TaxPayers' Alliance respond to the Spring Budget 2017

March 08, 2017 2:10 PM

Responding to the Budget statement given by the Chancellor of the Exchequer, John O'Connell, Chief Executive of the TaxPayers' Alliance, said:

"The Chancellor announced some welcome upward revisions to growth forecasts and set out a quicker pace of deficit reduction than at the Autumn Statement. That represents good progress, and so did the refreshing lack of complex fiddles used to play politics, but there is still some way to go before the public finances are in shape.

"For one, he should still be aiming to bring down borrowing much more quickly. There are huge chunks of unnecessary spending that could be wiped out in an instant, such as cancelling HS2, which would help to balance the budget as we disentangle ourselves from the EU.

"Furthermore, the national debt is still astronomical and growing. That will have to be paid off by future generations of taxpayers, so tougher action on the long-term challenges we face would put us on a much surer path to getting it under control. That means dealing with public sector pensions, state pensions and the funding model for the NHS and social care.

"It is good to try and equalise national insurance payments between employees and the self-employed, but this should be done by cutting rates rather than hiking taxes on entrepreneurs. The Budget also failed to deal with destructive taxes such as stamp duty, which gums up the housing market, means that young families can't get on the housing ladder and prevents older couples from downsizing when they would like to. In the longer-term, this pernicious tax should be abolished but at November's Budget he should slash it in half.

"It is encouraging that the Chancellor appreciates that the business rates revaluation process must be more regular and much smoother. That will head off the kind of political storm he faced in the past few weeks where some small businesses received devastating hikes in their bills. But it was less comfortable watching Mr Hammond trying to deal with George Osborne's sugar tax, where he was forced to commit to new spending because of uncertain revenue. Fiddly interventions like this are a distraction and should be binned in November."

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