In response to the Chancellor’s Statement on the Cost of Living, Morgan Schondelmeier, Director of Operations at the Adam Smith Institute, said:

We welcome the Government’s introduction of targeted support for households, a policy which the Adam Smith Institute called for in a recent report. 

A one off cash payment direct to the most vulnerable households is the clearest way to provide immediate support with the least distortionary effects. Uprating benefits in line with CPI is also a sensible measure to ensure the least well off don’t get left behind. Finally, the Chancellor is right to scrap the repayments on the energy bills rebate - a poorly designed scheme from the start. It’s just a shame that it took the Chancellor so long to come to these conclusions.

A conclusion the Chancellor never should have reached was that a windfall tax is a good idea. Spending months arguing against it both practically and ideologically and then caving to pressure from the left leaves much to be desired for a ‘fiscally conservative’ Chancellor. Even with the sensible sunset clause and investment measures, a windfall tax is still not the most effective way to raise revenue and sets a precedent that the UK is a risky place to do business. 

Notes to editors:  

For further comments or to arrange an interview, contact Emily Fielder, emily@adamsmith.org | 0758 477 8207.

The Adam Smith Institute is a free market, neoliberal think tank based in London. It advocates classically liberal public policies to create a richer, freer world.