FactCheck: Tory tax claims
Updated on 01 October 2007
Does a Tory Pacman-style computer game shed any light on Gordon Brown's tax tactics?
The background
In a surprise bid for the retro computer-game vote, the Conservatives today unveiled 'Taxman Gordon' - an amusing variation of the old-skool Pacman video game, where the poor voter runs around collecting money and trying to escape the ghostly faces of Taxman Gordon Brown.
Munch a Tory 'Tree' logo and you have a few seconds where you can munch Gordon back.
Click on the 'about Taxman Gordon', and you'll be told: "The Aim of the Game is to avoid Taxman Gordon and his 111 stealth taxes. With the longest tax code in the world, try as you might you'll never get away from Taxman Gordon."
It sounds almost as terrifying as being chased by four disembodied Gordon Brown heads. But is it true?
Analysis
Stealth taxes first - and as regular factcheck readers know, the whole concept of a stealth tax is rather problematic. All the UK taxes are make public, in that famously long tax code as well as other places. So it's not clear what makes a tax 'stealthy'.
Nonetheless, the Tories do have a methodology for calculating stealth tax rises, and they have come out with similar claims many times over the last few years.
They counted the number of separate tax raising measures announced in the small print of the main budget document, the Red Book.
Even using this method, their results have been rather suprising. In 2005, the number they repeated most often was sixty-six, a catchy round figure. But it was actually an underestimate - by one count, there had actually been 157 tax rises. Perhaps some were so stealthy even the Tories didn't notice them.
Many of those measures were totally obscure, or very small indeed. Some were also green taxes, similar to those the Tories themselves advocate.
And they were balanced out (to a certain extent) by an even larger number of tax cuts; in 2005, the Institute for Fiscal Studies counted 215 tax cuts.
Since then, the Tories' calculation for the number of tax cuts has risen steadily, to 99 by the 2007 Budget. Even if that had been an accurate figure, by FactCheck's count there were 26 'tax rises' in the 2007 Budget - so the FactCheck figure should have gone up to 125, not the 111 quoted in the Pacman game.
How about the jumbo tax code claim? Well, the source of this claim is the Doing Business report from the World Bank and accountancy firm PriceWaterhouseCoopers.
This actually places the UK second in the number of pages in the number of pages of Primary tax legislation that make up its tax code.
India comes first, though the Tories estimate that since the report was published (in 2006) the UK has added pages faster than the India, the defending champions, nudging Britain into first place.
Not ideal, perhaps, but it only tells you a certain amount about the difficulty of paying tax, which is surely the salient point here. And the same source - the World Bank - actually gives the UK quite a good ranking for the overall ease of paying tax.
The UK is 12th out of 178 nations, even outranking tax havens like Luxembourg and Switzerland, and the 'flat tax' regimes touted as examples of fiscal simplicity, like Estonia.
(Though perhaps tax havens are a poor comparison; paying tax is possibly harder there because the government refuses to take it off you).
Verdict
The Tories' claims are neither accurate nor informative. They're a way for the party to sound like a low-tax party, without having to propose actual tax cuts which would have to be matched by politically uncomfortable cuts in spending.
Blathering on about stealth taxes gives a certain spurious credibility to the allegation that Gordon Brown is a high-tax chancellor, but it's a ridiculous way to calculate how heavy the tax burden is. It's like measuring your food intake by the number of items you eat - as if three apples were three times as fattening as one cake.
The more useful way to measure it is to measure total tax revenues as a percentage of national income. When Labour came to power, government revenues were just over 37.3 per cent of GPD, and for 2007-8 they are expected to nudge just above 40 per cent - a substantial increase.
But somehow, "Gordon's 2 per cent of GDP" isn't such a catchy name for a computer game.
FactCheck rating_ 4.5
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The lower end of the scale indicates that the claim in question largerly checks out, while the upper end of the scale suggests misrepresentation, exaggeration, a massaging of statistics and/or language.
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Sources
Budget 2007: Chapter A: Budget Policy Decisions
Doing Business - Paying Taxes. World Bank and PricewaterhouseCoopers
Doing Business - World Bank Economy Rankings
Green Budget, Institute of Fiscal Studies
Channel 4 Factcheck: Has Gordon Brown raises taxes 99 times?
Taxman Gordon
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