Alastair Darling has, by universal consent. Left and Right, made a complete mess of his first pre-budget report. These comments give some idea.

From the FT on private equity:

"A sledgehammer to crack a nut" is how one private equity executive described Alistair Darling's creation of a flat capital gains tax of 18 per cent to crack down on high-earning buy-out executives.

The strange thing about Mr Darling's sledgehammer is that it is being cheered by the nut and complained about by almost everyone else who has been hit by it.

And:

the buy-out titans themselves are chuckling merrily, relieved that the chancellor seems to have ditched the more aggressive ideas he had been rumoured to be considering before the pre-Budget report.

Whilst on capital gains the FT says:

It is like using a howitzer to hunt a rabbit - and then missing. But not only does the change miss its target, it will have big effects across the economy, which the Treasury ought to consider.

As they note:

From April next year individuals will face a flat capital gains tax rate of 18 per cent. That means three key changes:

- First, there will no longer be a lower rate for the sale of a business rather than other assets such as property.

- Second, there will no longer be extra relief for assets held long term.

- Third, and most important, capital gains will no longer be taxed at the same rate as an individual's other income.

But they rightly say:

Removing the special rate for business assets, however, will only graze buy-out executives. They will now pay 18 per cent on their carried interest, instead of the 10 per cent that was sometimes achievable, but their cleaners, who earn £7,500 per annum, will still incur a marginal rate of 22 per cent.

Why, one has to ask, was this logic missed by Alastair Darling? Did he really think no one would spot it?

And, as the FT again says:

Accountants are no doubt dreaming up new and exciting ways to turn income into capital gains - thereby cutting the maximum tax payable from 40 to 18 per cent - even now.

Business has long called for simplicity in tax. And there's no doubt we now have a much simpler CGT system. But most striking of all is this comment:

What is most striking though is that Mr Darling offered no rationale or philosophical basis for the rate he chose or the reversal of his predecessor's policy. A simpler tax system is welcome - but it needs to be a logical tax system as well.

That realisation is just about the only merit of Tuesday's debacle.