Damon Lambert works as a Financial Services Tax Adviser at KPMG. He was a member of the working party on Business Taxation that supported the Tax Reform Commission and assisted with the case studies included in the "Reform is possible and works" chapter.
Six months ago the Tax Reform Commission reported. Since then no serious commentator has made any valid challenge to its comprehensive and coherent, findings and recommendations. The TRC extolled cutting and reform taxes to make the UK more competitive; tax simplification that would remove market distortions creating a system that applied fairly to all; it would raise the personal allowance and cut marginal tax rates to improve incentives; and it would turn the making of tax law into a coherent process rather than an aside of political spin thinly disguised as a Budget Speech. The TRC numbers were properly costed, containing a prudent margin given the dynamic impact of rate reductions shown in the TRC’s evidence on the economically expanding, tax cutting nations.
Yet the main beneficiary of this Conservative commissioned report could be the government. We all know that the tax and spend dicta of the Iron Chancellor has rusted UK competitiveness. But in the latest Budget, his reduction of the UK corporate tax rate, the proposal that may see the end of the toll tax on profits brought back to the UK, and an advance clearance regime all nod, if gently, to the TRC. Lost for words? Well, unfortunately, on March 21st, our leader was.
So where is Tory party tax policy at the moment? The three tax cuts of the 2005 British General Election, two of which were announced during the campaign, have been forgotten. That is, if anyone knew them in the first place. "Sharing the proceeds of growth" doesn’t really make the point either way, and sounds like the leadership campaign fudge it originated from. Successful right wingers push repetitively for clear, logical, well-thought through policies that are respected, rather than liked, and the TRC report meets those base criteria with ease. Its quality means that it can stand-alone as policy, but better still, lets combine it with a comprehensive spending that debunks the New Labour myth, (another proof of the political benefits of repetition), that central spending of our money with careless abandon is crucial to maintain basic standards in public services.
The Conservatives should take the initiative and adopt the key findings of the TRC as party policy with immediate effect. When launched our capable Shadow Treasury team referred to the TRC Report as a menu of options from which they can pick and choose. But if David Cameron wants to change the party he needs to end the spasmodic and incoherent a la carte style of manifesto promises that dogged the 1997, 2001 and 2005 General Election Campaigns. The party should move from the miscellaneous moaning about stealth taxes of a permanent opposition. Instead it should adopt, and adopt soon, the TRC report as the comprehensive policy package of a reforming and dynamic, incoming government.