Tuesday, April 22, 2008

A little advice for Mr Darling

What a pickle the Chancellor finds himself in when he has to promise his errant supporters unspecified fiscal changes. It seems that Mr Darling promises to put right the mistakes made by the Queen's ghillie in last year's budget; but this rectification will not take place yet.

It is an absurd promise for a Chancellor to make; even more absurd that any member of parliament with a jot or tittle of self-respect should give it credence. Yet these MPs are sheep; ewes that have broken through a hole in a hedge; animals that will gladly return to captivity with a little yelp from a dog.

How is the Chancellor to honour his promise? I have a little experience in these matters and for the sake of working people, rather than for the sake of a government without anchor, without rudder and with bearing, I will assist.

It is time he adhered to good principles of making a budget; that changes should be simple and easy to understand. It is to be feared that Mr Brown and Mr Darling will be loath to hold to these principles. For theirs is a history of meddling, of creating complexity and confusion. Mr Darling will believe he can identify those who have suffered and pass money to them; he will create new classes of recipients; he will recruit many thousands more clerks to process lengthy applications from those who would belong to these new classes.

His imperative, rather, should be to continue his declared mission to simplify the tax system whilst also adhering to a second major principle: that the poor should not be made poorer.

His choices are therefore straightforward: to reduce the 20p rate further; to reintroduce a tenpence rate or similar; to increase the personal allowances allowed to taxpayers.

Now these are hard times and the Chancellor may believe he cannot make such concessions, which would improve circumstances for all tax-payers. Yet in truth, in removing the tenpence rate, he has not delivered a single income tax; for there remains, I believe, a rate of 40p in the pound for those earning above a certain portion. Distant as I am now from Treasury affairs I do not have the figures but, it is my belief, that a progressive Chancellor could, if events warranted it, recover his shortfall by reducing the threshold at which 40p becomes payable. It may even be that within 12 months he could recover his position by simply failing to raise threshold.

Now that would indeed be a sleight of hand worthy of a Chancellor within a progressive government.

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