ITEM Club Budget reaction: Tax has stolen the show, the cupboard seems bare of new spending initiatives to promote growth

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Andrew Goodwin, senior economic advisor to the EY ITEM Club comments on the Chancellor’s Budget:

  • A steady budget after the turbulence of the autumn statement
  • It's now down to business to deliver the goods
  • Tax has stolen the show, the cupboard seems bare in terms of new spending initiatives to promote growth

“This was generally a steady, but business-friendly, Budget. It is clear that the Government is trying to improve the climate for business and it’s now up to businesses themselves to deliver the goods.

“This was one of the most predictable Budgets of recent times, with the many leaks leaving the Chancellor with no rabbits to pull out of his hat.  In previous Budgets the focus has been on the huge spending cuts that will be implemented over the next five years. It’s clear that the Government has now moved on to reforming the tax system, seeing that as the key to promoting growth. Disappointingly it seems that the cupboard is bare in terms of new ideas around using government spending to promote growth.

“The economic and fiscal forecasts were remarkably similar to those published in November. As we suspected, there was a small war-chest available to the Chancellor, but he wisely decided against any large scale giveaways, which will no doubt go down well with financial markets.”