James Ashton: Red cards and red braces at Chambers of Commerce


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The Independent Online

A panel debate I took part in on Tuesday at the British Chambers of Commerce (BCC) annual conference combed through the issue of whether this economic recovery was good or great.

At the end of the hour, a majority of red cards were held aloft signifying that the delegates thought that greatness was still some way off.

Before we got that far, fellow speakers Andrew Sentance, the former Bank of England rate setter, and economist Vicky Pryce predictably fell out about the pace of interest rate rises. But they had a rare agreement of sorts when the conversation turned to tax and its reform. The red-braced markets commentator Justin Urquhart-Stewart made the case for tax being paid on outputs rather than inputs – sensible when the Government is imploring doubting businesses to invest more. Of course George Osborne has little room to cut the overall tax take with a deficit to reduce. Hence a £1bn sop to the high street instead of a pledge to review before 2017 business rates that rake in £26bn a year.

Mr Sentance thinks there is a good case to reform VAT in the next parliament, when there should be more flexibility in the public finances, to the benefit the population at large. After calls for the 40p income tax rate to be scrapped, one of the major parties should really grasp this nettle.