‘Modern and dynamic economic policy’: Labour and taxation, 1951–1970.

Many people think of the Labour Party as a ‘higher taxation’ Party … It is very important that we should establish the fact that we stand for the more equitable distribution of taxation; this means easements for some as well as heavier (but fairer) burdens for others. There was no evidence that high taxation had a disincentive effect. By the time Labour lost power in 1951, leading civil servants felt that Labour's fiscal policy was threatening economic growth and efficiency. Although Labour politicians were less inclined to accept the need for a shift to a free market economy with incentives for higher incomes, many members of the party admitted that the tax system should be reassessed. The Attlee government established a Royal Commission on the Taxation of Profits and Income in 1951. The main lines of Labour's fiscal policy emerged from the memorandum of dissent to its report (largely the work of Nicholas Kaldor), and from a series of internal working parties. When it returned to power in 1964, Labour introduced a major series of reforms to the tax system, escaping from the constraints of the Conservative government, and adding a layer of complexity to the fiscal system. [ABSTRACT FROM AUTHOR]