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Bright Blue, the independent think tank for liberal conservatism, has launched a high-profile cross-party and cross-sector commission to advise on reforms to the tax system in the years ahead to support the post-COVID economic recovery, the restoration of the public finances, and the achievement of better economic, social and environmental outcomes.

The announcement of the Tax Commission marks the start of a major new research programme by Bright Blue, which will propose new principles and policies for tax reform in the 2020s, focussing in particular on four areas of tax policy: carbon taxation, property taxation, business taxation, and work and wealth taxation.

Bright Blue’s research, guided by the Tax Commission, will engage with both the short-term challenges of supporting the revival of the economy, as well as necessary tax rises in the medium-term to reduce the large budget deficit incurred by the Chancellor’s generous response to COVID-19 and commitments to increased investment in public services.

The proposed principles and proposals will also align with long-term economic, social and environmental objectives, including increased funding for public services and achieving net zero by 2050.

The research will combine detailed policy analysis in areas such as business, property taxes, carbon, wealth and work taxes with a clearly articulated, strategic vision for a tax-reforming, rather than just tax-cutting, agenda over the next decade.

Bright Blue’s Tax Commission includes leading politicians, chief executives, academics and union leaders. Bright Blue is seeking to build a cross-party and cross-sectoral consensus on tax reform.

Bright Blue’s new Tax Commission includes:

  • The Rt Hon David Gauke, Former Lord Chancellor
  • The Rt Hon Sir Vince Cable, Former Secretary of State for Business, Innovation and Skills
  • The Rt Hon Lord Willetts, President of the Advisory Council and Intergenerational Centre at the Resolution Foundation
  • The Rt Hon Dame Margaret Hodge MP, Former Chair of the Public Accounts Committee
  • The Rt Hon Andrew Mitchell MP, Former Secretary of State for International Development
  • James Timpson OBE DL, Chief Executive, Timpson Group
  • Luke Johnson, Entrepreneur and Chairman, Risk Capital Partners
  • Emma Jones MBE, Entrepreneur and Founder, Enterprise Nation
  • Mike Cherry OBE, National Chairman, Federation of Small Businesses
  • Mike Clancy, General Secretary, Prospect trade union 
  • Victoria Todd, Head of the Low Incomes Tax Reform Group
  • Professor Sam Fankhauser, Director, Grantham Research Institute, LSE
  • Christina Marriott, Chief Executive, Royal Society for Public Health
  • Helen Miller, Deputy Director and Head of the Tax Sector, Institute for Fiscal Studies
  • Giles Wilkes, Former Special Adviser, Number 10 Downing Street
  • Caron Bradshaw, CEO, Charity Finance Group
  • Pesh Framjee, Global Head of Nonprofits, Crowe UK
  • Robert Palmer, Director, Tax Justice UK 

The final proposals to be made in the report are those of Bright Blue and will not necessarily imply endorsement from the commissioners listed above.

Ryan Shorthouse, Director of Bright Blue, commented:

“The monumental impact of COVID-19 has necessitated unprecedented increases in government spending and borrowing. There are also growing promises of and demands for an increase in government spending on public services. Considering the UK’s historic and projected long-term growth rates, and the commitment to and need for balancing the books, a period of deficit reduction will eventually be necessary. This inevitably will mean some significant tax rises in the future.

“This is uncomfortable territory for the Conservative Government. In recent years, Conservative Ministers have largely pursued a tax cutting agenda, stemming from a belief in personal responsibility, economic freedom and a smaller state. But, as the response to Covid-19 has shown, in a mature economy, governments play a major role in ensuring both efficient and equitable outcomes. As such, Conservative Governments cannot just keep shrinking the tax base.

“We need a new agenda on tax in the 2020s which can help pay for public spending, improve public attitudes to the tax system and the broader economic model, and achieve better economic, social and environmental outcomes.” 

The Rt Hon Sir Vince Cable, Former Secretary of State for Business, Innovation, and Skills, commented:

“On the principle that a crisis is a good opportunity for innovation and shouldn’t go to waste, I think this is a timely initiative. There have been some seminal studies on the tax system from Mirrlees and earlier Kay and King; but they were largely not acted upon and in any event were for a pre-digital age. We now need a practical guide to the post-COVID-19 era.”

The Rt Hon Dame Margaret Hodge MP, Former Chair of the Public Accounts Committee, commented:

“The need for tax reform has long been clear. But at a time of such fiscal uncertainty, that need has never been more profound. The big problems that beset our tax system require bold solutions. That’s why I’m excited to join this vital cross-party commission of renowned experts and thinkers so that we can work towards a fairer and more responsible tax system, for now and for the future.”

The Rt Hon David Gauke, Former Lord Chancellor, commented:

“Once the health and economic crisis has passed, it will be necessary to put the public finances on a sound footing. Tax is going to have to play a crucial role in doing this and it is essential that, as a country, we think deeply about the best way we do this in order to deliver a fair and prosperous society.  I am delighted to be part of Bright Blue’s commission on the future of the tax system. I am sure that the commission will have an important contribution to make to this debate.”

[Image: Carlos Delgado]