The UK's economic woes have taken centre stage as a coalition of prominent economists demand radical overhaul of the country's tax system. A new report, 'Prosperity 2030', spearheaded by the Institute for Global Prosperity, outlines a comprehensive reform plan that could rake in an additional £75 billion annually within five years. To achieve this, the economists propose scrapping income tax and National Insurance contributions in favour of a single national contribution – a unified levy applied to all forms of income.
The 'Prosperity 2030' blueprint has garnered support from notable figures including Jonathan Portes, an economics professor at King's College London, Danny Sriskandarajah, chief executive of the New Economics Foundation, and John Muellbauer from Nuffield College, Oxford. The collective aim is to tackle systemic issues that have hindered economic growth and exacerbated public services strain. Currently, Britain faces a pressing challenge in balancing its annual debt interest payments, which stand at £100 billion – an amount surpassing the country's entire defence budget and equivalent to half of NHS expenditure.
The economists' proposals are predicated on replacing six key taxes with a single levy. The unified contribution would be applied uniformly across income derived from employment, asset sales, or inherited wealth. This move could potentially alleviate the burden on taxpayers by reducing complexities in the current system. Furthermore, the report suggests that an increase in air passenger duty – proposed to triple its value – could yield additional revenue for public services.
'Prosperity 2030' outlines the distribution of these additional funds across universal public services, including free bus travel and complimentary lunches for primary schoolchildren. According to Professor Henrietta Moore, director of the Institute for Global Prosperity at University College London, the report's focus is on rebuilding systems impacting daily life – work, care, housing, skills, and the cost of living. Success would be measured by individuals' ability to live secure and dignified lives.
Among the key features of 'Prosperity 2030' are suggestions for abolishing stamp duty and council tax in favour of a 1% property levy. This new charge would apply uniformly across all properties, with the proceeds remitted to local authorities based on their population size. Critics argue that assumptions underpinning the report's calculations may be flawed, raising questions about its feasibility.