Certainly there is a feeling that any attempt at serious, all embracing reform has already run into the sand.Yet we shouldn’t underestimate the determination of policy makers, and although the impression may be of progress at a snail’s pace, almost to the point of standstill, the wheels are grinding and change which might eventually lead to a quite considerable reinforcement of the free market system is gradually being brought about.The most important of these changes are the dull, boring and worthy – measures to improve transparency, put in place universal standards of regulation and accountability, and mechanisms for making investors and lenders more aware of the risks they are taking on.Much more problematic are the proposals that involve direct intervention in the market – reinforcing the IMF’s position as international lender of last resort by giving it pre emptive powers and funds, or finding a credible way of tying creditors in and forcing them to participate in any bailout.As a Yank and former investment banker, Mr Rubin is much more aware of the dangers and contradictions inherent in such an approach than his British counterpart. Give investors too much of a safety net, and they will ignore the risks. Close off the exit route too tightly, and they won’t invest, or will demand an unacceptably large premium for doing so. As Mr Rubin has remarked on more than one occasion before, there are no magic wands, or easy solutions.SIMPLICITY is a much-underrated virtue. It ought to have pride of place in the design of any tax system In practice, it rarely gets any more than a look in. For successive Chancellors, simplicity has invariably been way down the list of tax reform priorities. Virtually every year the Finance Bill gets fatter and our system of taxation more complex and confusing.

The present Chancellor seems to have been particularly adept at adding extra layers of complexity, further obfuscating the big picture and disguising the real impact of tax on our lives.It is this quest for simplicity which is the most appealing aspect of a call for radical tax reform in a new pamphlet published this week by the Centre for Policy Studies by Maurice Saatchi, the Tory peer, and Peter Warburton, economic adviser to the City investment bank Robert Fleming. In it, the writers list an extraordinary range of tax allowances and exemptions, and demand their abolition in favour of a much higher personal income tax threshold that would take many low earners out of the tax net altogether.Most tax reliefs and exemptions are the result of the usually failed attempts of successive governments to engineer taxpayers’ behaviour. Once in place, they are devilish difficult to get rid of, even though it is hard to think of any credible intellectual defence for them. Any Chancellor designing a tax system from scratch would abandon the lot. But the two authors do not stop at demanding simplicity in taxation. They also reissue the traditional call for smaller government and a lower tax take out of national income. In net terms this has risen from a low of 28 per cent of GDP in the Macmillan era to a high of 39 per cent under Mrs Thatcher in 1981.Since then, it has fallen and risen again, to 37.2 per cent last year.

They would like to see a return to 1950s lows, taking “tax independence day”, the day on which the average person ceases to work for the Government and starts earning for himself, back from 18 May to 21 April. They link this to cutting benefits and reducing the “dependency culture” of the welfare state.It is easy to see why Conservatives want to reclaim the tax-cutting agenda. The Labour Government achieved a spectacular political coup in cutting a penny off income tax in this year’s Budget, even though the overall tax burden will be higher. The Opposition calls this “stealth” taxation, so perhaps Gordon Brown should steal a bit more Tory tax thunder by repressing his social engineering tendencies and recognising the merits of simplicity too.. FINANCE MINISTERS of the Group of Seven industrial countries will agree plans at their meeting in Washington on Monday to make private lenders share the burden of tackling future international financial crises. The move, signalled in separate speeches yesterday by Gordon Brown, the Chancellor of the Exchequer, and Robert Rubin, the US Treasury Secretary, is among a wide-ranging package of measures to reform the international system following last year’s financial market crisis.
New codes of conduct in the provision of information by governments and a planned International Monetary Fund (IMF) credit line for countries in danger of falling victim to financial contagion will also get the go- ahead from the G7 next week.The Chancellor said there must be a partnership between private lenders and public sector organisations in order to maintain confidence in crisis- hit countries. He will call for specific proposals for burden-sharing to be agreed by the end of this year.”It is in the interest of the private sector that there be clear rules of the game which create the confidence that all investors will be treated equally and there is no advantage in being the first to get to the door,” he said.Mr Rubin laid less emphasis on a formal set of new arrangements, but said a “powerful programme” of reform was planned.

He joined Mr Brown in saying bond contracts should contain majority clauses making co-ordination between lenders easier.Mr Rubin added: “There is no reason why one category of unsecured private creditors should be regarded as inherently privileged relative to others .. Claims of bondholders should not be viewed as necessarily senior to claims of banks.”Mr Brown will also propose to other G7 ministers a new surveillance unit at the IMF to co-ordinate the data and information gathered by international institutions.This would join the new financial stability forum, which co-ordinates the work of national and international bank financial market regulators and met in Washington for the first time last week.Mr Brown and Clare Short, the international development minister, will be urging the G7 to speed up and extend the debt relief initiative for poor countries.Ms Short will tell a conference in London tomorrow that the decisions taken next week will be “decisive” for the future of the world’s poorest and most indebted nations. A new combined EU debt initiative is on the drawing board.However, the G7 agenda is likely to be dominated by international financial reform. Mr Brown said yesterday that the fading of the crisis had not made reform less urgent. “There is no point in waiting for the next crisis before making the necessary reforms,” he said.His remarks were echoed by Michel Camdessus, managing director of the IMF. Speaking in Washington yesterday, he said: “The situation is better but there is no room for complacency.”. LIBERTY, the struggling Regent Street department store group, announced a modest return to the black yesterday, although the feat was only achieved by a boost from property proceeds.