A reader sent me this comment after reading my post about the Canadian spending cuts of the 1990s:

The Liberal cost cutting was significant and the former Finance Minister who then became Prime Minister, Paul Martin, was chiefly responsible.
HOWEVER, it is worth noting and commenting that this was in large part done by increases employment insurance rates for employers and employees and then taken into general revenue, essentially an invisible stealth tax that the taxpayers have no recourse to change. It is quite simply a hidden tax.

If Great Britain emulates Canada’s methods, will they emulate this hidden tax also?

For more, see this link regarding EI surpluses, “Appropriation of Employment Insurance Surpluses.”

Another key issue centres on the existence and appropriation of past surpluses in the EI program. Unemployment insurance is intended to be self-sufficient, with annual employee and employer premiums covering benefits over the long term.
Beginning in the middle of the 1990s, Employment Insurance witnessed regular surpluses in the billions of dollars each year, with a cumulative surplus of $57 billion as of March 2008. This was due to the fact that premiums paid into the system were reduced at a slower pace than benefits paid out. As discussed above, however, this amount is only a record of total annual surpluses, as the money was diverted into the federal government’s general revenue and used in support of its annual budget during this period.
This led to criticisms of the federal government, particularly in allowing the surpluses to accumulate to the level that they did. In this context, critics have argued the federal government should have recognized that contributions were much too high relative to what was required to cover annual benefit payouts. As such, the government should have either reduced premiums to a more appropriate level, or increased benefits to take advantage of the surpluses…

In my opinion, the Liberal party does deserve some credit; however, their efforts must be viewed in the context of this extra source of revenue — essentially a tax on capital both human and financial.