Tax and Fiscal Policy

IEA responds to mini budget statement

Commenting on the Chancellor’s announcements, Mark Littlewood, Director General at free market think tank the Institute of Economic Affairs, said:

“This isn’t a trickle-down budget, it’s a boost-up budget. The government has announced a radical set of policies to increase Britain’s prosperity – from cancelling the corporation tax rise, to cutting stamp duty and extending investment allowances.  

“It’s refreshing to hear a Chancellor talk passionately about the importance of economic growth and supply-side reforms, rather than rattling off a string of state spending pledges and higher taxes. Only by bearing down on the amount of tax the state collects across the income spectrum, and reducing the regulatory burden, can we create better conditions for growth.

“The additional rate of income tax (45p) was always performative politics rather than sound economics. A simplified income tax system, with just two rates of tax, will mean higher earners spend less time tax planning and more time boosting their own productivity. The 1p off the basic rate of income tax will put more money in people’s pockets. The government should also consider raising income tax thresholds to help boost pay packets further.

“There were also important announcements on liberalising planning, scrapping the ludicrous cap on bankers’ bonuses, and encouraging those who can work to do so.

“This is a very encouraging start, but the government must not take its foot off the pedal. It will be important to keep reforming the tax system and spell out details on cutting burdensome red tape, including sunsetting EU regulation.

“Growth in state spending has been more than five times growth in GDP since 2015. Bringing down taxes from an absurd high is welcome, but the government needs to outline plans to get down public spending and borrowing in the medium-term.

“If this was the Chancellor’s ‘mini’ budget, l look forward to the ‘maxi’ budget.”


Notes to editors

Contact: [email protected] / 07763 365520

IEA spokespeople are available for interview and further comment.

The IEA and the TaxPayers’ Alliance will be hosting a post-budget briefing at 3.30pm with economists Andrew Lilico and Julian Jessop. Watch here or RSVP to [email protected] to attend in-person.

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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