Voters might reasonably ask what there is to choose between a Conservative creed expressed in September 2022 by Liz Truss, who told the House of Commons: “You can’t tax your way to growth,” and Labour’s approach under the shadow chancellor Rachel Reeves, who on 26 August told the Sunday Telegraph: “I don’t see the way to prosperity as being through taxation. I want to grow the economy.” Both parties advocate paying for public services with the tax receipts that would come from growth and higher GDP, rather than higher taxes. Both parties have represented British workers and businesses as struggling beneath a tax “burden” that is at its highest level for several decades.
It is true that the total amount of tax the UK levies relative to its GDP is higher than at any point since the mid-1960s. But in relative terms, Britain is a fairly low-tax regime, with a tax-to-GDP ratio more than seven percentage points lower than that of major European economies. In income tax, the highest 10 per cent of earners pay 60 per cent of total receipts. This does not show how munificent the wealthy are but just how much better off they are than the median earner, in a system that helps to entrench inequality still further.
Content from our partners
