Tax transparency is a political masterstroke by Osborne

The annual statements will increase support for the Chancellor’s cuts.

Like Gordon Brown before him, George Osborne is a highly political chancellor. Whenever possible, his measures are designed to meet both economic and electoral imperatives (as well as being Chancellor, he remains the Tories' chief electoral strategist).

Today's announcement that taxpayers will be given an annual breakdown of how their money is spent by the government is a particularly striking example. As the Telegraph reports, Osborne believes that the transparent statements will lead to "greater public acceptance of the need to reduce taxes and government spending". One government source is quoted as saying that "when people see how much they pay towards welfare, the argument about whether to cap benefits will be brought into sharp relief".

Osborne is likely right. Someone on £25,000 (just below the median wage of £26,000), for instance, will learn that they contribute £1,901 a year to welfare (including pensions), £363 to national debt repayment and £113 to "recreation, religion and culture". After casting their eyes over those figures, few will be inclined to hand over more of their money to the state.

But the transparent statements will also bust some of the tabloids' favourite myths. That £25K earner will also discover that he spends just £28 on the EU and £57 on overseas aid, far less than the Mail and the Express's hyperbolic headlines suggest.

All the same, it's hard not to see this as a measure that will advance the cause of small-staters. No wonder Stewart Wood, one of Ed Miliband's top advisers, has already (rightly) suggested that taxpayers should also receive a statement detailing how they benefit from public spending.

George Eaton is political editor of the New Statesman.

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The 5 things the Tories aren't telling you about their manifesto

Turns out the NHS is something you really have to pay for after all. 

When Theresa May launched the Conservative 2017 manifesto, she borrowed the most popular policies from across the political spectrum. Some anti-immigrant rhetoric? Some strong action on rip-off energy firms? The message is clear - you can have it all if you vote Tory.

But can you? The respected thinktank the Institute for Fiscal Studies has now been through the manifesto with a fine tooth comb, and it turns out there are some things the Tory manifesto just doesn't mention...

1. How budgeting works

They say: "a balanced budget by the middle of the next decade"

What they don't say: The Conservatives don't talk very much about new taxes or spending commitments in the manifesto. But the IFS argues that balancing the budget "would likely require more spending cuts or tax rises even beyond the end of the next parliament."

2. How this isn't the end of austerity

They say: "We will always be guided by what matters to the ordinary, working families of this nation."

What they don't say: The manifesto does not backtrack on existing planned cuts to working-age welfare benefits. According to the IFS, these cuts will "reduce the incomes of the lowest income working age households significantly – and by more than the cuts seen since 2010".

3. Why some policies don't make a difference

They say: "The Triple Lock has worked: it is now time to set pensions on an even course."

What they don't say: The argument behind scrapping the "triple lock" on pensions is that it provides an unneccessarily generous subsidy to pensioners (including superbly wealthy ones) at the expense of the taxpayer.

However, the IFS found that the Conservatives' proposed solution - a "double lock" which rises with earnings or inflation - will cost the taxpayer just as much over the coming Parliament. After all, Brexit has caused a drop in the value of sterling, which is now causing price inflation...

4. That healthcare can't be done cheap

They say: "The next Conservative government will give the NHS the resources it needs."

What they don't say: The £8bn more promised for the NHS over the next five years is a continuation of underinvestment in the NHS. The IFS says: "Conservative plans for NHS spending look very tight indeed and may well be undeliverable."

5. Cutting immigration costs us

They say: "We will therefore establish an immigration policy that allows us to reduce and control the number of people who come to Britain from the European Union, while still allowing us to attract the skilled workers our economy needs." 

What they don't say: The Office for Budget Responsibility has already calculated that lower immigration as a result of the Brexit vote could reduce tax revenues by £6bn a year in four years' time. The IFS calculates that getting net immigration down to the tens of thousands, as the Tories pledge, could double that loss.

Julia Rampen is the digital news editor of the New Statesman (previously editor of The Staggers, The New Statesman's online rolling politics blog). She has also been deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines. 

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