The ASI Spring Budget Response

Sam Dumitriu, Head of Projects at the Adam Smith Institute, said:

"We knew this would be the dullest budget in recent history - the Chancellor even leaked that in advance. That's not necessarily a bad thing – exciting budgets tend to contain ill thought-out ideas, but there's a lot he should be doing now to prepare the economy for Brexit by cutting the worst taxes to make us more competitive.

"The Chancellor missed an opportunity to make major reforms to our outdated corporate tax system or tackle the thicket of loopholes and exemptions that plague our tax code. But, he has another budget in the Autumn, that'll be where the real action is. He should think hard about deeper reforms then."

On raising National Insurance on the Self-Employed:

"It's right to bring National Insurance on the self-employed in line with that paid by employees. The current system is in effect a subsidy of £1,240, and although the self-employed do have mildly reduced access to some contributory benefits, given the choice almost everyone would plump for the £1,240.

"But the Chancellor must ensure he is not discouraging the self-employed from investing - and allow them to immediately deduct capital expenditures from their taxable income. We shouldn't be looking to increase the overall tax burden - especially not on low income workers. So we should use the extra revenue raised to cut the overall National Insurance rate."

On equalising tax treatment between directors and employees:

"Company directors have substantial scope to avoid tax by misclassifying labour and investment income. Indeed, there's evidence that company directors' wages bunch up around the higher rate threshold, suggesting substantial avoidance. The Chancellor's right to consider reforming it to create a level playing field between employees and managers, but he must tread carefully.

"Taxes on income from dividends and capital gains are rightfully lower in order to incentivise investment. Simply raising dividend and capital gains taxes could discourage investment, reducing productivity and lowering wages across the board. To avoid this, Hammond should should allow company directors to immediately deduct capital expenditures from their taxable income. This would boost investment and deal with his fears of a shrinking tax base."

On business rates:

"It's reasonable that the Chancellor has increased the transitional support. Business Rates are ultimately paid by property owners with rents adjusting eventually. However, in the meantime some businesses may struggle to stay afloat.

"Mr Hammond should set out to reform business rates so that revaluations are more frequent and fluctuate less wildly. But he should also consider scrapping them altogether and replacing them with a tax on unimproved land values. That would reduce the need for transitional relief and encourage property improvements.

"He should reject calls to 'level the playing field' between the high street and internet retailers. Rates should be determined by rental values not special interests. Picking winners by favouring the high street over online businesses would make shopping more expensive, consumers poorer and only help landowners."

On rate relief for pubs:

"The Chancellor's plan to give pubs a £1,000 business rate relief is a mistake. We shouldn't be picking winners and creating an increasingly complex tax code. Landlords are already setting up snail farms to qualify for agricultural exemptions. When he wakes up tomorrow he'll face the hangover of an even more complex tax code that tries and fails to pick winners."

On social care funding:

"The Chancellor is right to ditch Labour's proposed death duty hike to fund social care. Taxes on inheritance discourage long-term investment and are notoriously easy to avoid."