Guido brings you the lowdown on the wonk world reaction to Rishi’s continued public finance splurge:

The Adam Smith Institute praised the reforms to Universal Credit (UC) and Alcohol Duty, yet slammed “Spendy Sunak” for his “tax and spend” strategy. Head of Programmes Daniel Pryor: 

“This high-tax, big-spending budget is largely bankrupt of inspired policy. The Conservatives seem to be out of new ideas, instead sticking to the tired old ‘tax and spend’ playbook. Where they see a problem, they reach for your wallet […] The Chancellor says he wants a more innovative, high productivity economy but is increasing corporate tax rates that will discourage investment. He says that he wants work to pay but is increasing National Insurance. The new fiscal rules at least signal some interest in controlling public spending, though are conveniently the same metrics the Government is already on track to meet. There are welcome reforms to tackle increases in the cost of living and working, including on the Universal Credit taper rate, reductions in duties on alcohol, and business rates reform […] At the same time, we’ll need cheaper pints to cope with the rest of our eye watering tax burden.”

The Centre for Policy Studies took a similar view. Director Robert Colvile:

“It is absolutely right to make a tax cut for the working poor the centrepiece of the Budget, and we are grateful to the Chancellor for crediting the CPS, among others, for its work on this. But if we are to get long-term growth rates above the 1.3% and 1.6% predicted, we need to stop raising taxes and do more to encourage enterprise – for example by making cuts to business rates and incentives for investment permanent rather than temporary.”

The Taxpayers’ Alliance also approved of the UC taper cut, though warned of the increased spending. Chief Executive John O’Connell: 

“Cuts to business rates, alcohol duties and a cancellation of planned fuel duty hikes will all be welcome news for families and entrepreneurs struggling under a historic high tax burden, which overall will continue to grow. But as the chancellor reeled off one huge spending pledge after another, many taxpayers will be left wondering why there was no mention of saving money and eradicating waste elsewhere to pay for it all. Targeted tax cuts with more responsible spending would have delivered a much stronger boost to growth while giving much-needed respite to taxpayers and businesses under the cosh.”

The Institute of Economic Affairs welcomed the simplifications to Alcohol Duty, although criticised Rishi for making “our over-complicated tax rulebook still more impenetrable” in other areas. Director General Mark Littlewood: 

“His new Charter for Budget Responsibility sounds good – but one wonders whether it will be abandoned at the first sign of political difficulty, which has been the fate of previous fiscal rules of this type. The Chancellor is banking on strong economic growth to sustain the many additional billions of pounds of spending he has pledged. However, in the absence of meaningful tax cuts and deregulation, and with state spending as a share of GDP at near record-levels, it is entirely possible that our post-Covid recovery will be rather more sluggish than the OBR’s upbeat numbers would indicate.”

Policy Exchange urged the government to go for growth. Senior Fellow Dr Gerard Lyons:

“The key message from this Budget is clear: the need to deliver on stronger economic growth. The good news is that the economy is recovering, public finances improving and government borrowing is heading lower. It was also a Budget with a powerful message about the need to build a stronger economy, with a focus on innovation and investment. The Chancellor said that credibility was built on what is done, not just on what is said and therein lies his challenge. His desire is to reduce the size of the state and to cut taxes, yet he has recently raised taxes. Today’s policies will prevent borrowing falling as much as it would have done and also give a welcome but big boost to public spending.”

The Centre for Social Justice (CSJ) had plenty of praise for the UC taper cut. Director of Policy Edward Davies:

“Brilliant news. A 55% taper rate was where [CSJ] pitched its tent when UC was just a theory in 2009. This is a big boost for low earners at a really important moment.”

The Resolution Foundation’sDirector Torsten Bell cautioned that the OBR was being optimistic in its forecasting:

“This is a much much bigger Budget than expected. Why? Because the [OBR] have become hugely more optimistic: borrowing down because taxes are up. And it’s a Boris Budget because the Chancellor has basically gone and spent it. Winners: unprotected departments, working Universal Credit claimants, Rose drinkers, anyone who had a bet on an early general election. Losers: the Treasury (given that if the OBR turn out to be too optimistic they’ll struggle to undo today).”

Overall, a pretty clear picture: praise for the reforms to UC and Alcohol Duty, and furrowed brows at the colossal spending. Whether you’re popping the cork in celebration, or drowning your sorrows, either way it’ll probably be cheaper…