Tim reported yesterday that Labour MP Jim Spellar said "the nation is at the limits on tax".
So I thought it would be worth setting out my calculations of just how much extra tax households are paying. In 1996/97, all taxes raised £271.7 Billion. In 2007/08 total taxes are expected to be £516.8 Billion. Those are Budget Red Book figures.
Pretty much all taxes end up being visited on households - directly (income tax, council tax), indirectly (VAT) through lower wage settlements if business taxes rise or later on in the case of the pensions tax. So it is reasonable to say that pretty much all this tax ends up as a burden on British households.
There are around 24.5 million households in the UK. The total tax burden for each household will have therefore gone from £11,090 in 1996/97 to £21,094 in 2007/08. That's a rise of over £10,000. So tax is up nearly 100%. In real terms, the rise amounts to around £6,500.
It's not surprising that Jim Spellar is saying that the nation is at the limit. Yes we must cut taxes. But I think George Osborne is right when he points out that we need to accept voters want to be sure we will not act in a way that endangers the economy and will not result in worse public services.
One area I think more progress can be made is to tackle the whole slew of public money spenders who are accountable to no-one. I'm thinking of things like health trusts and regional development agencies (the list goes on and is very, very long). Too often they do as they please, they are too unaccountable on how they spend their money, the services are rubbish, they empire build and they overlap.
Either ministers should take direct control and have direct accountability or local councils should be given control and have direct accountability. Reducing overlap and empire building will do much to streamline things. It could enable a covenant for people to understand and know where they stand on the services they will receive - and who will provide those services. It should promote both efficiency and accountability. And reduce that infuriating buck passing. We can also be more innovative - for example why not push a whole load of healthcare services to local authorities that handle public health and social services? Not everything should be pushed down to local authorities - we need to do the right thing at the right level. For me this is a major part of the jigsaw of how a Conservative Government could improve the quality of public services and get costs back under control.
Recent Comments