Hare-brained taxes that don’t add up

TO an almost audible sigh of relief from householders across the land, the Government has now promised to scrap its hare-brained scheme to impose a spurious environmental ‘tax’ on home improvements.

The proposal – highlighted by the Mail last week – was to force anyone building an extension or conservatory, or installing new windows or a boiler, to spend a small fortune putting in extra insulation.

It was all part of the Coalition’s largely bogus Green agenda – driven by the lib Dems – which also involves covering large swathes of the countryside with pointless wind farms, risking an energy crisis by dithering over building a new generation of nuclear power stations, and trying to tax air travel to death. But while the U-turn marks a welcome outbreak of common sense, why on earth was the tax ever contemplated?

It is yet another glaring example of the Government’s shambolic fiscal policy and leaves us questioning whether ministers or their civil servants have a clue what they’re supposed to be doing. All tax changes – however wellintentioned – have real consequences for real people, and it’s crucial those consequences are identified and forensically analysed long before the changes are made.

Surely the most basic rule is that any reform proposal which would raise only minimal revenue while causing maximum upset should be instantly abandoned.

The ‘conservatory tax’ is a perfect example of this rule being ignored, but there are many others which have provoked outrage across the political spectrum. Most Coalition backbenchers, some of the Tories’ biggest donors and almost every charity in the land have excoriated George Osborne’s plan to cap tax-free charitable giving, saying it unjustly brands philanthropists as tax cheats and will cost millions in lost donations to good causes.

The Church, heritage organisations and country landowners have come together in a bitter attack on his decision to remove VAT relief from alterations to listed buildings.

The so-called ‘pasty tax’ which removes VAT exemption from hot takeaway food from shops and bakeries has put 20 per cent on the cost of lunchtime snacks for millions of ordinary people. The same applies to having a haircut, as selfemployed barbers too will now be subject to sales tax.

And for what? The total anticipated tax take from all these reforms is around £100million a year, a drop in the ocean of Britain’s public finances. To put it in context, Britain’s overseas aid budget will increase by 30 times that amount in the lifetime of this Parliament.

These are difficult and austere times for working people in Britain and, if it is to survive the next election, this Government must persuade them it is on their side.

It could start by making real cuts to public spending so it can reduce existing taxes, rather than inventing new ones to saddle them with.