"I am frequently told by businesses and the tax profession about the importance of predictability, stability and simplicity in the tax system", said David Gauke, Exchequer Secretary to the Treasury. He went on, reasuringly, in last summer's official Government report on reforming the tax system, "Tax Policy making: a new approach", to say: "I want a new approach to tax policy making; a more considered approach.
Consultation on policy design and scrutiny of draft legislation proposals should be the cornerstone of this approach". After 13 years of capricious Labour meddling in the tax system, the new Government's statement of intent seemed like a breath of fresh air, or at least it would have been had it actually been followed.
In so far as perhaps the most vital industry of all – energy - is concerned, last week's Budget fell short of these laudable ambitions by a country mile.
The increase in petroleum revenue tax came like a bolt out of the blue to all concerned, and because nobody has bothered properly to think it through, it is likely to have those very same unintended consequences that Mr Gauke said the consultation process would avoid.
As for a price floor for carbon, it's as if the limited consultation the Government launched last December never took place; all advice has been roundly ignored. (read more)
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