Public Finances
Based on the Government’s current plans, we will reduce overall public expenditure by 25% and cut taxes by 20%.
| Public Finances | ||
|---|---|---|
| Existing plans | Our plans | |
| Expenditure | £bn | £bn |
| Education | 115 | 230 |
| Health | 178 | 225 |
| Law and order | 38 | 20 |
| Welfare and pensions | 285 | 90 |
| Defence | 58 | 6 |
| Transport | 44 | 45 |
| Local | 68 | 65 |
| Other | 142 | 19 |
| Total | 928 | 700 |
| Taxation | £bn | £bn |
| Income tax | 208 | |
| National insurance | 150 | |
| Education tax | 0 | 230 |
| Health tax | 0 | 170 |
| Health VAT | 0 | 55 |
| VAT | 161 | 105 |
| Corporation tax | 58 | 0 |
| Fuel and tobacco | 49 | 40 |
| Rates | 70 | 55 |
| Other | 177 | 45 |
| Total | 873 | 700 |
| Figures are based on 2020-21, excluding COVID 19 for notes go to thepeoplesparty.com/peoples-polices/public-finances | ||
Notes
- A key problem with public finances is getting accurate figures. It should not be difficult but it is. Every effort has been used to get the most reliable figures from official sources.
- As far as possible, COVID-19 expenditure has been extracted from figures to aid comparison. Again this has proved very difficult and the scope for error is large.
Economic growth rather than extra taxes or borrowing should finance increases in public spending. A key aspect of the proposals in this book is that they do not involve any public sector borrowing or interest payments on existing debt.
Current UK government liabilities, including public sector pensions and debt, are over £5 trillion or around £80,000 each for every man, woman and child. Realisable assets are virtually zero. It is time to grasp the nettle and deal with the debt problem.
We must put arrangements in place for holders of gilts to sell them at face value to the Bank of England. The Bank would then write off these purchases and the existing debt it holds.
Public sector deficits and borrowing go hand in hand with bad government, poor value for money and the scourge of inflation. People should pay for what they get, judge the quality of the services and be encouraged to vote accordingly.
As a principle, we must not burden the young through taxes and borrowing to pay for the old.
We must not support “unfunded” public sector pensions schemes. The generous, unrealistic pension promises are not backed up with any pension fund and cannot be afforded by current and future generations.
In recognition that the current and past governments have betrayed public employees, we must introduce hardship arrangements to ensure that every public sector pensioner whose scheme is unfunded receives a pension equivalent to the average private sector pension. We must also stop routine early retirements.
In future, we must ensure that public sector employees pension contributions are invested to create proper pension funds with real investments.