The Autumn Statement was yet another example of the tinker’s tale; fiddle-faddling at the edges, short on vision and long on a sense of weary resignation. Here is what the chancellor should have said to the country:
“Mr Speaker, for too long now we, as a government, have been under the spell of our coalition partners and a slavish fear of upsetting the status quo. Not anymore. For today I am setting before you a radical departure from our ridiculously complicated and stultifying personal tax system. No doubt what I am proposing will encounter severe opposition inside and outside parliament but the time has come for real leadership. The country expects nothing less. Our constituents are fed up with obfuscation and indecision.
Firstly, I am going to abolish income tax banding and national insurance, to replace these disincentives to work and enterprise with a single flat rate income tax of 30 per cent. This will immediately cut the overall tax burden for standard rate tax payers, and act as a major incentive for higher rate tax payers to purchase a greater amount of goods and services. This will stimulate growth and indeed boost tax revenues in so doing.
Secondly, I am going to abolish capital gains tax (CGT). Time and again it has been proven that CGT acts as a major barrier to investment, holds up the passing on of assets to those who can make them work harder, and lowers the overall tax take by preventing the development of companies and their workforces. The only reason we have shied away from this obvious step to date is that we are scared of being labelled as the party of the rich. This is absolute nonsense and real leadership is perfectly capable of withstanding the fallacious arguments of our detractors. It is not a coincidence that some of the most prosperous nations in the world either have no CGT (Hong Kong, Singapore, Switzerland) or have very low rates (USA).
I make no apology for lifting these proposals from the report of the 2020 Tax Commission, published in May this year. I and my predecessors have continuously suffered under the illusion that only our colleagues in the Treasury know best. The time has come to do away with the ?not invented here syndrome.
Of course, it will take time for these groundbreaking changes to our lives to take effect and in so doing galvanise our economy. Thus, in the meantime, we expect a revenue shortfall of between £30 and £40bn a year. In order to address this I intend to halve the defence budget, saving £17bn per annum. We cannot go on with our traditional role of standing beside the USA as we attempt to sort out the trouble spots of the world. Iraq and Afghanistan have exposed the folly of this old style imperialistic policy. We are a small nation, not a superpower.
We will also shortly be holding a referendum as to whether we stay in the EU. We fully expect a ?no” vote, thus saving the exchequer a further £10bn per annum in our net contribution to Brussels and many billions more as the accompanying bureaucracy is dismantled. Mr Speaker, I commend this refreshingly dynamic Autumn Statement to the House.