The legacy Budget

Most commentators seem to be working on the assumption that on Wednesday 21
March Gordon Brown delivered his last Budget speech. One wonders if his mind is
turning to what sort of legacy he leaves behind of his time as chancellor.

As far as tax legacies are concerned, most practitioners will simply take a
look at the phalanx of finance acts on their bookshelves and decide that is more
than enough. Others will suggest that the growth in the UK’s economy and
decisions such as independence for the Bank of England could sit well in the
legacy ledger.

But has there been a significant shift of the tax system during Mr Brown’s
tenure as there was, arguably during the tenure of chancellor’s such as Geoffrey
Howe (the switch from direct to indirect tax from 1979) and Nigel Lawson (the
recast of corporation tax rates and capital allowances)?

There has been the move to tax credits, which has affected a very large
number of people and distributes significant amounts of money. Secondly, the
coming together of the Inland Revenue and Customs & Excise to form HM
Revenue & Customs, coupled with a much increased Treasury Tax Policy team.

These two changes in many ways bookend all that volume of detail, both of
them shifting resources – one of a monetary nature, the other of an
organisational variety.

So what was there left to do? Could it be that Mr Brown was planning a
surprise in his final chapter on the tax front? Perhaps a celebratory sacrifice
of one of the UK’s taxes? This was always unlikely.

Or was it just a question of tying up loose ends? There were plenty of
consultative documents that have been around for a while and needed closure,
ranging from residence and domicile to professional subscriptions. There was a
raft of proposals claiming attention (for example the review of HMRC’s powers)
plus an in-tray with various things turning a shade of green (and not through
age) and the perennial issue of addressing the competitiveness of the UK’s tax

But perhaps one of the chancellor’s legacies is simply that he kept the tax
system going for ten years. That was certainly challenging enough and therefore
a measure of achievement – even if many would rather he had done a good deal
more…or less.

John Whiting is a tax partner with
PricewaterhouseCoopers LLP

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