Household tax has risen by £7,800 a year under Labour, says

Thats just over 15,000 a year and it's coming your way

guardian.co.uk, Monday February 4 2008

The average UK family is paying almost £8,000 a year more in tax than in 1997, while stagnating earnings are making it harder for households to meet these and other rising costs, a report claimed today.

The Centre for Policy Studies (CPS), a centre-right thinktank, said the average household now paid £16,938 in taxes - £7,800 more than when Labour first came to power.

It said the rise, when combined with "excessive debt" and the increasing costs of servicing a mortgage and paying bills, meant British households were vulnerable to any economic downturn.

"The government's increases in taxation and the recent availability of easy credit is a potentially toxic mixture," the CPS said in a report entitled Why do we feel so broke.

It said that until recently, average families were able to absorb tax increases partly through rising salaries and greater levels of personal debt. But since 2005 increases in disposable income after tax and housing costs have stalled or gone into reverse.

As a result, average disposable incomes have been squeezed from 71% of take-home pay in 1997 to 67% today.

The report said families on average earnings had been hardest hit by the tax rises, with their disposable income falling by £950, or 6%, since 2002.

The impact of rising tax bills was compounded by weak increases in earnings and a significant increase in housing costs - the CPS said for "average households with average mortgages" the cost of running a home has been increasing at around 10% a year.

In the five years since 2002, it said, the costs associated with owning a property have increased by 80%, with mortgage interest payments doubling and electricity and gas bills rising by 68% and 52% respectively.

Household debt has increased sharply over the same period, with the total for each household rising from £34,019 in 2002 to £55,554 in the third quarter of last year.

While debts were worth 66% of household income in 1997 and 83% in 2002, by 2007 they had increased to 108% of income.

"The increase has been dramatic and has left households very exposed to any significant increase in interest rates," the report said.

The shadow chancellor, George Osborne, said the report showed "how the cost of living has soared under Labour".

"Gordon Brown has heaped stealth taxes on to hard working families and now they are feeling the squeeze," he added.

http://www.guardian.co.uk/money/2008/fe ... eholdbills