A Reform-linked think tank is backing state pension means-testing as part of a “radical” proposal to shake up Britain’s tax and benefits system.
The Centre for a Better Britain (CFABB) has published recommendations for future Governments targeting public spending, which would see £75billion in tax cuts for high earners.
According to the think tank, it is drawing on what it said was “the experience and expertise of senior figures from across financial services, business, economics and politics”.
The organisation called for Bank of England senior leaders, including Governor Andrew Bailey, to have their remuneration tied to meeting the two per cent inflation target, with pay docked if the goal is missed.
A Reform-linked think has suggested the state pension should be means-tested
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Furthermore, the report described its vision as “a programme of radical reform to Britain’s financial system and tax code, designed ultimately to raise productivity and living standards”.
The CFABB argued that inheritance tax (IHT) and capital gains tax (CGT) should be scrapped entirely, contending that these levies drive people to shift their wealth overseas.
Stamp duty land tax and stamp duty on share transactions would likewise be eliminated under the proposals.
The think tank branded the current 25 per cent corporation tax rate “internationally uncompetitive” and recommended a phased reduction to 15 per cent over an eight-year period.
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Together, these measures would amount to approximately £75billion in tax cuts, a package that critics would note overwhelmingly favours those with the greatest assets and highest incomes.
However, the report acknowledged that significant reductions in public expenditure would be necessary to offset the fiscal impact, while notably failing to set out precisely where spending cuts would fall.
To replace the state pension, which Department for Work and Pensions (DWP) forecasts suggest will cost £146.1billion in 2025 to 2026, the CFABB proposed giving every newborn a £1,000 “lifetime investment account”.
Individuals would then pay up to 15 per cent of their earnings into this personal retirement fund throughout their working lives. Under the plan, the existing state pension would be retained only as a means-tested safety net for the most disadvantaged.
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The think tank also floated closing the public service pension scheme to newly recruited teachers and civil servants as a further cost-saving measure.
Despite the enormous fiscal implications of its proposals, the report conspicuously stopped short of detailing how the required spending reductions would be achieved in practice.
The CFABB formally came into being last year, having previously operated under the name Resolute 1850 before securing fresh funding and relaunching.
Since its launch, ith Nigel Farage’s party, but the report’s authors insisted that their work has not yet been reviewed by the party.