IEA reacts to the Chancellor's Spring statement
“The Chancellor has basically promised us “a little bit of jam tomorrow” in his Spring statement. The budget deficit is falling a little faster than expected, which is welcome. But he is likely to use some of this £4 billion bonus to simply increase state spending in the Autumn. Disappointingly, he didn’t signal any meaningful aspiration to cut taxes even if he has the room to do so.
“The forecast for growth this year has been turned up by a tiny notch, but this should not be allowed to distract from the vital objective of getting public finances under control and returning to balanced budgets. By easing off on this target, the Chancellor has all but guaranteed that we are destined to experience a quarter of a century of budget deficits, with increased debt being passed on to future generations as a result.”
Notes to editors:
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To read the IEA’s report, ‘Taxation, Government Spending and Growth’, published in November 2016 click here.
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Further IEA Reading: Taxation, Government Spending and Economic Growth