For immediate release
- TaxPayers’ Alliance dynamic tax modelling estimates that the measures announced today could boost output by £99 billion over the next ten years, recouping around three quarters of the lost revenue due to faster growth.
- Cancelling planned rises makes up more than half of the new growth, with a significant impact on investment, particularly the corporation tax rise, which will unlock £29bn of annual investment.
- The TaxPayers’ Alliance and the Institute of Economic Affairs will be holding a joint briefing on the measures this afternoon.
Economic modelling from the TaxPayers’ Alliance (TPA) suggests that the measures announced today could boost the economy by almost £100 billion. This would see three quarters of the foregone revenue of the measures returned to the exchequer through dynamic effects over the next decade.
The TPA dynamic tax model, built in collaboration with consultants Europe Economics, estimates that the tax cuts could boost economic output by £99 billion over the next ten years. The cancellation of planned tax rises will have a considerable impact. Preventing the corporation tax rise alone accounts for more than half of the total economic boost, at £59 billion, driven by a significant £20 billion boost to investment as a result of the rise being cancelled. The scrapping of the health and social care levy accounts for another £25 billion, dynamically raising average earnings by £5.50 per week.
The newly announced tax cuts will boost economic activity, unlock enterprise and enable improvements in productivity. Reforms to income taxes could together enhance growth by £7.8 billion, by strengthening incentives to engage in productive economic activity. Stamp duty impedes the effective allocation of capital in property markets, in turn affecting investment decisions. Today’s stamp duty reforms could boost output by £2.1 billion. These are likely to have a noticeable impact on taxpayers’ personal finances.
The TPA welcomed cuts to income tax and stamp duty, the cancellation of the corporation tax and national insurance rises, and the freeze to alcohol duties, making up the most taxpayer-friendly budget in recent memory. The group also called on the treasury to get serious on spending and ensure borrowing doesn’t weigh down generations to come.
The TaxPayers’ Alliance and the Institute of Economic Affairs will be holding a joint briefing on the measures this afternoon.
Duncan Simpson, chief economist at the TaxPayers' Alliance, said:
“Our modelling suggests the chancellor has been true to his word, providing a package that will have a significant impact on long-run economic growth.
“The reversal of short-sighted rises in corporation tax and national insurance contributions will offer the lion’s share of the impact, while reforms to income taxes and stamp duty will better incentivise productive economic activity alongside a welcome retail offer for taxpayers.
“The package today represents a bold first step towards the liberalising policies which will be required to meet the government’s growth aspirations.”
TPA spokesmen are available for live and pre-recorded broadcast interviews via 07795 084 113 (no texts)
The TaxPayers’ Alliance and the Institute of Economic Affairs will be holding a joint briefing on the measures at 3.30pm today in Westminster. For details please call 07795 084 113 (no texts).
Investigations Campaign Manager, TaxPayers' Alliance
24-hour media hotline: 07795 084 113 (no texts)
Notes to editors:
Founded in 2004 by Matthew Elliott and Andrew Allum, the TaxPayers' Alliance (TPA) campaigns to reform taxes and public services, cut waste and speak up for British taxpayers. Find out more at www.taxpayersalliance.com.
TaxPayers' Alliance's advisory council.
- The TaxPayers’ Alliance response to the mini-budget can be found here.