Tag Archives: chris giles

Labour’s VAT cut: bad economics and disingenuous politics

In the run-up to today’s county council elections, Ed Miliband has been taking to a wooden pallet in towns and villages around the UK, telling anybody who would listen about Labour’s plan to rescue the British economy by temporarily reversing the 2.5 percentage point increase in the rate of VAT.

Desperate, though, to avoid admitting this would involve a significant increase in borrowing, he’s been telling us that this would actually be a free tax cut because the economic growth that resulted from it would increase revenues by more than the upfront cost.

That unlikely-sounding claim was given short shrift by …

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Welfare: right policy, wrong reasons?

Many column inches have been filled with comment over the government’s decision to restrict a number of benefits and tax credits to increases of 1% over the next couple of years.

This piece (£), however, by the FT’s economics editor, Chris Giles, warrants a special mention, not least because it is makes some interesting points that nobody else seems to have done.

Here’s a (fairly lengthy) extract:

In any case, good evidence exists on living standards to assess the merits of restricting benefit uprating. According to the most recent year of data, 2010-11, the crisis has caused real household net incomes around the

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The Weekend Debate: Bank of England independence – an economic success story or a well-intentioned failure?

Here’s your starter for ten in our weekend slot where we throw up an idea or thought for debate…

The Liberal Democrat 1997 manifesto said the following:

We will turn the Bank of England into a UK Reserve Bank, free from political interference. We will charge the Bank with keeping inflation low and make it accountable to Parliament for achieving this goal.

Of course after Labour’s landslide victory in that election, one of Gordon Brown’s first decisions as chancellor was to borrow this Lib Dem policy and essentially transfer responsibility for monetary policy to the Bank of England.

Most Labour politicians look back on …

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  • User AvatarTsar Nicolas 29th Jan - 8:14pm
    Colin, "if those things happen." When, not if. The first IPCC report in 1990 warned of "rapid, unpredictable and non-linear" consequences if warming went beyond...
  • User AvatarJohnTilley 29th Jan - 8:11pm
    I see that two whole hours are devoted to one MP, 45 minute for a Q+A session and 75 minutes for a speech. By way...
  • User AvatarMatthew Huntbach 29th Jan - 7:18pm
    Alex Sabine Gordon Brown not only borrowed heavily throughout Labour’s second and third terms, but also based his spending plans on shaky foundations in the...
  • User AvatarMatthew Huntbach 29th Jan - 7:11pm
    Alex Sabine But if you are arguing that governments should budget on the basis of assuming no economic growth at all in perpetuity, then I...
  • User AvatarTsar Nicolas 29th Jan - 6:57pm
    Tez, You are right. I doubt there is anything that can be done at this late stage, but if the human race is going to...
  • User AvatarAlex Sabine 29th Jan - 6:47pm
    @ Matthew Oh yes - well of course ALL politicians say things like that "Our policies are so marvellous and wonderful, that they'll result in...