With the UK government now planning for economic recovery, it has to avoid a trade-off between health and the economy. Nevertheless, planning is required; this will focus on stimulating demand. Tax reform has an important role to play.

Mentioning the use of taxes to stimulate demand immediately brings to mind the Laffer curve. This is a theory developed by US economist Arthur Laffer who argued that, by cutting tax rates, the economy would be stimulated with the result that tax revenues would increase.