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IEA - Osborne serious about deficit reduction

Mark Littlewood, Director General at the Institute of Economic Affairs, commented on George Osborne’s speech

“The Chancellor should be applauded for recognising that raising taxes is not the best way to reduce the deficit. Spending restraint rather than increasing the tax burden is the right way to ensure a prosperous UK economy and to reduce living costs for struggling families across the country.

“Unusually, George Osborne outlined the measures a Conservative government would take to encourage deficit reduction. In 2010 politicians made the mistake of discussing the deficit in abstract terms. Explicitly outlining where savings will be made will increase the public’s understanding of the scale of the challenge and the importance of balancing the books.

“With an ageing population putting significant pressure on the UK’s finances, it seems perverse to again exempt all pensioner age spending from spending cuts in favour of further cuts to working-age welfare.

“Enshrining Help-to-Buy as a permanent policy is a mistake. Whilst it may help some families to become homeowners, politicians must understand that chronic lack of supply of new housing is the key cause of the UK housing crisis. Demand-side measures are extremely misguided - only planning reform to allow more houses to be built will increase home ownership and reduce prices.

“On housing and airports, the Chancellor talks of the need to ‘make tough choices’ but sometimes seems unwilling to take on the vested interests to get the new building and new runways we desperately need.”

Notes to editors:

To arrange an interview with an IEA spokesperson, please contact Stephanie Lis, Head of Communications:slis@iea.org.uk or 07766 221 268.

The mission of the Institute of Economic Affairs is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems.

The IEA is a registered educational charity and independent of all political parties.

Channel website: https://www.icaew.com

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