Economic proposal cuts cost of living by expanding public services and eliminating council taxes

Prosperity 2030, published by the UCL Institute for Global Prosperity, is a proposed five-year programme of structural reform to combat the rising cost of living, simplify the tax code, boost infrastructure spending and raise the living standards of the poorest households.

The proposal has been endorsed by a range of leading economists, policy experts and public figures from across the political spectrum, including Lord O’Neill of Gatley, advisor to Andy Burnham, who is widely expected to become prime minister. In an open letter published on the Prosperity 2030 website, O’Neill and five other leading experts call for significant structural reform to Britain’s public institutions outlined in the report.

The report lays out 30 recommended major policy changes across nearly all areas of government. Proposed new services would make the poorest fifth of households better off by cutting the cost of living for all households by a total of £51 billion a year. At the same time, a progressive revamp of the tax code would further cut the tax bill for nearly three-quarters of full-time workers.

The report outlines a range of new and expanded services that would reduce the overall cost of living on households. Known as “Universal Services,” they are essential services made free for everyone, with no means tests or qualifying criteria. These include free local bus travel and expanded networks, energy and water services that would remove standing charges, a National Food Service that would provide 1.83 billion meals a year, including year-round free school meals and at least one public diner in every postcode, and the abolition of TV license fees.

Jobcentres will be replaced with Skills Centres that employ people directly and provides local firms with an on-demand pool of skilled and unskilled labour.

Altogether, the researchers estimate that the poorest fifth of the population would save £1,037 per household on average, and lone-parent families would save £1,249 a year on average, while the top 20% would contribute an additional £4,303 per year.

Lead author and Co-Chair, Social Prosperity Network Andrew Percy (UCL Institute for Global Prosperity) said: “The economy is not working because the state is not working. We have a tax system that punishes work, a welfare system that manages poverty rather than preventing it, and a housing market that locks people out of security. Prosperity 2030 is a practical route out of that trap, with lower taxes for workers, Universal Services that cut living costs, and new paid pathways into work for young people.”

A fundamental reshaping of the UK tax code is another of the central pillars of the proposal. Instead of the complex network taxes that currently exists, the country would be funded through “National Contributions,” a new progressive single tax system that replaces income tax, employee and self-employed National Insurance, Dividend Tax, Inheritance Tax and Capital Gains Tax. The proposal also institutes a new property tax and increased airline passenger duty.

The National Contributions are projected to raise £52 billion in its first year, rising to £75 billion after five years through a simpler, more efficient system rather than higher borrowing.

Senior author Professor Dame Henrietta Moore, (UCL Institute for Global Prosperity) said: “Prosperity 2030 shows that Britain does not have to choose between fiscal responsibility and improving people’s lives. The programme is fully costed and creates headroom for government. After years of short-term fixes, we need structural reform that matches the scale of the challenge.”

The researchers say that the sweeping changes proposed by Prosperity 2030 require a democratic mandate and would only start after the public has a chance to vote in the next general election in 2029. As such, the five-year program would begin in 2030, hence the name Prosperity 2030.

Links

• Prosperity 2030
• Open Letter
• Professor Dame Henrietta Moore’s academic profile
• Andrew Percy’s academic profile
• UCL Institute for Global Prosperity
• UCL Bartlett Faculty of the Built Environment

Image

• Credit: tupungato via iStock Photo

Media Contact

Michael Lucibella

E: m.lucibella [at] ucl.ac.uk