The OBR’s latest Fiscal Risks and Sustainability report, published this week, gives a blunt assessment of the UK’s public finances: we can’t go on like this. If nothing changes, government debt will rise to an unsustainable 300% of GDP in 50 years’ time. How did things get so bad? Well, there’s one big demographic challenge […]
While it’s almost certain that Rachel Reeves will meet her fiscal rules at this week’s Budget, her rules will not stop the UK’s slide to bankruptcy. In case you haven’t been on the rollercoaster of economic speculation, Rachel Reeves has three fiscal rules. The first of these is that the current Budget must be in […]
It’s no secret that the UK tax system is a mess. In fact, it’s so bad, that if you locked a bunch of left-wing and right-wing think tankers in a room, they could largely agree on what needed to change – even though they’d agree on precious little else. That’s why the Centre for the […]
Today the Tax Foundation publishes its International Tax Competitiveness Index – and it’s not good news for the UK, which comes 32nd out of 38 OECD countries. The Index, produced in the US, measures how pro-growth a tax system is. Importantly, it does not measure the overall level of taxation, but the way taxes are […]
Today, Kemi Badenoch said that the UK is in danger of becoming a ‘welfare state with an economy attached – 28 million people in Britain are now working to pay the wages and benefits of 20 million others’. She’s right. Changes to the system are sorely needed. In April, the OBR forecast that the cost […]
Nigel Farage made a bold pitch to British families this week, announcing Reform’s plan to introduce a fully transferable marriage allowance alongside promises to scrap the two-child benefit cap and restore winter fuel payments. Standing at a Westminster press conference, the Reform leader declared his party would help families feel ‘financially able’ to have children. […]
Despite the political pain, Labour’s announcements on welfare come nowhere near close enough to solving the crisis of rising health-related benefits. Even after planned reforms, health-related benefits will still rise 5.3% per year throughout the 2020s, compared to the economy’s growth rate of 1.6%. Labour can be commended for correctly identifying the problem, which is […]
Today, the Tax Foundation releases the 2024 edition of the International Tax Competitiveness Index, an annual ranking of how pro-growth the tax systems of 38 OECD economies are. It’s not great reading for the UK, which comes 30th. This is behind other G7 economies such as the US (18th) and Japan (25th), but still ahead […]
Rachel Reeves is fast discovering the limits of how much money she can extract from the economy without raising ‘taxes on working people’. Let’s review the numbers. The Labour manifesto had £7.35 billion in revenue raising initiatives (in fiscal year 2028-29), with most coming from non-doms changes (£5.23bn), VAT on schools (£1.51bn), and carried interest […]
This piece was originally published on the Centre for Policy Studies’ monthly newsletter, which you can sign up to here. If there’s one clear economic lesson we should take from the last 20 years, it’s that where markets are allowed to work, we get richer, and where they were restricted, we get poorer. In terms […]
The Conservative Party’s new pledge to address the unfairness of the high-income child benefit tax charge is very welcome. As outlined in the Centre for Policy Studies report ‘Family Friendly Taxation’, the current regime is badly designed, distorting incentives for work and punishing one-earner families. How will it work? At present, families are able to […]
