UK Taxpayers Fleeced For 19% More Tax Under New Labour

Jeremy Hetherington-Gore, Tax-news.com, London

11 May 2000

The Adam Smith Institute has compared today's level of UK taxation with that in 1965, when Harold Wilson was prime minister. Many people might think that we pay less tax today than back in the Old Labour days of supertax, and before Maggie Thatcher 'rolled back the boundaries of the state', but they would be wrong.

Tax Freedom Day in 1965 (the day when you stopped working for the Government and started working for yourself) was on May 2nd, compared with May 30th in the year 2000. Taxes did rise in the interim before falling back again: in 1984 Tax Freedom Day was as late as June 11th.

The full report from the Adam Smith Institute follows:

New Labour taxes more than Old!

Burden was much lighter in Wilson years

Remember when Harold Wilson was Prime Minister? Reggie Kray got married. Ken Dodd topped the hit parade with "Tears for Souvenirs". There was a huge state funeral for Sir Winston Churchill. The death penalty was abolished. Kenneth Tynan uttered TV's first four-letter word. Cassius Clay defeated Floyd Patterson. BBC presenter Richard Dimbleby died of cancer. Rhodesia declared independence. Ian Brady and Myra Hindley were charged with the first "moors" murder. Brad Pitt was born.

You could buy a new Austin for £757 (though heater and windscreen washers cost extra). Whisky fell to 5/6d (27p) a bottle.

And by May 2 we were free of the taxman.

That, of course, was back in 1965. Remember?

Thirty-five years later, Kray and Hindley are still in the news, but in 2000 we have put in another four weeks' work - until 30 May - before we have earned enough to pay off the Chancellor' demands for tax revenue.

The Adam Smith Institute calls this Tax Freedom Day - the point in the year where we have worked for long enough to pay off our taxes and at last can said to be working for ourselves. With 40% of the national income being swallowed up by taxation, says the independent policy think-tank, that means we are now tax slaves until the end of May.

True, it has been worse. We had to wait until 11 June for Tax Freedom Day in 1984 - the year when Torvill & Dean won Olympic Gold for "Bolero", Yvonne Fletcher was shot dead outside the Libyan embassy, York Minster caught fire, and an IRA bomb destroyed the Tory conference hotel.

But back in 1965, when Chairman Mao's Little Red Book told the world that "political power grows out of the barrel of a gun", the tax burden in Britain was very much lighter than it is today.

On 2 May 1965, Bill Shankly's Liverpool had just won the FA Cup for the first time, Scotland Yard was asking for help in capturing the three great train robbers still at large - and British workers could go home content that, for the remaining eight months of the year, they could keep everything they earned.

For the taxman, however, 1965 was a difficult year. Government finances were being stretched by the costs of developing Concorde and the TSR-2, plus the extra police needed to keep apart the Mods and Rockers who were converging on seaside towns. To escape VAT, retailers were passing off the new mini-skirts as children's wear: Customs decreed that in future, dresses would be taxed on bust size, not length. The budget put 1d on a pint of beer, and 4/- (20p) on a bottle of whisky. But then two weeks in the Costa del Sol cost just £66, while LP records could be bought at 12/6d (65p).

"Tax Freedom Day has certainly moved around the calendar a bit over the last 35 years," commented Adam Smith Institute director Dr Eamonn Butler, "but the fact is that this year's tax burden is very much higher than it has been for most of those years. Having to work an extra month just to pay off Gordon Brown's tax demands is a big burden on anyone's pocket."

The Institute has recently unveiled a new website, taxfreedomday.co.uk which allows people to keep a check on how the "Stealth Chancellor" is raising the burden. Visitors to the site will be able to send each other electronic "Happy Tax Freedom Day" cards when the day itself dawns. But that is another three weeks away…

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