UK Think Tank Attacks New Labour's Record On Business Taxes

by Jason Gorringe, Tax-News.com, London

03 May 2004

Free-market think tank, the Centre for Policy Studies has accused the Labour government of destroying a “golden inheritance” with the imposition of a series of tax increases and new regulations on the business sector since coming to office in 1997.

“The overall burden of taxation, however measured, rose during each of Labour’s periods of office,” held John Littlewood, a former group director at S G Warburg, and author of the CPS critique.

“Historically, it has had few scruples about introducing taxation policies that discriminated against profits or dividends,” he added.

Mr Littlewood cited a raft of detrimental tax measures introduced by the Labour government since winning power seven years ago, including: a windfall tax on the excess profits of private utilites; the abolition of the dividend tax credit on pension funds; the abolition of the advanced corporation tax leading to an element of double taxation on company earnings; reduction of tax free savings limits on ISAs and PEPs; and the doubling of stamp duty on share purchases from 1% to 2%.

“Gordon Brown has immeasurably complicated the taxation regime with endless tinkering,” Mr Littlewood continued.

“He has imposed a range of taxes on business, some openly but many commonly referred to as stealth taxes.”

"Labour enjoyed a golden inheritance," he observed, adding "but the competitive advantages it inherited have been significantly eroded by regulations imposed in roughly equal measure by the government and by Europe."

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