There were several innovations in Tuesday's budget. In addition to the tax and spending changes there was a new transparency. Gordon Brown persistently lied when presenting his budgets, making it difficult for analysts to work out what was actually happening. George Osborne, by contrast, seemed to be telling it like it really is, without hiding his real changes in the small print of the written version to be chiselled out afterwards.

A most welcome innovation appeared in his section on capital gains tax. The Chancellor said:

"I asked the Treasury to examine what would happen if we had increased the rate much further beyond 28 per cent, and their dynamic analysis showed that this would have resulted in smaller total revenues."

This, I think, is a first. I do not remember the Treasury having previously made or admitted making dynamic analysis. (Actually, there might have been one occasion, on their secret advice to Gordon Brown on flat tax which the Telegraph obtained under Freedom of Information, and which revealed the blacked-out bits.)

It is a welcome admission that higher tax rates can cause lower revenues, with the converse implied that tax cuts can boost them. It gives the Adam Smith Institute room to manoeuvre, and provides a ready response to those who think that if we jack up taxes on high achievers, people will simply pay them without changing their behaviour. It is a most welcome innovation.