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Political parties are offering 'piecemeal changes' to tax

Study finds 'little evidence of any coherent strategy and numerous proposals that would complicate the tax system'

28 April 2015

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The Institute for Fiscal Studies (IFS) has accused the three main political parties of 'an inability to resist the urge for piecemeal changes' to tax policy, 'which would make the overall system less efficient and coherent'.

The institute recognises that the next government will need to continue reducing the deficit, but has said that all three parties 'share a lack of willingness to be clear about the details'.

The damning verdict comes after a joint study from the IFS and Nuffield Foundation into the tax policies being proposed by the parties, in the run up to the general election.

Policy areas scrutinised include income tax, pension contributions, taxation of housing, and the social security system.

This comes after another industry body, the National Association of Pension Funds (NAPF), called for the creation of an independent savings commission, to protect savings and pension policies from parties who will 'often legislate for the short-term to secure the next electoral cycle'.

Lack of coherence

James Browne, a senior research economist at the IFS and one of the report's authors, said: 'We have seen little coherent reform to the tax system for many years and the parties' manifestos promise little going forward.

'Damage has been done, and more is being proposed, to pension taxation, while proposals on the taxation of housing lack coherence. There is a limit to the extent that we can continue to pretend that tax revenues can rise while protecting the vast majority of people'.

Meanwhile Robert Joyce, another research economist who also worked on the report, was equally unimpressed.

'The Conservatives have continued to fail to explain how they would achieve the substantial cuts to social security they say they would deliver in the first half of the coming parliament. These will be neither easy nor painless to deliver.

'Meanwhile, Labour claims to be taking tough decisions by removing winter fuel payments from a small fraction of pensioners and limiting child benefit increases to 1 per cent'.

He continued: 'The former will save almost nothing - about one pound in a thousand spent on pensioner benefits. The latter is likely to save literally nothing. The manifestos have not helped us towards a sensible debate on the future generosity or structure of the benefits system.'


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Tax & Wealth structuring