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 AvatarRichard 21st Dec - 5:38pm
    Good universities have always been international. Non-EU students contribute at least £7bn to our balance of payments. Unemployment is coming down rapidly and skills shortages...
  • User AvatarHireton 21st Dec - 5:24pm
    A very strange article. Firstly the Lib Dems bottled their chance to advance their alleged commitment to Home Rule in the Smith Commission so we...
  • User AvatarJimbob 21st Dec - 5:16pm
    There is an absolutely huge space for standing up for a strong economy, fairness, human rights and civil liberties. Unfortunately the party has stood for...
  • User AvatarMartin 21st Dec - 5:14pm
    It was always clear that the threat of a referendum on the EU has the potential to initiate a further Scottish independence vote. If the...
  • User AvatarEddie Sammon 21st Dec - 5:07pm
    I'm glad Caron has written this. The SNP said "oil will pay for it all", then its value has crashed and Salmond has the cheek...
  • User AvatarPaul Pettinger 21st Dec - 5:06pm
    Try reading the coalition agreement theakes - the Govt's key goal was deficit reduction, and by now the structural deficit was supposed to have been...