Responding to Philip Hammond's Budget today the Adam Smith Institute welcomes the fact that the Chancellor appears to be identifying the issues that Britain faces.
Ben Southwood, Head of Research at the Adam Smith Institute, says:
"Philip Hammond’s budget today was unambitious, but it showed that a grown-up is in charge of the country’s finances. With Jeremy Corbyn and John McDonnell across the chamber, uncertainty about the Brexit deal, scandals plaguing every level of government, as well as very bad productivity and growth forecasts, it’s nice to see a budget avoid all major potential policy mis-steps and properly diagnose Britain’s most serious problems.
"The Chancellor showed that he understands that the UK’s housing shortage is because of planning controls stopping development in the places people want to live and showed welcome restraint on empty homes, land banking and council housing, despite huge pressure for bad, kneejerk crackdowns that would make the housing market even more dysfunctional. His focus on densifying areas around existing train stations and investigating the regulatory barriers to longer leases in the private rental market, in particular, echo policies that the Adam Smith Institute has been proposing for years.
"A stamp duty cut is welcome but should be across the board, not just first-time buyers. The big problem with stamp duty is that it stops older people from downsizing and freeing up larger homes for new families, and often these will not be first time buyers. We hope that next year’s budget sees this cut broadened to apply to the whole market, as a move towards total abolition of this destructive tax. Similarly, the announcements today will not be nearly enough to boost housing construction in the most in-demand parts of the country, like London’s underdeveloped outskirts and the Oxford-Milton Keynes-Cambridge corridor. We need major planning liberalisation and a review of the green belt to tackle these problems. But in general, Hammond has shown that being sensible and dull can be a very welcome thing in turbulent times."
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