Here's hoping for a stunt-free budget
Whatever the chancellor announces in his first Budget next week, the profession will be looking for one thing in particular
It is hoping for a chancellor who stands up and appears to take tax
seriously.
The impression given in recent years has been that tax is nothing but a
political tool, a toy to drum up votes and send political signals. Think of
Gordon Brown’s move before the last election to give OAPs a winter fuel handout,
financed by an accounting change to oil taxation. Think also of Brown’s cut to
the basic rate of income tax a move that hammered the poor to fool the
better-off. Think, mainly, of the pre-Budget Report’s desperate political
gestures on non-doms and inheritance tax.
Alistair Darling has been dealing with the hangover from his rash non-doms
moves ever since. While a review of the non-doms rules was overdue (and the
fears of mass emigration of the brightest and best are surely overdone), it was
handled messily and was a hostage to fortune. The inheritance tax changes are
also set to be ‘revalued’ next week, revealing that Darling’s giveaway was not
all it was cracked up to be. The chancellor needs to avoid such political stunts
next week. Tax is a serious issue.
Ironically, the most serious and thoughtful contribution to the British tax
system Darling has made was on capital gains tax. The moves created winners and
losers, but were an admirable attempt to simplify a famously complicated tax.
The chancellor has also been slated on those moves, and he may feel that
seriousness on tax is overrated as a result. But he would be mistaken. A serious
crisis calls for a serious Budget. Deliver one, and Darling might still salvage
his stewardship of the nation’s finances.