Head of Research at the ASI, Ben Southwood, wrote an article for City AM on why Osborne’s u-turn on tax credits was the right decision, despite the fact it might make him look weak.
This time round Osborne has been lucky. A £27bn windfall from lower debt interest payments and higher expected tax revenues—whose exact provenance we are still waiting to discover from the Office for Budget Responsibility—made it easy for him. This may not happen again, and we should be wary of what Osborne or his successor might do in 2020 when the tax credits system is rolled into Universal Credit.
Rarely is a u-turn encouraging, but in this case it’s heartening to see a government rethink such a damaging switch, even at the cost of looking weak.
Read the full article here.