{"id":10193,"date":"2011-05-27T06:51:30","date_gmt":"2011-05-27T05:51:30","guid":{"rendered":"http:\/\/www.taxresearch.org.uk\/Blog\/?p=10193"},"modified":"2011-05-27T06:51:30","modified_gmt":"2011-05-27T05:51:30","slug":"new-labour-taxed-and-spent-much-less-than-thatcher","status":"publish","type":"post","link":"https:\/\/www.taxresearch.org.uk\/Blog\/2011\/05\/27\/new-labour-taxed-and-spent-much-less-than-thatcher\/","title":{"rendered":"New Labour taxed and spent much less than Thatcher"},"content":{"rendered":"

The\u00a0following\u00a0blog has been put on Left Foot Forward<\/a>. Written by Michael Burke<\/a> it examines the myth that Labour's spending caused the financial crisis, and shows that was not the case. The blog was\u00a0produced\u00a0as a result of discussion at the New Political Economy\u00a0Network\u00a0on Monday. I am a member of that group.<\/p>\n

\"Backers of the coalition often\u00a0say<\/a> that New Labour taxed and spent profligately, however the chart below, using\u00a0Treasury data<\/a>, shows this assertion to be factually incorrect. Until the \u2018Great Recession\u2019 New Labour spent less as a proportion of GDP than Thatcher did. The cause of any deficits over New Labour\u2019s terms of office was a result of taxing at a much lower rate than Thatcher did.<\/p>\n

\"Government-spending-and-revenues-percentage-of-GDP-1978-2010\"
\nAs the chart clearly shows both spending and taxation were lower under the New Labour years than under Thatcher.<\/strong> The table below shows the average spending and taxation receipts over the period, as a proportion of GDP:<\/p>\n\n\n\n
\nAverage expenditure and taxation receipts, % GDP, 1978\/79-2009\/10<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n\n\n
<\/td>\n\nAverage expenditure, % GDP<\/td>\n\nAverage taxation receipts, % GDP<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n\n\n\n\n\n\n
Callaghan
\n1978\/79*<\/td>\n		45.6<\/td>\n41.3<\/td>\n<\/tr>\n
Thatcher
\n1979\/80-1990\/91<\/td>\n		44.2<\/td>\n42.0<\/td>\n<\/tr>\n
Major
\n1991\/92-1996\/97<\/td>\n		42.1<\/td>\n36.6<\/td>\n<\/tr>\n
Blair
\n1997\/98-2006\/07<\/td>\n		38.7<\/td>\n37.5<\/td>\n<\/tr>\n
Brown
\n2007\/08-2009\/10<\/td>\n		44.2<\/td>\n37.4<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n\n\n
\nSource: UK Treasury, Public Finances Databank (Tables B2 & C1<\/a>); * Last year only<\/em><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Before the \u2018Great Recession\u2019, New Labour had by some margin the lowest level of public spending of any of the governments identified.<\/strong> Even during the Brown premiership \u2014 which coincided with the deepest recession in the post-WWII period \u2014 spending only rose to the same average level as under Thatcher. Taxation receipts were also considerably lower.<\/p>\n

Of course under Mr Brown the sharp decline in the level of GDP produces a declining denominator which magnifies both tax and spending as a proportion, while the economic effects automatically reinforce that effect \u2014 spending rises (welfare, etc) and tax revenues fall.\u00a0New Labour taxed and spent much less than Thatcher.\"<\/strong><\/p>\n

I might add that this might, of course, precisely define the problem with New Labour. In particular, its tax cuts were profligate for no gain.<\/p>\n","protected":false},"excerpt":{"rendered":"

The\u00a0following\u00a0blog has been put on Left Foot Forward. Written by Michael Burke it examines the myth that Labour’s spending caused the financial crisis, and shows
 Read the full article…<\/em><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[96,118],"tags":[],"class_list":["post-10193","post","type-post","status-publish","format-standard","hentry","category-conservatives","category-labour"],"_links":{"self":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts\/10193","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/comments?post=10193"}],"version-history":[{"count":0,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts\/10193\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/media?parent=10193"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/categories?post=10193"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/tags?post=10193"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}