Author Archives: Adam Corlett

What they don’t tell you about TTIP

Countless articles, emails and campaigns have expressed anger about TTIP. This is the Transatlantic Trade and Investment Partnership, which would cover over 800 million people in the EU and US, as well as helping determine the shape of future agreements the world over. There are numerous concerns – some entirely misguided, some merely exaggerated – and from reading the literature of campaign groups like 38 Degrees it might be hard to know whether there are any benefits at all from this trade deal. So supporters of free trade need to straightforwardly spell out some of TTIP’s advantages.

In particular, lost among the scaremongering and obscure debates has been the very foundation of TTIP: an abolition of almost all the remaining import and export tariffs between the US and EU. It’s true, as both supporters and opponents of TTIP say, that tariffs are only a part of the deal: harmonising regulations (without lowering standards) is now often more important. But when the entire process is under attack, the scrapping of tariffs should not be glossed over. I hope it’s not too insulting to suggest that many of those attacking TTIP or signing petitions (not to mention those who haven’t heard of TTIP) may have no idea that it includes the scrapping of import and export tariffs.

Posted in Europe / International and Op-eds | Tagged , , and | 69 Comments

Conference Countdown 2015: Cutting VAT for tourism would be a costly mistake

In the run-up to Autumn Conference in Bournemouth, we’ll be looking ahead to examine the highlights in the debating hall, the fringe and training rooms. You can find the papers here. You can find all the posts in the series here.

One of the motions at conference is for reducing VAT on tourism as far as possible. Here’s why that’s a bad idea.

The idea is to reduce VAT on hotels and selected attractions from the standard rate of 20% to 5% – the minimum allowed by the EU. This is something the British Hospitality Association has been lobbying the Treasury on for years. The motion refers to the importance of tourism more generally, with figures that include all restaurants, pubs and outbound flights, amongst other things, but I assume its VAT proposal is (mercifully) more limited.

The government’s response to this lobbying (under both Labour and the Coalition of which we were a part) has been to point to the substantial price tag. The cost of cutting VAT for accommodation alone would be £2 billion a year, with amusement parks and similar adding another £200 million. This is serious money. A comparable total would be the cost of the Pupil Premium that Lib Dems fought so hard to introduce.

Posted in Conference, Events and News | Tagged , , and | 22 Comments

Opinion: Do UKIP’s sums add up? Absolutely not!

ukip manifestoLike the Lib Dems and Greens (and unlike the biggest two parties), UKIP have released a manifesto that includes a list of what each policy costs (see pages 74-75). They have even had an independent body check that those costs sound reasonable, and put a lot of emphasis on their manifesto being “fully costed”. Kudos to them, you might say, but unfortunately their sums don’t add up.

For 2019-20 they have identified £32 billion of savings – largely from slashing overseas aid, ending EU contributions, cancelling HS2 and reducing Scottish spending. And £32 billion is then used for tax cuts (such as scrapping inheritance tax) and some spending increases. In this sense – and assuming all of these costs are indeed correct – the sums do balance. But…

Posted in News | 17 Comments

Opinion: Should Britain copy Obama’s capital gains proposals?

President Obama has announced proposals to increase taxes on the wealthy and help those on lower incomes (such as by boosting tax credits). The plans include reforms to capital gains tax (CGT): increasing its rate and ending a loophole. Should we do the same in the UK, and how do the Lib Dems’ proposals compare?

Posted in News and Op-eds | Tagged and | 14 Comments

Opinion: No taxation without explanation – tax summaries are welcome but flawed

budget breakdownStarting yesterday, and over the next month or so, ‘tax summaries’ will be delivered to 24 million taxpayers, detailing how much income tax and National Insurance they paid in 2013-14, and where that money went. You can see examples here.

As Nick Clegg said in 2012, this will deliver “greater transparency accountability in government … empowering citizens” with information on what they pay in, and how their taxes are spent. It sounds rather like the ‘Annual Tax Contract’ policy from the party’s manifesto in 1997 and 2001:

No taxation without explanation: Central Government should inform taxpayers of the ways in which their money is raised and spent, just as local councils now do.

You can draw your own conclusions from the pie chart on the right, but it looks like these annual tax summaries will be important.

Posted in Op-eds | Tagged | 25 Comments

Opinion: Nick Clegg’s fiscal target – splitting the difference

Calculating Taxes Up And DownStephen Tall writes that “in terms of policies, there wasn’t much that was new” in Nick Clegg’s Bloomberg speech. Giles Wilkes and others have suggested that, on the contrary, Nick’s fiscal targets are a welcome change from the excessive deficit reduction the Coalition has pencilled in for the next parliament.

These commentators think that Nick’s deficit target (below) is a continuation of Labour and current Coalition policy – to balance the budget excluding capital spending. My understanding, however, is that what Nick said …

photo by: kenteegardin
Posted in Op-eds | Tagged , , , and | 17 Comments

Opinion: Of driverless cars and passengerless trains

"Driverless Car in Bonita Springs" by Chris Griffith

Driverless cars may not be quite as revolutionary as the 19th century spread of the railway, but there are huge benefits coming into view. The sooner we can deliver them, and the sooner policymakers can take them into account, the better – with mixed results for railways.

To be conservative, let’s imagine it’s 2044 – 30 years from now. We will look back at the idea of people customarily directing 1 tonne cars at speed as madness. Millions

Posted in Op-eds | Tagged and | 28 Comments
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