§ I have now almost completed my review of proposals involving spending, and spending forgone. I have described my decisions on Excise duties, and the major cut in national insurance surcharge which we propose. In the remainder of my speech I shall be dealing primarily with fiscal issues.
§ I wish to deal first, and briefly, with the key issue of fiscal justice. All Chancellors of the Exchequer come under pressure every year to remedy hardships and anomalies in the tax system. This year has been no exception; and by the end of this afternoon I shall have been able to meet a large number of such points.
748§ But there is another side to that medal. Justice is indivisible. Justice to the taxpayer must be matched by justice to the Exchequer. The revenue must be protected if the burden is not to fall more heavily on the general body of taxpayers.
§ We must all be glad to see the courts adopting a new approach towards artificial avoidance schemes. As a direct result, we expect to collect a very large sum of tax, possibly as much as £400 million, which might otherwise have been avoided. The proper vigilance of the Revenue departments in these matters needs to be matched by the determination of Parliament to legislate where this is needed. Last year I asked Parliament to do so on a number of important matters. This year I propose further action.
§ We must, however, tread a very careful path between safeguarding the interests of the taxpaying community on the one hand and avoiding economic damage on the other. This need for caution applies, for example, to the proposals affecting the tax liability of companies engaged in international business, on which the Inland Revenue put out consultative papers last year.
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