The Adam Smith Institute was encouraged by the pro-growth policies in Chancellor Kwasi Kwarteng’s ‘mini-budget’.
In response to the cancellation of the corporation tax hike and changes to business taxation, Daniel Pryor, Head of Research at the Adam Smith Institute, said:
“The Government is rightly prioritising growth after years of stagnation, and today’s measures are a welcome first step to getting the British economy back on track. The planned corporation tax rise would have hammered businesses, choked off investment and reduced workers' wages—scrapping it was a sensible move.
It’s also encouraging to see that the Chancellor understands the importance of generous capital allowances, as well as headline rates. Making the £1 million Annual Investment Allowance permanent means businesses across the country have greater capacity and certainty to boost the economy at a time we need it most.”
In response to changes to personal taxation and National Insurance Contributions, John Macdonald, Director of Strategy at the Adam Smith Institute said:
“The Chancellor said it loud and clear—this Government is serious about letting people keep more of their own money. Cancelling the NICs hike is a welcome return to principle —it might not be the most well targeted measure, but a Conservative Government should never have raised taxes in the face of a cost of living crisis in the first place.
Abolishing the higher rate of income tax is much the same—it should never have existed in the first place, and it shows the Chancellor is committed to returning the Conservatives to a party of low tax and individual freedom.”
In response to investment zones, Morgan Schondelmeier, Director of Operations at the Adam Smith Institute, said:
“The measures outlined for proposed investment zones show that this Government knows what will really drive growth and prosperity. Liberalising restrictive planning rules, generous tax allowances for investment, scrapping destructive taxes like stamp duty and drastically raising National Insurance thresholds will all turbocharge growth.
While there are risks associated with the government picking winners––situating the investment zones in politically convenient places––the ‘regulatory sandbox’ nature of investment zones will enable the Government to test and implement what works on the national level.
Ultimately, these reforms would help the entire UK, but fast tracking their implementation is a great first step towards reversing a doldrum economic cycle.”
Notes to editors:
For further comments or to arrange an interview, contact John Macdonald, john@adamsmith.org | 0758 477 8207.
The ASI recently released the following papers which may be of further interest:
Seeing It Through: A Plan for ‘Full Fat’ Freeports, which argues that—done right—freeports offer an exciting opportunity to create growth by addressing inefficiencies within the British economy.
In the Bleak Midwinter: How (and How Not) to Tackle the Energy Crisis, which sets out the most effective policies to tackle the energy crisis and alleviate pressure on poorer households
A Recipe for Growth: The Economic Effects of Corporate Tax Reform in the UK, which argues that reversing the corporation tax hike and replacing the super-deduction would have significant positive impacts on growth and wages
The Adam Smith Institute is a free market, neoliberal think tank based in London. It advocates classically liberal public policies to create a richer, freer world.