§ I indicated at the outset that this will be a radical, tax-reforming Budget.
Over the past few years there has been increasing recognition, throughout the industrialised world, of the importance of tax reform in improving economic performance. And for us in this country the lesson is underlined by the success of the reform of business taxation which I announced in my first Budget, at the start of the last Parliament.
But while tax reform is a simple matter for the armchair critic, it is very much more difficult in practice. It is difficult technically and difficult politically—since any tax system, however it arose, creates powerful vested interests in favour of the status quo.
Nor, indeed, is it right that change should be too violent. People have a right to expect a reasonable degree of stability in the framework within which they order their affairs. But change there has to be.
So the tax-reforming Chancellor must tread a careful path. That I have sought to do in this Budget. The proposals I shall he making today amount to a substantial and coherent package which will be of increasing benefit to the taxpayer and to the economy as a whole in the years to come.
I have been guided by four basic principles—first, the need to reduce tax rates where they are clearly too high; second, the need to reduce or abolish unwarranted tax breaks; third, the need to make life a little simpler for the taxpayer; and, fourth, the need to remove some manifest injustices from the system.