Tax proposals for the Chancellor ahead of the Autumn Statement
With the Chancellor George Osborne preparing to deliver the 2013 Autumn Statement in a just over a fortnight’s time, last week The Free Enterprise Group, a collective of backbench Conservative MPs, presented its proposed set of economic reforms at the Institute for Economic Affairs in London.
In the main, I support the proposals, which loosely focus around the implementation of stimulatory tax cuts aimed at those on low and middle incomes – or, as the media is obsessed with calling this demographic, ‘The Squeezed Middle Class.’
Amongst The Free Enterprise Group’s reforms are plans to create a single, revenue-neutral VAT rate; to cut green taxes in the longer term – this would, in my opinion, bring down the price of energy for lower and middle income families; to abolish Stamp Duty on land for properties under £500,000, thereby encouraging home ownership amongst this demographic; and to raise the basic income tax rate limit to £40,000, which would take ‘ordinary workers’ our of the top tax tier.
As I say, I largely champion these suggestions. However, I feel they do not go far enough and the Chancellor should be urged by The Free Enterprise Group to be more maverick in his approach. For example, on their list should be, for example, a refocus on that election-winning promise – which he is still yet to deliver on – to cut inheritance tax (IHT).
IHT is one of the most hated of all taxes, partly because it is a form of double taxation, partly because it hinders hard-working people from giving their children and grandchildren a better start in life, and partly because it dampens wider economic growth (if this capital were left in the hands of individuals it could be used for all sorts of wealth and job creating enterprises).
So will Osborne play it safe on 5th December? Who knows. We’ll have to wait and see. But what I am fairly confident about is that should he have the courage to roll out a wide(r) array of tax cuts he is far more likely to win the support of the UK’s hardworking, and all too often hard pressed, families and businesspeople, and as a result his party is more likely to win the 2015 general election.
Nigel Green deVere Group
Blog written 25th November