Paul Johnson, director of the Institue of Fiscal Studies, said the U-turn did not address the issue of ‘fiscal sustainability’.
On Twitter he said, ‘From a fiscal point of view important to remember cut to 45p rate was just about smallest part of the "mini budget". What was a £45bn tax cutting package is now a £43bn package. This U turn has, in itself, essentially no effect on fiscal sustainability.’
In a statement the IFS said, ‘The direct impact of the government's U-turn on the abolition of the additional 45p rate of income tax is of limited fiscal significance. At a medium-run cost of around £2 billion a year, it represented only a small fraction of the Chancellor's mini-Budget announcements. His £45 billion package of tax cuts has now become a £43 billion package - a rounding error in the context of the public finances.’
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