Slaying some dragons
Realism about what an incoming Conservative government can do, given the parlous and deteriorating state of our national finances, is much greater than a year ago. It remains unreasonable to ask the Shadow Chancellor to spell out in detail what he would do in two years time. Commitments on inheritance tax, stamp duty, corporation tax and small business tax have already been made anyway.
However it is the institutional architecture which is extremely important too. The growth of the influence of the Treasury under Gordon Brown was enormous. Tax credits have been spectacularly mishandled by the Treasury, and should be overseen by the DWP. It is therefore welcome that the all encompassing activities of the Treasury behemoth will be bought back to its original form by George Osborne.
Additionally he has set out clearly how he would reform the tripartite system between the Treasury, FSA and the Bank of England. Again a more traditional monitoring role for the Bank is to be restored.
The bloated and unfocussed size of the Treasury and the failed tripartite system caused sclerosis in our banking system, and negatively impacted confidence both domestically and internationally.
Whilst the spotlight may continue to shine on tax policy, quietly George Osborne’s proposed functional reforms are a crucial backdrop for a more rational tax and regulatory structure in this country. The significance of this should not be underestimated.
The bloated and unfocussed Treasury and the failed tripartite system caused sclerosis in our banking system, and negatively impacted confidence both domestically and internationally.
Whilst the spotlight may continue to shine on tax policy, quietly George Osborne’s proposed functional reforms are a crucial backdrop for a more rational tax and regulatory structure in this country. The significance of this should not be underestimated.