Evan Loves Tax - Episode 3

Evan Davis asks how well we make decisions about tax in Britain, from the way we vote in elections to Chancellors and their Budgets. To find out, he meets four ex-Chancellors: Geoffrey Howe, Nigel Lawson, Norman Lamont and Alistair Darling. Is the attitude of Government when deciding tax policy, Evan asks, usually 'not in front of the voters'? Evan begins the programme amid the massed ranks of photographers outside 11 Downing St on Budget Day this year. He watches George Osborne emerge to run the gauntlet of protestors, on his way to deliver his Emergency Budget. He points out that the Conservatives did not go into the last election promising the rise in VAT that Osborne's Budget introduced only weeks later. But that Labour also put up taxes in a way they hadn't put squarely to the public in elections. He asks whether we could make tax policy more openly - and whether the spectacle of Budget Day itself is part of the problem. He discusses the seductive theatricality of the Chancellor's annual moment in the spotlight with Nigel Lawson - and Norman Lamont, who cautions against it. He hears recollections of the backroom pressure in the run-up to the Treasury's big day from former insiders like Rachel Lomax, Private Secretary to Nigel Lawson in the 1980s, and Gordon Brown's ex-economic advisor Ed Balls. Rachel Lomax went on to become Permanent Secretary at the Department of Social Security. She recalls the impact the secrecy that surrounds the Budget had on her there. Not least through the surprise announcement in the Budget speech of major changes affecting thousands of staff. But Evan argues that at the heart of our decision-making on tax, there is a broader problem. Many find it hard to feel any connection between the money they pay and the services they get in return. And he visits the Albert Hall to explain why. He asks whether 'hypothecation' - specific taxes earmarked for specific services, such as healthcare - is the solution. He talks to Matthew Taylor, the man who created the much-discussed Liberal Democrat policy of putting a penny on income tax to fund a boost in education spending. And discovers he is against hypothecation. He finds out how Australia's health tax - the 'Medicare Levy' - ended up funding a gun buyback scheme. But if hypothecation isn't the answer, what is? Evan concludes the series by raising the underlying question that, for all the argument over the coming cuts, is little asked: what do we want tax to pay for? Producer: Phil Tinline.