Truth watch

Tony Blair said again yesterday that "one of the main reasons tax revenue has gone up has been the strength of the economy and the number of people in work"

True or false?

True, but far from the whole story. If Gordon Brown had sat on his hands for four years, the amount of money flowing into the Treasury's coffers would still have risen. Unemployed people do not pay tax; people in jobs do. Employees move up tax brackets when they get pay hikes. So income tax proceeds rose by 1.6% of GDP.

But didn't Labour promise not to raise income tax?

In 1997 Labour pledged not to raise the rate at which income tax is levied and is repeating it this time round. It stuck to the letter of the promise but the chancellor tweaked tax allowances (on mortgage payments, for example) and changed indirect tax, so the proportion of income some people pay to the state did rise.

But hasn't Gordon Brown offered tax cuts to selected families, too?

Tax credits for lower income families mean that, overall, the new measures adopted since 1997 have cut taxes by nearly £2bn. Labour raised fuel duty and changed tax allowances for companies (which increased revenues) but cut corporation tax and, relatively speaking, tax on alcohol. No wonder Mr Brown has earned a reputation as a fiscal fiddler.

Yet Mr Blair is surely right. The economy grew and joblessness fell.

Yes. But what he did not say was that Labour got a lot of its money thanks to tax changes introduced by the Tories between 1992 and 1997. For their different reasons, neither party is keen to remember that John Major upped tax by nearly £18bn.

So where does this talk about an increased "tax burden" come from?

Tax as a proportion of GDP has increased. Using international definitions, tax revenues are 40.1% of GDP, up from 37.6% in 1997.

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