at that level would create the conditions for wholesale reform and simplification of the tax system as proposed in The Single Income Tax. Those proposals could boost GDP by an additional £5,000 per family.

Among the additional reforms, which would help cut spending to that level, the TPA proposes:
  • Renegotiating GP contracts in order to cut excessive pay, saving £1,137 million
  • Saving £2,380 million by increasing the state pension age to 67 by 2021
  • Abolishing DfID, with remaining humanitarian relief responsibilities transferred to the FCO and the MoD, saving £15,726 million
  • The full list is available in the Notes to Editors
     

Read The Spending Plan in full

Read the summary and our full list of costed policy recommendations here


The political parties have so far announced limited ways in which they would reduce spending, with examples including:
  • Labour and the Lib Dems both plan to scrap Winter Fuel Payments for better off pensioners
  • The Conservatives want to reduce the welfare cap and freeze benefits for two years
  • UKIP would scrap HS2, cut the foreign aid budget and restrict the extent of Child Benefit
Those pledges are all welcome, but for every cut any of the parties is proposing, there seem to be far more promises of higher spending and protecting certain favoured budgets, such as:
  • Labour, the Lib Dems, the Conservatives and UKIP are all pledged to increase the NHS budget
  • Labour, the Lib Dems, the Conservatives all remain wedded to spending 0.7 per cent of GDP on international aid
  • The Conservatives and Labour are promising to keep handing out free bus passes and TV licences even to the wealthiest pensioners
  • Labour are promising to increase the education budget by at least the rate of inflation
Launching The Spending Plan, Jonathan Isaby, Chief Executive of the TaxPayers' Alliance, said:

"The politicians seeking our votes owe it to all taxpayers to come clean about what spending the country can and cannot afford. This candour has so far been noticeably absent in the election campaign, with politicians failing to acknowledge the dire state of the public finances and instead clambering to make additional spending pledges.

"Our Spending Plan honestly sets out the savings that need to be made by whichever party or parties take power after the election. Today we challenge our political leaders to accept our plan or to produce a similarly rigorous set of proposals of their own which explain where it is that they would reduce spending instead."

 
TPA spokesmen are available for live and pre-recorded broadcast interviews via 07795 084 113 (no texts)

Media contacts

Andy Silvester
Campaign Director, TaxPayers' Alliance
andy.silvester@taxpayersalliance.com
24-hour media hotline: 07795 084 113
07891 059567

Notes to Editors

1. Founded in 2004 by Matthew Elliott and now with 80,000 supporters, the TaxPayers’ Alliance (TPA) fights to reform taxes, cut spending and protect taxpayers. Find out more about the TaxPayers' Alliance at www.taxpayersalliance.com

2. The Spending Plan can be read in its entirety here: http://lowtax.es/1BISuD2 

3. The summary can be read in its entirety here: http://lowtax.es/1FE7w74

4. The final report of the 2020 Tax Commission, The Single Income Tax, can be read at http://2020tax.org/2020tc.pdf

5. The full, costed list of proposed savings to get spending down to 35.2% of GDP by 2019-20 are:
  • Abolish BIS and reassign necessary functions - £4,371 million
  • Abolish Child Benefit and increase the child element of the Child Tax Credit to address child poverty concerns - £3,058 million
  • Abolish DECC and reassign necessary functions - £351 million
  • Abolish free TV licences - £835 million
  • Abolish the Christmas Bonus - £148 million 
  • Abolish the Department for Culture, Media and Sport - £2,743 million
  • Abolish the pensions 'triple lock' and link state pension to CPI - £6,800 million
  • Cut annual leave entitlements where overly generous - £1,401 million
  • Cut Scotland's grant to match its relative prosperity compared to Wales - £4,385 million
  • Establish an excess sickness rate penalty to bring public sector rates into line with the private sector - £778 million
  • Flatten Housing Benefit rates across expensive areas to cut 10 per cent off bills - £2,680 million
  • Freeze benefits for two years then uprate with CPI - £1,962 million
  • Means test Winter Fuel Payments - £1,443 million
  • Reduce the welfare cap to £20,000 - £778 million
  • Relax planning restrictions that inflate housing costs to cut Housing Benefit bills - £3,752 million
  • Repeal the Equality Act 2010 - £49 million
  • Replace grants to local authorities with devolved taxes to encourage better local spending - £4,885 million
  • Scrap national pay bargaining - £5,800 million
  • Scrap trade unions’ subsidies of facility time, grants and office space - £99 million
  • Scrap the childcare subsidy programme named "Tax-Free Childcare" - £900 million
  • Scrap the remaining contributory benefits - £1,634 million
  • Cut the number, scope and budgets of quangos and public bodies - £389 million
  • Stop paying over the odds to borrow money - £688 million
  • Target free bus passes for the elderly on those who genuinely need them - £560 million
6. The full, costed list of savings to get spending down to 31.7% of GDP by 2020-21  are:
  • Abolish BIS and reassign necessary functions - £4,459 million
  • Abolish DECC and reassign necessary functions - £358 million
  • Abolish DfID, scrap development aid and transfer humanitarian responsibilities to the FCO and MoD - £15,276 million
  • Abolish the Department for Culture, Media and Sport - £2,743 million
  • Abolish child benefit and increase the child element of the child tax credit to address child poverty concerns - £3,138 million
  • Abolish free TV licences - £919 million
  • Abolish the Christmas bonus - £147 million
  • Cut child tax credits to their 2003-04 level in real terms - £5,905 million
  • Freeze benefits for two years then uprate with CPI - £2,018 million
  • Means test winter fuel payments - £1,440 million
  • Reduce the welfare cap to £20,000 - £794 million
  • Scrap the childcare subsidy programme named "tax-free childcare" - £900 million
  • Scrap the remaining contributory benefits - £1,630 million
  • Target free bus passes for the elderly on those who genuinely need them - £553 million
  • Flatten housing benefit rates across expensive areas to cut 10 per cent off bills - £2,720 million
  • Relax planning restrictions that inflate housing costs to cut housing benefit bills - £4,764 million
  • Amend repayment terms on student loans to make them more affordable - £2,692 million
  • Return the compulsory school leaving age to 16 and scrap the 16-19 bursary scheme - £1,216 million
  • Return the pupil premium to 2011 levels - £1,973 million
  • Scrap universal free school meals for pupils in reception to year 2 - £855 million
  • Increase the extent of charges in the NHS - £9,359 million
  • Raise the efficiency of NHS estates to match the top 25 per cent - £3,606 million
  • Reform patient list auditing to cut NHS 'ghost patients' - £147 million
  • Renegotiate contracts to cut excessive pay for GPs - £1,137 million
  • Stop prescribing branded medicines where generics are suitable - £211 million
  • Repeal the Equality Act 2010 - £50 million 
  • Replace grants to local authorities with devolved taxes to encourage better local spending - £6,198 million
  • Shrink grants to Scotland, Northern Ireland and Wales in line with England and cut Scotland's grant to match its relative prosperity compared to Wales - £10,408
  • Cut the number, scope and budgets of quangos and public bodies - £396 million
  • Withdraw UK funding for EU agriculture and fisheries, and spend it directly - £2,791 million
  • Cut annual leave entitlements where overly generous - £1,395 million
  • Establish an excess sickness rate penalty to bring public sector rates into line with the private sector - £774 million
  • Scrap national pay bargaining - £5,771 million
  • Freeze the basic state pension and minimum income guarantee in 2016-17, then uprate with CPI - £10,000 million
  • Raise state pension age to 67 by 2020-21 - £2,380 million
  • Scrap trade unions' subsidies of facility time, grants and office space - £97 million
  • Stop paying over the odds to borrow money - £795 million
  • Abolish rail operator subsidies and increase premiums by 33% by deregulating fares - £1,434 million
  • Abolish the bus service operators' grant - £302 million
  • Scrap HS2 - £4,498 million
  • Scrap operating subsidies to TfL - £769 million
Facebook Twitter Email YouTube Flickr RSS