Who was Britain’s worst chancellor?

From Brown selling off gold at a 20-year low to Sunak’s stealth taxes, there is plenty of choice.

Chancellor of the Exchequer isn’t the easiest job in the world. You’ve got to balance the books, keep your party and country happy while the prosperity of every household is in your hands.

So how have chancellors over the past three decades fared? Telegraph Money has taken a look at who was responsible for some of the most costly decisions, and analysed government data to also determine how the nation’s tax burden has increased, or decreased, while they were in No 11.

GORDON BROWN

Labour chancellors have on average over the past 30 years increased the tax burden by 1.1 percentage points – 0.5 percentage points more than their Tory counterparts.

But no chancellor has overseen a greater rise in the tax burden than Gordon Brown. From the day New Labour swept to victory in 1997 to when Mr Brown became prime minister in 2007, tax as a share of GDP rose by 2.6 percentage points, while the tax code doubled in size to more than 9,000 pages. Among the raft of tax changes were successive stamp duty land tax rises, from £675m but it leapt up to nearly £4bn in the decade after.

Mark Harris, of mortgage broker SPF Private Clients, said the rate rises have led to an “over- complicated stamp duty system” that is a barrier to those trying to get on the property ladder.

Mr Brown also gave the Bank of England independence on monetary policy and sold off the country’s gold (notoriously, when the price was at a 20-year low). His decision to scrap Advanced Corporation Tax relief – the tax relief on dividends that pension funds received on their investments – was barely noticed in his first Budget as chancellor.

But it has since cost pensioners millions of pounds in retirement savings. After the tax break was cut, many employers faced a shortfall in their pension contributions that forced them to give up their salary-linked schemes that guaranteed an inflation-linked income in retirement.

Tom McPhail, of the Lang Cat, said: “Gordon Brown’s tax raid on private pensions has exacerbated the growing disparity between the unfunded, guaranteed pensions enjoyed by public sector workers and those paid to private sector employees, which depend entirely on good investment returns. The tax change has cost our pension savings hundreds of billions of pounds.”

ALISTAIR DARLING

While Mr Brown increased the tax burden, his chancellor when he was prime minister oversaw the biggest drop during his tenure, at 0.6 percentage points. This was despite introducing one of the most pernicious tax rises for higher earners – the tapering of the personal allowance.

In 2009, Alistair Darling brought in a rule reducing the personal allowance by £1 for every £2 earned over £100,000. As a result, workers pay 60pc tax on earnings between £100,000 and £125,140. Over the past five years, this has cost higher earners £18.6bn.

GEORGE OSBORNE

David Cameron’s right- hand man will forever be remembered as Britain’s austerity chancellor. In last year’s Covid inquiry, George Osborne defended his drastic cuts – arguing that they strengthened the UK economy ahead of the pandemic, when government spending soared.

But his state-shrinking policy has been heavily criticised, with research from the University College London Institute of Health Equity suggesting life expectancy shortened in 90pc of the country during the austerity years due to the wide-reaching welfare cuts. However, austerity was far from Mr Osborne’s only controversial policy. He was also responsible for what the Resolution Foundation think tank has described as one of the “worst parts” of the tax system. The High Income Child Benefit Charge sees child benefit clawed back once a working parent earns more than £60,000 (previously £50,000). Since its introduction in 2013, the levy has raised more than £3bn for the Treasury, costing families £405m in 2020- 21, the latest year for which figures exist. The reason it is so controversial is the tax is based on individual income rather than household income, so single-income families can be adversely affected.

Jeremy Hunt announced plans to address this disparity in his spring Budget. Mr Osborne was also behind cuts to mortgage-interest relief for private landlords in 2015. Mr Harris said: “George Osborne gave the impression that he really had it in for landlords and was accused of trying to kill off buy-to-let as a result of the measures he introduced to boost Treasury

coffers.” In addition, it was Mr Osborne who introduced what the Office of Tax Simplification called the most complicated part of the inheritance tax system. The residence nil-rate band grants individuals an extra £175,000 inheritance tax allowance towards their main property. Mr Osborne’s successor, Philip Hammond, continued his austerity programme during his time in office from 2016 to 2019. After him came Sajid Javid who was in office for six months.

RISHI SUNAK

After Mr Brown, Rishi Sunak is the biggest tax-rising chancellor of the past 30 years. Tax as a share of GDP jumped up by 2.2 percentage points during his time in office. This is unsurprising given his decision to freeze tax thresholds across the board in 2021. According to the Office for Budget Responsibility, Mr Sunak’s original plan to freeze income tax thresholds until 2025- 26 was set to cost taxpayers £8.2bn per year. However, because of soaring inflation, and Mr Hunt’s twoyear extension to the freeze, the Government is now predicted to rake in £33.6bn in 2028- 29 – more than four times the original estimate.

Rachael Griffin, of Quilter, said: “The rapid rise in tax take can be viewed as both the unintended, but no doubt welcomed, consequences of Mr Sunak’s original plans, as well as a chance captured by Mr Hunt and extended to continue making the most of fiscal drag.”

Mr Sunak was followed by Nadhim Zahawi, who held the position for two months.

KWASI KWARTENG

Liz Truss’s chancellor was only in office for 38 days, and few of the policies he announced were ever introduced.

But his September 2022 mini-Budget nevertheless had an impact on homeowners by fuelling mortgage rate rises, which hit a post- 2008 peak of 6.65pc in October 2022. Borrowing costs for homeowners have remained persistently high ever since. “The Liz Truss ill- fated mini-Budget led to a spike in interest rates which continues to mean higher mortgage costs for millions,” said Mr Harris.

JEREMY HUNT

Workers will be feeling the impact of “fiscal drag” for years to come because of Mr Sunak and Mr Hunt’s freeze on thresholds. The amount of income tax a typical worker will pay over their lifetime has shot up by £50,000 since 2020-21, according to analysis by the TaxPayers’ Alliance. Another of Mr Hunt’s most controversial policies has been the abolition of non-dom status.

Simplifying the regime will raise an estimated £ 3.1bn from 2026- 27 to 2028-29. But some say it could trigger an exodus of wealthy foreigners.