IEA slams Darling for ducking tough decisions

by Richard Kilner

Story link: IEA slams Darling for ducking tough decisions

Free market thinktank the Institute of Economic Affairs (IEA) has attacked Chancellor Darling’s Pre-Budget Report (PBR) for ducking the tough decisions necessary to reduce the nation’s deficit.

Director General of the IEA Mark Littlewood described the tax on bankers’ bonuses as populist rather than practical, and has stated that both spending and tax rates are excessive.

Littlewood singled out spending on welfare, which accounts for over a quarter of all spending and includes pensions, as an area for concern, and condemned the Chancellor’s headline-chasing PBR as barely cosmetic in its efforts to address the fiscal challenge the country faces.

IEA Editorial Director Professor Philip Booth has said that raising taxes to deal with a deficit partly due to large state spending is a mistake, and has argued that arbitrary taxes on bonuses are even worse, as they will drive talent and business out of the country.

Professor Booth added that benefits should be linked to inflation, and that in a deflationary situation child trust funds should be abolished.

In addition, the ABI has criticised the PBR for the absence of any measures to promote saving, and for the increase in national insurance.