I have argued for some time that the UK has gone above the tax saturation level. A country which does this finds that increased taxes become very unpopular, and may collect less not more revenue.
Mr Osborne wisely cut oil company taxes in his latest budget, realising that the tax increases of 2011 on this sector had depressed exploration and development.
He has now wisely changed the pasty and caravan taxes, and offered some compensation to churches for the VAT on historic building repairs.
The changes to Income Tax and National Insurance made by the outgoing government were wrecking amendments which are reducing the revenues. Mr Osborne has promised some changes in 2013 but will lose output and tax revenue in the meantime.