News Column

New tax figures show boost to rich in recovery

May 14, 2014

Patrick Wintour Political editor

Labour released figures last night that show the return of economic growth has overwhelmingly benefited the top 1% of earners.

The disclosure of the findings from HM Revenue and Customs precedes the announcement of employment and earnings statistics today which are expected to reveal a buoyant economy.

Over the past year, the share of national post-tax income of the top 1% of taxpayers - just 300,000 people - has risen from 8.2% in 2012-13 to 9.8 % in 2013-14. Over the same period, the bottom 90% - a total of 27 million taxpayers - have seen their share of post-tax income fall from 71.3% to 70.4%, according to estimates contained in the latest Income Tax Liabilities Statistics published by HMRC. They cover the year when GDP growth returned and the top rate of income tax on earnings above pounds 150,000 was reduced from 50% to 45% .

Labour will use the figures to argue that there has been no recovery for middle Britain. Chris Leslie, shadow chief secretary to the Treasury, said: "What we need is a recovery for the many, not just a few at the top. That's why we need to reform our economy to mend the broken link between the wealth of the nation and the living standards of hardworking Britain."

The raft of labour market statistics published today will be studied to see how quickly unemployment is likely to fall below its pre-crisis levels. The rate in the three months to February stood at 6.9%, down sharply from a year ago but still well above its pre-crisis level of about 5%.

New immigration numbers are likely to show that as many as 30,000 extra Romanians and Bulgarians were working in the UK in the first three months of this year compared with the same period in 2013.

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Source: Guardian (UK)

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