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Thursday, May 26, 2005
TPA on Daily Politics

TPA Chief Executive Matthew Elliott has recorded a short interview for today's Daily Politics on the nine-week summer holiday that MPs get each year. Watch it at 12 noon on BBC2.

Posted by Matthew Elliott | Permanent Link

Government adviser advocates 51% income tax

The Daily Express' front page story today reveals that the Prime Minister's Special Adviser wants the ceiling on National Insurance contributions to be abolished, heralding a 51p in the pound tax rate for those earning over GBP32,000 a year. In his book The New Egalitarianism, Patrick Diamond recommends abolishing NI for the low paid and floats the idea of soaking the better off. He asks: "Is it not time to remove the ceiling altogether?"

The newspaper quotes the TPA's description of the proposals as "a massive attack on the hardworking middle classes." TPA Chief Executive Matthew Elliott said: "Labour implied heavily during the election that it would not increase National Insurance again. But now we appear to be glimpsing their real plans."

Posted by Matthew Elliott | Permanent Link

Wednesday, May 25, 2005
Financing local services

Peter Webb, Chairman of the Surrey Tax Action Group - an Alliance Member of the TPA - has written to the Daily Telegraph today responding to their leader which argues that "locally run services should as far as possible be locally financed." This is what Peter thinks:

SIR - Today in your leading article you say that locally run services should as far as possible be locally financed. They already are. But with centrally driven prescription we don't know who runs what local services, and 'local' and other taxes are recycled between areas by grant and between people in benefits before being put to work. Tax is not a price for local services and does not measure anything for accountability. 'Local' tax is as much a lie as is 'national insurance fund' (there isn't one).

To separate tax raising from tax distribution would allow great reform for simplicity, transparency and national well-being. The Lib Dem Party is to be congratulated for its vision, and action to investigate flat tax.

Any devolved operation should be able to tap into centrally banked tax. After all Local Authorities are now required by law to conduct the full panoply of corporate planning and associated disciplines. This unavoidably renders the budgets as better than centrally imposed grants as the measure of revenue required.

I have been able personally to give Sir Michael Lyons, leading the Lyons inquiry set up to prescribe for an improved council tax, a simple non-bureaucratic scheme for accessing revenue which does not conflict with national strategy and fiscal responsibility. And it is possible on one sheet of paper, or personal tax statement, to show the national accounts and the link to local spending, an objective which some experts have turned somersaults to try and achieve at great cost and complexity with local income tax design.

Peter Webb

Chairman, STAG

Posted by Matthew Elliott | Permanent Link

Monday, May 23, 2005
Carpet Baggers in Partnership

All taxpayers should beware the carpet baggers of the bureaucracies that surround us. They can always justify what they do as necessary and important by declaiming broadbrush visions and worthy goals. How can "promoting regional economic growth" or "developing the arts" or "helping inclusiveness among the disadvantaged" ever be wrong?

Look inside these worthy aims and you find what actually goes on while they spend our money. King among the buzz phrases now are "partnerships". Worthy types in suits meet others to develop these arrangements. Endless meetings on plans and structure and programmes of consultation abound.

What this means in reality is one tax-funded salary meeting with other tax-funded salary in tax-funded rooms in tax-funded organisations. Arts Council staff regularly meet with County Councils to discuss art in the community in schools, public buildings and open spaces in its "creative partnerships". OK, so now we've got an art bureaucrat, a county planner or two, an educationalist, a community architect and a town manager - no doubt with a publically funded tame artist or two in attendance - all in one room that we pay for - talking about a programme we didn't ask for and never hear about.

"Economic partnerships" are another boondoggle. At the top level you get the big companies in a local area meeting with the local economic development team. They talk about something called "strategy". That means second guessing the labour force, housing market, transport needs, and business content of the local community. They are then usually split up into "partnership working groups" on transport, workforce, occupational health and so on. You then get meetings between economic planners, transport bureaucrats, and skills advisers with an occupational health observer working out whether forcing everyone out of their cars and onto the buses (central government policy) will damage regional business competitiveness (regional government policy) or promote healthier lifestyles (health service policy) or make skilled workers move elsewhere (nobody's policy).

The truth is that our world is far too complex to plan. We are doing ourselves a dis-service when we provide tax revenues to bureaucracies that then adopt the conceit of partnering. Clamping down on tax and hence government spending has its own added value; it prevents wasteful intra-governmental chit chat.

- Eben Wilson, TPA Editorial Director