Efficiency is if anything more important now than it was then. These days the realities of the new global economy have significantly increased the dynamic impact of taxes, and particularly business taxes, on international investment. Given the constraints of the public finances, a significant reduction in overall business taxation is simply and sadly unaffordable in the short term. That is why I have pledged to cut the main rate of corporation tax from 28p to 25p, and to reverse the increase in the small companies’ rate from 20p to 22p, paid for by reducing complex capital allowances so that depreciation rates in the tax system are closer to those actually used in accounts.

Adam Smith’s second principle was certainty, a lack of which undermines incentives for investment in a similar way to high tax rates. Much of the uncertainty introduced by this Government over the last 11 years has stemmed from a lack of understanding of the unintended consequences of tax policy.

A Conservative Government must not make the same mistakes — we need to fundamentally change the way we make tax law in this country. That is why I have asked Geoffrey Howe to lead a group of senior tax specialists and experienced politicians to propose long-term fiscal reforms.

These reforms will include a requirement on the Treasury to publish technical changes to the tax system in the autumn before the Budget, to be scrutinised by a new Parliament­ary committee and external experts. By the time the legislation reaches the statute book it will have been scrutinised by the people who will have to implement it. That means no more stealth taxes.