Budget 2015: Reactions to the chancellor’s statement

THE BUSINESS GROUP


Confederation of British Industry director general
John Cridland

The Budget provides a clear plan for fiscal health and growth and will help businesses create jobs.
“Stability and consistency are what businesses need to grow and prosper. This Budget sets the tone, providing a clear plan for fiscal health and growth. This Budget has some encouraging measures to help businesses create jobs for the benefit of all. The brighter fiscal picture has allowed the chancellor to recalibrate his deficit reduction plans. In the next Parliament this fiscal breathing space should be used to achieve intelligent reductions in public spending.

THE PENSIONS EXPERT


Institute and Faculty of Actuaries president
Nick Salter

A cut in lifetime allowances for pensions could have unintended consequences on people with low earnings, but who have a number of years in service.
“The chancellor announced in today’s Budget a cut in lifetime allowances (LTA) for pensions savings from £1.25m to £1m and indexed thereafter. This could have a significant long-term impact on the ability of those individuals caught by the cap to receive their retirement income without being disadvantaged by tax charges, with perhaps unintended consequences. It could affect hard working people who are not earning a very high salary but who have a number of years in service.”

THE ECONOMIST


Oxford Economics UK economist
Andrew Goodwin

Policies unlikely to have meaningful impact on UK economy. Relaxation of austerity in 2019-20 seems solely designed to neuter Labour’s 1930s spending claim.
This was a Budget heavy on rhetoric but low on policies that are likely to have any meaningful impact on the UK economy. The most eye-catching change was a significant relaxation of austerity in 2019-20, a move which appears solely designed to neuter the Labour party’s claim the chancellor would take public spending back to the levels of the 1930s. The OBR’s economic forecasts look very conservative, with little noticeable boost as oil prices fell. Its view of medium-term prospects remains gloomy.”

THE OPPOSITION’S RESPONSE


Shadow chancellor
Ed Balls

People’s living standards are lower than in 2010, our export performance has been poor and our business investment weak. There will be more extreme cuts in the next three years than the last five. Labour would cut the deficit in a steadier way.

“I thought it was a very hubristic performance from the chancellor. I think most people who’ve really struggled with their living standards in the last few years would listen to the chancellor boasting and think ‘this doesn’t really accord with my life’. People’s living standards are lower than in 2010, people are worse off, people are still struggling and in the wider economy our export performance has been poor, our business investment has been weak and yet George Osborne seemed to say it was all fine. I thought it was out of touch with reality. people voting in this election need to know: if you vote Conservative you’re voting for more extreme cuts in public spending in the next three years than in the last five. That will either mean decimating cuts to our police and to our Armed Forces, it will either mean our National Health Service being cut, or it will mean another rise in VAT from a Tory chancellor if they were to win after the election. On that fundamental choice a more balanced plan from Labour to cut the deficit in a steadier way and to do so, not just by spending cuts or Tory extreme cuts – nothing in this Budget changed that picture at all. In fact, if anything, it’s deeper cuts from the Tories and it surprises me that, in the end, George Osborne has chosen to stick to such an extreme spending cut profile which the Office for Budget Responsibility is really highlighting in its report.”

THE TRADE UNION’S VIEW


Trade Union Congress general secretary
Frances O’Grady

Osborne did not spell out where he would make spending cuts or solve the chronic housing shortage.
“The chancellor’s Britain, where happy people skip to their secure jobs to celebrate their rising living standards, is not one that many will recognise. But it’s what he did not say that is most significant. He did not spell out where, if re-elected, he will make the huge spending cuts he plans, nor did he tell Britain’s low paid workers which of their benefits he will cut. Nor did he address the big problems faced by those not living in the chancellor’s Promised Land – the chronic shortage of housing, an NHS in crisis and the huge growth of zero-hours jobs.”

THE BUSINESS VIEW


London Chamber of Commerce and Industry
Katharine Howell

Chancellor should devolve powers to London and act on business rates rhetoric.
“After committing to further fiscal devolution to Manchester, the chancellor said that his door is open to other regions looking for greater power over local finances. London has been knocking on the door of HM Treasury for years, calling for tax and spend capabilities in London to be devolved to the Mayor and London boroughs and today we renew that call. “On the promised review of the outmoded business rates regime, we call for this rhetoric to be transformed into reality.”

THE HOUSING EXPERT


Global head of research, Knight Frank
Liam Bailey

Help-to-Buy has boosted transactions but the new Help-to-Buy ISA is nothing to shout about.
“There is no doubt Help-to-Buy it has had a positive, if modest, impact on transaction volumes over the last two to three years .The new Help-to-Buy ISA is likely to be another support for first time buyers. However, we do not expect the impact to lead to a substantial number of new transactions, and is very unlikely to influence pricing in the market.”

THE WHISKY MAKER


Chief exec of the Scotch Whisky Association
David Frost

Spirits duty cut of two per cent is massive boost to the industry.
“This is a historic decision and only the fourth time whisky duty has been cut in a century. The chancellor’s announcement will be toasted across the whisky industry and by consumers who are getting a fairer deal on tax when they have a drink of Scotch. The move is a major boost to our industry as we look to grow again in the UK, and equally sends out an important signal on fair taxation to our export markets. The industry is raising a glass to George Osborne and his Treasury team.”

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