Summer Budget: A tentative step in the right direction

July 08, 2015 4:02 PM

Responding to the Budget, Jonathan Isaby, Chief Executive of the TaxPayers' Alliance, said:

"This Budget was frustratingly complicated, but overall this was a tentative step in the right direction. The general focus on eradicating the deficit via spending reductions rather than tax hikes is welcome. It was as ever a political Budget from a political Chancellor and there were notable groups left immune from austerity - not least well-off pensioners - but it's good news that this Budget will leave more of people's own money in their own pockets."

On changes to tax credits, he continued:

"Eradicating the deficit has to involve welfare reform, and tax credits have to be part of that. It is a shame the Chancellor is still unwilling, though, to take on other elements of welfare, particularly on Child Benefit and universal pensioner benefits."

On changes to Corporation Tax, he continued:

"Companies don't pay taxes, people do. They fall on the heads of individuals through lower wages, fewer jobs in the economy, and higher prices for the products and services those companies provide. Cutting Corporation Tax further is no doubt a brave move but it is one that is most welcome."

On the speeding up of changes to Income Tax thresholds, he continued:

"The Chancellor should be congratulated on going further and faster to take action on these thresholds, even if he could have been more ambitious. The increase in the Personal Allowance will help all taxpayers, though more action is needed to merge National Insurance with Income Tax thresholds. Moving up the point at which the 40p rate kicks in is well overdue, as this rate designed for higher earners has hit more and more people in recent years thanks to inflation and resulting fiscal drag."

On the announcement of changes to Inheritance Tax, he continued:

"As house prices have increased, frozen thresholds have meant more families have been dragged into paying this unfair and immoral tax. The Chancellor is right to increase the thresholds, but it is regrettable that the changes have introduced added complexity in the system. The next step should be the complete abolition of this unpopular levy."

On the reduction of the benefit cap to £20,000 outside of London and £23,000 inside, he continued:

"Efforts to ensure work pays more than not working isn't just sensible or moral but hugely popular. A £20,000 cap is roughly equivalent to the post-tax national average wage, so scaremongering around the figure is just that. Tailoring it for different regions of the country makes perfect sense and the Chancellor should apply the same logic to public sector pay."

The TaxPayers' Alliance called on the Government to reduce the benefit cap to £20,000 in our March 2015 report The Spending Plan.

On the announcement that Fuel Duty would be frozen, he continued:

"The Chancellor is right to continue the good work done in the last Parliament on Fuel Duty. Families across the country rely on their cars to get to work and take their children to school, and ensuring that the cost of living tax burden doesn't rise this year will be widely and rightly welcomed. Indeed, the Chancellor resisted the urge to slap further taxes on tobacco and alcohol and taxpayers up and down the country will raise a glass to the Chancellor."

On the changes to Insurance Premium Tax, he continued:

"No ifs, no buts, this rise will increase the price of a family holiday and is to be regretted."

For more on the budget:

Summer Budget reveals spending increases: Overall there was a spending increase?
Bank levy down: So the bank levy was a bad idea then
So that Budget Surplus: How likely is it to happen?

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