report: Principles of tax policy.

The Budget may not lead to a net simplification in tax law-although this is difficult to quantify. We recognise that it is very difficult to simplify an already complex system and welcome the work of the Office of Tax Simplification and the establishment of a 'direction of travel' towards simplification. (Paragraph 131)

The committee also noted the Government's decision to increase the supplementary rate of corporation tax on the oil and gas industry by 12 percentage points in the Budget -less than a year after promising to provide a stable tax regime in the sector -might weaken the Government's credibility in seeking to establish a stable tax regime.

The Plan for Growth

The Committee was pleased with the further reduction in corporation tax announced in the Budget. It considered that this was a positive measure aimed at boosting growth. The report said:

We welcome the reduction in the headline rate of corporation tax and note the evidence provided that this has boosted business growth and tax revenues elsewhere. We will monitor closely the impact of this policy on corporation tax revenues in the UK. (Paragraph 81)

The committee urged the Government to monitor the effect of the FirstBuy scheme on the supply of additional housing. The scheme should-along with reforms to the planning system-increase the supply of new houses. It was important for the housing market that it did so.

On Enterprise Zones the report says:

Enterprise Zones may have some effect in reviving particular areas, but we note that almost all the evidence received is unsure about the extent to which they will contribute to UK growth. It is clear that there is still much to be done on the details of this policy. (Paragraph 93)

The plan to boost micro businesses and start-ups by a moratorium on new domestic regulation is intended to reduce the burdens on business. The committee has taken limited evidence on this. We have however received evidence that the proposal may create problems. Several lists of regulatory exceptions and some administrative complexity could however be created by this apparently attractive proposal. (Paragraph 106)