Reassuringly boring, but a missed opportunity - Adam Smith Institute on the Autumn Statement

In response to the Autumn Statement the Adam Smith Institute made the below comments.

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Missed Opportunity:

“Philip Hammond should be congratulated for delivering a dull, quiet Autumn Statement that was largely free of gimmicks, but it was a missed opportunity for pro-growth tax cuts that could have strengthened the British economy.

“Scrapping the Autumn Statement and only having one major fiscal event every year is a good thing – the temptation is for Chancellors to tinker and buy off voting groups with little policies that add up to more complexity in the tax system and more distortions in the economy. With only one Budget a year, we may see a more sober and holistic approach to Britain’s finances from Mr Hammond’s Treasury.

“Though we’re pleased this didn’t have quite as many giveaways and gimmicks as the average Osborne budget, the Chancellor could have cut the taxes that hold back growth the most to boost economic growth. Stamp duty is a terrible tax that gums up the housing market and stops people from moving into better jobs; our corporation tax rate is still too high; and capital gains tax deters investment. By not touching these anti-growth taxes, the Chancellor has not done enough to buoy the economy after Brexit.” – Sam Bowman, Executive Director of the Adam Smith Institute

Growth and Debt:

"It is encouraging that the Chancellor has got the UK’s three biggest problems exactly right: productivity, housing, and regional divides. Autumn Statement policies like investing in Northern infrastructure, devolving power to city regions, and deregulating the housing market will go some distance towards chipping away at these.

"And the overall outlook is relatively optimistic. The employment rate is at an all-time peak—74.5%—unemployment is at an 11-year low, and we are predicted to grow solidly over the next five years, except for a 2017 dip to 1.4% due to Brexit uncertainties. We may like or dislike policy tinkering, but it seems that the macroeconomy lumbers on steadily regardless, and small changes pale into comparison versus these headline effects." - Ben Southwood, Head of Research of the Adam Smith Institute

Fuel Duty:

"It's nonsense for the Chancellor to claim that he's saved motorists £130 a year by cancelling a planned rise in fuel duty. The Fuel Duty Escalator exists in name only - it hasn't gone up for the last five years and has been frozen for two more.

Whatever the merits of raising or cutting fuel duty, it helps no one for the government to constantly announce then scrap rises in the tax. Businesses want certainty to plan for the future, if he's not going to stick to his promises then the Chancellor should scrap the escalator altogether." - Sam Dumitriu, Head of Projects at the Adam Smith Institute