Friday 4 May 2007
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A decade of business under Blair

Last Updated: 12:01am BST 01/05/2007
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Business and Markets

Tony Blair's ability to convince middle England that the Labour Party could successfully manage Britain's economy and allow businesses to flourish was crucial in winning the 1997 election.

Top 10 FTSE 1997
FTSE100 2007: click to enlarge to see
all companies for 2007

Here we give the key facts on how markets, companies and individuals have fared since Mr Blair first stepped into Downing Street on May 2 1997.

FTSE 100
The UK stock market has underperformed notable major global indices since Tony Blair came to power.

The FTSE 100 has risen around 40pc since May 1997, but the Dow Jones and S&P 500 are up around 75pc, while Germany's Dax has soared more than 100pc and France's CAC 40 has risen 130pc.

Top 10 FTSE 1997
FTSE100 1997: click to enlarge to see
all companies for 1997

Japan's Nikkei, however, is down more than 10pc in the same period.

Alternative Investment Market (AIM)
In the last decade, 1,432 companies have floated on the London Stock Exchange's international market for smaller growing companies, raising £22,270m.

At the end of 1997, 22 international companies were listed on Aim, which had a total of 308 listings, with a total market value of £5,655m.

Today, according to latest figures from the London Stock Exchange, there are 1,637 companies listed on Aim worth a total of £101.7bn, 304 of which are international companies.

Since its launch in 1995, over 2,500 companies have joined Aim - raising more than £34bn in the process, both through initial public offerings (IPOs) and further capital raisings. Companies that have made the jump from Aim to the main market include Connaught, Erinaceous and Sinclair Pharma.

Your Money

10 very taxing years

  • Pension funds' tax freedom abolished
  • Income tax thresholds not raised in line with earnings
  • Upper limit on National Insurance Contributions removed
  • Married Couples Allowance scrapped for most husbands and wives
  • Mortgage interest relief at source (Miras) abolished
  • Peps and Tessas replaced by less generous Isas
  • IHT and Stamp Duty thresholds not raised in line with house prices
  • Average householder pays £480 more in Council Tax
  • Tax
    HM Revenue & Customs now pockets £2.34bn more each week out of what Britons earn than it did in 1997. Government figures show we paid £115bn in tax and national insurance in 1996-97, while this tax year, 2006-07, the Revenue expects to collect more than double that, at £234bn, an increase of £119bn.

    In 1996-97, there were just over two million higher rate taxpayers, but in 2006-07, more than 3.2 million people will pay tax at the higher rate, as increases in tax thresholds have failed to keep up with rising earnings.

    Average earnings have risen by 41pc since 1997, according to BDO Stoy Hayward, but the threshold after which individuals have to pay the highest rate of tax has only increased by 31pc.

    Gordon Brown removed the upper limit or ceiling on National Insurance contributions (NICs) and introduced a new upper band of NICs which now applies at 1 per cent on all earnings above £645 a week.

    How pensions have plunged during the last decade

    Private sector retirement funds pay an extra £5bn a year tax as a result of Gordon Brown abolishing these funds' ability to reclaim dividend tax credits on their shareholdings back in 1997.

    Higher taxes combined with lower investment returns and interest rates to cut the annual in come received by private sector pensioners by more than three quarters during the past decade.

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