There’s some applause for George Osborne’s Autumn Statement from the centre-right think-tanks, although many of them suggest he could go further in cutting back the state. Matthew Sinclair of the Taxpayers’ Alliance gets the theme started:

“There are welcome tax cuts in the Autumn Statement which will ease the burden on families whose finances are under enormous pressure. But in several crucial areas the Government has not done nearly enough and the Chancellor announced complicated, limited relief instead of serious reforms. The Treasury is finally conducting proper dynamic analysis of corporation tax cuts and it should replicate this work across the board. There is now a golden opportunity to show how cutting a range of taxes that hold back the economy and leave people worse off would strengthen the recovery with very little impact on revenues.”

Mark Littlewood, Director General at the Institute of Economic Affairs, continues it:

“The government is basically attempting to freeze both spending and taxation, but this is not sufficient. Government spending as a proportion of national income has not shrunk nearly enough. It’s essential the government reassesses spending levels more radically so they can cut taxes and allow people to keep more of their own hard-earned cash.”

George Osborne’s overall strategy is indeed yielding results, but if deficit reduction is now being shown to work, why not pursue this policy more aggressively? To finally eliminate the budget overspend by 2019 is moving at a snail’s pace. Trimming £3bn off contingency budgets along with feeble efficiency gains is simply not good enough. He should have taken this opportunity to make much greater reductions in state spending.”

And then there’s Ryan Bourne, Head of Economic Research at the Centre for Policy Studies, who says in his response:

“Firstly, the Government must continue to cut government spending to try get the budget back to balance. … Whilst steps like raising the state pension age are sensible long-term measures, a fundamental review of the welfare state from first principles is looking increasingly necessary in the coming decade if we are to achieve a low-tax, low-spend approach to sustainable public finances.”

Also from the CPS, Kathy Gyngell focuses – critically – on the marriage tax break:

“Since taxation is done at the level of the individual, there is a clear unfairness in terms of the relative tax burden on one-earner families, especially where the worker is a higher rate taxpayer – which more and more people have been drawn into as the starting threshold has been lowered. A significant transferable tax allowance for married couples could have addressed this discrepancy. But the Government’s £200 a year tax cut, limited to basic income taxpayers, is a pretty derisory effort to address this anomaly.”

The IoD’s Chief Economist, Graeme Leach, welcomes the Statement’s pro-business stance

“This was a pro-business, confidence-building Autumn Statement. Supported by the OBR’s forecasts of stronger economic growth, the Chancellor was able to announce further improvement in the public finances, with a budget surplus pencilled in for 2018-19. It’s good news to see light at the end of the tunnel.

The IoD would welcome a return to surplus much sooner, but we recognise the political realities. Of course, much could change between now and then, but the IoD strongly supports the pursuit of budget surplus. Whilst the public debt to GDP ratio can fall by debt growing slower than GDP, much quicker progress can be made with a return to annual budget surpluses.”

Lottie Dexter of the Million Jobs campaign says:

“We are thrilled with this pro-youth Autumn Statement. 

Levelling the playing field for under-21s and backing youngsters to succeed means the Government are clearly serious about tackling youth unemployment.”

And Ben Southwood, Head of Macro Policy at the Adam Smith Institute, reckons that Osborne should do more on the monetary side of things:

“It’s understandable, now that the economy looks finally to be recovering, that the chancellor has moved his focus away from monetary policy, but it’s also worrying.

Economies can absorb financial crises but they cannot absorb inconsistent monetary policy and massive drops in demand. We need George Osborne to change the Bank of England’s remit, requiring it to stabilise demand according to strict rules.

A rule-based monetary policy will stop the economy from overheating into unsustainable booms, and dive-bombing into harsh recessions.”

The Adam Smith Institute’s Sam Bowman also offers twelve observations here.

11 comments for: The centre-right think tanks urge Osborne to keep going with cuts and deficit reduction

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