Politics – General Election 2015 – Tory Claim, Labour to Increase Taxes by £3,068.
What is the truth behind this Tory Claim?
There are always Tory claims and Labour claims during an Election. Very few are accurate. Sometimes they seem to be pure fantasy. What about this Tory claim? What is it based on? The claim is that a future Labour government would raise taxes on every working family buy £3,068. That is a remarkably specific amount, so it must be true, mustn’t it? Not according to Labour, they dismiss it as being just made up, plucked out of the sky.
To begin with the claim says “every working family”. What is a working family and how many are there? According to the Office for National Statistics there are 17.4m families with at least one member working in the UK. Take out the working families in Northern Ireland, the Tory Claim says British families, and the figure becomes 17m.
So 17m x £3,068 and Labour would raise £51bn. What? Really? (Have I got the decimal point in the right place?). Labour is askance at the suggestion that it would need to raise that much through taxation. They would raise the top rate of tax, we know that. Mind you The Tory claim that that tax rise will not actually increase the tax take for the Exchequer. The Tory claim is based on their belief that Labour is committed to save £30bn a year as it has signed up to the Charter for Budget Responsibility. Labour denies that. Remember that the Tories do not want to borrow at all while Labour is happy to borrow for investment.
Confused yet? I will press on. The Tories claim that Labour has to raise £30bn either by tax rises or borrowing. They also claim that Ed Milliband said that he wanted a 50:50 split between tax rises and spending cuts. Milliband says that he has not committed to a 50:50 split. Even if he had and he did need to raise half of £30bn that is £15bn and not £51bn.
So have the Tories just reversed the figures? Apparently not. The Institute of Fiscal Affairs has the answer to where the original figure came from. The Tory claim has been beefed up. It is their calculation of the tax rise under Labour per working family over the life of the next parliament. So, what looks like a massive tax rise is, actually, not that big. The Institute of Fiscal Affairs also says that “Cumulating numbers like this over several years is, at best, unhelpful. Ignoring the existence of non-working households doesn’t help provide sensible averages either.”
Besides which, having analysed labour’s rules on taxing and spending the IFS calculates that Labour would need to borrow only £6bn, not £15bn, or £51bn.
Lies, Damn Lies and Statistics. We can look forward many more Tory claims and Labour counter claims. All the fun of an election and there are still weeks to go! What’s not to love?
Phil’s British Heart Foundation Donation – you know it makes sense
