Facts Evasion II

John Rentoul

osbo 300x225 Facts Evasion IIHere is a complicated fact in George Osborne’s speech today:

Here is a simple fact: the richest will pay a greater share of income tax revenues in every single year of the coalition Government than in any one of the 13 years of the last Labour Government.

The sentence was not in the text of the Chancellor’s Autumn Statement. It was essentially the same as a sentence spoken by David Cameron at Prime Minister’s Questions last week. As I commented then, it is similar to, but not the same as, a sentence in George Osborne and David Cameron’s speeches to the Conservative Party conference in October.

The change is that Osborne and Cameron now make their claim about income tax only, and not total taxes. That renders it nearly meaningless, as income tax raises only a quarter of total tax revenue.

I am puzzled, as I have been since the party conference. As I wrote here and here, I tried to find the figures that would support the claims they made then, which are almost true but which fall short in two important respects.

One was that the only figures to which the Treasury would refer me were for income tax, although there is some indirect evidence that their claim is true of total taxes for most of the period.

But the other is that the claim is not even true for income tax for the whole period, because the share paid by the highest-earning 10 per cent fell in the Coalition Government’s first year, 2010-11, compared with Labour’s last year, 2009-10.*

So it would seem that Cameron and Osborne are now trying to correct part of their unsupportable claim in October by restricting it to income tax, but it is still not right because the share paid by the rich fell in the first year of this Parliament.

I wonder if Osborne ad-libbed it today because Treasury officials wouldn’t let him put it in the official text of his speech.


*The Treasury line about the conference speeches was that, when the Chancellor said “our nation’s tax revenues”  and the Prime Minister said “tax” they meant income tax; and, on the timing, as I explained:

The Treasury says that, when the Chancellor and the Prime Minister said “every year of this Parliament”, they did not include the 2010-11 tax year, because that “was based on the plans of the previous government” …

But to suggest that 2010-11 was not a “year of this Parliament” requires the reasonable listener to Cameron and Osborne’s speeches to discount the Coalition Government’s responsibility for tax policy for 11 months of it. Even allowing the new government time to prepare its emergency Budget on 22 June 2010, Osborne set policy for more than nine months of the year.

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  • Toocleverbyhalf

    The thing about the highest rate income tax cut is that it benefits nearly all the commentators who bring us our daily news. Few newspaper editors, Today or Newsnight presenters or even humble newsreaders will be on less than a few hundred thousand pounds per year. No wonder they remain subdued on the topic.

    We’ve endured forty years at least of very rich men telling us that it would be a disaster if very rich men had to pay more tax. No wonder so many otherwise sensible people now seem to believe it.

    Oh for the good old days when that dangerous leftie Margaret Thatcher was in charge. The higher rate was 60% for most of her time with the standard rate hovering around 30%. The daftest things G Brown did were to cut the later to 20% and to fail to raise the former…

  • creggancowboy

    Labour did not stop the rich getting richer only the poor getting richer.

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