Silvia Andreoletti, Head of Communications at the Adam Institute, said:
Instead of cutting taxes and spending, the Chancellor delivered a
hodgepodge of expensive measures without a clear direction.
They'll plunge the country deeper into debt and sabotage efforts
to get Britain growing.
The OBR figures could not speak more clearly: inflation is on the
rise, growth is a distant dream, and government borrowing is out
of control. Support on energy costs and small business rate
relief sound good from the dispatch box, but they will likely be
wiped out by rising inflation and sluggish demand.
What good is business rate relief for a small business that can't
afford to hire employees because the minimum wage has been
increased, can't borrow money because its bank is overburdened by
taxes, and can barely pay its rising energy bills?
Maxwell Marlow, Director of Public Affairs at the Adam Institute, said:
This is a budget defined by fiddling around the edges, rather
than delivering the bold tax changes that would fix the
economy.
With welfare spending forecast to reach over £400 billion by the
2030s, the government must have a sober reassessment of its
priorities.
Deep spending and red tape cuts are required to deliver the
growth in living standards the nation is crying out for.
On the energy measures, Jasper Ostle, Head of Research and
Education at the Adam Institute, said:
The Chancellor's Budget has missed the mark on reducing energy
costs. Abolishing standing charges will only further distort the
cost of energy, whilst he's avoided tackling the root cause of
our sky-high energy prices and dangerous energy insecurity: the
proportion of electricity that comes from intermittent sources
like wind and solar.
The Government's plan to finally address the UK's industrial
electricity prices, which are among the highest in Europe, is a
welcome commitment. However, the proposed 25% cut comes nowhere
near the 82% gap between British and French industrial
electricity prices, and it does nothing to address the
fundamental reason costs are so high.
Bringing industrial electricity costs down to French levels could
increase long-term GDP by over 4%. This can only be done through
a sensible strategy to increase the UK's energy production - a
glaring omission in today's announcements.
On the growing deficit, Sebastian Charleton, Head of Programmes
and Partnerships at the Adam Institute, said:
With all the talk of cutting the price of pickles and marmalade,
this budget is the fiscal equivalent of fiddling while Rome
burns, ducking the tough choice needed to halt our slide into
ever deeper debt.
We already spend more servicing our national debt than defending
the realm - a worrying milestone made worse by the absence of any
credible plan to fund ambitious new defence commitments.
With an ageing population and anaemic growth, Britain's spending
trajectory is blatantly unsustainable, locking us into a
doomspiral that will see public debt balloon to an eye-watering
330% of GDP by 2075.
Fixing this requires real political bravery. This means bold
supply-side reforms to kickstart productivity, paired with
genuine structural restraint on spending. Sadly, this budget
delivered neither - prioritising short-term political wins at the
expense of Britain's long-term economic health.
On the announced small producers alcohol duty relief, Viggo
Terling, Chief of Staff and Digital Manager at the Adam Institute, said:
£10 million of relief on a tax that raises £12 billion will be
gratefully received by the small minority who qualify for it.
Everyone else gets another inflation-linked rise.
Alcohol duty is already an unreliable source of revenue: last
year the tax base shrank by 3.3% and receipts fell by 1.4%, in a
year when rates went up.
The system currently taxes every drinker in the hope of curbing
harm caused by a much smaller group. A moderate drinker's first
pint is taxed as heavily as a heavy drinker's twelfth. Bolting on
another bespoke relief does nothing to address this and only adds
complexity to a system in need of simplification.
The Chancellor should replace the present patchwork of alcohol
duties with a single flat duty per unit of alcohol, whatever the
drink or the size of the producer, and a relief for drinks served
in pubs, where drinking is safer and already heavily taxed.
