Tories Set Out Tax Reform Plans

by Robert Lee, Tax-News.com, London

18 February 2008

The UK Conservative Party has announced that it is to establish a new policy unit to study how long-term tax reform and simplification of the nation's tax laws could be implemented.

In a speech outlining the Tories' long-term tax policy objectives to Policy Exchange, a free market think-tank, Shadow Chancellor George Osborne unveiled plans to establish a new Office of Tax Simplification with a remit to examine the existing system and make proposals for change.

The tax reform process will be spearheaded by a group of senior tax specialists and experienced politicians led by Geoffrey Howe, a former Chancellor of the Exchequer under the Thatcher government.

The Tories have also drafted in big-four accounting firms PricewaterhouseCoopers, to study long-term simplification of corporation tax, and Grant Thornton, to examine the simplification of income tax and National Insurance, and the administration of VAT.

Osborne stressed the need for "a fundamental rethink" to prepare the UK tax system for the twenty first century, observing that: "We need tax policy designed to address long-term challenges and based on solid underlying principles."

However, in a rebuttal to the party's right wing, the Shadow Chancellor stressed that there would be no quick-fix for the UK tax system, and that the first parliament of a new Tory government would have to stick to the current Labour government's tax and spending plans before reforms could commence.

"Many Conservatives understand that the pressures on public spending from defence, law and order, education and health care are only likely to increase. So the right solution is to reform public services, improve their productivity and stick to sustainable spending plans over an economic cycle," Osborne noted.

"We will stick with this long term approach," he added.

Recommended