Taxing idea to fill that black hole

IT would appear the Government, in supporting Phillip Hammond’s first Budget, completely forgot its commitment in relation to tax in the Tory Party manifesto, thus causing a somewhat humiliating reversal.

This has left a substantial hole in the Chancellor’s figures, and one which will not be forgotten by the Opposition when they get round to thinking of taking real advantage of such a calamitous error.

To balance the books, Mr Hammond must have another think – but I have a suggestion. It is a bit strange that an employee, working after the age of 65, does not have to pay National Insurance, although the employer still has to contribute. With more than 1.5 million people continuing to work after official retirement, perhaps removal of the age restriction would help to improve the bottom line.

I am one who would suffer as a result of such an imposition, but it could help sugar the medicine if the Chancellor guaranteed that such tax collected would be ringfenced for the NHS.

After all, those of us continuing to work after statutory retirement age are generally blessed with reasonable health, not making much call on NHS services. I also believe continuing to work helps to keep us fit, for it is only going to be a matter of time before Government raises the retirement age to 70 to pay the increasing cost of advancing life expectancy.

The trouble with ring-fencing a tax is that after a period of time, it gets quietly merged into general taxation. A classic is the Road Fund Tax, brought into existence in 1920, and at the time guaranteed to be ring-fenced for the provision of new roads, needed just as much now as then. Unfortunately, this was merged into general taxation in 1937, not much comfort for those of us stuck in traffic jams today.

For the rest of this Parliament, the Chancellor’s hands are tied in respect of personal tax and NI rates, but a few tweaks here and there may help to balance the books. But the mud will stick in relation to his reputation as a safe pair of hands. Such is life!

Russell Luckock is chairman of Birmingham pressings firm

AE Harris