Taxmanship Mr. Callaghan's unexpected declaration that he wanted to try
and change the rules of GAIT (the General Agreement on Tariffs and Trade) to enable him to give tax rebates to exporters should not, I suspect, be taken too seriously. It's the sort of thing that Ministers are inclined to say in an election campaign when they're out of the reach of their permanent advisers. But back in Great George Street it's not difficult to imagine the tut-tutting of the Treasury knights. And even if he did insist on pursuing this line after the election, the Chancellor would be far better ad- vised to ask for a temporary GATT waiver for Britain, instead of trying to re-negotiate the whole treaty which—even if possible—would take an age and end up giving equal advantages all round.
A better long-run bet, in any case, is the value- added tax in place of most of the corporation tax, as Mr. Heath, I'm glad to say, pointed out. I've been lobbying for the value-added tax for the past five years and more, so far without success. But with strong support from within the inner circles of the present Government, and now the backing of the Leader of the Opposition, there may yet be hope. But perhaps the most ridiculous aspect of the whole controversy is the sight of Mr. Callaghan, who turns purple at the mention of devaluation, desperately looking for a method of back-door devaluation through ex- port •rebates. Evidently it's all right to work on the basis that our exports are uncompetitive so long as we deal with this, not through open devaluation, but by introducing a multiple cur- rency like a minor Latin American republic.
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