Britain's Higher Taxes Rack Up Giant Treasury Surplus

by Jason Gorringe, Tax-News.com, London

27 April 2001

Each year, the UK's right-wing Adam Smith Institute think-tank calculates Tax Freedom Day; that's the day on which an average British tax-payer stops working for the Government and starts working for himself or herself. This year Tax Freedom Day is 10th June - compared with 9th June last year (the 2000 budget added 10 days to the country's tax burden) and 27th May in 1999.

That means the George Brown stealth taxation machine, while claiming to reduce taxes, has actually increased them by 9% in just two years; indeed, figures from the Institute for Fiscal Studies show that the tax burden has risen by no less than 20% in the last five years, although they don't attribute all of this to nasty Mr Brown - some of it results from tax increases already planned by the Tories before they left office, and some from cash-flow effects stemming from the abolition of ACT and the introduction of self-assessment.

While tax has been pouring into the Treasury, public spending has been kept under tight control, at least until the recent pre-election splurge, so it's not surprising that the Treasury was able to announce an even bigger surplus for the 2000/2001 financial year than had been forecast as recently as March - including the £22bn raised from 3G mobile phone licenses, the total comes to a mammoth £37bn, and this has allowed a reduction in the national debt from £340bn to £306bn, representing only just over 50% of the Maastricht guide line of 60%.

Even £37bn ($53bn) doesn't sound much though when it's compared with the US surplus of nearly $400bn for the current year - but expressed in terms of population, the UK racked up just $913 per head, while the US managed a handy $1,300 per head.

Recommended