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Adam Smith Institute – There are concerns about a “big-spending budget”. The ASI’s Head of Research Matthew Lesh said:

“It is seriously concerning that the Government is looking at ripping up the fiscal rules. A Conservative Government should not implement debunked Keynesian stimulus theories. Some infrastructure and public services spending, as well as supporting individuals and businesses during Covid-19, is necessary. But in the longer-run, spending like a drunken sailor will not create a thriving entrepreneurial economy. Expansive vanity projects won’t make us better off. Bureaucrats picking winners does not support risk-taking by entrepreneurs — the Government should be cutting red tape on innovation like limits on biotechnology, not presuming to know what is best.”

Centre for Social Justice

“There were some big announcements worth welcoming, but where was the social policy and anything like a programme for social justice? The Chancellor fiddled with the so-called poverty line to ensure that boosts to the Living Wage mean by 2024 it won’t be possible to be ‘in poverty’ and in full time work. We heard about “human capital” but little about the people behind the term. If the government is going to build their way to a new majority, we need much more for young people in forgotten towns looking for a bright future off the back of this building largesse. The big announcement around Further Education colleges is important and is to be welcomed (it is also nicked from CSJ reports). It shouldn’t be overlooked by headline writers. There’s an announcement on family hubs co-located in schools and scaling up family support. This is a big step forward in delivering a manifesto commitment, but we need more than a research report. The government seems to be admirably focused in tackling rough sleeping through building new accommodation to get people off the streets for good. This is welcome and needs work alongside previously announced funding for Housing First style accommodation to turn around the most chaotic lives. Affordable housing largesse needs to be built for families stuck in temporary accommodation so there’s a lot to play for there. Small charities face an uncertain future with fundraising cancelled and donors tightening their belt as the stock market plummets. The newly announced £500m hardship fund for local authorities shouldn’t forget these local charities operating in their own backyard and helping vulnerable people. There’s still a lot to do for social justice and let’s get it done for the next Budget later this year.”

Centre for Policy Studies – Robert Colvile, the Director of the CPS, said:

“We welcome the Chancellor’s focus on supporting businesses, especially small businesses, and levelling up regions across the UK. We were particularly proud to see so many of the Centre for Policy Studies’ priorities reflected, from increasing the National Insurance threshold and other tax cuts for low-paid workers, to the overwhelming focus on supporting small businesses as the heartbeat of the economy, to the levelling up agenda, to the expansion of capital allowances for businesses, to the freezing of spirits duty. However, amid all the focus on extra spending, it is vital that the Government also remembers the pressing need to live within its means and to raise GDP growth, as the only sustainable way to keep the economy on track.”

TaxPayers’ Alliance – John O’Connell, its chief executive, said:

“The only thing this budget is getting done is net borrowing figures being spun. While there were some welcome wins on measures like the freezing of alcohol and fuel duties, this was basically a Gordon Brown-style budget of eye-watering bumper borrowing, a higher tax burden and billions in spending bungs. With the tax burden already at a 50 year high as a percentage of GDP, and the impact of coronavirus yet to be taken into account, the unfortunate truth is that it’s future taxpayers who will lose out from being expected to pay for the massive public sector net borrowing announced today.”

Institute of Economic Affairs – Mark Littlewood, Director General of the IEA, said:

“Economists have long been predicting an economic downturn, but no one could have anticipated that it would be triggered by a global pandemic. Nonetheless, the coronavirus outbreak highlights that the UK government has again failed to fix the roof while the sun was shining. Successive governments have lacked real fiscal discipline and failed to eliminate persistent deficits, leaving the current Chancellor with less room for manoeuvre. Fiscal loosening to cope with the Covid-19 shock is understandable, but the Chancellor seems to think the only best way to boost growth is through public spending. The Budget rightly still meets the fiscal rules set out in the Conservative Manifesto and a temporary hit to the 2020 numbers shouldn’t change this. The Chancellor hinted these could be relaxed in the near future but there is no reason not to balance the books in 2023. The hit to the public finances from the coronavirus is, as the Chancellor was at pains to stress, temporary and not structural, so there are no grounds for changing fiscal strategy – merely a need for some short term fiscal tactics.”

Resolution Foundation – Welcoming the Chancellor’s announcement to scale back the lifetime limit in Entrepreneurs’ Relief from £10 million to £1 million, thereby reducing the maximum benefit of the tax break from £1 million to £100,000 each, Adam Corlett, Senior Economist at the Resolution Foundation, said:

“Entrepreneurs’ Relief is a hugely expensive tax break that does little to encourage genuine entrepreneurship. The Chancellor has made the right call in drastically scaling back its scope and cost – saving around £6 billion over the next five years by reducing the maximum tax break from £1 million to, a still significant, £100,000 per person.”

Northern Powerhouse Partnership – Henri Murison, its Director said:

“Connectivity alongside devolution in North and more funding for R&D outside London has been focus today. Northern Powerhouse Rail, which must include a city centre station in Bradford on a new line between Leeds and Manchester is being consulted on as part of a wider network. Wider investment in connectivity across the North, including the long term funding settlement to underpin a mass transit system in West Yorkshire, and significant investment in Teesside and Sheffield City Region, as well as West of Pennines in Greater Manchester and Liverpool City Regions. The massive share of £4.2 billion for London style public transport coming to North because devolution here is now the norm, those places without the exception we will work to bring forward. The commitments made to a West Yorkshire devolution deal are just the first step, with further deals across the North from York and Scarborough to Cumbria, Cheshire and Warrington to north and south banks of the Humber. Five deals for the North across three fiscal events is our ambition and challenge for Ministers, which we will back them on every step of the way. A northern Chancellor has given a budget which makes a credible start towards levelling up – closing the North – South divide by investing in the infrastructure which will underpin the Northern Powerhouse. Ensuring those living and growing up here today can take advantage of the opportunities that will be created here is the challenge for the Comprehensive Spending Review.”

Blue Collar Conservatism – The further freeze in fuel duty after a Blue Collar Conservatism 130-strong parliamentary caucus: Dehenna Davison, who became the MP for Bishop Auckland in December, said:

“It’s fantastic to see the Government back working people with another fuel duty freeze. Blue collar voters in Bishop Auckland and beyond can see today from the Budget that Boris and the Conservative Party are on their side, repaying their trust by delivering for them and their families.”

NHS Employers. Responding to the announcement in the Budget that the threshold for the annual allowance taper in the NHS Pension Scheme will be raised, Danny Mortimer, chief executive of NHS Employers, which is part of the NHS Confederation, said:

“Employers across the NHS will welcome this significant step in reforming pensions taxation. The overwhelming majority of NHS employees will no longer face the uncertainty and distress of the application of the annual allowance taper based on additional NHS earnings. This importantly provides certainty for them. Employers will also hope that this announcement reassures clinical colleagues so that they can agree to undertake additional work without the perverse consequences that have resulted in recent years. The change in the taper will also benefit a wider range of employees, and this is also very welcome.”

Institute of Economic Development – The Executive Director Nigel Wilcock commented:

“This might be the budget that brings Keynes back in vogue with the Office for Budget Responsibility expecting the expansionary measures to create a demand-led economic boost. Certainly, from the budget speech there was little not to like – some emergency fiscal loosening, some provision for the lower paid, and lots and lots of spending announcements.”

Local Government Information Unit – Jonathan Carr-West, Chief Executive, said:

“This budget was dominated by the Government’s response to coronavirus. No one could argue with that, but for local government it provides more questions than answers. Social care has been all but absent in the response to Covid-19. Hospitals will not be able to cope if large numbers of older sufferers cannot be discharged because of a lack of social care provision and social care providers will not be able to cope if a fifth of their already stretched workforce is off sick. This could create a dangerous and vicious circle. The £500 million hardship fund the Chancellor announced for local government will help with this, but will it be enough? Mr Sunak promised “whatever it takes” for the NHS, but once again, we risk forgetting the symbiotic relationship between health and social care. Councils will be at the front line of our response to coronavirus and will be a crucial player in long term economic transformation. However, local government may feel that it has dropped through the middle somewhat as the Government attempts to get so many other things done.”

The Entrepreneurs Network – It’s founder Philip Salter says:

“Cutting the lifetime limit for Entrepreneurs’ Relief from £10m to £1m – rather than scrapping it entirely as many feared – will ensure that ambitious startups are still able to attract talent through employee stock options. The Enterprise Management Scheme (EMI) allows startups with fewer than 250 employees and £30m in assets to offer workers share options that qualify for the reduced capital gains tax of Entrepreneurs’ Relief. While the Chancellor may be right that Entrepreneurs’ Relief doesn’t incentivise all business owners, in our regular discussions with the foreign-born founders of Britain’s fastest growing companies, Entrepreneurs’ Relief is widely understood and cited as part of a package of incentives that helped them decide to start their business in the UK, or move it here. Cutting the lifetime limit has reduced this incentive.”

Federation of Small Businesses – The FSB National Chairman Mike Cherry said:

“The Chancellor has thankfully unveiled a pro-small business Budget. The measures he’s put forward today – coupled with those unveiled by the Bank of England this morning – should go a long way to reinjecting optimism back into the small business community after years of uncertainty. It was encouraging to hear the Chancellor saying he will take forward our proposals for reform of entrepreneurs’ relief, and we look forward to working with the Treasury to protect the thousands of everyday entrepreneurs who make use of this incentive to help fund their retirement every year. Expanding access to statutory sick pay for those impacted by coronavirus is the right thing to do, and so too is making that access affordable for small businesses. By announcing an extension of the retail discount and an SSP rebate for small firms, as FSB called for, the Chancellor has shown he’s on their side. The rebate must be easy to access.”

Bright Blue – Ryan Shorthouse, the Director says:

“This Budget confirmed that the Conservative Government’s fiscal approach this decade will be dramatically different to the one pursued in the last decade. Theresa May wanted an end to fiscal austerity – talking radically, but delivering modestly. It will be her successor, to borrow a phrase, that gets this done. The Government should be applauded for introducing bold financial measures to support people and businesses during the coronavirus crisis. But, especially since this additional spending has not been taken into account in OBR assessments and the Treasury are reviewing the fiscal framework, it is very unclear at the moment what precisely the UK’s future fiscal trajectory is. If, as seems likely considering growth forecasts, borrowing increases substantially to fund both new capital and current spending, future generations of taxpayers will face a bigger bill. The Conservative Party should not shy away from stressing the economic and moral need for, and their commitment to, fiscal discipline. To fund this significant increase in public spending, it is almost inevitable that some taxes will have to rise. The Government shied away from making the tough decisions on taxation today – a missed opportunity, considering now is when this Government’s political capital is likely to be highest during this parliament. It is right to reduce taxation on employment, both on the National Insurance paid by employees and employers, but freezing Fuel Duty yet again was a serious mistake – for environmental, fiscal and political reasons. Climate Change is another profoundly serious problem our country and the rest of the world faces, requiring stronger incentives and investment. If we are to meet our net zero emissions target by 2050, this decade really is crucial to facilitating deeper decarbonisation. Though some welcome ideas were announced, it is still not enough, especially for tricky sectors such as heating and transport.”

53 comments for: “Seriously concerning.” “A Gordon Brown-style budget”. Centre-right think tanks resist the Budget’s main platform.

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