What is the point of government passing a law to stop it doing something when it can just as easily repeal it? If George Osborne were still to find himself Chancellor after the election I can’t see that we would feel any more bound to abide by a law fixing the rates of income tax, National Insurance and VAT than he would by a pledge to the same effect.
If he ever fancied notching up VAT in a future budget all it would take is a clause in the finance bill excusing himself from such a law. In any case, we haven’t yet seen the text of the tax-fixing bill which David Cameron proposes today. You can bet it will contain a get-out clause, as with Ed’s promise to fix energy prices, saying that it can be overlooked in a state of economic crisis – which, given that the public finances seem to exist in a perpetual state of crisis, just about covers every eventuality.
It has become quite a fetish, governments passing laws to bind their own hands. The Brown government did it with the Climate Change Act, which sets supposedly legally-enforceable targets for cutting carbon emissions. It is now legally binding, too, for future governments to spend 0.7 per cent of GDP on international aid.
It isn’t hard to see how this could get out of hand. You can expect future governments heading for election defeat to pass lots of these laws as a political stunt to try to thwart the opposition. The opposition party, if it gains power, will then of course repeal any law which stands in the way of its programme – to cries of protest about ministers changing the rules to suit them.
The real test would be if a future government, say, fails to reach the legally-binding target for carbon emissions. Will the then climate change secretary be led off in chains to do a couple of years at the Scrubs? I can’t see it myself.
Meanwhile, you can take for granted that the George Osborne, should he present another budget, will almost certainly be jacking up the taxes not mentioned in the proposed law. There’s nothing there about not raising road tax, fuel tax, business rates and many others.
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