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In a move we’re told has interested George Osbourne, Ipswich’s Ben Gummer MP will today put forward a ten minute rule bill aimed at making the tax man reveal how our taxes are spent each year, providing all taxpayers with a personalised statement that would show exactly how much tax they had paid and where it was spent.

The bill, to be read after Prime Minister’s Question Time in the House of Commons this afternoon, would make certain that every taxpayer in the country received a statement explaining (a) what taxes they pay and (b) how those taxes are spent. These tax statements could be a powerful way of increasing awareness of the tax burden and therefore they could create further downward pressure on the tax burden. Mr Gummer thinks the statements would mean taxpayers would see not only how much direct tax they pay but also how this would change as a result of the government’s budget, that taxpayers would see precisely how their elected representatives decided to spend that money on their behalf and that taxpayers would see whether a government was sticking to its promises on taxation and spending.

When challenged that this scheme was being used to bash spending on benefits, Mr Gummer maintained that this was not his aim, insisting he was looking for transparency in Government spending. He also denied that it would become a job creation scheme for bureaucrats, pointing out that it would be relatively simple to administer and is really no different from the data generation used by direct mail marketeers every day.

Mr Gummer told Ipswich Spy “Few of us would part with more than a few pence without a record of how it was spent. From supermarket receipts to electricity and mobile bills, we expect an itemised breakdown of where our money goes.

“Yet for our largest monthly payment, to the taxman, we get just two numbers printed on the right hand side of a pay slip. We are not told the overall value of our taxation obligation. We are not told what proportion of our income it represents. Crucially, we are not told how the government spends the money we are made to give it.

“This must change. Just as we are under an obligation to pay tax, the government should be obliged to tell us how it spends our money. Transparency calls for this most basic view of what we pay and where it goes. Accountability demands this most simple tool with which to hold those who spend our money to account. Democracy requires that we understand what politicians promise us and how those promise affects our lives.”

Local Authorities already produce Council Tax bills that have a breakdown of who spends what part of the bill, and many produce literature that explain how they spend our money. This clarity on local authority funding leads directly to the public questioning how their money is spent, and it is no doubt with this in mind that Mr Gummer introduces his bill in the House of Commons. 10 minute rule bills have no chance of becoming law, but it is clear that Mr Gummer has considerable support from the Government on this, with carefully placed articles in The Sun and The Daily Telegraph, as well as a pre prepared mocked up tax bill sent out with the press release which was included by Conservative Home. Sources “close to the Chancellor” told The Sun that “George likes the idea a lot” and we would not be surprised to see this idea included in a Finance Bill in the future.

Private quotations received suggest that the cost of producing and mailing Tax Statements to the 30.5 million payers of direct tax at about £7.5m (under £0.25 per taxpayer, approximately £0.20 of which is for postage). This cost would be substantially offset should HMRC combine posting the Tax Statements with revised Tax Codes. There would be a minimal cost to setting up the systems and processes in the OBR and HMRC needed to calculate Tax Statements.

Opposition politicians criticised the scheme as an expensive gimmick, with David Ellesmere, Labour’s General Election candidate for Ipswich, saying “It beggars belief that, when essential public services are being cut, Ben Gummer is proposing to waste £7.5million on what is little more than an expensive gimmick.”

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