Bright Blue: The country needs a change in direction, but this is a continuity Chancellor
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Responding to the Autumn Budget 2026 Ryan Shorthouse, the Executive
Chair of Bright Blue, said: This country needs a change in
direction. But this is just a continuity Chancellor. Over the past
decade, successive governments have pursued increased taxes,
spending and borrowing. It is not efficient. Individual and
national prosperity has effectively stagnated. So has the
productivity of our public services. It is not equitable either.
Younger and future taxpayers are being...Request free trial
Responding to the Autumn Budget 2026 Ryan Shorthouse, the Executive Chair of Bright Blue, said: This country needs a change in direction. But this is just a continuity Chancellor. Over the past decade, successive governments have pursued increased taxes, spending and borrowing. It is not efficient. Individual and national prosperity has effectively stagnated. So has the productivity of our public services. It is not equitable either. Younger and future taxpayers are being asked to pay more and more for public entitlements and debt. Healey is investing more in this unsuitable and unsustainable social democratic model. There were some good policies. Younger people are getting a much-needed, much-deserved helping hand with achieving major milestones in life: a better-targeted demand-side subsidy for home ownership and paid paternity leave for the growing number of self-employed. Frankly, it would be better, economically and politically, if the Chancellor announced a handful of major fiscal changes in the Budget, rather than a shopping list of relatively small items to support sectional interests. We need bold, brave, broad tax reforms and spending cuts to make Britain more prosperous and fairer for younger and future generations. On spending, the Chancellor ought to means-test all universal benefits, including the state pension, albeit with the ceiling on eligibility determined by tapers rather than cliff-edges. There should be a plan for a meaningful and specific reduction in net public debt, not just the current budget deficit, by the end of this parliament, which bond investors would reward. All public services should also have to demonstrate successful use of AI to increase their efficiency and effectiveness. The Chancellor's focus should be on broadening the base rather than raising the rate of taxes, especially VAT. We need a significant shifting of the weight of taxation off of effort, enterprise and entrepreneurialism. The 2026 Autumn Budget adopted six Bright Blue policies:
Energy
Cyril Davydenko, Researcher at Bright Blue, commented: The measures to subsidise energy bills are unnecessarily broad and expensive. The extension of zero-rated VAT on electricity benefits more affluent households who consume more energy. Around 70% of households will receive £100 through the Household Energy Payment. The Government should have instead increased the Warm Homes Discount for in-work and out-of-work households on benefits. However, it is welcome that the Chancellor is committed to phasing out standing charges on gas and eventually electricity bills. These fixed charges are regressive. More broadly, the Government's commitment to shifting new non-commodity costs, such as the forthcoming Gas Shipper Obligation, from energy bills to general taxation establishes a positive direction for energy policy. Social security
Dr Will Prescott, Head of Research at Bright Blue, commented: No sensible tax or benefits system should penalise those who are merely trying to help themselves. Subjecting carers to the loss of their entire benefit for earning a penny above the earnings threshold is especially perverse, and the Government's move to scrap the Carer's Allowance cliff edge is long overdue. They should replace more cliff edges with tapers for state benefits in future budgets. As the Government itself says, the current welfare system is letting too many people down while driving ever-higher costs'. However, while increasing the use of face-to-face assessments should help to reduce the number of especially younger people onto disability benefits, it is disappointing and slightly concerning that the Government has delayed its promised rewiring' of benefits until at least next year. Bartek Staniszewski, Head of Policy at Bright Blue, commented: It is fantastic to see paternal pay introduced for self-employed dads. The previous system was arbitrary and misandrist, and its victims included the newborn children who got to spend no time with their dads. Now it is time to go further and also introduce pensions auto-enrolment for self-employed workers and end the arbitrary tax gap between them and employees. State pension
Dr Will Prescott, Head of Research at Bright Blue, commented: While protecting the elderly is noble in and of itself, adding yet more complexity to a tax system in desperate need of simplification is not the way to go about it. Moreover, ensuring that pensioners whose sole income comes from the State Pension are tax exempt effectively turns the triple lock into a quadruple lock, at least for the remainder of this Parliament. If the State Pension is to remain non-taxable, it should be means-tested like most other non-taxable state benefits for non-disabled people. Housing
Bartek Staniszewski, Head of Policy at Bright Blue, commented: Labour has already conceded they will not hit their new homes target this Parliament, andthis Budget will do little to change this. Taking VAT off land sold to social housing providers is the best supply-side announcement in it, as the cost of land consumes the lion's share of said providers' funds. It is therefore no surprise to see the Government go hard on demand-side measures with the Your First Home scheme. This looks to be a better-targeted scheme than its predecessor, Help to Buy. You will not meaningfully broaden home ownership without both significant demand-side support and supply-side support. Dr Will Prescott, Head of Research at Bright Blue, commented: In fiscally constrained times it is always tempting to raise taxes on unpopular groups, and few are less popular than landlords. However, following successive reductions in reliefs and allowances, together with the introduction of the Renters' Rights Act, the Government really does need to be mindful of going too far and carefully monitor unforeseen impacts. If too many landlords quit the sector, the UK's rental shortage will only worsen. Devolution
Dr Will Prescott, Head of Research at Bright Blue, commented: Requiring Whitehall's sign-off to allocate funding for local transport projects is both cumbersome and inefficient. Giving mayors, who know their areas' needs far better than anyone in Westminster, a share of Income Tax revenue is a welcome development that could lead to real improvements in local infrastructure. Giving local and regional governments full control over local business rates is another positive step. Not only would this provide a clear incentive to adopt pro-growth policies, but it could also help to alleviate long-standing problems with local government finances. Ryan Shorthouse, Executive Chair of Bright Blue, commented: The evidence shows that if overnight visitor taxes are levied in major tourist destinations and are relatively small, they have no impact on visitor numbers. Such taxes are widespread in Europe and the US. We need to raise taxes from somewhere to raise revenue for both central and local governments. Let's apply them where the evidence shows there is no or limited damage. Taxation
Dr George Pickering, Senior Economist at Bright Blue, commented: While the announced temporary increase to the UK bank surcharge may go some way toward providing the additional revenue this government desperately needs, the Chancellor should be wary of excessively burdening one of the UK's most internationally competitive and mobile industries. Instead, the government should urgently seek savings on welfare and pensions. The Chancellor's announced increase in the Machine Games Duty on Category B gaming machines is welcome. These high-stakes machines are closely associated with problem gambling, and a majority of the British public consider the high-street betting shops and Adult Gaming Centres which feature them to be a sign of community decline. The Government should not expect Capital Gains Tax relief for business founders and early investors to be an economic silver bullet. Previous examples of Capital Gains Tax relief for entrepreneurs only benefitted a relatively small number of people, and there is little evidence that such measures significantly affect investment decisions. Minimum wage
Ryan Shorthouse, Executive Chair of Bright Blue, commented: The Government should completely abandon its commitment to harmonise the wage floor between those under and over the age of 21. Even if we didn't have a fairly loose labour market, it would be the wrong aim. Hiring a young and inexperienced person is generally a cost to an employer for a much longer period. Therefore, there needs to be a financial incentive to hire them over a more experienced employee. Trade
Dr George Pickering, Senior Economist at Bright Blue, commented: The Chancellor's announcement that import tariffs will be suspended on more than 100 products does not go far enough in lowering the prices of everyday essentials. Import restrictions accomplish little other than propping up uncompetitive and wasteful businesses whilst increasing prices for British consumers. If the Government is serious about reducing the cost of living, it should permanently end tariff burdens on a broader range of imports. Savings
Dr George Pickering, Senior Economist at Bright Blue, commented: The Chancellor's reversal of plans to cut the annual Cash ISA limit to £12,000 will be welcome news to the millions of people who use their Cash ISAs to responsibly build up secure savings pots for themselves and their families. Britons should be investing more to secure their financial futures, but the government should incentivise this by raising the annual Stocks and Shares ISA limit, not by penalising cash savers. Notes to editors
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