Even when inflation is taken into account Britain’s tax burden has soared by over 50% in the last ten years under the Labour government, new research claims.
In its report, the TaxPayers’ Alliance (TPA), a lobbyist for fairer taxes, said a combination of up-front and stealth levies has led to a total tax bill of £517billion a year.
In other words, a single British household has seen their annual tax bill rise, helped by fiscal drag, to an extraordinary £20, 700.
“Shamefully,” a significant part of the tax rise has been in the form of ‘stealth’ taxes, the report says, pointing to the 10p sting in last year’s so-called “tax-cutting” budget.
Alongside stealth taxes, there have been “sly increases” in the shape of fiscal drag – the failure to adjust tax thresholds in line with earnings and asset prices.
Over the last decade, the TPA said Labour has hiked taxes in this way by £14 billion a year, partly explaining the group’s view that taxpayers have been ‘ripped off.’
Wallets have been hit even harder because taxpayers have been made to pay additional fees or charges for what used to be ‘free’ or virtually free public services.
For example, the Driver Vehicle Licensing Agency now takes £300 million per annum from the sale of driving licences, while its business in personalised number plates brings in another £100 million per annum.
Passport charges are another good earner, the report said pointing out that in 1997 a passport cost £18, but last year the cost soared to £72, a quadrupling in price.
These charges now cost taxpayers nearly £500 million per annum, and the TPA said it fears further costs could be on the way given the increasing expense of ID cards.
But it is the NHS and local authorities which have proved the biggest money-grabbers, the report says.
Its authors said school dinners charges have risen 50% in ten years, parking charges and fines have risen to over £1 billion and hospital car parks raise over £100m in England alone.
Mike Denham, a former economist at the Treasury who authored the report, reflected that “the government has used every trick in the book to drive up the tax burden.”
“Ordinary families are paying a heavy price,” he said. “People are increasingly beset by record levels of taxation and growing service charges, but there has been no improvement in services in return.
“We find ourselves paying more and more for less and less. With rocky economic times ahead, this rate of taxation simply cannot be sustained.”
Matthew Elliott, the TPA's chief executive, believes the British public are being “ripped off in the most shameful way.”
“The cloak and dagger methods the Government is using the squeeze money out of hard working people are deplorable,” he said.
“With fewer police stations, limited GPs’ hours, libraries closing, rarer bin collections and a host of other cuts we are getting less for our money than ever before.
"People are facing higher fuel bills, more expensive food and much bigger mortgage bills – and on top of all that they are being stealth taxed and charged more than ever before. This con has got to stop.”
