Caesar: ‘Who is it in the press that calls on me? I hear a tongue shriller than all the music. Cry "Caesar!" Speak, Caesar is turn'd to hear.’

Soothsayer: ‘Beware the ides of March'" [plus 8 days]

Shakespeare: Julius Caesar Act 1, Scene 2 15-19

Early public response to Rishi Sunak’s speech last Wednesday was positive, reflecting a carefully-judged balance between continuing short-term support, a determination to tackle the deficit in the medium term, and some major growth strategy announcements for the longer term: even the reaction of big business to the proposed hike in Corporation tax rates was comparatively muted.

However, a lot was left unsaid, and neither was it included in the printed Budget report.

So, in this commentary we remind you that Mr Sunak has not finished yet - he announced on 18 February that the Government would be publishing a number of tax-related consultations and calls for evidence on a single day: Tuesday 23 March. Caveat a potential sting in the tail, which may not be so high profile as his main Budget speech last week.

At first sight, the announcement of a 31% increase in Corporation Tax to 25% did seem rather a blunt instrument, even though it carefully avoided small businesses and contained a major incentive for setting profits to work via new investment - via the 130% ‘Super-Deduction’. This rise will wipe out almost all of those George Osborne reductions between 2012 and 2016.

Corporation Tax is indeed a blunt instrument, as it applies to all businesses registered, or with offices/branches in, the UK. It hardly touches online businesses which sell into the country, such as Amazon. These may be providing a great doorstep service during the pandemic, but they were already doing massive damage to the High Street before the virus emergency, and it's hard to imagine their impact receding once the lockdown is over.

So will the 23 March Consultation Report address the long-debated proposal for an Online Sales Tax, combined with a more radical proposal to dispense with business rates for High Street retail outlets? Retailers claim that at present they shoulder c. 19% of the business rates bill notwithstanding their 5% share of the economy, and they have far more capacity to generate employment as we move away from the pandemic than online sales businesses, especially among the young.

Taxes on non-essential expenditure reflect policy much more attuned to Conservative thinking than taxes on income and risk-taking: the argument being that individuals ought to be in a position to spend their own money as they choose, rather than seeing the Government spending it for them.

Chris Sanger, Head of Tax at Ernst and Young, has pointed out that the net tax rises described in last Wednesday's Budget fall short of the figure the Chancellor was thought to be targeting. So, notwithstanding The Times’ headline ‘Highest Tax Levels for 50 Years’, we can expect further net increases from that Consultation Report to be published in two weeks’ time.

It is critically important that these do not undermine the appetite for investment and risk taking, and no doubt that's why there was no mention of the Office of Tax Simplification’s proposals to overhaul capital gains tax. Any move to bring CGT rates ‘more into line’ with income tax would seriously undermine entrepreneurial activity in the UK, just at the time we need to encourage free enterprise.

So, there is considerable scope for additional discussion in and following the 23 March Report, and my hope is that it will be rather more targeted than last week - with particular attention being given to the introduction of an Online Sales Tax.

Continuing low levels of inflation should provide scope for such a tax to be introduced without significant impact on the cost of living. It was interesting to note that, apart from the observation that every 1% on interest rates implies a £25 billion additional financing cost, there was little comment on rising inflation in the Budget speech. Of course, the word ‘implied’ is appropriate because the huge majority of additional pandemic debt has been shouldered by the Bank of England; it's more a question of the left hand paying the right hand, that’s what the Japanese have done for decades.

Nevertheless, Sunak is right to say that the deficit must be tackled in the medium term, if only to prepare ourselves for any future emergency.

Finally - it's good to see the UK taking the lead (aside from Israel) on the rate of vaccination. We are at last seeing major falls in the rate at which Covid-19 mortality is increasing, and hopefully this will be the last time we publish our international comparisons analysed from Worldometer. I look forward to see a broad international analysis of excess death rates, in order to check whether we have really done as badly as the Worldometer numbers suggest:

 Meanwhile - we’ll take a close interest in what comes out from HM Treasury on 23 March.

Gavin Oldham OBE

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