The War of Independence

Britain’s system of tax and spending is 200 years old this year; it needs modernisation. The present system causes a ‘double whammy’ – taxes always go up, but there is always a shortage of money for good things like the health service and education. The overall tax burden has risen from below 30% of UK GDP in the 1950s, to 37% in 1998, defeating many determined efforts to reduce it. International comparisons suggest that a higher tax burden is associated with weaker economic performance – and less money to spend on public services in the long run.

It is time to declare a War of Independence, a War which aims to return taxation to 1950s levels, and, at the same time, to provide more funds for health and education. ‘Independence Day’ – the day on which people stop working for the government and start working for themselves – should be moved back from 18 May where it is today to 21 April, where it was in the 1950s.

As an initail step, three proposals are made.

Firstly, to clear up the muddle at the heart of our current tax system, the absurd overlap between taxes and benefits.

Secondly, to simplify the system by exchanging the existing web of allowances, reliefs, credits, tax breaks, and indexations for lower tax rates.

Thirdly, to merge selected government departments. This would result in a 20% to 30% saving in administration costs, all of which could be used to boost investment in health and education.

The results of such reforms are that nearly 12 million people could stop paying tax. The proposals are a call to arms. The pamphlet is dedicated to those people who believe that something has to be done, and that it can be done.

Maurice Saatchi, Peter Warburton - Wednesday, 7th April, 1999