3rd July 2015
The chancellor has been urged to cut spending on benefits and the public sector instead of hiking tax in next week’s Budget
The Taxpayers’ Alliance (TPA) has called on George Osborne to use his deficit reduction mandate to make savings in government spending rather than introduce tax increases.
The group said he ‘must use this mandate to embark on a radical savings programme and resist the urge to use higher cost of living taxes – such as fuel duty – as a way to fill the gaps in the Treasury coffers left by excessive spending’.
It said cutting spending was a national priority and Osborne should use next week’s Budget to make ‘radical’ changes and keep his promise to eliminate the deficit by 2018.
The country is running a £75 billion deficit this year and add to that £1.5 trillion of household debt.
TPA argued that families cannot afford to be hit with increased living costs and therefore spending cuts are the only way to help them.
As part of the spending cuts the TPA said the chancellor should scrap the Business and Energy Department, which would save more than £5 billion by the end of Parliament.
It also wants the benefit cap to reduce further to £20,000, which is equivalent to a post-tax national average salary, saving £700 million. It is already reducing from £26,000 to £23,000.
TPA has called for an ‘end to national pay bargaining for public sector staff’ that would save around £5.8 billion by 2020. It also wants ‘the end of middle class welfare’ and for benefits such as the winter fuel allowance and free bus passes to be means tested.
Jonathan Isaby, chief executive of TPA, said: ‘It’s time for an end to the gimmicks and the tinkering. The chancellor has been given a mandate to eliminate the deficit, and he must crack on with it – that means radical changes to Whitehall, welfare reform, and driving down on public sector inefficiency.
‘George Osborne must also resist the urge to match our over-spending with too-high taxes. There are worrying rumours of an increase in fuel duty, which would hit families across the country who rely on their cars to take children to school and themselves to work.
‘Deficit elimination should be achieved through spending reductions, not tax hikes.’