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In Portsmouth, the traffic wardens will soon be sent out in cars so that they can harvest more fines in a shorter space of time. Dozens more local authorities now have the power to punish you for straying into a bus lane or a box junction. Meanwhile, HMRC fined a record number of people for missing their self-assessment deadline this year, while the punishments dished out by the tax office are rising by up to 25pc annually.
The UK is developing a “fine culture”, with an increasingly bankrupt state using levies in a desperate attempt to sustain its profligacy. The trouble is, we can’t fine ourselves back to solvency. All we will do is erode respect for the law, as ordinary people feel they are being punished simply for going about their business, and allow politicians and officials to duck serious questions around what the state can afford.
Our roads are littered with potholes, trains don’t run on time, it’s nigh on impossible to get a GP appointment and tax helplines may be unmanned for half the year. Still, there is one arm of the state that is working harder and more efficiently than ever: the penalty charge unit.
Only last week, we learned that one local authority will soon be sending traffic wardens out in their own cars – although presumably they won’t ever actually try to park them – so that they can detect more offences per hour worked. Dozens more councils have applied for permission to fine drivers for infractions including driving in a bus lane, with more than half of motorists now in areas where councils can enforce the fines instead of the police.
HMRC hit a record 1.1 million people with a late charge, raising over £100m for the Treasury, a 10pc rise over the year. Many of them didn’t even owe any tax, but frozen thresholds mean they still have to get their heads around a new form, on penalty of a fine if they don’t.
Meanwhile, the accountants UHY Hacker Young reported in January that the value of HMRC tax penalties rose by around a quarter last year, hitting a total of £850m. It included, for example, one small business that was fined £140,000 because it lost its HMRC account password.
It doesn’t stop there. Data rules are yielding a rising amount of penalty income, with the Information Commissioner’s Office fining British Airways £20m in 2020 and TikTok £12m last year. Complex employment legislation is playing its part, with 200 companies fined a total of more than £7m last year for failing to comply with minimum wage legislation.
Of course, people need to play by the rules but we have shifted from a society and economy where there is some leeway, where the rules seem fair, to one where individuals and businesses are increasingly viewed by officials as cash cows to be milked.
Consider the “boiler tax”, now scrapped by the Tories: it would have seen plumbers fined for not installing enough heat pumps regardless of market demand. And the Conservative government’s ZEV mandate, where car manufacturers may be penalised for failing to sell enough zero emissions vehicles, even though it is hardly their fault if people don’t want them.
The list goes on and on. The growing number of cash-strapped local councils have little choice but to impose more and more penalty changes to plug the vast holes which mismanagement have blown in their budgets. Along with hiking taxes – bills for the typical band D home will exceed £2,500 in four local authorities from April 2024 – fines can be a rich revenue stream.
Likewise, bodies such as HMRC see fines as an “easy win”, and many quangos assume that handing out a few million in penalties every year means they are “getting tough” and “cracking down” on whoever they are meant to be regulating. Never does it seem to occur to officials that they might be able to reduce their own spending.
There is a very real risk we are starting to follow the EU, which imposes mega-fines of Apple and Amazon partly to fill its budget. Over the last few years, fines have played an increasingly important role in its finances with, to take one example, a 50pc year-on-year rise in penalties for breaching the ludicrously complex GDPR rules, and with data rules alone now raising €1.6bn (£1.4bn) a year for the Brussels bureaucrats, far more than some EU members contribute on net.
The trouble is, that is a terrible way to raise revenue. First, the fines are often capricious and unfair. They are imposed by poorly trained staff, often because they have to reach a target, and it is usually impossible to appeal against them, or even if you can, it is an immensely time-consuming – or even expensive – endeavour.
Next, the revenues are unpredictable. Even the brainiacs at the Office For Budget Responsibility find it virtually impossible to forecast tax revenues from one quarter to the next. Fine revenues are even harder.
Third, it undermines respect for the rule of law. As we write out the cheque, most of us suspect that the fine was imposed unfairly, mainly to squeeze some cash out of innocent people who may have done nothing more than misread a traffic sign or type in a number plate incorrectly.
Finally, and perhaps worst of all, it creates the incentive not for the state and its various bodies to reduce spending, but to find ever more ways of squeezing money out of the beleaguered taxpayer. That doesn’t feel like justice so much as a shake-down.
This country urgently needs to have a serious conversation about how it controls the size of the state, and how the revenue will be raised to pay for it. In truth, we can’t just fine our way back to solvency – and we will only make the whole mess even worse by trying to do so.
Britain cannot fine its way back to solvency
Punishing ordinary people to plug funding shortfalls is not a sustainable way to run a country