Our panel of experts delivers its verdict on Osborne’s spending plan

Key figures from economics and business pass judgement on the chancellor’s 2015-16 spending review

Alex Henderson PwC

“The chancellor announced more resources for HMRC but it’s not clear how far this will go beyond earlier government commitments. More HMRC resources are always a sensible move for the chancellor as HMRC is the revenue raising part of government. These resources will be focused on tackling tax evasion which is a criminal activity; it’s always been a major part of HMRC’s efforts to keep the black economy under control. There was little specifically on tax. The chancellor’s statement, especially the emphasis on intellectual capital and sticking to his plans, are consistent with his budget speeches, including the patent box regime and keeping Britain open for business.”

Howard Archer IHS Global Insight

“In terms of prospects for the economy, the spending review does not fundamentally change the picture, particularly in the near term. The spending cuts of £11.5bn announced for 2015-16 had already been flagged up by the chancellor in the 2013 budget and this is essentially providing the detail of where they will actually occur. There are no more spending cuts in total than had already been announced. Similarly, while the chancellor announced that £50bn of capital spending will be made in 2015-16 and set out capital spending pans to 2020-21, this confirmed the figures set in the budget. No extra investment spending has been introduced on top of the £3bn a year from 2015/16 set out in the budget.”

John Cridland CBI

“The chancellor has carefully walked a tightrope of protecting growth, while making sizeable savings to pay down the debt.
Infrastructure is rightly singled out as the most effective engine for growth, as we urged. While the government talks a good game on infrastructure we’ve seen too little delivery on the ground so far.
It is critical we see a real pipeline of projects announced tomorrow, so investors know what schemes are going ahead, where and when. Other pro-growth areas including science, innovation, skills and exports have also been shielded from cuts. The £185m boost for the Technology Strategy Board, a crucial anchor for innovation, is particularly welcome.”

Graeme Leach Institute of Directors

“The spending review leaves business feeling like Oliver Twist. More please, chancellor. Please could you go further and faster with spending restraint? Please could you shift even more expenditure from current spending towards infrastructure? Please could you widen the welfare cap to include pensions? But please could you also do less ring-fencing of spending in departments such as the NHS. There were many welcome announcements in the spending review, including the one per cent limit to public sector pay growth and the intention to curtail automatic pay progression, regardless of performance, within the public sector.”

John Allan Federation of Small Businesses

“It is good that the government has taken a long term view of how to plan capital spending to the end of the decade, it is something we raised in our submission. However what we now need is a clear timetable for delivery. Small firms tell us that school leavers aren’t ready for the world of work with many concerned about their ability in maths and English. Giving the funding direct to schools should be used to address this issue. The continued investment in science, technology and apprenticeships is also good news. The investment in strengthening the skills base in the long-term is welcomed by the Federation of Small Businesses.”

John Longworth British Chambers of Commerce

“In many respects, businesses will be encouraged by what they have heard from the chancellor. He and his team have signalled important investments in areas like transport, science, education, innovation and defence procurement, which are of great importance to companies of all sizes. Business will also be pleased to see an end to automatic increases in public sector pay, and will support moves to begin to tame welfare spending. Yet more must be done. For our economic future to be great, rather than just acceptable, Britain needs a more radical shift in public expenditure to underpin a truly enterprise-friendly environment. Infrastructure, exports, and access to finance must be top priorities.”

Frances O’Grady Trades Union Congress

“This is a toxic mix of bad economics, nasty politics and dishonest presentation. The last thing our struggling economy needs is further cuts to spending to try to close a deficit made worse by the chancellor’s earlier cuts. When the medicine is not working and side effects are choking the patient you need a change in treatment not more of the same. Many services will be hard hit. Worst of all is a new attack on some of the most vulnerable in our society through the seven day wait and other conditions for social security payments. For all the talk of new investment, the truth is that the overall capital spend in 2015 will be exactly the same as the chancellor forecast in his budget earlier this year.”

Matthew Sinclair TaxPayers’ Alliance

“The chancellor has announced some welcome savings which will ease the pressure on taxpayers now and in the future, including some sensible changes to the welfare system and an attempt to end the absurdity of pensioners on the Costa del Sol getting the winter fuel payment. Tens of billions of pounds are still being wasted by bloated bureaucracies each year, so there is plenty of room for further cuts. Unfortunately Mr Osborne is still boasting about squandering enormous amounts on foreign aid and vanity projects in the energy sector, while other developed economies are showing restraint. The best news was on public sector pay, although he is still planning to increase the pay of bureaucrats.”