Commenting on the Budget, Mark Littlewood, Director General at the
Institute of Economic Affairs, said: “This was a fiscally neutral
Budget, but deficit elimination is now being done wholly by growth,
not by savings. The Chancellor yet again said the right things
about the need for fiscal discipline, yet despite savings in some
areas, public spending continues to climb in cash terms and is
little changed from 2010 in real terms. And whilst it’s right to
continue to cut the budget...Request free trial
Commenting on the Budget, Mark Littlewood, Director General
at the Institute of Economic Affairs, said:
“This was a fiscally neutral Budget, but deficit elimination
is now being done wholly by growth, not by savings. The Chancellor
yet again said the right things about the need for fiscal
discipline, yet despite savings in some areas, public spending
continues to climb in cash terms and is little changed from 2010 in
real terms. And whilst it’s right to continue to cut the budget
deficit, the bigger issue is the overall levels of government
spending and taxation – which are both still far too
high.
“Broadly this was a sensible Budget which did not wildly
overstep its remit of tax and fiscal announcements. Yet the
Government is still lacking the gumption for some radical, big
decisions on the size of the state. With an ageing population,
these decisions cannot be put off forever. And while we’ve seen a
levelling of the playing field today in moves to align tax rates
and on a wider range of educational opportunities, the Government
has again failed to tackle key issues such as intergenerational
inequality.”
Commenting on business rates, Jessop, Chief Economist at the
Institute of Economic Affairs, said:
“The Chancellor has done the right thing to provide support
for small firms facing big hikes in business rates, but he is
fixing a problem of the Government’s own making. In the long term,
local business taxes need a fundamental review with all options on
the table – including their replacement by a land value
tax.”
Commenting on higher National Insurance Contributions for
the self-employed, Jessop, Chief Economist at the
Institute of Economic Affairs, said:
“It is right that the self-employed and employed should pay
similar National Insurance Contributions – the Government should
not set tax rates that artificially favour one form of employment
over another. However, it would have been better to level the
playing field by cutting NICs for the employed rather than raising
those for self-employed. NICs are a tax on jobs and wages and
reducing their burden would help many lower-income
households.”
Commenting on the Chancellor’s comments on social care
funding, Mark Littlewood, Director General at the Institute of
Economic Affairs, said:
“There has been an unreasonable stress on cutting social care
budgets, but it’s a relief that the Government has ruled out tax
rises to correct this. Tax-funded social care would see a stop to
majority of social care that is currently provided by friends,
relatives or that is self-funded.
“Yet it’s totally unjustifiable that measures such as the
triple-lock on pensions and pensioner cash benefits have been
maintained in the face of cuts. For too long we have given too much
money to people who are old, but not always poor. This is just the
beginning of a demographic crisis – the Government needs to think
long and hard about the serious challenges that
presents.”
Commenting on tax changes overall, Professor Philip Booth,
Academic Fellow at the Institute of Economic Affairs,
said:
“The main focus of any Budget should be tax policy. At 18,000
pages, the UK has one of the most complex tax codes in the world.
At least has avoided playing to the
gallery by making complex changes to taxation for short-term
political gain. However, if he wishes to be known as a successful,
reforming Chancellor, he should be enacting radical changes to
capital gains tax, inheritance tax, stamp duty and council tax with
a view to making the tax system simpler, more coherent and more
efficient.”
