The 1988 Nigel Lawson Budget that set bar high
NIGEL Lawson’s 1988 Budget was hailed by Tory MPs after he cut income tax and announced that the Government’s deficit was moving to a surplus.
He slashed the basic rate of income tax from 27 per cent to 25 per cent and simplified the levy by scrapping all higher rates above 40 per cent.
He raised the inheritance tax threshold from £90,000 to £110,000 and introduced a flat rate of 40 per cent, and cut small companies’ corporation tax rate by 2p in the pound to 25 per cent.
The future Lord Lawson also scrapped the rule by which a married woman’s income was taxed as if it belonged to her husband and created a mini-house price boom by abolishing a mortgage relief tax break for unmarried couples – prompting a scramble to buy.
But it did not go down well with everyone. A young Alex Salmond, Scotland’s future first minister, denounced the tax cuts as an ‘obscenity’ and was kicked out of the Commons.