Nigel Lawson

Britain's 1988 Budget reduced the basic income-tax rate to 25 per cent and replaced higher rates above 40 per cent with a single higher rate. Lawson presented lower rates and a simpler structure as incentives to enterprise. The reform makes the distributional question visible: reducing the top rate gave a different benefit from raising a tax-free threshold, and the political argument concerned who should receive relief as well as whether it encouraged growth.