Hundreds of tax perks offered to savers and investors could be on the line in five years time as the new Conservative government is urged to confront the public debt bill facing tomorrow's taxpayers.

Hundreds of tax perks offered to savers and investors could be on the line in five years time as the new Conservative government is urged to confront the public debt bill facing tomorrow's taxpayers.   

The Centre for Policy Studies is calling for all 1,156 tax exemptions currently available to "automatically drop dead" at the end of this parliament, forcing policymakers to reinstate only the most necessary tax relief.

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This 'sunset' clause could bring a whole range of tax policies into question, from the newly introduced personal savings allowance to incentives for investing in socially useful businesses.

The CPS, a highly influential think-tank, believes that reforming tax relief may be the only way to tackle a growing public debt mountain of at least £5.85 trillion, equivalent to £221,000 per household.

It also argues that such a rethink is the only way to be fair to 'Generation Y', the 18-35-year-olds who will end up footing the future tax bill for today's promises.

The government has already ruled out further rises in income tax, VAT and national insurance for the next five years as part of the legislation package announced in the Queens Speech on Wednesday.

In its latest paper published this weekend, the CPS argued that babyboomers in power have "become masters at perpetrating inter-generational injustice" through unfunded spending commitments, such as the "unaffordable" triple lock on pensions.

It says: "Reining back on unfunded promises means either stop making them, or fund them as they are made, which would require higher taxation or additional cuts in public spending. Unfortunately, pre-election pledges have limited the scope for raising rates of taxation, leaving the Chancellor with little choice but to cut tax reliefs and exemptions."

The CPS has become the latest critic of a complex network of tax incentives, with MPs and government accountants also arguing that the system is out of control. Prior to the general election, the Public Accounts Committee claimed that HM Revenue & Customs had underestimated the number of exemptions now available and failed to monitor their effectiveness.

It added that many of these exemptions, which cost more than £100bn a year in forgone tax, may be aiding tax avoidance.

In a damning report on the issue, the Committee wrote: "HM Treasury and HMRC do not keep track of those tax reliefs intended to influence behaviour. They do not adequately report to Parliament or the public on whether reliefs are working as intended and what they cost and whether they represent good value for money."

The National Audit Office has also highlighted the rising number of tax reliefs in the UK, with their total value in proportion to GDP also growing from 16 to 21 per cent since 2005.

Michael Johnson, pension analyst at the CPS, has called on the new pensions minister, Baroness Altmann, to replace today's tax relief framework for pensions contributions with a simple 50p per £1 saved, up to an annual allowance of £8,000, to be given out irrespective of taxpaying status.

Furthermore, he wants to see the lifetime allowance scrapped altogether and an annual combined cap of £30,000 on Isa and pensions contributions. Mr Johnson said: "The ultimate destination should be the merger of ISA and pension tax regimes, to hugely simplify the savings landscape - a lifetime ISA to serve everyone from the cradle to the grave."

Kate Smith, regulatory strategy manager at Aegon UK, said the only changes immediately on the horizon were a likely cut in pensions tax relief for higher earners and a confirmed "downward shift" in the lifetime allowance, scheduled to fall from £1.25m to £1m.

She said: "The latter adds another layer of complication and limit to around £25,000 a year the amount of retirement income people with a defined contribution scheme can purchase - well below what many aspire to."

But Stan Russell, retirement expert at Prudential, insisted tax relief on pensions was still very attractive. "By making a five per cent annual contribution into a pension fund throughout their career, the average worker could reduce their tax bill by £10,000. And of course, most people paying into a workplace pension will have the added benefit of employer contributions going into their retirement fund."