Where does all our tax go?

  • 27 January 2012
  • From the section England
  • comments
Ben Gummer MP Image copyright bbc
Image caption Ben Gummer MP says a tax breakdown could help the government explain spending decisions better

Do you really know how your income tax is spent? How much of the money taken away from you by the government goes on paying benefits, funding the police or running prisons?

Ben Gummer, the Conservative MP for Ipswich, wants us all to be sent an itemised statement every year giving us a breakdown of how our hard earned taxes are spent.

"There can be no substitute for something that lands on the doormat at the same time across the country and corresponds with our entire tax paid.

"It would, in a way, be a national water cooler moment," he told the Commons, as he introduced his Ten Minute Rule Bill.

He believes it would be easy enough for the Treasury to produce the form which could be individually tailored to the income tax that we have paid.

And to prove the point he's produced one for a person on a salary of £25,500. This person would pay tax of £5,979.

"We have taken taxpayers' money and distributed it with no explanation of what that means to each individual taxpayer," Mr Gummer told the House.

"As a result, we have forced people to question not how their tax is actually spent but how they believe it has been spent."

His statement shows that our earner on £25,500 pays £59 towards overseas aid and £28 to the European Union.

"How many times have each of us been told on the doorstep that all our money goes to Europe, or Africa, or Trident?

Armed with a tax statement, taxpayers would have a precise and accurate understanding of how their tax pounds are really spent."

And he said it would stimulate debate: "Our average earner would have a firmer grasp of the arguments made in this place about how pension reform is so badly needed.

"This one piece of paper could make Parliament more responsive to voters' demands, while helping the government better to explain the spending decisions they have chosen to make."

He reckons it would cost 25p per tax payer to draw up and send out a statement, a total cost of £7.5 million.

Mixed reaction

A number of Conservative MPs from the region, along with the Liberal Democrat Sir Bob Russell (Colchester), were in the chamber to applaud Mr Gummer's bill.

But the Labour MP Chris Bryant (Rhondda) dismissed it as "nothing more than a political puff and a press release for the Daily Mail".

He argued that because this was only a Ten Minute Rule Bill, with little chance of time to be debated, Mr Gummer and the government weren't serious about seeing this come about.

"There are far more important things that we should change about how expenditure is revealed to taxpayers, not least because we in this House do an extremely bad job of analysing expenditure," said Mr Bryant.

He suggested that the Chancellor's Budget could be drawn up in a different way with more open discussion before it was finally presented.

But make no mistake, Mr Gummer is serious about his idea.

He's told us the Chancellor likes it and the reaction from Downing Street has been "broadly warm".

We shall see if it takes off.