Economic and social experts comment and offer their thoughts and insights on the Pre Budget Report.

Howard Reed, Director, Landman Economics:

The PBR provides some welcome headline measures - on additional help for training unemployed people and the announcement of a super-tax on bank bonuses. However, the failure to make progress on a financial transactions tax is a missed opportunity, as is the very small amount - only a few hundred million pounds - allocated to green investments. The combination of National Insurance contribution increases and spending cuts on many services from April 2011 risks choking off a recovery that is likely to be fragile, if it is happening at all, by then. While the NICs increases have been designed not to take money away from the low paid, which is welcome, spending cuts on the scale envisaged are bound to have some impact on the least well-off, even if health and education are ringfenced.

Professor George Irvin, SOAS:

While taxing bankers' bonuses is to be welcomed, it raised less than £1bn. On balance this pre-budget statement is disappointing. Instead of raising NICs by half a percent, the Chancellor might have uncapped NICs, raising £11bn per annum and making the tax system less regressive at a stroke. The average public sector worker is already poor, and will get poorer while the top 5% of income earners will hardly be affected. Vast amounts of revenue go missing because of individual and corporate tax avoidance, but whether the Chancellor will walk the talk remains to be seen. Nor has he done the country any favours by committing himself to halving the budget deficit, his figures on the PBR depend on very optimistic estimates of UK growth. The bit of green investment sprinkled into this offering is woefully inadequate. He has missed a major opportunity for progressive tax reform which could have financed large-scale public investment in greening and modernising our infrastructure.

Richard Murphy, Tax Justice Network:

So was it good? Yes: because it retained the commitment to spend and that is by far the most important thing to do right now. No, because the commitment to fairness was not strong enough and some public sector employees are going to lose out badly. And there’s just not enough for a Green New Deal as yet. I’ll take it, but it could have been better still.

Zoe Gannon, Compass Research co-ordinator:

As Compass has said the PBR does represent a positive step in the right direction and we should particularly welcome measures that increase spending at this point in the economic cycle and protect front line services as well as ensuring the UK borrowing stays inline with other major economies. Some relatively hard hitting measures on tax avoidance, and the tax avoidance industry that fuels it should also be welcomed.  However, in this area as well as many others more can always be done particularly when we consider that the UK tax system is currently regressive – ie those on higher incomes pay a much lower proportion of their income in tax than those of lower incomes.  In the interest of fairness this is an issue which must now addressed. 

Professor David Byrne, Durham:

Given the parlous state of the UK economy which derives in very considerable degree from in effect betting the farm that our speculators in the City of London would be better than their speculators elsewhere, and all speculators everywhere having turned  to  be essentially useless, then everything government does should reflect a recognition that we need to recalibrate the UK’s economic base in a different direction. We hear a good deal, not least from the born again Mandelson, about the importance of the industrial base for the UK but there was little other than a far too small scale support for green investment which focused on this as an issue. A vital opportunity to integrate the green agenda and the development of an industrial base for the UK in the 21st century seems to have been lost.

Neal Lawson, Chair of Compass:

Labour may be starting to get off its knees, taking the action the economy needs and the people want, this must be the start of a trend to put society before the market that continues right through to the next election and beyond.

Gavin Hayes, General Secretary of Compass:

The one-off levy on bonuses is just the sort of bold and decisive policy a Labour Government should be about - a clear signal to the country that Labour is on the side of the many not the few. While Cameron may once have offered the empty promise of a ‘day of reckoning for bankers’ it was left to a Labour Chancellor to actually deliver it.