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Thursday, March 31, 2005
TPA coverage in the Express

In today's Express (p11), a report on how travellers living in illegal sites are being given free advice to launch discrimination cases quotes TPA Chief Executive Matthew Elliott saying: "The police should spend more money ensuring travellers behave responsibly and less on PR excercises informing them of their rights. Unless the Government starts treating ordinary taxpayers and travellers equally, the recent disputes will only get worse"

Posted by Matthew Elliott | Permanent Link

Tuesday, March 29, 2005
ASI blog shortlisted for Guardian award

The Adam Smith Institute's blog has been shortlisted for the Guardian's political weblog award. Make sure you cast your vote in the blog Oscars today!

Posted by Matthew Elliott | Permanent Link

TPA letter in the FT

The TaxPayers' Alliance letter in response to Martin Wolf's article on why 'Big spending does not mean less growth', was published in the Financial Times today.

Posted by Matthew Elliott | Permanent Link

How to sell a Flat Tax to Tony Blair

Flat Taxes are suddenly back in fashion. When I spoke to a well-known centre-right economist about Flat Taxes shortly before the Pre-Budget Report, they said to me: "I support them in principle, but I think it's about 120th on the list of things Britain needs to do." Fast forward six months and the media is full of Flat Tax stories.

This debate has been initiated by the spate of East European countries adopting a Flat Tax - the latest being Poland - and the question of how (high) progressive tax West European countries can compete with their new (low) Flat Tax neighbours.

Leading the way for a UK Flat Tax is the Adam Smith Institute: first with Andrei Grecu's Flat Tax: The British Case (November 2004) and now with Richard Teather's A Flat Tax for the UK: A practical reality (March 2005).

Commenting on Teather's pamphlet in the Daily Telegraph today, Christopher Fildes calls it "The Tythe Plan", after the tythe - 10% of income - that used to go to the local church. Seeing as all the Abrahamic religions - Christianity, Judaism and Islam - embrace the concept of tything, perhaps this is the way to sell a UK Flat Tax to our notoriously religious Prime Minister.

Posted by Matthew Elliott | Permanent Link

Press summary: Tuesday 29 March

The blanket coverage of the Howard Flight affair continues in Tuesday's newspapers (Financial Times, The Times, Daily Telegraph, Guardian, Independent, Daily Mail, Express, The Sun, Mirror). All of them agree that the on-going situation is damaging Michael Howard. Only the Daily Mail attempts to put a positive spin on the affair by headlining their article "How New Labour's new lies backfired."

Writing in the Daily Telegraph, Charles Moore supports Michael Howard's decision to take the whip away from Howard Flight, arguing that "no employee in a business could expect to stay in the company if he said that the business's product was wrong or that its advertisements were untrue."

In the Independent, Stephen Richards looks ahead to after the general election when "the Tories can have their much-needed row about tax and spending." He rightly says that there "is still an eager audience for Howard Flight's views among Tories who seek a much smaller state." The same is true of the general electorate.

Philip Stephens, writing in the Financial Times, suggests that the story indicates that "Whatever else one says about the Tories, two defeats and 15 years on they still walk in the Lady's shadow."

Giving an economic perspective to the debate for The Times, Gary Duncan argues that the situation is "a symptom" of the lack of debate between the major parties on taxation and public spending. "Bizarrely, the Tories, whose Shadow Chancellor is Oliver Letwin, have declared what amounts to a virtual non-aggression pact with the Government on the tax-and-spend issue. Their strategy is to fight Labour on its own territory, confining the fiscal fight between the parties to a silly scrap over their proposal for a derisory GBP4 billion tax cut - less than 1 per cent of total taxation. The consequence of this is that both sides spend most of their time exaggerating the almost non-existent differences between their economic platforms in an insult to the electorate's intelligence."

Christopher Fildes discusses the Adam Smith Institute's new Flat Tax pamphlet in his column for the Daily Telegraph.

Irwin Stelzer argues in The Times that Gordon Brown "does not yet understand how to equip his nation to play in the unforgiving game of international competititon."

"So, work late, earn a bit more, and turn 40+ per cent of it over to the Government when you earn it, and another 17.5 per cent when you spend it. No one can blame anyone who decides that the net benefit of that extra effort just isn't worth the trouble. Which may explain why Britain continues to trail in the productivity league tables."

Posted by Matthew Elliott | Permanent Link

Thursday, March 24, 2005
Press summary: Thursday 24 March

In a wide-ranging article for The Times (p21) on the general election, Anatole Kaletsky argues: "Both polling and common sense suggest that tax cuts would not in themselves be much use in wooing voters today. What the Tories need is not tax cuts but an alternative vision on how to meet the great social challenges of the future - health, education and pensions."

Comment: Whilst Kaletsky is right to argue that low taxes should be part of a wider agenda of reforming public services, he is wrong to underestimate the desire for lower taxes. A TPA/YouGov poll published ahead of the Budget clearly shows that a tax cutting agenda would be popular, with 44% of voters wanting to see taxes and spending reduced after the next election and only 12% wanting to see them increase.

The second item of yesterday's Newsnight focused on the rise of the Flat Tax and the general competitiveness of East European countries. The report included a 'lively debate' between Tim Evans of the Centre for the New Europe and John Monks of the European Trade Union Confederation.

Comment: Over the past few months, the British media has woken up to the rise of Flat Tax across the world and even the BBC carried a positive report on it last night. Poland has recently adopted a Flat Tax and the socialist government in Spain is said to be considering the introduction of a Flat Tax. After the general election, there is a real possibility that the introduction of a British Flat Tax will become a big talking point.

Figures released by the ODPM yesterday show that council tax bills will rise by more than twice the rate of inflation this year and even bigger increases are predicted next year when homes are revalued (The Times, report p1, commentary by Tony Travers p29)

The Government yesterday tried to present Conservative councils as high spenders by moving to cap the budgets of nine authorities which have posted inflation-busting council tax rises. The increases range from 9% in Aylesbury, Buckinghamshire, to 100% in South Cambridgeshire and have prompted ministers to claim that the councils had posted high increases in the hope of being bailed out by a Conservative government. Sir Sandy Bruce-Lockhart, Chairman of the Local Government Association, said that the councils capped were "low-tax and low-spend" and that the LGA "totally opposed" the decision" (Guardian, report; Daily Telegraph, p8)

Writing in The Times (p21), Michael Howard defends the Conservatives against Labour's accusation that they want to "cut" government spending by GBP35billion. "If those are cuts then I'm a banana."

The Daily Mail (p8) reports that spending on advertising and PR by the Government is likely to exceed GBP300m for the second successive year, making Whitehall Britain's biggest advertiser.

The Daily Telegraph has a very good special supplement today on inheritance tax.