Budget: "a missed opportunity to jump start the economy"

Reacting to today's Budget statement, Nick Pearce, IPPR Director, said:

"George Osborne has missed the opportunity to jump start the economy. Rather than raise the personal allowance and lower the top rate of income tax, he should have cut employer national insurance in the same way the Barack Obama has boosted the US economy with a consumer stimulus.

"US unemployment has fallen for nine months, while UK unemployment has been rising for nine months. The UK still desperately needs a 'jobs guarantee' to ensure that more than 800,000 people who have been out of work for more than a year get back to work or risk losing their benefits.

"There are better ways of helping low income families than raising the personal allowance and cuts to Working Tax Credits will really hit working families.

"Closing the loop hole for foreign buyers using companies to purchase homes is a welcome move, but he should have gone further and introduced a mansion tax. Stamp duty at 7% on £2 million mansions will help but more action is needed to prevent the super-rich from using the London housing market as a 'global reserve currency' and to tax housing wealth, not just transactions."

"The child benefit 'cliff edge' move is simply tinkering at the edges. The Chancellor should have gone back to the drawing board. It would have been better and bolder to invest in universal childcare by freezing child benefit for 10 years.

"The big surprise was the £1bn raised by the freezing pensioner tax allowances, which is a controversial but welcome move to spread the burden of deficit reduction to include pensioners."

Notes to Editors

Before the Budget, IPPR called for a temporary 2p cut in employee national insurance, funded by a mansion tax of 2% on houses over £2 million: http://www.ippr.org/articles/56/8885/just-one-thing-cut-national-insurance

IPPR's report - '10 ways to promote growth' - is available to download from http://bit.ly/IPPR8266

It argues for extra funds for the Green Deal to be used to take the scheme to scale by subsidising charges for installing energy efficiency measures and to subsidise the guaranteed employment of young unemployed people out of work for more than 12 consecutive months, matched by an obligation to take up the offer. It also argues for an increase in infrastructure spending of £10 billion in 2012/13 and the creation of a British Investment Bank operational by April 2013.

IPPR's report - 'Deficit Reduction Averaging' - is available from http://bit.ly/dZLfRH

It argues for the deficit to be reduced at a slower and flexible pace that averages depending on the strength of the economy.

IPPR's report - Making the case for universal childcare - is available from: http://www.ippr.org/publications/55/8382/making-the-case-for-universal-childcare

It argues that providing universal childcare is crucial to improve the UK's female employment rate. It shows that that universal childcare pays for itself: each mother returning to work part-time on an average wage after a year's maternity leave would net the Treasury £4,860 over four years, in additional tax revenue. This rises to £20,050 if women work full-time.

IPPR's report - Jobs for the Future: The path back to full employment in the UK - is available from http://www.ippr.org/publications/55/7938/jobs-for-the-future-the-path-back-to-full-employment-in-the-uk

Contact

Richard Darlington, 07525 481 602, r.darlington@ippr.org

Tim Finch, 07595 920899, t.finch@ippr.org