SUCH is the chaos generated by Gordon Brown’s tax credits that it has now become a job creation scheme in its own right. According to a parliamentary answer to a question from George Osborne, the Shadow Chancellor, there are now 3,200 people dedicated to dealing with those who are suffering because of the complicated system and its inept implementation.

Today there will be a debate in the Commons on the issue. Unfortunately, Mr Brown will not be in the House to answer Mr Osborne’s criticisms of the scheme, which in 2003-04 cost £403 million to administer yet made errors in 2.6 million of the 5.7 million awards granted.

Mr Brown will be otherwise occupied, chairing the meeting of European finance ministers, whom he will lecture on the need for reform to the way they run their economies. As he denounces their over-bureaucratisation and failure to modernise, he will probably not appreciate the irony of his situation. The hapless and humourless Dawn Primarolo, left in Westminster to defend the tax credits mess, will certainly not see the joke.

Mr Osborne, however, is not laughing. Having sensibly avoided joining the throng running for the Tory leadership, he is working his way to devising an economic policy for the Conservatives. Today, in a speech to the Centre for Policy Studies, he will give some indicators of the direction in which he is moving. He is doing away with some of his colleagues’ pussyfooting on one crucial issue and spelling out that he stands for lower taxes.

As the City is ever more fearful that Gordon Brown will be forced to raise taxes in order to balance his books, this is an important differentiator. Wisely, Mr Osborne is not yet detailing how he would make the books balance, but the potential cuts in Government spending that were highlighted by the James Review before the election would certainly form part of his thinking.

Yet he does not merely want lower taxes but simpler taxes, as opposed to the frantically complicated system that has been created under Gordon Brown, admittedly building on top of an already complicated structure he inherited. When some countries are moving to a flat tax, and seeing the benefit in attracting overseas investment, this fashionable fiscal system could not easily be substituted for what exists in Britain. What we have, however, could be simplified if there was a will to do so.

Yesterday the Public Accounts Committee called for the rules on inheritance tax to be made less complicated. Ridiculously, every estate worth more than £5,000 now needs to file an inheritance tax return, even though the threshold for the tax is £275,000. This is not merely an unnecessary burden on relatives, but an unnecessary cost to the country, since all those forms need to be processed.

Over-complication is also behind the Law Society’s demands for improvements in the stamp duty land tax. Solicitors are furious about the costly and ineffective workings of the system that sees forms being routinely rejected, even if they have been correctly completed.

Tomorrow, Mr Brown will berate his European colleagues for their failings without ever acknowledging the problems that he has created for the British economy. They are hardly likely, however, to pay very much attention. As Britain struggles under its own red tape, Europe is not going to heed its blandishments for chopping this away. As if to demonstrate the fact, the European Commission will today outline its ideas for regulating television over the internet. Regulating the internet is a near-impossibility, but that will not stop Europe from trying.

M&S fails to find its niche

GEORGE WESTON’S father Garry was renowned for his careful way with cash, both his own and the company’s. Only three months into his new role as chief executive of Associated British Foods, George is demonstrating a much more enthusiastic approach to spending.

His desire to expand Primark, the discount clothing chain that sits incongruously amid ABF’s food businesses, is understandable. Splashing out £409 million for 120 stores when he intends probably to turn only 30 of them into Primarks seems a bold way of going about it.

Takers are lined up for many of the stores that Primark does not want, but that still leaves the company with the costs of terminating the concessions that operate in the stores and closing down the Littlewoods head office. It reckons that, after refurbishment, its new trading space will have cost a hefty £375 million.

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