The Sunday Telegraph revealed in July that Lord Forsyth’s Tax Reform Commission’s 150 page report includes a chapter devoted to flat tax. According to Allister Heath in today’s Spectator, the proposals in the current draft amount to £20 billion of tax cuts, and that there is pressure to water them down. It’s main focus is on:

  • Reducing the basic rate of income tax
  • Significantly cutting the rate of corporation tax
  • Scrapping the 10
    percent starting rate for income tax
  • Aspiring to cut the top rate of tax
  • Merging inheritance and capital gains tax

It doesn’t include proposals for council tax reform or more green taxes. This is the TPA’s take on it:

"this article strongly suggests that there is almost no chance the
Party will commit to tax cuts at the next election – trying to have an
independent report by a senior Party figure effectively re-written is a
serious step to take and it won’t have been taken lightly.The
Conservative leadership seems to remain convinced that they can’t make
an effective case for lower taxes because people don’t want to hear it.
We think they are wrong."

It mightn’t be in the Commission’s Terms of Reference to look at lower taxes but it is the role of the Commission to look at "Britain’s ability to compete in the world". The Conservative Party’s ability to compete in the elections is irrelevant, but if it is to be factored in then the TPA’s recent poll should be noted.

Deputy Editor