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Spring Budget: University of Nottingham experts react to chancellor’s statement

As Chancellor Jeremy Hunt delivered the Spring Budgert statement and outlined the Government’s spending plans, University of Nottingham academics reacted to today’s announcement.

During the announcement, Jeremy Hunt revealed plans to cut National Insurance and further support for struggling households across the UK.

 

Experts from the University of Nottingham have been reacting to the announcements being made in the House of Commons this afternoon.

Dr Christopher Pich, Associate Professor in Marketing, comments on the Conservative brand:

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He said: “It seems like the budget will be the starting pistol for the General Election. It will be the make-or-break budget. I imagine the Chancellor wants to position the Conservative brand as ‘defenders of the economy’ and ‘champions of fiscal responsibility’.

“The Chancellor will want to appeal to the key factions within the Conservative party – so I am sure there will be some sort of tax cut or tax relief for families, businesses, and perhaps some version of Labour’s policies on scrapping non-dom tax status for example.”

Upon the announcement, Dr Pich added:

“It appears the Chancellor is trying to position the Conservatives as a low tax, high growth, long-term thinking, and economic responsible political brand. The Chancellor is attempting to position the brand as champions of fiscal responsibility and getting ready for future shocks.

“He is arguing its ‘plan’ is working and the plan started in 2010 means the UK is in a stronger state because the Conservatives have been in power. Plus, he is positioning the party as the ‘listening political brand’ – trying to be seen as inclusive and engaging – he keeps emphasising he has consulted MPs, voters, charities, The Sun newspaper, in relation to certain policies and tax cuts.

“The Chancellor is also attempting to position Labour as a political brand without a plan, a brand which will raise taxes, no principles and a party that can’t be trusted with the economy. I am sure Labour will respond and say the Conservatives have no plan, it was a budget based on style rather than substance and the Conservatives are out of ideas and presiding over a low growth, high tax economy. Labour will also probably call for a general election and ask the Conservatives to step aside as the country is crying out for change.”

Dr Christopher Byrne, Assistant Professor in Politics, on the budget’s impact on politics

He said: “The measures announced in this budget are unlikely to move the dial for the Conservative government ahead of any general election this year. The headline measure—a 2p cut in the rate of national insurance—is a repeat of what was done with the last Autumn Statement in November, and the Conservatives are lower in the polls now than they were then. In fact, the Conservatives are about as low as they were at their nadir under Liz Truss after the October 2022 ‘mini-budget’.

“Why aren’t the tax cuts working? Because taxes are not actually going down. Due to freezes in thresholds (a form of ‘Stealth Tax’), more and more people are either being dragged into paying taxes, or into paying higher rates of taxes, meaning that the overall tax burden on work is still rising. This is despite these cuts to National Insurance. Most voters either grasp that the narrative of this being a tax cutting government is not true, or they simply don’t feel better off because of a combination of rising taxes, high inflation and high interest rates.

“This budget suggests that the Conservatives are less focused on contesting the next election, and more on setting traps for a future Labour government or depriving such a government of some of their most popular policies. Most notable were the extension of the windfall wax on energy companies, a crackdown on non-doms and higher air passenger duty for business and first class travellers—all to raise revenue for the National Insurance cut.

“The nearest thing to a ‘rabbit out of the hat’ in this budget were the changes to the High Income Child Benefit Charge, raising the threshold at which Child Benefit starts to be removed from one parent earning £50,000 to £60,000 from this April, with further reform promised for down the line. This will be very welcome news to many families with young children, but less than 10% of the electorate are families with children under the age of 4, and only a fraction of those will have been affected by the HICBC, so this is unlikely to make a major splash.”

Dr Brendan Canavan, Assistant Professor in Marketing, on the new tax on vapes:

He said: “Taxing vapes is likely to be highly effective overall. Experience in Australia, New Zealand, as well as the UK, relating to traditional tobacco products, shows significant declines in smoking rates in line with tax increases.

“Regulation needs also to look at restricting marketing of vapes. Products sold in plain packaging and unable to emphasise product attributes such as flavour, or make cultural references such as towards lifestyles, would likely appeal less to new and young consumers.

“Again, evidence from various parts of the world is that marketing restrictions make traditional tobacco products less visible in day-to-day life, and hence combat smoking as a normalised activity.

“Any tax increases and other regulations would need to be backed up by enforcement. For example, existing Advertising Standards Agency regulations around e-cigarettes and vaping could also be updated about and upheld more aggressively on social media.

“This requires government investment in monitoring. Vapes, typically manufactured in China, are easily available online, and already often imported and sold illegally. This is likely to increase with any tax rises as people attempt to circumvent.”

• Read next: Spring Budget: £20 million funding announced for Carlton

• Read next: All the main points from The Chancellor’s Spring Budget statement today

 

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