Economy Policy

The Government has increased taxes to the highest level in 70 years with more taxes to come. Medium-term growth is expected to be the lowest for 60 years. This means lower wages and less money to invest in health and other public services.

Inflation is at the highest level for over 30 years and productivity is at the lowest for 20 years, with 1 in 8 people of working age on out of work benefits, totalling well over 5 million.

The combined works of Harry Potter are fun but dwarfed by our tax code of some 20,000 pages, the most complex in the world. This stifles growth and creates an industry of unproductive tax avoidance.

Smart money and smart people will not invest in the UK nor come to the UK in a mobile world if they think we are uncompetitive in tax terms.

Reform UK is the only party that stands for cutting taxes and simplifying taxes to create higher growth, better wages and better healthcare.

Our ‘Emergency Recovery Plan’ can be seen in detail at reformparty.uk Reform UK will also oppose the creation of a Central Bank Digital Currency (CBDC) and all attempts to turn Britain into a cashless society.

EMERGENCY RECOVERY PLAN CREATES FASTER GROWTH

+0.5% p.a. estimate

Stimulus Plan:

• Free up 6 million people from paying Income Tax by lifting the minimum threshold to £20,000 from £12,571 p.a. This amounts to 1 in 5 taxpayers. Basic Income Tax rate stays at 20%.
• The less well-off benefit proportionately the most, saving £1,500 p.a. @£20,000 salary, circa £30 per week.
• Free up 1.2 million SMEs from paying Corporation Tax (over 80% of companies) by lifting the minimum profit threshold to £100,000.
• Reduce the cost of living by lowering consumer taxes, which will reduce inflation whilst stimulating growth: - Scrap VAT on energy bills = saves £100 / year per household. - Scrap environmental levies = saves £160 / year per household. - Lower fuel duty by 20p / litre = saves £240 / year per driver. - Lower VAT from 20% to 18% = saves £300 / year per household.
• Funded by cost savings totalling approximately £85 billion: - Reduce wasteful Government spending: £5 in £100 = £50 billion per year. - Enable over 1 million out of the over 5 million on out of work benefits back into jobs: saves circa £15-20 billion per year. Some 1.5 million more people are on benefits than pre-Covid, so a return just to 2019 levels is eminently realistic. - Tax the Renewable Energy industry the full amount of the circa £11 billion in subsidies they currently receive under old contracts; they claim it is cheaper than other energy forms, so they no longer need taxpayer support.
• Remove vast swathes of unnecessary regulations that hinder growth.

All figures are approximate and based on estimates.

REORGANISING QUANTITATIVE EASING DEBT

We would reorganise the Bank of England internal Quantitative Easing (QE) debt into a 75 year wartime-like Corona Bond, with a fixed notional interest rate of 2%, to be left on the Bank’s computer as internal debt. As this QE debt represents some 35% of the national debt at some £850 billion, this will calm markets by removing the refinance and interest rate risk. It will save some £10-15 billion in nominal annual interest payments used by the Treasury in their forecasts. The Bank must stop its plans for Quantitative Tightening which will increase interest payments completely unnecessarily and worry the markets.

The Bank of England must also stop paying interest on reserves created by money-printing QE to commercial banks, which other central banks are not doing. It is an unnecessary transfer of taxpayers’ money to wealthy City institutions, which totals some £20-40 billion per year, depending on interest rates. This money can instead be used to fund our policies to create higher net wages, with lower taxes and lower inflation.

 

LOW TAX, SIMPLE TAX CREATES FASTER GROWTH

Medium term tax simplification ambitions as conditions allow:

• Reduce the main Corporation tax rate from 25% to 20%.
• Lift threshold for 40% income tax rate to £70,000.
• Reduce and simplify residential Stamp Duty: 0% below £750k, 2% on £750k–£1.5m, & 4% above, will stimulate economic activity and construction.
• Abolish the burdensome Apprenticeship Levy, which ironically reduced apprentice numbers.
• Abolish business rates for small & medium firms, offset with Online Delivery Tax at 3%, which will create a fairer playing field for High Street and physical versus online businesses.
• Abolish Stamp Duty on share trading, this will help savers and enable the City to compete globally.
• Abolish Inheritance Tax for all estates under £2m (98% of all estates). 20% tax above £2m — executors can choose to give this to registered charities or HMRC.
• Abolish the burdensome IR35 rules introduced by the Conservatives in recent years.
• We aim to reform the over-complicated tax system on savings and pensions, that currently benefits those with the most to save at the expense of those on lower incomes.

Reform UK will save £100 billion of taxpayers money to pay for these lower taxes:

• Scrap the bloated vanity project HS2 saving £100 billion, of which £50 billion would be spent on infrastructure in the North-East and North-West, resulting in a £50 billion net saving.
• Put the cost of the energy price cap on the UK producers not the taxpayers (as per our Emergency Energy Plan on our website). This should save some £50 billion in the first

 

Credits

Photo by Brooke Cagle on Unsplash