A Fairer and More Efficient UK Economic System
Introduction
The UK faces growing economic challenges—rising inequality, government inefficiencies, and a tax system that benefits passive wealth over earned income. We need a fairer, more efficient system to create sustainable growth, reduce reliance on benefits, and open up opportunities for all.
This plan outlines practical reforms that could generate £77.5 - £111 billion per year—funds that could be reinvested into public services, infrastructure, and tax relief for working people.
Why This Matters:
- 14 million people in the UK live in poverty, despite many working full-time.
- The wealthiest 1% hold over 20% of the UK's wealth, while corporate tax avoidance drains billions from public funds.
- Housing Benefit costs taxpayers £15 billion annually, mostly benefiting private landlords instead of creating affordable housing.
This proposal provides practical solutions that benefit both low and high earners, ensuring a stronger, fairer economy for all.
1️⃣ Tax Passive Income Fairly
The Problem
- The UK tax system favours wealth over work—investment income is taxed at lower rates than wages.
- Capital Gains Tax (CGT) and dividend tax rates are significantly lower than income tax, benefiting the wealthiest individuals.
Proposed Reforms
✅ Increase Capital Gains Tax (CGT) to match income tax rates (20%, 40%, 45%) and reduce the CGT allowance from £6,000 to £2,000 for high earners.
✅ Increase Dividend Tax Rates to align with income tax rates and remove the dividend allowance for top earners.
✅ Reform Rental Income Taxation by eliminating mortgage interest relief for high-income landlords and taxing rental income at the same rate as wages.
Estimated Revenue Impact
💰 £25-30 billion per year
Why This Benefits Everyone
✅ Higher wages = more consumer spending = stronger businesses
✅ Well-funded public services = healthier, more productive workers
✅ Lower inequality = less crime and social instability
✅ Stable tax system = safer investments and stronger markets
✅ Public investment = better infrastructure, benefiting businesses
2️⃣ Reduce Government Waste & Stop Corporate Tax Avoidance
The Problem
- Large corporations exploit tax loopholes, shifting the burden onto workers.
- Billions are wasted on inefficient outsourcing, MP expenses, and unnecessary House of Lords costs.
Proposed Reforms
✅ Introduce a Minimum Corporate Tax Rate of 15-20% to prevent tax avoidance.
✅ Crack Down on Profit-Shifting by enforcing stricter multinational tax regulations.
✅ Reduce Outsourcing & Contract Waste by prioritising in-house public service delivery.
✅ Reform MP Expenses & House of Lords by reducing allowances and limiting lifetime peerages.
✅ Increase Taxes on Luxury Goods & Private Jets by raising VAT on high-end items and closing tax loopholes.
Estimated Savings & Revenue Impact
💰 £47.5-71 billion per year
3️⃣ Invest in Housing to Reduce Benefit Dependency
The Problem
- Housing Benefit costs taxpayers billions while funding private landlords instead of building homes.
- A shortage of affordable housing forces reliance on expensive temporary accommodation.
Proposed Reforms
✅ Build More Social Housing to reduce long-term Housing Benefit costs.
✅ Cap Rents in High-Inflation Areas to prevent excessive rental increases.
✅ Use Public Land for Housing rather than selling it to developers for profit-driven projects.
Estimated Savings
💰 £5-10 billion per year
4️⃣ Reform the Benefits System for Fairness & Efficiency
The Problem
- The majority of benefit recipients are either sick, disabled, or in low-paid work.
- Low wages mean businesses rely on taxpayer-funded benefits to supplement income.
Proposed Reforms
✅ Increase the Minimum Wage to a Real Living Wage to reduce reliance on in-work benefits.
✅ Ensure Disability Benefits Are Fair and Accessible by removing punitive assessments and delays.
✅ Scrap Harsh Benefit Sanctions that leave vulnerable people without support.
✅ Speed Up Universal Credit Payments so new claimants receive funds within five days.
✅ Invest in Retraining and Employment Support to help people transition into higher-paying jobs.
Total Estimated Savings & Revenue Increase
💰 £25-30 billion – Fair taxation on passive income.
💰 £47.5-71 billion – Stopping corporate tax dodging & government waste.
💰 £5-10 billion – Housing investments reducing benefit reliance.
💰 Long-term savings – Fairer wages reducing need for benefits.
📢 TOTAL ANNUAL REVENUE & SAVINGS: £77.5 - £111 billion
Call to Action: How You Can Help
📢 Contact Your MP – Demand action on fair taxation and economic reform.
📢 Join the Discussion – Share this proposal on social media and with community groups.
📢 Support Public Awareness – Advocate for policies that benefit both businesses and workers.
🔹 Will you stand for a fairer economy? Let’s take action together. 🔹