by Stephen Tall on March 19, 2014
ConservativeHome asked me for some top lines about my wishes for George Osborne’s fifth budget today. Here they are…
My top three requests:
1) No surprise this one: an increase in the personal allowance to £10,500 take more of the low-paid out of income tax. The Lib Dems alone campaigned for this tax-cut in 2010; now both the Tories and Labour want to do it. (It would be more progressive to raise the National Insurance threshold, albeit politically less sellable; then abolish NI completely, merging it into income tax.)
2) A major transfer of funding powers from central to local government. Two-thirds of what councils spend comes from central government grants, meaning councils aren’t properly accountable to the voters. Not only does this undermine local democracy, but it stifles innovation in tax-raising and tax-spending according to local priorities.
(Have a read of CentreForum’s Budget 2014 proposals for more detail on how these first two could work in practice.)
3) Scrap the absurd twice-yearly cycle of Budgets and Autumn Statements, as proposed by Tim Harford here. Governments should offer the confidence that comes with three-year planning to businesses and households, rather than this constant ad hoc tinkering. It would also give the Treasury the time and space needed to take a long-term look at tax and spend, becoming more strategic and less tactical.