The TaxPayers' Alliance - Burning our Money

£1.5 BILLION: THE TAX ON HOLIDAYS

Download the full report (PDF).

New research from the TaxPayers' Alliance reveals the true cost of taxes on holidays abroad. With hard-working people saving all year round for a well-deserved break, few of us are aware of just how much of our holiday money goes straight into the Treasury's coffers.

Most simple but important purchases made inside Britain before going on a holiday, such as clothes for adults or hair cuts for all the family, are subject to VAT, while travel insurance purchases are hit by Insurance Premium Tax and budget flights by Air Passenger Duty. As the summer holiday season draws near, new calculations by the TaxPayers’ Alliance reveal just how heavy a burden the taxman places on rest and relaxation. Click here for the full report (PDF).

Key findings:

• The total tax bill on Britons holidaying abroad is almost £1.5 billion, or over £30 for each of the 45 million holidays abroad taken by British residents each year (based on a representative basket of goods typically purchased). This is equivalent to the cost of a return flight to Europe for every holidaymaker.
• A family of four travelling to Florida this summer will face an average tax bill of over £200 on their flights and holiday purchases. That is equivalent to the cost of having to take an extra child along.

Matthew Elliott, Chief Executive of the TaxPayers’ Alliance, said:

“The credit crunch and soaring food and fuel costs are making it harder than ever for people to afford a well-deserved summer holiday abroad. Instead of hiking taxes on flying, Gordon Brown and Alistair Darling should give us all a tax break.”

Tax charged on some examples of holiday essentials:

• Economy flight to Florida: £40.00
• Budget flight to Malaga: £10.00
• Budget family travel insurance: £4.23
• £20 bottle of aftershave/perfume: £2.98
• Hair cut: £2.23
• Summer dress from Primark: £1.79

These are only some examples of the holiday purchases used in our calculations - for a complete list please see the full report (PDF).

The Great British TaxPayer Rip-off

Rising taxes, soaring charges, service cuts. It’s…

THE GREAT BRITISH TAXPAYER RIP-OFF

Download the full report (PDF)

In a new report, the TaxPayers’ Alliance outlines the way that over the last decade British taxpayers have faced a huge increase in their tax bills, but at the same time, they’ve been made to pay additional fees and charges for what used to be “free” public services. To cap it all, service levels have suffered widespread cuts. Faced by a rising cost of living, these taxes and charges are adding a sizeable burden to ordinary households.

It all adds up to the Great British Taxpayer Rip-Off.

Key Findings:

Rising taxes

• The tax bill has soared, increasing over 50% in ten years even taking inflation into account. Through vast increases in a range of up-front taxes, stealth taxes and cunning measures such as fiscal drag, the average household tax bill has grown to £20,700.
• The total Stamp Duty collected has increased a staggering 314% in the last ten years. Together, the nine fastest growing taxes, which are detailed in the report, make up three quarters of tax revenue.
• Fiscal drag, by which the Government catches millions of people in higher tax bands by raising thresholds slower than inflation, has raised £80 billion in the last ten years, including £14 billion in the last year alone.

Higher Charges

• The total cost of NHS, local authority and quango charges is now over £17 billion per annum, nearly £700 per household.
• Full details of the range of charges are given in the report, but some examples include: school dinners charges have risen 50% in ten years to £1 billion per annum; parking charges and fines have risen to over £1 billion; Hospital car parks raise over £100m in England alone.

The full report provides the most comprehensive analysis of the rise in taxes, stealth taxes and charges that has ever been compiled, illustrating the burden borne by ordinary families across the country. A PDF of the report is attached to this email.

Mike Denham, the former Treasury Economist who authored the report, said:

“The Government has used every trick in the book to drive up the tax burden, and ordinary families are paying a heavy price. People are increasingly beset by record levels of taxation and growing service charges, but there has been no improvement in services in return. We find ourselves paying more and more for less and less. With rocky economic times ahead, this rate of taxation simply cannot be sustained.”

Matthew Elliott, Chief Executive of the TaxPayers' Alliance, said:

“The British public are being ripped off in the most shameful way. The cloak and dagger methods the Government is using the squeeze money out of hard working people are deplorable. We are sick and tired of being exploited and let down. With fewer police stations, limited GPs’ hours, libraries closing, rarer bin collections and a host of other cuts we are getting less for our money than ever before. People are facing higher fuel bills, more expensive food and much bigger mortgage bills – and on top of all that they are being stealth  taxed and charged more than ever before. This con has got to stop.”

Council Spending Uncovered No. 5: The Ten Percent Challenge

• TAXPAYERS' ALLIANCE THROWS DOWN GAUNTLET TO COUNCILS
• WITH SIMPLE AND MODEST SAVINGS COUNCIL TAX CAN BE CUT BY 3.5%, WHICH IS £40 OFF THE AVERAGE BAND D BILL
• INDIVIDUAL DETAILS FOR HUNDREDS OF COUNCILS SHOWS SIMPLE SAVINGS IN PUBLICITY, MANAGEMENT AND PENSION COSTS

Ahead of the local elections on May 1st, this fifth Council Spending Uncovered paper brings together the previous papers which revealed large amounts of spending poured into publicity, middle and senior management and gold-plated pensions, and issues councils of all parties across England and Scotland with a simple challenge:

If councils cut publicity, management and pension costs by just 10 per cent, they can cut council tax by an average of 3.5 per cent, or around £40 off an average Band D bill.

This is the TaxPayers' Alliance "Ten Per Cent Challenge".

KEY FINDINGS:

• In 2006-07, councils in England and Scotland spent over £400 million on publicity, £1.9 billion employing managers earning over £50,000 and over £4.3 billion on employer pension contributions. The total of the three expenditures is therefore £6.6 billion.
• Saving just 10% on those three areas alone would therefore reduce expenditure by £660 million.
  In the same year, council tax collected in England and Scotland totalled £18.7 billion (excluding Fire and Police precepts). Saving £660 million from that total would allow councils to reduce council tax by 3.5%.
• The average Band D council tax bill in 2006-07 (including both the district and county council where relevant but excluding the GLA and Fire and Police precepts) was just over £1,100. A 3.5% reduction would equal around £40.

The full report, which can be found here, provides detailed breakdowns for the savings that can be made by each local authority in England and Wales.

Matthew Elliott, Chief Executive of the TaxPayers’ Alliance, said:

“Council tax has doubled in the last decade and is now so high that it tips many families and pensioners over the edge.  But it doesn’t have to be that way.  Local authorities of all parties could make meaningful council tax reductions if they saved a modest 10 per cent in these three non-priority areas.”

Andrew Allum, Chairman of the TaxPayers’ Alliance, said:

“These 10 per cent savings could easily be achieved if local authorities focused resources on the real priorities.  We hear repeatedly that councils are cash-strapped, but there is a lot they can do to reduce costs, cut council tax and better serve their local residents.”

Council Spending Uncovered 4: The Town Hall Rich List 2008

• FULL LIST OF THE 818 COUNCIL EMPLOYEES EARNING OVER £100,000 PUBLISHED
• INDIVIDUAL DETAILS OF NAMES, JOBS AND FULL REMUNERATION PACKAGES FOR SENIOR OFFICIALS AT HUNDREDS OF COUNCILS

Download the full report (PDF, 1.3MB)

The TaxPayers' Alliance presents the second annual Town Hall Rich List, which reveals details of the 818 local authority employees who earn over £100,000 a year from the taxpayer. As well as providing individual data for officials in hundreds of councils across the country, the report reveals:

• 6 people in town halls earn more than £200,000 a year, while 88 earn more than £150,000. 14 earn more than the Prime Minister (£188,849) whilst a staggering 132 earn more than a Cabinet Minister (£137,579).
• The average remuneration received by those on the list is £120,938 - over £2,300 a week.
• Those who appear in both this year's Rich List and last year's enjoyed an average pay rise of 4.6% - more than double the Government's target for public sector wage inflation. The number of people featured on the list has risen from 645 last year to 818 this year - a rise of 27%, showing a boom in high salary executives.
• The top ten earners in local Government and a comprehensive list of 818 other high-earning executives listed by local authority.

Unlike companies in the private sector, and even many other public sector bodies, local authorities do not make executive remuneration details publicly available so TPA researchers compiled the Rich List using Freedom of Information requests to every local authority in the country. A small minority of councils used a series of highly questionable excuses not to release the information - the report also features a "Top Five Ludicrous Excuses" table to name and shame those withholding important information.

Matthew Elliott, Chief Executive of the TaxPayers’ Alliance, said:

“Taxpayers have a right to know how much senior town hall officials are being paid because only then can we judge whether they deserve their remuneration. Too often, council executives are rewarded handsomely even when they fail. Families and pensioners are struggling with the demands of yet another council tax rise, and councils owe it to them to cut back on executive pay hikes.”

Ben Farrugia, Policy Analyst at the TaxPayers’ Alliance, said:

“Some local government executives still feel that what they’re paid is not the taxpayer’s business. But with council tax bills now tipping many families over the edge, it is more important than ever that councils are open and transparent about their costs. Council employees must be accountable to the local residents who pay them.”

Council Spending Uncovered 1: Publicity

• NEW SERIES TO REVEAL HOW COUNCILS REALLY SPEND THEIR MONEY
• AVERAGE PUBLICITY SPENDING DOUBLED TO £1 MILLION SINCE 1997
• TOTAL TOWN HALL PUBLICITY BILL £450 MILLION A YEAR

With council tax bills having doubled over the last ten years, the TaxPayers' Alliance has launched a new series to review expenditure by local authorities in all corners of the UK and highlight areas of spending that could and should be reduced.

The Council Spending Uncovered series challenges the claim that Town Halls are short of money by publishing figures that will allow council taxpayers to decide for themselves whether their local authority is spending their money wisely.  These figures have never previously been compiled in one place because the TPA is the first non-government body to have collected the accounts for all 450-plus councils.

The first paper in the Council Spending Uncovered series examines the increase in town hall spending on publicity over the last decade, which is itemised in the annual accounts of all councils. 

Key findings

• The average local authority spends almost £1 million (£985,000) on publicity.
• The average local authority is spending double the amount on publicity than it did in 1996-97:

- Without taking account of inflation the average local authority spent £430,000 on publicity ten years ago.  The average spend today is a 130 per cent increase on that 1996-97 figure. 

- In today’s prices the average local authority spent £550,000 on publicity in 1996-97.  The average spend today is an 80 per cent increase in real terms on a decade ago.

• The total local authority publicity bill is £450 million.
• There is one local authority, Birmingham City Council, that spends more than £10 million on publicity.
• There are 8 local authorities spending more than £5 million on publicity.
• There are 73 local authorities spending more than £2 million on publicity.
• There are 141 local authorities spending more than £1 million on publicity.
• The total spend on publicity is not broken down in a uniform way in the various local authority accounts.  It is possible, however, to identify 44 councils that spend at least £1 million and 4 councils spending at least £2 million on staff recruitment advertising – despite the increased use of websites.  If all local authority accounts provided a full breakdown of publicity spending, the number of councils spending at least £1 million on staff advertising would almost certainly increase.
• The doubling of average publicity spending per local authority in the last decade is extremely  disappointing.  There are, however, a number of councils that are actually spending less on publicity than ten years ago. For example:

- Hammersmith and Fulham Borough Council spent £669,000 on publicity in 2006-07, down 11 per cent from the £751,000 spent in 1996-97. 

- In 2005-06, however, the council spent £1,030,000 on publicity, meaning that the 1-year fall in spending was 35 per cent. 

- If Hammersmith and Fulham can reduce publicity spending by 35 per cent in one year (in part by allowing advertising by local businesses in council publications) make other efficiency savings and reduce council tax by 3 per cent, then it must be possible for other councils to follow suit. 

Matthew Elliott, Chief Executive of the TaxPayers’ Alliance, said:

“It’s important for council taxpayers to see just how their hard-earned money is being spent by town halls.  With council tax doubling in the past decade, it’s extremely disappointing that councils have chosen to double their publicity budgets over the same period.  With the internet cutting the cost of communication, it shouldn’t be difficult for local authorities to find savings in this area and bring council tax down.”

Click for full report:

Download Council Spending Uncovered, No. 1: Publicity (PDF)

Click for regional tables, to be read in conjunction with the full report above:

Download East Midlands Regional Table (PDF)

Download East of England Regional Table (PDF)

Download London Regional Table (PDF)

Download North East Regional Table (PDF)

Download North West Regional Table (PDF)

Download Northern Ireland Regional Table (PDF)

Download Scotland Regional Table (PDF)

Download South East Regional Table (PDF)

Download South West Regional Table (PDF)

Download Wales Regional Table (PDF)

Download West Midlands Regional Table (PDF)

Download Yorkshire and the Humber Regional Table (PDF)

Public Sector Rich List 2007

In November 2006 the TaxPayers' Alliance produced the first ever list of the richest people in the public sector.  The second edition of the annual Public Sector Rich List presents a list of the 300 most highly paid people in the public sector – people receiving remuneration packages of at least £150,000 a year in 126 government departments, quangos, other public bodies and public corporations.

Key findings

• There is 1 person in the public sector – Adam Crozier, Royal Mail Chief Executive – who earns more than £1 million a year.
• There are 17 people in the public sector earning above £500,000 a year.
• There are at least 66 people earning above £250,000 a year (recent media reports suggest that some GPs are in this category).
• The 300 people had an average pay rise of 12.8 per cent between 2005-06 and 2006-07.  This is three times average earnings growth (including bonuses) across the country, which fluctuates around 4 per cent and over six times the current 2 per cent government target for growth in pay for ordinary public sector workers.
• The average total remuneration of the 300 people on the list is £237,564 per annum.  This works out at over £4,500 a week.  Although many people on the list are likely to work longer, based on a 35-hour week, this is equal to almost £130 an hour, or around £2.15 a minute.
• The 10 most highly paid people in the public sector earn on average around 40 times the amount earned by someone starting out as a police officer, nurse or soldier.
• There are 10 people involved in delivering the London 2012 Olympics on the list, including two in the top 10 highest remuneration packages overall.  Their packages average £325,000 per annum.
• The 82 most highly paid people in the NHS earn an average of £181,956 each.  By comparison, the starting salary for a nurse is around £22,000.
• Gordon Brown is only the 143rd highest paid person in the public sector.

Purpose of compiling the Public Sector Rich List 2007

• Transparency.  People and organisations that receive large amounts of taxpayers’ money should be accountable to the public they serve.  Taxpayers should be able to judge for themselves whether the remuneration of senior officials represents good value for money.
• Rewards for failure.  People in the public sector should be paid well for good performance.  But in far too many cases senior public sector officials are being paid over the odds for dreadfully poor performance, which in some cases would warrant a sacking in the private sector (see Table A1.2 for 10 examples).

Matthew Elliott, Chief Executive of the TaxPayers’ Alliance, said:

“Taxpayers have a right to know how much senior public sector officials are being paid because only then can we judge whether they deserve their remuneration.  Too often, public sector executives are rewarded handsomely even when they fail.  At a time when the Government is rightly aiming to restrain public sector pay increases to 2 per cent, these top officials shouldn’t be hiking their pay by six times as much.”

Download the Public Sector Rich List 2007 (PDF)

The top 10 public sector remuneration packages are shown below:

MPs record expenses "extortionate", says TaxPayers' Alliance

• TPA says MPs "should be ashamed of themselves"
• Increase per MP calculated by TPA
• TPA calls on Commons authorities to follow Scottish Parliament in revealing itemised expenses

Responding to the publication of MPs’ expense claims for 2006-07 today, the TaxPayers' Alliance described the rises as “extortionate”. TPA Chief Executive Matthew Elliott said:

“MPs should be ashamed of themselves. Families are struggling to pay higher tax bills whilst MPs are spending more and more of our money on themselves each year. What’s worse is that they won’t even give us a full itemised breakdown of their expenses as MSPs do in Scotland. No wonder voters have little respect for politicians when they see so many MPs with their snouts in the trough.”

The TPA has compared this year’s expense claims to last year and has produced a ranking of all the MPs by their overall increase.  This analysis reveals that the MPs who increased their claims the most are:

   

NB: Sinn Fein MPs are excluded from this list given the dispute over their expenses that occurred recently, which reduces the 2005-06 figures, thereby inflating the increases.

Contact the TaxPayers' Alliance if you wish to see the full rankings.

The TaxPayers’ Alliance has been campaigning for the House of Commons authorities to publish MPs’ expense claims in full, to include a breakdown of all receipts and invoices, as occurs in the Scottish Parliament.

Heather Brooke, freedom of information campaigner and TPA supporter, said:

"The totals published today are merely the tip of the iceberg. If the Government is serious about open government then it needs to follow the Scottish example and publish a detailed breakdown of all claims. Instead we find the House of Commons spending thousands of pounds on expensive lawyers battling to keep secret the details of how MPs spend the public's money. What have they got to hide?"

MPs’ EXPENSES: Tories best value for money, Plaid Cymru worst

The TPA’s analysis of today’s expense claim figures for MPs ranks the main Parties by the average amount claimed per MP in expenses. Travel expenses are excluded given the different geographic spread of the Parties.

Matthew Elliott, Chief Executive of the TaxPayers' Alliance, said:

“Conservative MPs should be proud that their average expenses are lower than the other political parties.  However, their expense claims have still gone up by around 7 per cent, far more than inflation, so there is still room for improvement.  Plaid Cymru MPs should go to the back of the class.”

The Non-Courses Report 2007

The TaxPayers’ Alliance has compiled Britain’s first ever list of university “non-courses” – university degrees that lend the respectability of scholarly qualifications to non-academic subjects – and calculated their annual cost to students and taxpayers.

The huge expansion in student numbers in recent years, encouraged by the Government’s 50 per cent higher education target, has resulted in a proliferation of different degree courses on offer.

Unfortunately, a number of these new courses are of dubious academic merit, offering training better learned on-the-job.  In the worst cases, they offer neither intellectual stimulation nor any improvement in employment prospects. 

The cost of these “non-courses” falls on tw o groups: students, who are diverted from useful training and work experience by the lure of a degree; and taxpayers, who still pay for most of the cost of educating every student, despite university tuition fees.

Download The Non-Courses Report 2007 (PDF)

The key findings of this report are:

• “Non-courses” are costing taxpayers over £40 million a year. 
• If the £40 million cost of “non-courses” was spent on other undergraduates, it could cut their fees by £104 a year, or pay for a pint of beer a week for each student.
• There are 401 “non-courses” across Britain in the 2007-08 academic year.
• 89 different institutions offer one or more “non-courses”.
• The institution with the greatest number of “non-courses” on offer is the University of Derby, which offers 41 “non-courses”.
• In our judgement, top of the list for “non-courses” is “Outdoor Adventure with Philosophy” at Marjon College in Plymouth.

'Green Tokenism' - Government Cars

Car of choice for Hollywood movie stars and British civil servants

New research by the TaxPayers' Alliance reveals that £888,000 of taxpayers' money could have been saved if the Government Car & Despatch Service (GCDS) had bought normal cars, which cost around £8000 less each, instead of Toyota Prius and Honda Civic Hybrids.

As the former Prime Minister Tony Blair told National Public Radio in the United States:

"The reality is, if we shut down the whole of Britain — shut it down, nothing emitted — within two years, the growth in Chinese emissions would wipe out the difference we would make."

The implications are clear:  Marginal differences in a small portion of the UK's carbon emissions will not make a significant difference to global emissions which, it is feared, contribute to climate change.  There is a strong argument that the £888,000 is therefore wasted.

However, if the GCDS really wants to cut emissions it could achieve more by buying regular cars and then using the £888,000 to have 74,028 trees planted.  This would create a significantly larger reduction in atmospheric CO2.

Blair Gibbs, Campaign Director of the TaxPayers’ Alliance, said:

“Our politician’s obsession with the Toyota Prius is the worst sort of green tokenism.  For the same money they could have purchased ordinary Fords with enough left over to plant more than 70,000 trees, which would have been much better for the environment and given our children a forest of trees to play among for generations to come.  Instead, the government blew our money on the Hollywood option.”

Download 'Green Tokenism' - Government Cars (PDF)