Capital Gains Tax revenue down, total revenue up by almost £100bn a year under the Coalition to pay for extra spending

Yesterday the government published the figures for tax revenue and spending for March, and the full financial year figures for 2013-14.

These show that the deficit has been cut from the inherited peak levels to £107bn last year. Public sector debt as a proportion of our National Income has fallen from the peak level of 151.7% in 2009-10 to 132.4% now. Whilst debt to pay for extra spending has continued to rise, state banking debt has been reduced.

The deficit has been brought down by collecting £100bn a year of extra tax revenue, compared to an increase of £66bn in current public spending. (2013-14 compared to 2009-10) Labour’s cuts in capital spending were largely implemented, but have been eased more recently.

The full year figures confirm the damage a higher rate of CGT has done to CGT revenues. They fell slightly again last year compared to 2012-13, which in turn was well down on the previous year.

Conversely, the higher rates of VAT and Stamp Duty have added to revenues as planned.
The strategy in cash terms still rests on collecting more tax revenue from a growing economy. As the economy grows, so the proportion taken as public sector activity will fall.

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54 Comments

  1. Antisthenes
    Posted April 25, 2014 at 5:41 am | Permalink

    The left continually hold to the view that high taxes will always lead to greater tax revenue despite the evidence to the contrary. Coupled with the fact that every social and economic forecast or policy of theirs is mostly always wrong or leads to outcomes opposite to that which was intended. Yet not just in the UK but all over the world they are allowed to time and time again to return to govern us. It surely is a mad mad world.

    • rick hamilton
      Posted April 25, 2014 at 9:41 am | Permalink

      Unhappily the left are ‘allowed’ to govern us time and time again because (putting aside the issue of unfair boundaries) too many people vote for them !

      If you get into a situation where more than half your voters are paid directly or indirectly by government, either to work or not work, it is hardly surprising that they will vote for ‘more government’. Just as those riding on the EU gravy train are so eager to have ‘more Europe’.

      The only way out of this trap is for a real Conservative government to ask ‘Why does government need to do this?’ in every case except matters of national defence, law and order. I heard that NZ did this years ago and one department – which was I think Public Works – privatised everything and reduced its staff from thousands to one (the minister).

      That’s what a radical party would do but we are nowhere in sight of any such thing from the present political class.

      • Tad Davison
        Posted April 25, 2014 at 8:51 pm | Permalink

        Rick,

        You use the term ‘real Conservative government’. That is the key to it all. The last time we had one, it won three general elections in a row. Then the Heathites usurped the power within the Conservative party and leading to the present mess. It won’t be remedied until the party is taken back. That won’t happen under the present leadership, so it’s up to ordinary Tory MPs to listen to what we are constantly telling them and do something about it. But from what I hear, rather than throw shoes at him, Cameron was cheered at the last 1922 meeting. I’ll say again, they just don’t get it. If UKIP do well in the May elections, the Tories shouldn’t be surprised if they do correspondingly badly. The people are trying to tell the pro-EU wing a very important message. Only a fool consistently ignores it

        Tad

        • rick hamilton
          Posted April 26, 2014 at 10:21 am | Permalink

          My reply is a bit late Tad but yes, quite so.

          I suppose the present crop of Tory MPs are more interested in getting re-elected using whatever ragbag of policies they think will do the trick rather than actually offering a conservative manifesto. Lack of spine I would say.

        • Lifelogic
          Posted April 26, 2014 at 7:17 pm | Permalink

          Exactly.

    • roger
      Posted April 25, 2014 at 10:14 am | Permalink

      Although I agree in general with your comment, I’m not sure that it’s true in regard to the top rate of income tax. Labours promise to put it back up to 50% is purely a matter of spite and envy which will help win votes. After all even Gordon Brown realised that for revenue raising purposes 40% was about right.

      • Hope
        Posted April 26, 2014 at 8:26 am | Permalink

        All debt economies rely on growth to alleviate the government’s addiction to spending. To win votes the government gets the public addicted to state hand outs and then believe it would be political suicide to cut that spending. It is not about prudent finance, public interest or national interest. It is about MP self interest and self interest of political parties.

    • uanime5
      Posted April 25, 2014 at 7:51 pm | Permalink

      The left continually hold to the view that high taxes will always lead to greater tax revenue despite the evidence to the contrary.

      Did you miss the part in John’s post where he said that the higher rates of VAT and Stamp Duty have added to revenues. Antisthenes I suspect you were blinded by you right wing belief that lower taxes always lead to greater tax revenues.

      Coupled with the fact that every social and economic forecast or policy of theirs is mostly always wrong or leads to outcomes opposite to that which was intended.

      Care to provide some examples to back up this claim.

      Also the Conservative policy of austerity resulted in years of stagnation, while Obama’s policy of Kenyan stimulus resulted in years of high growth.

      • Edward2
        Posted April 26, 2014 at 4:08 pm | Permalink

        Your last claim Uni, has been found to be wrong on several occasions.
        You seen to feel repeating incorrect things is Ok
        I do not.

        • Posted April 26, 2014 at 9:25 pm | Permalink

          @Edward2,

          I’m not sure how you can challenge Uni’s last statement. It is clearly correct. Except for his typo! Or possibly a reference to Obama’s birth place ? :-)

          http://upload.wikimedia.org/wikipedia/commons/7/7e/UK_vs_US_post-crisis_GDP.png

          • Edward2
            Posted April 27, 2014 at 9:49 am | Permalink

            It was low energy prices in the USA which helped their slow change back to growth.
            It is a perversion of Keynsian theory to call Government spending raised by huge borrowing and increased taxes as a Keynsian stimulus.

          • Posted April 27, 2014 at 10:06 pm | Permalink

            US energy prices have always been less than UK energy prices. That doesn’t mean the UK economy is incapable of growth. It grew steadily up to 2008. This attribution to lower energy prices is a superficial explanation to explain away an inconvenient truth.

            A Keynesian (lets get the spelling right) stimulus is the injection of spending power by government to enable the aggregate demand in the economy to better match its productive capacity. If the non-government sector are either spending money earned within the economy overseas, or saving it, and so are only buying (100-N)% of output then government must buy N% for everything to clear.

            If it buys less we have recession and unemployment. If it tries to buy more then we have inflation. Of course it can also cut taxes like VAT to encourage the private sector to buy more. It doesn’t have to be all about increased spending. As the economy improves the need for governments to do this will lessen.

          • Edward2
            Posted April 29, 2014 at 8:29 pm | Permalink

            Completely wrong Peterr
            The shale gas revloution in the USA has reduced their gas prices by nearly 50%
            It gives the USA a huge competitive advantage compared to the EU and hss been accepted as a major reason they have strong growth.
            Your analysis of Keynes is typical of those who wish to use his economic theories to borrow tax and spend endlessly.
            You forget that Keynes believed in the State using only the
            surpluses developed in the growth periods of the trade cycle to use in the downturns to help stimulate growth not just to tax borrow and overspend.
            PS Peter,
            Ive placed a deliberate spelling error in this post, see if you can spot it.

  2. Posted April 25, 2014 at 5:47 am | Permalink

    Mr Redwood,

    Even though the economic policies of the US and UK have been markedly different, there is fair bit of talk on both sides of the Atlantic about how cuts in Govt spending have started to work and budget deficits have started to fall. But budget deficits do always rise sharply after a crash and fall afterwards. So are your government just trying to take credit for what would have happened anyway? Surely not!

    You can’t just consider spending and taxation in isolation. If £66 billion were to be spent into the economy would that just add on to the deficit? Of course not. If it were spent on wages and salaries about a third would come back straightway in taxes and nearly all the rest would quickly follow in a matter of months.

    You said in the last post, for the UK, the “state deficit will have decreased by 40%”. You also say (in a previous post) that “house prices will be up on average by 16% over the five years” . If house prices were rising because of increased personal income that could be argued to be a good thing but this is obviously not the case at all. Your 4% over the course of the Parliament isn’t enough to keep pace with inflation.

    House prices are rising because banks have started to lend again into the housing market. As interest rates are currently ultra-low, much bigger loans can be
    taken out than would have been possible previously and so are forcing up prices.

    The mainstream don’t at all make the connection between increased bank lending and the reduction we see in government deficits. But they should. When banks
    lend they create new money. It is often said they “create money out of thin air”. Anyone who is doubtful might want to Google this phrase. That’s what banks do. They don’t take in money from depositors and lend it out to borrowers. That’s a myth. They create their own IOUs, or their own new money, and therefore
    increase the money supply.

    This new money when spent, and respent, attracts the usual government taxes: Income tax, VAT, Corporation tax, National Insurance contributions etc etc. After its been spent and respenta few times there is hardly anything left in the active economy. It’s nearly all gone back to government. Not all, some 10% ,
    will have been saved or spent on imports. So naturally the deficit falls! It is really little to do with any cuts in spending or increases in taxation. That spending too would have quickly returned to government in taxes in exactly the same way except it wouldn’t have left the private sector in debt.

    Of course when the banks stop lending, as they always will when asset prices get too high, thus causing them to fall back, the govt deficit shoots up again. That’s where we were just after the 2008 crash and may well be again after the 2015 election. Politicians then want to make more cuts in spending and raise more taxes to try to reduce the deficit. The recession deepens.

    But, eventually the banks will start lending again, as they do, and so incorrect economic policies do appear to have a positive effect. That’s where we are now.

    Tory governments are particularly susceptible to falling into the trap of creating this boom -bust cycle. We’ve seen it before under Chancellors Barber and Lawson. Encouraging private sector lending offers a quick fix to the economy by letting the commercial banks create new money rather than directly spending it into the economy in the way Keynes or Lerner would have advocated. Its not the right way to run the economy!

    PS Apologies if this ends up appearing twice. I did post nearly the same comment under the previous posting but it seems to have been missed.

    • Gary
      Posted April 25, 2014 at 4:41 pm | Permalink

      Nice post.

      It’s all debt. These so-called recoveries are as you say, debt. Again, just as prior to the last bust, most new debt is flowing into mortgages and taxes on that money is flowing to govt coffers. The net effect is more total debt in the economy. This perpetual motion machine of debt is an outrage that will hopefully bust before the Tories can reap the feel-good votes. Because it may be good for the next election, but it is certainly not good for our long term future.

    • WALOR
      Posted April 25, 2014 at 6:57 pm | Permalink

      Not quite sure why the reference to the US, but may be worth pointing out that the equivalent US (federal) budget deficit is around £42billion on latest (CBO) projections (year ending September). Those who get their information from UK media are unlikely to know this!

      • Posted April 25, 2014 at 9:52 pm | Permalink

        This is an interesting graph which shows something has gone very wrong in the UK economy:

        http://tinyurl.com/lcqzm4r

        Reply This graph is very biased and misleading. Mr Osborne’s “austerity” is blamed for a big fall in output which took place in 2007-10 under Labour! It is true that the ERM did damage, a policy backed by Labour and the economic establishment at the time. Margaret Thatcher had to arrest the runaway inflation of the 1970s Labour years before we could have good low inflationary gr90wth.

        • Lifelogic
          Posted April 26, 2014 at 7:21 pm | Permalink

          It is not Osborne’s austerity that is the problem – it is his over taxation and complete lack of control over endless government waste & spending.

    • sm
      Posted April 26, 2014 at 10:45 am | Permalink

      More specifically its the rate of growth in debt. In our system of crony capitalist fractional reserve banking, that’s all it is. Create money ex-nilho , charge interest,pay bonuses, hey presto an election boom. The system must be radically changed.

      Maybe this is the only area the EU has merit.

  3. alan jutson
    Posted April 25, 2014 at 5:47 am | Permalink

    Its turning out to be a very slow, slow job, getting back to the promised balanced budget.

    Given the Chancellor was very confident about wiping out the deficit within 5 years, he seems to have miscalculated badly given the economy is now growing faster (we are told) than almost everyone expected, and tax rises have been higher and more numerous than originally promised.

    Why is it so difficult for the Government to control its constant increases of expenditure, surely four years is sufficient time to grasp control.

    • Lifelogic
      Posted April 25, 2014 at 8:58 am | Permalink

      Osborne also promised to increase IHT thresholds to £1M but instead he ratted on that promise and decided to further attack private sector pensions and increase 299 other taxes instead.

    • Posted April 25, 2014 at 12:28 pm | Permalink

      Germany has a balanced budget. It also has a 7% (of GDP) surplus on its external trade or current account. German citizens and companies, their private sector, also save about 7% so everything adds up.

      If the German Private Sector still saved 7% but Germany had a balanced external trade, Germany would need to run a 7% budget deficit to make up for that saving. Unless it wanted to end up like Greece of course! It could no longer rely on export money to keep the economy going.

      A Govt budget deficit or surplus cannot be treated in isolation from other parameters in the economy. If the UK government wants to balance its budget, either internally or externally, it would need to phase out the sale of gilts which are used to finance both. Unless it wanted to end up like Greece of course.

      • Edward2
        Posted April 29, 2014 at 8:33 pm | Permalink

        You ignore the 25% overvaluation of the Euro which Germany enjoys as it is the most powerful controlling economy in the Eurozone.

  4. Lifelogic
    Posted April 25, 2014 at 5:54 am | Permalink

    You say “As the economy grows, so the proportion taken as public sector activity will fall.”

    Well perhaps, but this is clearly putting the cart before the horse. If you want the economy to grow significantly you need to stop over taxing it, get cheap energy, cut the size of largely parasitic government (and other parasitic activity out side government usually caused by daft regulations, subsidies and a poor legal system), cut regulation, cut the EU drivel and generate some real lasting confidence.

    The government might also get departments like the NHS to run efficiently (or better still largely get out of the business). I heard Cameron boasting about there being no deaths during the construction of the hugely expensive white elephant Olympic buildings, but what about the preventable 1000 deaths a month in the NHS he made no mention of it?

    CGT should clearly be no higher than about 20% and after inflation. IHT should go completely for confidence and morality reasons and total tax as a proportion of GDP should be about 20%. Rather than the nearly 50% that it reached.

    The deficit is anyway just deferred taxation, this too restricts growth. It is government waste and half baked spending that needs to be addressed, Why for example are the government stopping land wind farms but still pushing, with absurd subsidies, the even more idiotic off shore ones?

    Vince Cable, Greig Clark the LibDums and Ed Davey are all clearly anti-business and anti growth. Why are they all still in there jobs? One assumes it is because Cameron has been infected by the exaggerated AGW religion or perhaps he foolishly and cynically just thinks there are votes in it.

    As I said before we just need Cameron to turn 180 degrees on all the main issues. The EU, the size of the state, the level of taxes, the green religion, warmongering and much else. Still it is too late now I suppose, what is he going to do after he comes third in the EU elections shortly with the Libdems nowhere to be seen?

  5. Jennifer A
    Posted April 25, 2014 at 6:26 am | Permalink

    “…to pay for extra spending.”

    We now know that governments having money to spend is not good news. Not for British people anyway.

    • Lifelogic
      Posted April 25, 2014 at 8:46 am | Permalink

      If government ever have cash to spend they should invest it by cutting employers NI. That would be the best investment. Let businesses and employers decide how to invest it they know what they are doing in general.

    • Posted April 26, 2014 at 1:34 am | Permalink

      “governments having money to spend is not good news”

      Would you prefer the situation to be the same as in the Eurozone? The Greek, Spanish, French, Italian, and Portuguese governments don’t have money to spend. They effectively gave up their fiscal independence when they gave up their own currencies. It was a big mistake and has led to double digit levels of unemployment.

      If people like Charles Clarke and even Tony Blair in the Labour Party and Nick Clegg in the Lib Dems had had their way in 2003 the UK would have given up the pound sterling and been trapped with the Euro in the same way. Nick Clegg should never be allowed to forget that piece of economic advice. His economic credibility should be rated at C- at best!

      But, credit where credit is due, Gordon Brown made the right decision on the £. He may have got it wrong on the sale of Gold but if he had got it wrong on the Euro, it would have been so much worse.

      • lifelogic
        Posted April 28, 2014 at 4:42 am | Permalink

        I would prefer the position with responsible government that spent what is actually needed to do only what governments do best and left the rest with the people, rather than just spent or wasted everything it can get in tax or borrowings (deferred tax) by hook or by crook.

  6. Andyvan
    Posted April 25, 2014 at 6:26 am | Permalink

    So absolutely no attempt to reign in the bloated and intrusive state then. Just rely on stealing ever more wealth from the productive to redistribute in the most wasteful manner possible. No more small government from the Tory party, just a slightly watered down socialism that only pretends to be pro free market.

    • Lifelogic
      Posted April 25, 2014 at 11:47 am | Permalink

      Indeed 299+ tax increases and “public services” (as they call them but often a euphemism for further taxes and licence fees) diminish. Or are of increasingly poor quality.

      I hear some councils even refuse to take old tins of paint now.

      • alan jutson
        Posted April 26, 2014 at 1:42 am | Permalink

        LL

        “Refuse to take paint:.

        Yes because paint has been designated as a toxic waste, even the water based emulsion,.
        May come as a surprise for many but true, officially you need a toxic waste license to carry anything other than a full can if you are a builder, its been like that for the last 8 years or so.
        All so called “waste” building products are classed the same.
        When challenged by an official a number of years ago, I told them it was not waste, but surplus materials being taken to the next job, he was lost for words, he called it waste, I called it left over stock of building product which I had paid for, and showed him the receipts, I said my waste was all put in a skip for which I was charged and included a landfill tax.
        h
        He was not a happy camper. !

        Cannot now put glass or plasterboard in skips either, as it contaminates the other “waste”

        Legislation gone absolutely mad.

        Customer pays for it all in the end, unless you simply dump it in a hedge like so many of our competitors did.
        Then it costs the Council a fortune to clear it up, and the Community charge taxpayers pay for it.

        More jobsworths employed to fine the workers and the productive.

        • Lifelogic
          Posted April 26, 2014 at 7:27 pm | Permalink

          Indeed.

    • waramess
      Posted April 25, 2014 at 4:49 pm | Permalink

      Absolutely and, this has nothing to do with the government inspired housing bubble?

      Our host seems to haave turned native

  7. Richard1
    Posted April 25, 2014 at 7:12 am | Permalink

    More firm evidence for the Laffer Curve. The CGT rate has gone up from 18% to 28%, and despite booming property prices and stock markets, capital gains receipts have gone down. We are all better off with lower, more competitive tax rates which incentivise risk taking and investment, saving and work. With the Welfare Party and the LibDems constantly whining about ‘inequality’ and proposing more taxes as a cure, this should be solid ground for the Conservatives.

    • Lifelogic
      Posted April 25, 2014 at 11:49 am | Permalink

      Lower and simpler taxes are needed and thus fewer tax accountants, lawyers and expensive convoluted business structures and more people doing constructive & useful things instead.

  8. Colin
    Posted April 25, 2014 at 7:17 am | Permalink

    “The deficit has been brought down [to £107bn] by collecting £100bn a year of extra tax revenue, compared to an increase of £66bn in current public spending.”

    …and if you hadn’t spent that extra £66bn the deficit would only be £41bn. And if you’d actually cut spending by £41bn (out of a total of over £700bn) we’d be in surplus. So not much to boast about, really.

  9. Brian Tomkinson
    Posted April 25, 2014 at 8:28 am | Permalink

    A poor performance from a Chancellor who before the last election pledged to eliminate the deficit by 2015. Furthermore, he was going to do this by 80% reductions in spending and 20% tax increases. We can see this for what it was – complete lies. The government debt, which you now conveniently never mention, has risen to £1.27 trillion. How much has the interest charge increased over the lifetime of this government? So much for your party’s false claims to small government and economic prudence. Don’t excuse them by talking of being in a coalition when, as you well know, Cameron sought that coalition and shows all the signs of being more in touch with your coalition partners than your erstwhile supporters.

    Reply Try reading my piece before you sound off. It does give you details on the current state of the debt!

    • Brian Tomkinson
      Posted April 25, 2014 at 8:49 am | Permalink

      Reply to reply,
      You chose to ignore the basic figures and, as with all politicians, looked for a statistic to make it seem as though it was reducing when in fact it is increasing.
      Mind you, your leader and Chancellor often show that they don’t know the difference between deficit and debt!

    • Lifelogic
      Posted April 25, 2014 at 8:54 am | Permalink

      Cameron is clearly a Libdim at heart. I do not believe he is EU sceptic, nor a small government, low tax person nor even a conservative. He is even a believer in expensive fake greenery and has made 299+ tax increases. He is even in danger of breaking up the Union.

      Just him by his actions, his words are clearly worthless.

    • matthu
      Posted April 25, 2014 at 9:48 am | Permalink

      John – please point out where you describe the level of debt – other than as a proportion of National Income, which we know is rising.

      Only referring to debt as a proportion of NI is rather like referring to net immigration. It is tacitly admitting that you have totally lost control debt, which also continues to rise.

  10. Narrow Shoulders
    Posted April 25, 2014 at 8:48 am | Permalink

    I corrected someone yesterday who used the excuse that the global crash caused the downturn in tbe UK. I pointed out that had Labour not been so profligate and enjoyed spending the taxes their light touch regulation in the city collected then, like Germany, UK may have been better insulated from the ensuing deficit and effects of reduced credit nationally and globally.

    I ended with the truism that socialists always run out of others’ money. Reading your blog this morning I see your Government is infected with the socialism bug (100 billion extra tax from a shrinking economy?)

    Maybe I should have told my colleague modern government always runs out of others’ money (and then prints more or in the case of the EU lends it into existence).

    • uanime5
      Posted April 25, 2014 at 8:44 pm | Permalink

      I pointed out that had Labour not been so profligate and enjoyed spending the taxes their light touch regulation in the city collected then, like Germany, UK may have been better insulated from the ensuing deficit and effects of reduced credit nationally and globally.

      Since when has spending taxes on healthcare and schools be considered wasteful?

      I ended with the truism that socialists always run out of others’ money.

      What about in 2008 when the capitalist banks ran out of other people’s money and needed a bailout from the taxpayer?

      • Narrow Shoulders
        Posted April 26, 2014 at 6:46 pm | Permalink

        and enjoyed spending the taxes their light touch regulation in the city collected then, like Germany, UK may have been better insulated

        Labour allowed the banks to get into the state to which you refer because they liked the tax revenue and credit fuelled growth which in turn permitted them to be profligate. Spending on schools and health are indeed worthy but government never spends as well as it could. There were many areas where Labour was profligate and extreme in its spending.

        At the time the Conservative opposition spokesmen and women promised to match Labour’s spending because the electorate (at the top and the bottom) had become used to feeding off the taxpayer. Government is wasteful but Labour government is more extreme than Conservative government.

  11. Denis Cooper
    Posted April 25, 2014 at 10:18 am | Permalink

    So where are we now, with a government budget deficit of £107 billion?

    I find a figure of £675 billion for total public spending here:

    http://www.ukpublicspending.co.uk/piechart_2013_UK_total

    of which the government is still having to borrow £107 billion, about a sixth.

    Obviously that’s better than back in 2009 when the government was having to borrow a quarter of all the money it was spending and had to resort to indirectly borrowing newly created money from the Bank of England, but there’s still a long way to go.

    One question is how much of this reduction in the budget deficit can be traced back to the effects of inflation, and especially to the above target inflation caused by the Bank of England creating £375 billion of new money for the government to spend.

    Back in January I calculated that CPI was 17% higher than it was in January 2009 before the money printing started; that was an average CPI inflation rate of 3.2% pa, 1.2% pa higher than the 2.0% pa target, and cumulatively the excess inflation amounted to 6.2%.

    At that time the Bank of England was still maintaining that the inflationary effects of QE had been small, only about 2%, but now a new report suggests that they were much higher than that:

    http://www.telegraph.co.uk/finance/bank-of-england/10773681/QE-has-boosted-UK-growth-by-3pc-says-Martin-Weale.html

    Extrapolating from the estimated 4.2% added to CPI through the first £200 billion to the effect of the full £375 billion suggests that QE added 7.5% to CPI, in the same ball park as the observed excess inflation of 6.2%.

    So the QE policy started by the Labour government on the pretext that it was necessary to avoid deflation has in fact resulted in excess inflation, significantly contributing to the “cost of living crisis” that the Labour party now complains about; when in reality the purpose of getting the Bank of England to create vast sums of new money and channel it to the Treasury was always to make sure that the Labour government would be able to carry on with its overspending during the year leading up to the general election; and yet five years on and this is still not understood by the mass of people in the country, with the number blaming the present government for making matters worse being similar to the number ready to give it any credit for the improving economy.

    For example, in this recent opinion poll, on page 2:

    http://d25d2506sfb94s.cloudfront.net/cumulus_uploads/document/l1m6nd2qg3/Sunday_Times_Results_170414_Economy.pdf

    “Who do you think is more to blame for people’s incomes not keeping pace with rising prices?”

    “The policies of the last Labour government” – 27%
    “The policies of the present coalition government” – 25%
    “Both equally” – 26%.

    Only 2% of those who intend to vote Labour blame the last government.

  12. Max Dunbar
    Posted April 25, 2014 at 10:21 am | Permalink

    These figures look disappointing, but what is more disconcerting is the language that you use when you talk of ‘The strategy in cash terms still rests on collecting more tax revenue from a growing economy’. It’s no wonder that people find it difficult to see much difference between the main parties. You all seem to believe in pouring more petrol into the lumbering old banger of the Public Sector instead of packing it off to the car crusher where it should have been consigned in 2010.

  13. AndyC
    Posted April 25, 2014 at 10:30 am | Permalink

    A very poor set of numbers really. Taxes up, spending up, debt up. The government seems to have conceded the left’s argument that all these things constitute economic growth. I don’t think you do believe that, but I’m surprised to read your last two sentences here; they are more worthy of Ed Balls than a serious economic commentator. The best that can be said is that we are jogging down the road to serfdom a little more slowly than we otherwise might. Add in the deliberately-stoked housing bubble and we’re in real trouble once the markets turn off the cheap money tap.

  14. DadOf3
    Posted April 25, 2014 at 11:59 am | Permalink

    I don’t understand why there is not more demand for overhauling or scrapping residential Stamp Duty. A tax on moving house can only act as a brake on the economy, discouraging people from moving to find work or to reduce commuting costs.
    The same revenue could be raised much more fairly from a land value tax. We need to encourage more efficient use of existing housing stock.

  15. Denis Cooper
    Posted April 25, 2014 at 2:12 pm | Permalink

    Off-topic, JR, did you see the Labour party broadcast last night?

    Although billed as being a broadcast about the EU Parliament elections it somehow neglected to say anything at all about the EU.

    http://www.youtube.com/watch?v=41_zFHcG1R0

    Shouldn’t there be a rule that if a party is allowed the invaluable privilege of a free broadcast about EU elections then it must be about EU elections and it must at least mention the EU at some point, even if only in passing?

    I presume the government pays the costs of the broadcasters as part of its overall expenditure on the elections, like paying Royal Mail to deliver election addresses, so wasn’t the Labour party misusing public funds, and shouldn’t the Tory party lodge official complaints about that?

  16. uanime5
    Posted April 25, 2014 at 8:52 pm | Permalink

    The full year figures confirm the damage a higher rate of CGT has done to CGT revenues. They fell slightly again last year compared to 2012-13, which in turn was well down on the previous year.

    It’s almost like people sold their assets in the years before this tax increase in order to avoid it. I suspect that it will start increasing in a few years.

    • Edward2
      Posted April 26, 2014 at 4:18 pm | Permalink

      According to left wing economists there is no reaction to increased tax rates.
      But here you are admitting that a rise in CGT has led to a big alteration in people’s behaviour.
      You need to make your mind up Uni.

  17. Tad Davison
    Posted April 25, 2014 at 9:20 pm | Permalink

    Denis,

    Perhaps Europe was an issue the Labour party most wanted to avoid, as they have been complicit in the push towards greater unity, with all the disadvantages that has brought, such as an open door immigration policy that few people seem to want.

    Doesn’t this just show how all three of the main Westminster parties will employ all manner of acts of subterfuge upon the hapless British people in order to get elected, and are not to be trusted. I would have loved the Labour party to use last night’s broadcast to try to sell such pro-EU policies to us a second time, but they were crafty, they weren’t going there as they would have had to admit their mistakes and eat a lot of humble pie.

    A pox on all their houses!

    Tad

  18. bluedog
    Posted April 25, 2014 at 9:49 pm | Permalink

    Capital Gains Tax is little more than a tax on inflation, just like Estate Duty.

    The British Government has racked up such spectacular debt since the Beveridge Report was implemented that there is no prospect of repayment. Roll-over is one option but even better is inflation. Shock! Horror! Inflation is at or exceeding the BoE guide-lines. Are we surprised? Absolutely, entirely out of the ordinary and the Bank will take corrective action.

    Pull the other one, and remember, only those who align their financial fortunes with those of the British government will prosper as the currency continues to be debased.

    Meanwhile Estate Duty continues the process by which the native British are forced to sell their family homes on the death of their parents. Heartening and our Christian duty to provide for the poor and huddled masses from the third world that continue to flood the country. Are the Conservatives really this stupid? No wonder the UKIP voting intentions seem so robust, despite the party being a one-man band.

  19. Lindsay McDougall
    Posted April 26, 2014 at 12:46 pm | Permalink

    Given how steeply progressive Stamp Duty is, and the fact that it is a transaction tax where no new wealth is generated, should we not recognise it for what it is, namely a Wealth Tax under a different name?

  20. margaret brandreth-j
    Posted April 28, 2014 at 8:21 pm | Permalink

    I thought that I may learn something about tax by listening to the post budget video.I managed to just about get that the honourable lady posed a contradiction and that is about all …I cant hear it ..Is this due to my inferior computer or the sound recording?

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  • About John Redwood

    John Redwood has been the Member of Parliament for Wokingham since 1987. First attending Kent College, Canterbury, he graduated from Magdalen College, and has a DPhil from All Souls, Oxford. A businessman by background, he has been a director of NM Rothschild merchant bank and chairman of a quoted industrial PLC.
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