Introduction
The Conservative party’s record on tax policy is contested. Previous research found that the Conservative government of Winston Churchill cut the tax burden as a proportion of GDP by more than any other postwar prime minister.[1] The 2019 Conservative manifesto promised that “Conservatives want to give you freedom – low taxes, opportunity, the chance to realise your dreams.”[2] Yet under the current Conservative prime minister, the sustained tax burden will reach a 70 year high.[3]
To aid public understanding of the tax policy debate, this paper itemises the scale of the changes made within the tax system from each budget since the Conservatives gained office in May 2010.
The paper analyses the number of tax changes which have taken place, quantifying both cuts and rises. Within each individual tax there are a number of bands, rates, thresholds and exemptions, changes to which have impacts on individuals, households and businesses. An example would be changes to vehicle excise duty: often, changes are made to different classes of vehicle based on metrics like emissions. Those discrete changes impact personal finances in different ways. Aggregating these changes sheds light on the scale of tax changes as well as the simplicity and predictability of the tax system.
Click here to read the research paper
Click here to see a list of tax changes since 2010
Key findings
- Since May 2010, Conservative or Conservative-led governments have implemented at least 1,651 tax changes. Of these, 1,034 or (63 per cent) were tax rises.
- The greatest number of tax changes was in 2012-13 with 189.
- The greatest number of tax rises occurred in 2012-13 with 132. This occurred despite the budget in 2011 purporting to implement policies which “achieve strong, sustainable and balanced growth that is more evenly shared across the country.”[4]
- The greatest number of tax cuts occurred in 2014-15, the last full year of the Conservative – Liberal Democrat coalition, with 83.
- The only year since 2010 with more tax cuts than rises was 2020-21, with 78 of the 151 tax changes being cuts.
- Vehicle excise duty was the tax with the largest number of changes over the period with 258. Of these, 248 were taxes rises.
- Value added tax (VAT) had the greatest number of tax cuts since May 2010 with 130. This includes the abolishment of VAT on female sanitary products in 2021. However, this is largely offset by 126 tax rises over the same period. These include VAT being charged on mobile phones and the standard rate rising from 17.5 per cent to 20 per cent.
- The majority of tax changes concerned indirect taxes, such as alcohol, fuel and tobacco duties. These accounted for 1,146 or (69 per cent) of the 1,651 tax changes implemented since May 2010.
- National account taxes – the amount of revenue the government receives in taxes each year – have increased by more than £187 billion between 2009-10 and 2020-21.[5] This is a real terms increase of £172 billion since 2010.[6]
[1] TaxPayers’ Alliance, Briefing: sustained tax burden at highest level since 1951, 1 February 2021.
[2] The Conservative and Unionist Party, Manifesto 2019, November 2019, p. 26.
[3] TaxPayers’ Alliance, Briefing: sustained tax burden at highest level since 1951, 1 February 2021.
[4] HM Treasury, Budget 2011, March 2011, p.1.
[5] Office for Budget Responsibility, Public finances databank – January 2021, 28 January 2021, https://obr.uk/data/, (accessed 10 February 2021)
[6] Office for National Statistics, GDP deflators at market prices, and money GDP December 2020 (Quarterly National Accounts), 6 January 2021, www.gov.uk/government/statistics/gdp-deflators-at-market-prices-and-money-gdp-december-2020-quarterly-national-accounts, (accessed 25 February 2021)