Labour are promising a radical reform agenda – from free university education to reversing elements of the austerity that has taken place over the past decade. But radical reforms don’t come cheap and sit alongside demographic headwinds that mean the annual cost of simply maintaining the status quo for our welfare state will rise by £36bn by the end of the decade. In response the Party has set out proposals for significant increases in taxation, including higher rates of income and corporation tax. But the party has also promised to only increase taxes for the top 5% of households. Will Labour’s tax plans bring in the revenue intended, and will they be sufficient to pay for the rising cost of our existing welfare state? How will it ensure that it’s tax policy is fair, robust and well targeted? And how will Labour’s plans contrast with those of a new Conservative leader committed to cutting taxes? Start: 6:00 pm End: 7:30 pm Location: Hilton Brighton Metropole, Kings Rd, Brighton BN1 2FU Room: Clarence Speakers: Torsten Bell (Chair) – CEO of the Resolution Foundation Rachel Reeves MP, Member for Leeds West James Meadway, former economic policy advisor to the Shadow Chancellor Anneliese Dodds MP, Shadow Treasury Minister Paul Johnson, Director of the Institute for Fiscal Studies

1. @resfoundation September 19
Paying for a fairer Britain
Labour’s Tax Policy
Anneliese Dodds, MP, Labour Party
Paul Johnson CBE, Director, Institute for Fiscal Studies
Rachel Reeves, MP, Labour Party
James Meadway, Economist
Chair: Torsten Bell, Chief Executive, Resolution Foundation

2. @resfoundation 2
Let’s talk about tax

3. @resfoundation
• The scale: £50bn
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Let’s talk about tax

4. @resfoundation
• The scale: £50bn (A LOT)
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Let’s talk about tax

5. @resfoundation
• The scale: £50bn (A LOT)
• The how: companies and the top 5 per cent
5
Let’s talk about tax

6. @resfoundation
• The scale: £50bn (A LOT)
• The how: companies and the top 5 per cent
• The economics: will enough cash come in
6
Let’s talk about tax

7. @resfoundation
• The scale: £50bn (A LOT)
• The how: companies and the top 5 per cent
• The economics: will enough cash come in
• The politics: moves from austerity to tax rises vs tax cuts
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Let’s talk about tax

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Spending as a share of GDP
Source: Office for Budget Responsibility, Labour Party Manifesto & HM Treasury
The old war: austerity vs no austerity

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Tax as a share of GDP
Source: Office for Budget Responsibility & Labour Party Manifesto
The new war: tax cuts vs tax rises

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Headline corporation tax rates
Source: KPMG, Labour Party Manifesto & HM Treasury
Battle line 1: £20bn corporation tax rise

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Headline corporation tax rates
Source: KPMG, Labour Party Manifesto & HM Treasury
Battle line 1: £20bn corporation tax rise

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Marginal tax rates for employees, 2020-21
Notes: Assumes full implementation in 2020-21
Source: RF analysis
Battle line 2: £6bn income tax rise

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Marginal tax rates for employees, 2020-21
Notes: Assumes full implementation in 2020-21
Source: RF analysis
Battle line 2: £6bn income tax rise

14. @resfoundation 14
Marginal tax rates for employees, 2020-21
Notes: Assumes full implementation in 2020-21
Source: RF analysis
Battle line 2: £6bn income tax rise

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Higher taxes is likely the right direction of travel
Historic and projected welfare spend as a proportion of GDP: UK
Notes: Data for years prior to 1966 are presented as five-year rolling averages. Total spend is based on the categories used in Hills (2004), so does not map precisely to HM Treasury and OBR totals. Source: RF analysis of
OBR, Fiscal sustainability report – July 2018, July 2018; HMT, Public Expenditure Statistical Analyses; J Hills, Inequality and the State, Oxford University Press, October 2004
@resfoundation

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And an important area has been neglected: wealth
Aggregate wealth and wealth-related taxes as proportions of GDP: GB/UK
Notes: Total household net wealth covers Great Britain; tax and GDP data cover the UK.
Source: RF analysis of ONS, Wealth in Great Britain; ISER, British Household Panel Survey; ONS, UK National Accounts; D Blake & J Orszag, ‘Annual estimates of personal wealth holdings in the United Kingdom since 1948’, Applied Financial Economics, 9, 1999; OECD.Stat @resfoundation

17. @resfoundation September 19
Paying for a fairer Britain
Labour’s Tax Policy
Anneliese Dodds, MP, Labour Party
Paul Johnson CBE, Director, Institute for Fiscal Studies
Rachel Reeves, MP, Labour Party
James Meadway, Economist
Chair: Torsten Bell, Chief Executive, Resolution Foundation