TAXATION & FINANCIAL REFORM
Rather than merely tinkering with tax rates, our financial policy is based on fundamental reform and in particular a return to traditional practices of fiscal responsibility and a rejection of the modern debt-based economic system. We would reverse radical changes to the monetary creation process which accelerated from the 70s and 80s, and put an end to the debt-based government spending system introduced in the Blair era and embodied in phenomenon such as PFI. A broad theme in particular which we wish to develop is challenging the debt-based economic system and the culture of debt which has taken root in Britain, and to return to more traditional fiscal systems.
Traditional Monetary Policy
Historically, money supply was controlled by central governments through the Royal Mint and later through central banks. Although most people think this is still the case, the truth is that since the 70s in particular the 80s private banks have been given huge power to create money electronically as debt (eg mortgages). This means they are now responsible for 97% of money creation, and have transformed us into a debt-based economy where the vast majority of money is create as debt. This wildly irresponsible system is why government spending has become so hard to manage; we would return to a system where money creation is centrally controlled by ending the rights of banks to in effect create money as debt, and demand that all bank loans are based entirely on existing liquid assets.
These contracts, whereby the public underwrites debt taken on by private companies to complete government projects, have built up a tax bill costing hundreds of billions of pounds to repay these irresponsible debts, and now account for a noteworthy proportion of each annual budget. They were first introduced under John Major and exploded since the Blair years - they must now be abolished and financial responsibility restored.
Restore a Single UK-Wide Tax System
We would restore common tax rates across the United Kingdom and scrap, for example, the division into separate Scottish and English rates of Income Tax brought about because of devolution.
Scrap the SNP Tax Hike on Middle Incomes
In re-introducing a single set of UK-wide rates, we would abolish the SNP’s tax hike in Scotland and put middle earners in Scotland back on the same footing with others across the UK.
Raise Tax-Free Personal Allowance to £13,500
By raising the tax-free personal allowance by £2,000 we would ensure no Income Tax for those on minimum wage.
50p Rate for the Highest Income Bracket
A small increase to a 50p UK-wide rate for earnings in the highest bracket would be an effective source of revenue, and still low by the standards of many neighbouring countries and by our own historical standards within the past one-hundred years.
Make Marriage Tax Allowance Fully Transferable
We recognise the family, not just the individual, as the vital and most basic social unit, and we would reflect that in the tax system by allowing one partner to transfer their tax allowance to the other, which would in practise free many young mothers from demoralising low-pay work and high childcare costs, and let them spend more time with their children. A reduction in dual-income households would also free up jobs for the unemployed.
Corporation Tax that Favours Small Businesses
Historically, larger companies paid corporation tax at notably higher rates than smaller companies. The difference diminished over recent decades, before finally becoming a flat rate over the past few years. This massively advantages large corporations; we would restore divergent rates for businesses based on their size, raising rates from 20 to 25% for large businesses (eg multinationals) and reducing them from 20 to 15% for small businesses.
A Diverted Profits Tax
A tax of this name was recently introduced in Australia; we would use a similar model to charge a 50% rate on profits where multinationals have used contrived measures to reduce their tax payments.
Scrap 'Free Zones'
There are plans to create a new twenty-one 'free zones' in addition to the existing five (Liverpool, Prestwick Airport, Port Sheerness, Port Tilbury and Southampton). This move towards dozens of mini tax-havens dotted across the UK disadvantages the rest of the country and creates a chaotic race to the bottom. We would restore common customs and duties across the UK, and end the implementation of tax evasion hubs for global corporations.
Scrap Sin Taxes
We would scrap nanny state 'sin taxes' such as the sugar tax, which are often counter-productive and simply shift taxation and other costs onto those who can least afford them.
Tougher Restrictions on High-Cost Credit Lenders
To tackle the culture of mass debt, we would toughen recent restrictions on pay-day loan companies and extend them to other high-cost credit lenders such as doorstep lenders and rent-to-own providers, stipulating that the borrower cannot have to pay back more than an extra 50% of the amount borrowed, inclusive of fees and interest.