For those that are interested, here's the tax "deal" as we know it from the published agreement between the Liberals and Tories this week.

Interestingly....I hear the favourite name for the merged group is "Con-Dem"....sounds right.....

So, it seems that taxes will rise more than the Tories had planned - justified by the coalition  - and cuts will be kinder to the poorest or something?......that said, talking of cuts...I noticed that the Met spents £10M per annum to kennel up to 400 dogs that have been confiscated under the Dangerous Dogs Act.  A sure sign that there are some easy savings to make.  Easy answer (suggested seriously by Lord Toby Harris!) is apparently to use the Met Office firearm section to shoot the dogs.  I don't really agree but I wonder that putting the owners into kennels might not be more productive than the dog... as they owners will just go and get another one.... or maybe the firearm section could shoot...no, maybe not!

Here's the narrative of the ConDem tax plans - with my comments in square brackets...and where's their VAT commitment now?.....hmmmm......watch this space.

3. Tax measures

The parties agree that the personal allowance for income tax should be increased in order to help lower and middle-income earners. We agree to announce in the first budget a substantial increase in the personal allowance from April 2011, with the benefits focused on those with lower and middle incomes. This will be funded with the money that would have been used to pay for the increase in employee national insurance thresholds proposed by the Conservatives, as well as revenues from increases in capital gains tax rates for non-business assets as described below. [Capital Gains Tax raises just £5Bn a year -less than 1% of national tax take - how they hope to offset any signficant income tax loss in a recessionary time (not gains) I do not know, and in any case I thought the Tories wanted to remove the Labour commitment to increase the rates of NI not the restriction of the thresholds....hmmm]

The increase in employer national insurance thresholds proposed by the Conservatives will go ahead in order to stop Labour's jobs tax. We also agree to a longer-term policy objective of further increasing the personal allowance to £10,000, making further real-terms steps each year towards this objective. [ I read elsewhere that the plain English version of this is that Employer's NI will not rise but that 1% will go on to every employee's NI rate i.e. same as increase in basic and higher rate taxes - 62% tax band at 100k here we come - I'm watching this as I anticipate a fudge where NI rises (rate goes up) but the thresholds increase so that those on modest incomes win and the higher earners get clobbered just the same - squeeze the rich coming - politicians will vote for employer's NI as that won't reduce their pay or that of public sector workers! - am I too cynical ! - some dressing up coming methinks].

We agree that this should take priority over other tax cuts, including cuts to inheritance tax. We also agree that provision will be made for Liberal Democrat MPs to abstain on budget resolutions to introduce transferable tax allowances for married couples without prejudice to this coalition agreement. [all bets are off on these commitments ]

The parties agree that a switch should be made to a per-plane rather than per-passenger duty; a proportion of any increased revenues over time will be used to help fund increases in the personal allowance. [this will be put in long grass as unworkable surely - otherwise flight costs must surely rise on lower demand routes where planes not always full - a commitment by the Tories to look at it may turn out to be a "nothing"?]

We further agree to seek a detailed agreement on taxing non-business capital gains at rates similar or close to those applied to income, with generous exemptions for entrepreneurial business activities. [ note, no commitment to retain the effective 10% rate for business assets which we have at the moment - I'm hoping all they will do is increase the current full capital gains rate of 18% rate to 30% (say) but I think and fear we'll return to capital gains tax at your own normal income tax rate with indexation and a business relief - another change in rules - more work for me - yippee - but potential 50% and 60% rates available if careless.....and I wonder if the CGT change will be made instantly when Osborne delivers his Budget]

The parties agree that tackling tax avoidance is essential for the new government, and that all efforts will be made to do so, including detailed development of Liberal Democrat proposals. [ worrying step towards a "General Anti-Avoidance Rule" - a proposed system where every deal has to get HMRC blessing that it is the least tax efficient way of doing it on the grounds that if you do it the most tax efficient way you're avoiding tax - Gordon Brown's mantra that we should all pay the "right" amount of tax on acid I'm afraid - for those in business themselves be afraid of this closing clause as it's HMRC running the show soon!]

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In any case, sorry for sending two blogs in one week after such a long gap during the election campaign.

Regular readers will know that I promised to be equally cynical if the next Chancellor was blue not red - and I hope to keep to that commitment.

Finally, to those who sponsored me for macmillan for my bike ride- thanks very much - I'll put photos and an update on the web (left hand side of this page) next week.

This email reflects my views and not those of my directors or the firm.

Donald Parbrook