The short version
- The Centre for a Better Britain has released a report calling for the elimination of the state pension and significant reductions in capital gains and inheritance taxes.
- The proposal suggests replacing public pensions with individual lifetime investment accounts, funded by initial government contributions and personal savings.
- While the think tank is linked to Reform UK, it maintains that its findings have not yet been formally adopted by the party platform.
A policy group with close ties to Reform UK has published a comprehensive plan that would fundamentally restructure Britain’s tax code and social safety net. The Centre for a Better Britain released an extensive report advocating for the complete abolition of the state pension, alongside substantial cuts to taxes levied on high-net-worth individuals and corporations. The proposals are designed to reshape the economic landscape by shifting retirement security from public provision to private investment mechanisms.
The document argues that the current state pension system operates similarly to a Ponzi scheme, wherein active workers subsidize the income of retirees. Jonathan Brown, the founder and leader of the think tank, described the existing arrangement as unfair to the workforce. Under the proposed model, the universal state pension would be eliminated for most citizens, remaining only as a means-tested safety net for those with the lowest incomes. This shift aims to reduce the burden on public finances, which are projected to spend over £146 billion on pensions in the current fiscal year.
In place of the traditional pension, the report introduces the concept of lifetime investment accounts. Every newborn would receive a starter contribution of £1,000 into such an account. As these individuals enter the workforce, they would be encouraged to contribute up to 15 percent of their earnings into their personal retirement funds. This approach mirrors certain private savings initiatives seen in other jurisdictions, emphasizing individual responsibility for long-term financial security over collective state support.
The tax reforms outlined in the report are equally ambitious. The think tank calls for the removal of capital gains tax and inheritance tax, arguing that these levies disrupt family businesses and incentivize wealthy individuals to move their assets out of the United Kingdom. Additionally, the proposal includes the elimination of stamp duty on property and shares, as well as the digital services tax and air passenger duty. These measures are intended to stimulate investment and retain capital within the domestic economy.
Corporate taxation would also see a significant reduction under this plan. The report recommends lowering the corporation tax rate from its current level of 25 percent to 15 percent over an eight-year period. This gradual decrease is framed as necessary to make the UK more competitive on the international stage. Collectively, these tax cuts are estimated to cost public finances approximately £75 billion, representing a substantial removal of existing revenue streams.
To address the fiscal impact of these tax reductions, the report emphasizes the need for corresponding cuts in public spending. It warns against repeating the market instability associated with previous unfunded tax cuts, referencing the economic turmoil seen during the tenure of former Chancellor Liz Truss. However, the document does not provide a detailed roadmap for achieving these savings, leaving the specifics of budget balancing largely undefined.
Potential areas for expenditure reduction include changes to public sector pension schemes. The report suggests closing the generous pension plans available to teachers and civil servants for new hires. This measure would help offset some of the costs associated with abolishing the state pension and cutting taxes for the wealthy. The think tank argues that these reforms are essential for raising productivity and living standards through better-paid jobs and increased business investment.
The Centre for a Better Britain was formally launched last year, having previously operated under the name Resolute 1850. Its leadership includes former Reform UK officials, such as Jonathan Brown, who served as the party’s chief operations officer. Although the think tank maintains its independence, its proximity to Reform UK headquarters and shared personnel raise questions about the influence of these ideas on the party’s future platform.
The release of this report comes weeks before Prime Minister Andy Burnham’s government is scheduled to unveil its first budget. The timing suggests an attempt to shape the national conversation around economic policy ahead of the next election. While the think tank states that Reform UK has not yet reviewed or adopted these proposals, the radical nature of the recommendations is likely to spark significant debate among policymakers and the public.
Additional structural reforms proposed in the report include breaking up the Treasury to create a new Department for Economic Growth. It also calls for linking the pay of senior Bank of England officials to their success in meeting inflation targets. These measures aim to align financial institutions more closely with broader economic goals, reflecting a holistic approach to revitalizing Britain’s financial system.
Sources behind this briefing
Go to the original reporting
- The Guardian World↗Thinktank linked to Reform UK calls for abolition of state pension
