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This time George, let there be no Budget bodging

17 March 2014

The first and best thing George Osborne could do is start all over again. Of course he won’t and this week’s budget will be another missed opportunity. But each year that passes without real reform is another year wasted.

Britain’s current tax code is the product of a century of bodging. Each year the Chancellor promises to ‘simplify’ the system only to reward chosen groups with allowances for this and relief for that and lord knows what else. Other, less favoured, petitioners are punished to compensate for the trinkets dished out to this year’s chosen interests. The new simplicity turns out to be as much a warren as the old complexity.

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So another year of bodging. The system is rickety and contradictory and no longer, as they say, ‘fit for purpose’. Dismantling it and beginning again would not be an act of fiscal barbarism but, on the contrary, an opportunity to write from scratch a tax code that was sensible, equitable and, even, comprehensible.

Fortunately, the Chancellor need not start from scratch. A plan already exists. The Mirrlees Report commissioned by the Institute for Fiscal Studies provides a framework for a better way. As starting points go, it is a good one.

Implementing the Mirrlees Report – or something like it – would ensure Osborne’s legacy as a great reforming Chancellor. Less importantly (sic) it would also be in the national interest. Even more so if he secured Ed Balls’s agreement that if elected next year Labour would continue the multi-year work of demolishing the existing tax code and building a new, better, replacement.

‘Everyone’ knows the current system is broken. No amount of bodging can fix or make sense of it. Blow it up and start again, George. Your place in history awaits.

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Show comments
  • Jambo25

    The Mirrlees Report wasn’t by that nice Sir James Mirrlees

  • anyfool

    Mentioning Balls in the same column as simplifying tax law is the most idiotic thing imaginable.
    His whole policy on taxation is based on lies and subterfuge, his giving but not giving strategy could not operate with a simple tax code.

  • asalord

    ” ‘Everyone’ knows the current system is broken. No amount of bodging can fix or make sense of it.”

    Perfect summation of this “united” kingdom. Vote Yes.

    • monty61

      And Alex ‘the Milky Bars are on me’ Salmond is going to makeit all better for you. Bless, such touching faith.

      • Jambo25

        Couldn’t do much worse than Osborne.

        • ButcombeMan

          The Clunking Fist and author of the Big Brown Mess was much worse, on any measure.

          • Jambo25

            I’d wait to see what the long term historical appreciation is before making my mind up if I was you.

            • ButcombeMan

              Fortunately there is no Ministry of Truth to re write his shocking history.

    • andagain

      An independent Scotland would inherit the same tax code: it would have to start with something after all. And it would continue to make the tax code more byzantine for the same reasons as UK governments.

  • kle4

    Well at least you acknowledge proper chaneg won’t happen, even if it should. Sadly, I cannot see a government with a firm majority of either political stripe doing so either.

  • BarkingAtTreehuggers

    “last chance to secure a legacy”

    The legacy is secured – YOY budgets and their headline policy were designed to obfuscate what was really going on

    Year 1: ‘paying down the deficit’ and ‘austerity’ whilst doubling the debt.
    Year 2: ‘shares for rights’ whilst increasing zero hours contracts.
    Year 3: ‘help to buy’ in a £2m, driving up the price in select centralist locations only, leading to massive book value gains not in the regions but in the centre only.

    The legacy is clear. No matter what comes next, the opposite of what is announced will actually happen.

  • Leo McKinstry

    The voices calling for wholesale tax reform are appealing, but I’m afraid that they don’t belong in the realm of practical politics. Any Chancellor embarking on such a radical restructuring of the system would not stand a chance. The fact is that the majority of the population are net gainers rather than contributors to the state, so the present arrangements suit them. Look at the ridiculous hysteria that was generated over the so-called “Omnishambles” budget in 2012, where perfectly sensible moves likes the rationalisation of pension allowances (“granny tax”) and VAT on takeaways (“pasty tax”) were treated as crimes against humanity.

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