Earlier in the week the Lords Economic Affairs Committee published a new report which argues that taxpayers are being treated unfairly by HM Revenue & Customs. The committee said, “There is a clear difference in culpability, for example, between deliberate and contrived tax avoidance by sophisticated, high-income individuals, and uninformed or naive decisions by unrepresented taxpayers.” A notable example is the recent loan charge scandal which would see up to 50,000 people facing very large tax bills because, as the committee argues, a failure of HMRC to communicate properly with those affected.
A new report by the Lords Economic Affairs Committee argues that taxpayers are unfairly treated by HMRC
Commenting on the report our chief executive John O’Connell said: “We are encouraged to see some parliamentarians recognise that HMRC has gone too far in many instances, and that the balance is tipped against ordinary taxpayers. It’s important to ensure that taxpayers who have been unfairly treated get the justice they deserve. Britain’s hugely complex tax code places an enormous burden on ordinary taxpayers, and it’s time for the government to take bold action to simplify the system.”
Our policy analyst Duncan Simpson echoed John’s thoughts in an interview for talkRadio which you can listen to here.
Let us know if you have been hit by the loan charge scandal or similarly unfair tax issue.
TPA suggests new guide for government
At the TPA we are always keen to hold the government to account on wasteful spending but also on the language used by many departments. For example a common phrase you will hear many politicians use is “government money” when what they actually mean is “taxpayers’ money”.
With this is mind we have compiled a handy guide (see below) for government employees to ensure clarity and accuracy when discussing public spending. Can you think of any other examples? Do send me your suggestions.
Have the wheels come off for Motability?
Regular readers may recall that we have previously looked at the large amounts of cash hoarded by the Motability Operations scheme. The firm offers a fleet of vehicles to wheelchair users and others in return for part of their State disability allowance and back in February of this year MPs called for an investigation into the company.
Fast forward to the present day and a new report by the National Audit Officehas concluded that customers were overcharged to the tune of £390million due to mismanagement. All the while it was kept quiet that chief executive Mike Betts had received a £2million bonus on top of his already very generous £1.7million pay package. As a result of the investigationMr Betts will step down from his position, although there are fears this may drag on while a successor is found.
Commenting on the story for The Express our chief executive John O’Connell said, “This report from the NAO is damning. The vast tax concesions and benefit payments which Motability Operations enjoys have kept the good times rolling for these at the top. This organisation is desperately in need of reform and some proper corporate governance.”
Motability enjoyed an effective monopoly thanks to government assistance and we hope lessons will be learnt from this shambles. Please email me if you know of a similar scheme that has gone awry.
The end is nigh for HS2?
HS2 has been very much in the public eye this week after chairman of the project Sir Terry Morgan resigned his post. The Today programme on Radio 4 ran a series of news pieces on HS2 and questioned Chris Grayling, the transport secretary, about how much trouble the project is in. Mr Grayling maintains that all phases of HS2 can be delivered for a total of £56billion and that the new rail line is desperately needed to increase capacity and relieve pressure on existing lines.
The truth is that HS2 is not needed and there are much better ways to spend £50billion or so on transport infrastructure projects. That’s why we launched The Great British Transport Competition to gather ideas from all over the country on how the nation’s transport could be improved. Results of the competition will be announced in January but two of our judging panel, Lord Berkeley and Michael Byng were asked by the BBC what they made of Chris Grayling’s comments and whether HS2 is worth the money:
Lord Berkeley: “I think there is a lot of bad news to come from the [HS2] numbers. The work that we’ve done indicates that the cost will be about double… I think that’s really serious. When you get into a figure that’s probably £100billion for a high-speed line, that’s an awful lot of money.”
Michael Byng: “It’s very difficult to see how you maintain a positive, attractive cost-benefit analysis, prepared in 2015 before the project received royal assent, when the costs have probably doubled. That cost benefit-analysis will probably have disappeared.”
Duncan Simpson our policy analyst was a guest on Andrew Castle’s LBC show last Sunday to discuss rationing of operations provided by the NHS. He made the point that in the absence of a price mechanism rationing will be “a fundamental part of the NHS” and that resources are allocated to meet expected demand. Therefore when demand exceeds projections there will be shortages of medical services and consequently waiting lists. Click here to listen to the interview.
Duncan Simpson discussed rationing of NHS services on LBC with presenter Andrew Castle.
TPA in the Financial Times
Our report on the tax burden was cited in a fascinating article in the Financial Times by Merryn Somerset Webb editor of MoneyWeek. In an examination of today’s tax culture she writes:
“The US is running a policy of cutting tax rates in the hope of stimulating the economy enough to increase the absolute tax take. In the UK we are not. A report from the TaxPayers’ Alliance last week noted that our tax bill now comes to 34.6 per cent of GDP. Back in the mid-1990s it was more like 30 per cent. At the same time we are seeing endless attempts by the government to find ways to nibble at the tax cherry.” Click here to read the article.
Reviewing the papers
Our campaign manager Chloe Westley was extremely busy this week reviewing Wednesday’s and Thursday’s newspapers for Sky News and talkRadio respectively.
Chloe Westley (centre) alongside journalist Benjamin Butterworth (left) and Sky News presenter Niall Paterson (right)
War on Waste
Many outlets reported that the BBC spent £11,000 on promotional items to advertise its new production system to its own staff. The Times reports, “The BBC bought 1,500 Open Media mugs and 1,100 T-shirts for £9,000, according to a response to a freedom of information request, ‘to ensure staff knew the system was changing’. It also spent £2,000 on 30 banners.”
Unfortunately the system was somewhat flawed and in October this year the system crashed forcing the BBC to replay recorded material from earlier in the day while it was rectified. Commenting on the story our policy analyst Duncan Simpson said the BBC should have focused the money on fixing the system instead.
Do you think this was the best use of licence fee money? Is time the funding model was changed?