Transcript The tax burden under Labour - Institute for Fiscal Studies

The tax burden under Labour
Carl Emmerson
Christine Frayne
Gemma Tetlow
Net taxes and national insurance contributions
Financial year
© Institute for Fiscal Studies 2005
09–10
05–06
00–01
95–96
90–91
85–86
80–81
Current receipts
75–76
50.0
48.0
46.0
44.0
42.0
40.0
38.0
36.0
34.0
32.0
30.0
70–71
Percentage of national income
Revenues since 1970–71
8.0
Current receipts
National income
6.0
National income minus current receipts
4.0
2.0
0.0
Five year average ending
© Institute for Fiscal Studies 2005
09–10
05–06
00–01
95–96
90–91
85–86
-4.0
80–81
-2.0
76–77
Real percentage growth
National income ‘after tax’
Revenue and national income
growth by parliament
Annualised average real increase (%) in:
Conservatives 18 years
1st Labour parliament
2nd Labour parliament
Labour 8 years so far
Labour current plans
© Institute for Fiscal Studies 2005
Current receipts
National income
National income
minus current
receipts
1.7
2.1
2.4
Revenue and national income
growth by parliament
Annualised average real increase (%) in:
Current receipts
National income
National income
minus current
receipts
Conservatives 18 years
1.7
2.1
2.4
1st Labour parliament
5.0
3.3
2.3
2nd Labour parliament
Labour 8 years so far
Labour current plans
© Institute for Fiscal Studies 2005
Revenue and national income
growth by parliament
Annualised average real increase (%) in:
Current receipts
National income
National income
minus current
receipts
Conservatives 18 years
1.7
2.1
2.4
1st Labour parliament
5.0
3.3
2.3
2nd Labour parliament
2.3
2.5
2.6
Labour 8 years so far
Labour current plans
© Institute for Fiscal Studies 2005
Revenue and national income
growth by parliament
Annualised average real increase (%) in:
Current receipts
National income
National income
minus current
receipts
Conservatives 18 years
1.7
2.1
2.4
1st Labour parliament
5.0
3.3
2.3
2nd Labour parliament
2.3
2.5
2.6
Labour 8 years so far
3.3
2.8
2.6
Labour current plans
© Institute for Fiscal Studies 2005
Revenue and national income
growth by parliament
Annualised average real increase (%) in:
Current receipts
National income
National income
minus current
receipts
Conservatives 18 years
1.7
2.1
2.4
1st Labour parliament
5.0
3.3
2.3
2nd Labour parliament
2.3
2.5
2.6
Labour 8 years so far
3.3
2.8
2.6
Labour current plans
3.5
2.4
1.7
© Institute for Fiscal Studies 2005
Contributions to changes in
government revenue
Labour’s 1st term
% GDP
Cash
1.6%
£19.6bn
Conservative
Labour 1st term
Labour 2nd term
All announcements
Fiscal drag
Economic cycle
Other factors
Total
© Institute for Fiscal Studies 2005
Labour’s 2nd term
% GDP
Cash
Labour to date
% GDP
Cash
Contributions to changes in
government revenue
Labour’s 1st term
% GDP
Cash
Conservative
0.7%
£9.1bn
Labour 1st term
–0.2%
–£2.3bn
1.6%
£19.6bn
Labour 2nd term
All announcements
Fiscal drag
Economic cycle
Other factors
Total
© Institute for Fiscal Studies 2005
Labour’s 2nd term
% GDP
Cash
Labour to date
% GDP
Cash
Contributions to changes in
government revenue
Labour’s 1st term
% GDP
Cash
Conservative
0.7%
£9.1bn
Labour 1st term
–0.2%
–£2.3bn
0.5%
£6.8bn
1.6%
£19.6bn
Labour 2nd term
All announcements
Fiscal drag
Economic cycle
Other factors
Total
© Institute for Fiscal Studies 2005
Labour’s 2nd term
% GDP
Cash
Labour to date
% GDP
Cash
Contributions to changes in
government revenue
Labour’s 1st term
% GDP
Cash
Conservative
0.7%
£9.1bn
Labour 1st term
–0.2%
–£2.3bn
All announcements
0.5%
£6.8bn
Fiscal drag
1.0%
£12.4bn
Economic cycle
0.4%
£5.1bn
Other factors
–0.3%
–£4.7bn
Total
1.6%
£19.6bn
Labour 2nd term
© Institute for Fiscal Studies 2005
Labour’s 2nd term
% GDP
Cash
Labour to date
% GDP
Cash
Contributions to changes in
government revenue
Labour’s 1st term
% GDP
Cash
Conservative
0.7%
£9.1bn
Labour 1st term
–0.2%
–£2.3bn
All announcements
0.5%
£6.8bn
Fiscal drag
1.0%
£12.4bn
Economic cycle
0.4%
£5.1bn
Other factors
–0.3%
–£4.7bn
Total
1.6%
£19.6bn
Labour’s 2nd term
% GDP
Cash
0.6%
£6.9bn
Labour 2nd term
© Institute for Fiscal Studies 2005
Labour to date
% GDP
Cash
Contributions to changes in
government revenue
Labour’s 1st term
Labour’s 2nd term
% GDP
Cash
% GDP
Cash
Conservative
0.7%
£9.1bn
0.0%
0.0
Labour 1st term
–0.2%
–£2.3bn
0.0%
–£0.5bn
0.9%
£11.6bn
0.6%
£6.9bn
Labour 2nd term
All announcements
0.5%
£6.8bn
Fiscal drag
1.0%
£12.4bn
Economic cycle
0.4%
£5.1bn
Other factors
–0.3%
–£4.7bn
Total
1.6%
£19.6bn
© Institute for Fiscal Studies 2005
Labour to date
% GDP
Cash
Contributions to changes in
government revenue
Labour’s 1st term
Labour’s 2nd term
% GDP
Cash
% GDP
Cash
Conservative
0.7%
£9.1bn
0.0%
0.0
Labour 1st term
–0.2%
–£2.3bn
0.0%
–£0.5bn
0.9%
£11.6bn
Labour 2nd term
All announcements
0.5%
£6.8bn
0.9%
£11.1bn
Fiscal drag
1.0%
£12.4bn
0.8%
£9.6bn
Economic cycle
0.4%
£5.1bn
–0.3%
–£3.8bn
Other factors
–0.3%
–£4.7bn
–0.8%
–£10.1bn
Total
1.6%
£19.6bn
0.6%
£6.9bn
© Institute for Fiscal Studies 2005
Labour to date
% GDP
Cash
Contributions to changes in
government revenue
Labour’s 1st term
Labour’s 2nd term
Labour to date
% GDP
Cash
% GDP
Cash
% GDP
Cash
Conservative
0.7%
£9.1bn
0.0%
0.0
0.7%
£9.1bn
Labour 1st term
–0.2%
–£2.3bn
0.0%
–£0.5bn
–0.2%
–£2.8bn
0.9%
£11.6bn
0.9%
£11.6bn
Labour 2nd term
All announcements
0.5%
£6.8bn
0.9%
£11.1bn
1.4%
£18.0bn
Fiscal drag
1.0%
£12.4bn
0.8%
£9.6bn
1.8%
£22.0bn
Economic cycle
0.4%
£5.1bn
–0.3%
–£3.8bn
0.1%
£1.3bn
Other factors
–0.3%
–£4.7bn
–0.8%
–£10.1bn
–1.2%
–£14.9bn
Total
1.6%
£19.6bn
0.6%
£6.9bn
2.1%
£26.4bn
© Institute for Fiscal Studies 2005
£ billion (2005-06)
14.0
12.0
10.0
8.0
6.0
4.0
2.0
0.0
-2.0
-4.0
© Institute for Fiscal Studies 2005
2004 Pre-Budget
Report
2004 Budget
2003 Pre-Budget
Report
2003 Budget
2002 Pre-Budget
Report
2002 Budget
2001 Pre-Budget
Report
2001 Budget
2000 Pre-Budget
Report
2000 Budget
1999 Pre-Budget
Report
1999 Budget
1998 Budget
1997 Budget
Cumulative budgetary changes
Election 2001
So to conclude
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•
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Revenues up 3.3% per year over 8 years
Faster increase going forward
Lower economic growth expected
… and without introducing new measures
Policy measures yielded 2/3 of increase so far
More might be needed in the future?
© Institute for Fiscal Studies 2005
The tax burden under Labour
Carl Emmerson
Christine Frayne
Gemma Tetlow