In the peak year under Labour an 18% Capital Gains Tax rate brought in £7.8 billion of revenue. Last year a 28% rate brought in just £3.9 billion, a fall of 50%.
In the peak year under Labour with a 40% highest rate, Income Tax brought in £22.5bn from self assessment Income Tax. Last year with a 45% rate it brought in £20.85billion, a fall of 7.3%.
In the peak year under Labour the then lower Stamp duty rates on property brought in £9.9billion. Last year with higher rates the Treasury collected £9.4 billion, a fall of 5%.
The one tax increase which did work, bringing in substantial new revenue, was the VAT increase. Labour’s peak year for VAT brought in £89.9 billion. Last year the higher rate brought in £118 billion, an increase of 31%.
The tax cut that worked, taking more people out of Income Tax altogether with higher thresholds for standard rate payers, still allowed an increase in revenue from PAYE from Labour’s peak £126.4 billion to last years £135.5 billion.
Meanwhile, total public spending has risen from £655.6 billion in 2009-10 to £711.5 billion last year, a rise of 8.5% in cash terms. There are arguments about whether this is a small reduction or a small increase in real terms. Bearing in mind the planned freeze on public sector wages, which are a main component of public spending, the inflation rate in the public sector has clearly been reduced substantially.
The latest figures for total spending and borrowing remind us there is still a lot to do in the next Parliament to eliminate the deficit. This remains a necessary task.