Fiscal rules are no more than vague hopes for this government
23 November 2016
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Reaction to the Autumn Statement 2016
Commenting on the chancellor’s Autumn Statement today, Mark Littlewood, Director General at the Institute of Economic Affairs said:
“This was a thin and fiddly statement, so it’s a relief that the Chancellor has found one area of government activity to cut in abolishing the Autumn Statement. Sadly though, he has abandoned any attempt to balance the books. Over the next five years the Government will be adding over £233 billion to the national debt, as much as the entire annual welfare bill. Fiscal rules to this government sadly seem to be no more than vague aspirations which are abandoned with impunity.
“On the upside, the Chancellor does seem to realise, however, that there’s no need to implement policy for the sake of it. A boring budget statement is better than a gimmicky one.”
Housing
“Outlawing letting fees will only drive up the cost of renting. Agencies will inevitably foist these fees onto landlords, who will in turn be forced to put up rents.
“Instead of making artificial changes that skirt around the problems of the housing crisis, the government should be improving affordability by allowing the construction of more houses. Instead of pumping public money we don’t have into housebuilding, the government should liberalise planning regulations to free up land for building.”
Ring-fencing
“Protecting the triple-lock pensions guarantee is misguided and unsustainable. With an ageing population, this mechanism locks in increased spending on pensioners relative to a shrinking working population who unfairly bear the burden. If it is decided that the state pension should increase, it should be either pegged to price level increases or earnings growth, to ensure it is linked to the health of the economy. Phillip Hammond paid lip service to the UK’s demographic challenges. He would do well to seriously consider an end to arbitrary ring-fencing of budgets; a thorough and strategic examination of what government should be doing is badly needed.”
Notes to editors:
For media enquiries please contact Stephanie Lis, Director of Communications: slis@iea.org.uk or 0207 799 8909 or 07766 221 268
The mission of the Institute of Economic Affairs is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems.
The IEA is a registered educational charity and independent of all political parties.
“This was a thin and fiddly statement, so it’s a relief that the Chancellor has found one area of government activity to cut in abolishing the Autumn Statement. Sadly though, he has abandoned any attempt to balance the books. Over the next five years the Government will be adding over £233 billion to the national debt, as much as the entire annual welfare bill. Fiscal rules to this government sadly seem to be no more than vague aspirations which are abandoned with impunity.
“On the upside, the Chancellor does seem to realise, however, that there’s no need to implement policy for the sake of it. A boring budget statement is better than a gimmicky one.”
Housing
“Outlawing letting fees will only drive up the cost of renting. Agencies will inevitably foist these fees onto landlords, who will in turn be forced to put up rents.
“Instead of making artificial changes that skirt around the problems of the housing crisis, the government should be improving affordability by allowing the construction of more houses. Instead of pumping public money we don’t have into housebuilding, the government should liberalise planning regulations to free up land for building.”
Ring-fencing
“Protecting the triple-lock pensions guarantee is misguided and unsustainable. With an ageing population, this mechanism locks in increased spending on pensioners relative to a shrinking working population who unfairly bear the burden. If it is decided that the state pension should increase, it should be either pegged to price level increases or earnings growth, to ensure it is linked to the health of the economy. Phillip Hammond paid lip service to the UK’s demographic challenges. He would do well to seriously consider an end to arbitrary ring-fencing of budgets; a thorough and strategic examination of what government should be doing is badly needed.”
Notes to editors:
For media enquiries please contact Stephanie Lis, Director of Communications: slis@iea.org.uk or 0207 799 8909 or 07766 221 268
The mission of the Institute of Economic Affairs is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems.
The IEA is a registered educational charity and independent of all political parties.
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