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IEA - Government must refocus its efforts to reduce the deficit
Commenting on Chancellor George Osborne’s Autumn Statement, Mark Littlewood, Director General at the Institute of Economic Affairs, said:
“The government is basically attempting to freeze both spending and taxation, but this is not sufficient. Government spending as a proportion of national income has not shrunk nearly enough. It’s essential the government reassesses spending levels more radically so they can cut taxes and allow people to keep more of their own hard-earned cash.”
“George Osborne’s overall strategy is indeed yielding results, but if deficit reduction is now being shown to work, why not pursue this policy more aggressively? To finally eliminate the budget overspend by 2019 is moving at a snail’s pace. Trimming £3bn off contingency budgets along with feeble efficiency gains is simply not good enough. He should have taken this opportunity to make much greater reductions in state spending.”
Pensions:
“The government should accelerate the introduction of a later retirement age. With an ageing population, this is becoming increasingly urgent. A later retirement age will simply restore the balance between the time spent in work and the time in state-funded retirement that existed in the 1960s and 1970s. The Chancellor seems to recognise the ticking time bomb of pensions but is not acting fast enough to diffuse it.”
Cost of living
“The government is still failing to get to grip with living costs. The Chancellor seems determined to tackle housing costs through demand-side tinkering rather than the necessary supply-side reforms. Without major planning liberalisation, householders across the country are going to continue to feel the strain of high living costs. We need a supply-led, rather than demand-led, approach.”
Notes to editors:
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The mission of the Institute of Economic Affairs is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems.
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