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Tory pledge to end tax surprises | |
(about 5 hours later) | |
Major tax changes should be unveiled six months before the Budget and be more heavily scrutinised, the Conservatives say in a report. | |
Ideas to simplify the system and end "stealth taxes" have been drawn up by ex-chancellor Lord Howe. | |
The proposals are not official party policy, but shadow chancellor George Osborne is expected to back them later. | |
Lord Howe told the BBC the delay would avoid problems such as those created by the "10% tax debacle". | |
The 10p tax rate was abolished by Gordon Brown last year in his final Budget as chancellor, in an unexpected announcement at the end of his speech. | |
At the same time, he unveiled a cut in the basic rate of income tax from 22p to 20p. | |
'A mess' | |
But the move backfired when it came into effect as millions of low paid workers were left out of pocket, sparking a backbench Labour rebellion and a government U-turn. | |
Last week a report on the abolition of the 10p rate - and the £2.7bn package brought in to compensate many of those who lost out - raised doubts about the "perceived benefit of seeming to pull rabbits from the hat" at Budget time. | |
Lord Howe told BBC Radio 4's Today programme: " A lot of changes being introduced at the last minute and then turning out to be a mess." | |
"We simply cannot go on multiplying the tax law on our statute book Lord Howe Cameron's Britain: Tax and spend | |
He added: "What we are proposing is that any significant tax change that is proposed should be proposed in a form that Parliament can examine at the time of the pre-Budget report, that's six months before the Finance Bill actually reaches the House." | |
His report calls for a cross-party committee of MPs and peers to be set up specifically to examine tax policy, which he said was currently "under-scrutinised". | |
It would also examine proposals from a new Office of Tax Simplification, charged with coming up with ways of simplifying the whole system. | |
Small print | |
Lord Howe said tax had become much more complicated under Labour and he said the Tories would end "stealth taxes" - an example of which, he said, was Mr Brown's "raid on pension funds" in the 1990s. | |
"We simply cannot go on multiplying the tax law on our statute book, we have got to begin clearing the undergrowth," he said. | |
Shadow chancellor George Osborne said the Tories would make taxes "simpler and more transparent". | Shadow chancellor George Osborne said the Tories would make taxes "simpler and more transparent". |
"With these changes suggested by the former Chancellor of the Exchequer, Geoffrey Howe, there will be no more stealth taxes," said Mr Osborne. | |
"Future governments will no longer be able to bury the bad news in the small print." | "Future governments will no longer be able to bury the bad news in the small print." |
The ideas are not official policy yet, but give a clear indication of what may feature in a future Conservative election manifesto. | The ideas are not official policy yet, but give a clear indication of what may feature in a future Conservative election manifesto. |