Fiscal Prudence Triumphs over Political Gimmicks
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- UK’s borrowing forecast for this year drops by £16bn. But borrowing from 2017-18 onwards is unchanged and the UK will still have a budget deficit of 0.9% GDP in 2020-21.
- It is welcome that the Chancellor’s budget measures are fiscally neutral over the forecast period. Fiscal prudence is needed over the next few years.
- NICs change could affect competitiveness and entrepreneurship. Instead, the Chancellor could have lowered NICs for the employed and reduced spending in other areas to pay for the change.
- However, recommitments on income tax thresholds and lowering corporation tax rates to 17% show that Britain is still open for business.
- New free schools and the introduction of T-levels will offer a much needed long-term boost to productivity and skills across the UK.