Tax and Fiscal Policy

The IEA & TPA’s 10 policy proposals for a Conservative manifesto


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IEA release 10 policy proposals for a Conservative manifesto

The Prime Minister’s call for a snap general election last week has provided all parties with an opportunity to review and upgrade their manifesto pledges. And, in less than 50 days a government – one most likely with a strong mandate – will be formed, tasked with the responsibility of ensuring our economy is fit for Brexit.

While the UK economy has performed comparatively well over the last five years, it continues to be hampered by overregulation and punitive levels of taxation. In order to prepare for life after Brexit, the newly formed Government will have to pursue bold policies which will lower taxes, reduce wasteful government spending and ensure fiscal discipline is maintained.

The Institute of Economic Affairs in partnership with The Taxpayers’ Alliance have put together ten decisive policy proposals to address the long-standing economic challenges the UK economy will face over the coming years.

The IEA & TPA’s 10 manifesto proposals:

1. End special protection for all areas of government spending – including spending on the NHS, and commitments such as the state pensions’ “triple lock” should be scrapped. The Conservatives have already decided to keep the 0.7% target for international aid, but the money could be spent more effectively if tied more closely to other foreign policy, defence and trade objectives.

2. Make infrastructure spending work for the economy. The new Government should clear the way for more house building by liberalising the planning system and also leave infrastructure spending decisions to the market.

3. Cap and cut taxes – taxation should be lowered to alleviate the financial burden currently being placed on working families & the commitment not to raise income tax or National Insurance Contributions should be retained.

4. Eliminate government borrowing by 2022. The bringing forward of the election should be used as an opportunity to accelerate fiscal consolidation, with a clear commitment to eliminate the deficit no later than 2022.

5. Commit to an industrial and trade strategy that works with the market, not against it.  ‘Industrial strategy’ should focus on deregulating the economy to let market forces allocate resources to wherever the opportunities are the greatest.

6. Increase choices in education and employment. The new Government should allow greater diversity and choice in the UK’s education system and modern forms of working, such as the ‘gig economy’ should be encouraged, not clamped down on.

7. End political interference in wage-setting. Control of setting the National Minimum Wage should be returned to the independent Low Pay Commission and national pay bargaining for the public sector should be abolished so that wages can be set according to local conditions.

8. Commit to a serious programme of red tape abolition. Brexit should be seen as a golden opportunity to realign and reduce regulation in a wide range of areas, from agriculture and fisheries to labour markets.

9. Devolve and decentralise power. Devolving power to local authorities would improve democratic accountability, widen the scope for policy experimentation, improve efficiency and ensure that public spending matches the preferences of local residents more closely.

10. Introduce co-payments and private sector competition in healthcare. A co-payment of 10% of medical bills, subject to a cap and with exemptions for poorer people, would discourage inefficient use of the health service and encourage greater cost-consciousness.

To download the full policy document, with further explanation of each proposal, please click here.

Commenting on the proposals, Mark Littlewood, Director General at the Institute of Economic Affairs said:

“With it looking ever more likely that Mrs May will soon be leading a government with a substantial majority, it is time for bold policies that aim to balance the books, reform our tax system and abolish vast swathes of regulations which pile huge costs onto our economy. This document acts as a blueprint to kick-start these initiatives, suggesting a new approach to the UK’s tax and spend policy, a re-imagining government’s role in areas like infrastructure, trade and wage-stetting, and outlining realignment and reduction of regulation as a priority following Brexit.”

John O’Connell, Chief Executive at the TaxPayers’ Alliance, said: 

“Drawing up a new manifesto offers up an opportunity to scrap many of the silly gimmicks to which the last government committed itself, so vanity projects like HS2 should be scrapped along with ring-fencing certain items of spending. It must not be forgotten that the politicians are still borrowing beyond taxpayers’ means to the tune of almost £60 billion a year but there has been very little discussion about getting spending under control. Those seeking our votes owe it to taxpayers to commit to eradicate the deficit and cut taxes.”

Notes to editors: 

For media enquiries or to arrange an interview with an IEA spokesperson please contact Nerissa Chesterfield, Communications Officer: [email protected] 020 7799 8920 or 07791 390 268.

To arrange an interview with a TPA spokesperson please contact Harry Davis, Campaign Manager: [email protected] 020 7340 6036 or 07747 804 988.

The mission of the Institute of Economic Affairs is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems.The IEA is a registered educational charity and independent of all political parties.Find out more about the Institute of Economic Affairs at www.iea.org.uk

Founded in 2004 by Matthew Elliott and now with 80,000 supporters, the Taxpayers’ Alliance (TPA) fights to reform taxes, cut spending and protect taxpayers. Find out more about the Taxpayers’ Alliance at www.taxpayersalliance.com



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