Missing Tax Link in Labour Policy to Attract Business

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IN THE first budget after Margaret Thatcher's general election victory in 1979, the Conservatives cut the top rate of income tax from an effective rate of 92% all the way down to 60%. The result in the following years was that income-tax receipts increased.

In his end-of-summer report in yesterday's Financial Times, an upbeat Chancellor pointed out how, in the early years under Labour after its 1997 victory, the tax rate on company profits, known as corporation tax, has been cut from 33% to 30%. The yield has once again gone up - but this, unfortunately, is less as a result of the incentive and more due to a much tougher attitude by Revenue Customs to what used to be …