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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Recent Comments

  • Simon R
    That's a very thoughtful article that gives a good account of the problems we need to solve, thanks @William. @Steve: Two answers to your question about weal...
  • Steve Trevethan
    How can a crumbling society produce sufficient wealth to sustain itself and cope with the current financial extractions by the tax favoured wealthy? We seem ...
  • William Wallace
    Steve: We need wealthy people because, even if they don't pay a very high proportion of their income in tax, it nevertheless adds up to a very useful amount of ...
  • Nigel Jones
    Yes we need a strong narrative to justify a fairer tax system which also raises more for investment as well as public services. I suggest part of that narrativ...
  • Steve Trevethan
    Why do we need very wealthy people who value personal wealth more than loyalty to our nation?...