Press Story

IPPR researchers have reacted to today’s emergency financial statement by Jeremy Hunt, the new chancellor of the exchequer.

IPPR executive director Carys Roberts said:

“The Chancellor has rightly reversed course on his government’s ‘sugar rush’ mini-budget. Slashing taxes was never a credible plan for growth or dealing with inflation.

“Now the sugar-rush has turned to a crash, the danger is that the government swings the other way and prescribes austerity. This is a failed approach, that left public services and investment weak and families struggling throughout the past decade.

“These things are the foundation of a prosperous economy. There is an alternative - the Chancellor should be stepping up green investment, shoring up public services and incomes, and taxing the wealthy to fund it.”

On public spending and taxation, Dr George Dibb, head of the Centre for Economic Justice at IPPR, said:

“Today’s statement leaves the door open for significant budget cuts to be announced later in the year, but these will be near-impossible to deliver in a way that’s acceptable to parliament and to the country. There is little fat to be cut from public services and other cuts would put at risk the government’s vital investment in growth, through R&D and capital investment. That would be disastrous for the future health of the economy.

“The chancellor has rightly reversed the mini-budget's damaging and unfunded tax cuts, but he should be reforming taxes in a fairer way to ensure that those who are doing well during the cost of living crisis bear a greater burden. This should include reforming capital gains tax, raising tax on income from wealth to the same level as taxes on income from work, and broadening the existing windfall tax.”

On the Chancellor’s commitment to prioritising the most vulnerable, Rachel Statham, IPPR associate director for work and the welfare state, said:

“The new Chancellor stated his commitment to prioritising the most vulnerable in society – but this urgently needs to be backed up with action. Without a guarantee that benefits will be raised in line with rising prices, those on the lowest incomes face continued uncertainty, heaping stress and anxiety on millions of people who are unable to plan for the future.

“With key public services already in crisis, the Chancellor signalled a return to austerity mentality. But now is not the time to repeat the mistakes of the 2010s – and there is simply nothing left to cut back on. The chancellor would be wise to recognise that strong public services are the foundation of shared prosperity and sustained growth, creating good jobs and supporting people to lead good lives in every part of the UK.”

On scaling back the energy price cap from next April, and its impact for net zero, Luke Murphy, associate director for energy, climate, housing and infrastructure, said:

“The energy price freeze was introduced to protect and provide certainty to households and businesses from soaring gas prices, so the news that this will end in April will be deeply worrying for many.

“Any successor scheme must protect those on the lowest incomes and bring down energy use, while also ensuring that businesses are not sunk by the rising cost of energy, taking our economy with them.

“The chancellor’s talk of energy efficiency - a gaping hole in the government’s strategy until now - was welcome. That must be translated into a national public information campaign to reduce energy use, alongside a retrofit scheme to upgrade homes across the country. Together these would lower bills, reduce energy demand, and tackle climate change. Investment in and expansion of renewables must also be accelerated.”

ENDS

Available for interview are:

Carys Roberts, IPPR executive director

Dr George Dibb, head of the centre for economic justice at IPPR

Rachel Statham, IPPR associate director for work and the welfare state

Luke Murphy, associate director of energy, climate, housing and infrastructure

CONTACT

Liam Evans, Senior Digital and Media Officer: 07419 365334 l.evans@ippr.org

David Wastell, Director of News and Communications: 07921 403651 d.wastell@ippr.org

NOTES TO EDITORS

IPPR is the UK’s pre-eminent progressive think tank. With more than 40 staff in offices in London, Manchester, Newcastle and Edinburgh, IPPR is Britain’s only national think tank with a truly national presence. www.ippr.org