HM Treasury

Policy Statement

We will use the full range of fiscal and monetary controls to keep the economy within reasonable bounds for both unemployment and inflation.

Performance Reporting

Rate of unemployment of British citizens and rate of inflation.

Strategic Initiatives

Boost the Economy

As Government expenditure has crept up towards 50% of Gross National Product the traditional tools of tax and spending have become less effective in controlling the economy to the point where a stimulus is needed but the National Debt is so high a stimulus is not possible.

5 years and Longer term: We will restore the traditional controls by reducing Government spending as a % of GNP. Meanwhile we will introduce non-financial measures (such as those on adult illiteracy, skills and overseas aid) to boost confidence and to stimulate the economy.

Root and branch simplification of the tax system

We have too many taxes, we have counter-productive taxes, we have excessively complex taxes. The system is costly to run and ineffective. We will clarify, simplify and simply abolish many taxes – although this might mean that the rates of tax on those that we retain might have to rise.

100 days: We will commission a review of the present tax system

1 year: We will set out our ambition for the eventual system and publish a programme of simplification measures.

10 years: We will implement those measures and continue to reduce the number of taxes

Turn deficit into surplus; reduce both expenditure and tax as a % of GNP

100 days: No central initiative – but central management. The decentralisation of Departments and enhanced external reporting reported under Cabinet Office will provide the basis for a continual flow of simplifications, improvements and cost reductions. The role of the Cabinet will be to encourage, query, manage – and applaud!

10 years: All the departmental initiatives will reduce Government expenditure; tax will be reduced as part of this initiative. As expenditure reduces we will determine the consensus on reducing tax vs repaying the National Debt

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