Tag Archives: economy

Caron Lindsay

Autumn Statement: the good, the bad and the ugly

By Caron Lindsay | Wed 5th December 2012 - 2:17 pm

So, the Chancellor has given his Autumn Statement. Liberal Democrat reaction is likely to be at best mixed. Will people feel that the balance of tax and benefit measures is sufficient to support our claims that we are making the system fairer?

Osborne painted a fairly gloomy economic picture. The growth forecast is under 3% for the next 5 years. Austerity will continue way beyond the next election. It’s in that context that his measures must be judged.

Let’s take a brief look at the key points from a Liberal Democrat activist’s point of view:

The good – Lib Dem gains

Steve Webb’s Pension …

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Caron Lindsay

LibLink: Christine Jardine..A coffee with a sweeter taste

By Caron Lindsay | Wed 5th December 2012 - 11:27 am

Christine Jardine was until this Summer a Liberal Democrat Special Adviser at the heart of Government. She is now back working full time in politics in Scotland and writing occasionally for the Scotsman.

This week she’s turned her attention to the fact that large corporations like Starbucks don’t pay tax in the UK and reflects on the good that local, independent coffee shops bring to the community:

As I sat there enjoying my Americano, eyeing up the chocolate cake and cinnamon swirls, I began to think about the value that the entrepreneur behind the counter had brought to my community.

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Mark Pack

David Howarth: liberals should increase indirect taxes

By Mark Pack | Wed 21st November 2012 - 10:25 am

David HowarthMartin Tod recently drew my attention to a short publication from David Howarth published over the summer about levels of public spending: Spending and Growth – a response to David Laws.

As the title suggests, it is primarily a response to someone else’s views on appropriate levels of public spending:

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Mark Pack

Eliminating the structural deficit is aiming for the wrong target

By Mark Pack | Mon 19th November 2012 - 10:53 am

HM Treasury logoThere is an appealing simplicity behind the idea of having a zero structural deficit. It is the policy the government is committed to, with its plans to eliminate the structural deficit. And it’s also wrong.

For all the problems in measuring the structural deficit accurately, the concept is a useful one – to measure what the deficit is, once you have allowed for where we are in the economic cycle. Or, as the FT puts it, “A budget deficit that results from a fundamental imbalance in government receipts and expenditures, as opposed to one based on one-off or short-term factors”.

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Geoff Crocker

Opinion: Get real about corporate tax

By Geoff Crocker | Wed 14th November 2012 - 2:25 pm

Companies currently pay corporation tax in the country where they are incorporated. A campaign is under way, in the Guardian, and the Commons Public Accounts Committee, that companies should instead pay tax where they make their sales. The proposal has populist appeal, but is impracticable.

Many companies, including UK companies, make export sales without costly incorporation in each sales country. If a US coal producer sells 1m tonnes of coal to UK powerplants for £100m, and makes £5m profit, it submits accounts in the US for tax authority scrutiny, and pays US tax on the £5m. Should this profit be …

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Mark Pack

What’s happened to real wages over the last 25 years?

By Mark Pack | Sat 10th November 2012 - 2:50 pm

This little presentation from the Office of National Statistics has the answer. It’s packed full of interesting information, presented in a very clear manner:

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David Thorpe

Opinion: Growth has returned, but what does it reveal?

By David Thorpe | Wed 7th November 2012 - 1:59 pm

One of the few tactically savvy moves made by the coalition recently has been its muted response to UK economy’s return to growth. This article examines what the return to growth means for the wider economy.

The first point to make is that, just as the double-dip phase of the recession was caused by international events, the return to growth has similarly been caused by external factors. The coalition deserves neither blame for the double-dip, nor credit for its ending.

Many of those who oppose the coalition’s economic policies on political rather than economic grounds question the validity of the …

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Posted in Op-eds | 5 Comments
Shaffaq Mohammed

Opinion: Tough Choices – Yes, but local politicians must grasp opportunities as well as challenges

By Shaffaq Mohammed | Tue 6th November 2012 - 11:49 am

Sheffield Town HallI doubt that there are many councillors who are unaware of the scale of the country’s financial difficulties. Yet whatever your prescription for resuscitating the British economy, politicians of all parties agree that reducing the deficit is a crucial piece in the puzzle.

Regardless of your views on the Government’s strategy, it is clear that reductions in council budgets are a reality. The challenge for councillors is to best adjust to the new climate and mitigate the impact on the services that people care about most.

I do not believe that the way forward is to abandon all council services, leaving local government as a sole provider of social care. Rather, local government should be taking the lead in innovative ways of thinking – taking bold steps to cut waste, not just services.

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Posted in Local government and Op-eds | Also tagged , and | 4 Comments
Bill le Breton

Opinion: Will Special Branch be knocking on the Old Lady’s door?

By Bill le Breton | Tue 6th November 2012 - 9:09 am

Today three reports have been published into the operations of the Bank of England. None of these pose the killer question: why, when for month after month in 2008 the UK’s Gross Domestic Product in money terms (the NGDP) fell from its stable long term annual growth rate of +5% to -5% a year, did the Monetary Policy Committee stubbornly maintained the Bank’s interest rate at 5%?

This excellent blog by Britmouse details, details the quarterly falls in NGDP and the inertia of the Bank which has the power to set the level of aggregate demand in the economy.

It is …

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Jayne McCoy

Opinion: Supporting local businesses – the Sutton story

By Jayne McCoy | Mon 5th November 2012 - 12:23 pm

In Sutton we have supported our high streets by investing in them. This strategic commitment has not only helped businesses to survive the recession and thrive, it has stimulated additional private investment which has helped to further unlock potential.

Our first project was the refurbishment of our main town centre in Sutton, initiated before the recession took hold, out of the London Mayor’s Great Spaces scheme. This was not an unqualified success as there were issues around implementation and design, which lost resident buy-in. However, it has succeeded in improving the area. Most importantly it was welcomed by the town centre businesses, who appreciated our

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Posted in Op-eds | 2 Comments
Paul Reynolds

Opinion: The importance of party unity over the economy

By Paul Reynolds | Wed 31st October 2012 - 11:15 am

There has been a rise in factionalism across the Liberal Democrats during their time in the Coalition Government – with the Liberal Left, Social Liberal Forum, Liberal Reform and other groups, all promoting their different perspectives. At Party Conference a left/right divide over economics and fiscal policy was very noticeable.

My thesis is that this divide is a serious one which is widening, not narrowing, and without measures to halt the fragmentation,

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Paul Walter

Clegg to hand 20 cities more economic powers

By Paul Walter | Mon 29th October 2012 - 5:23 pm

Nick Clegg is giving more economic powers to a new batch of cities and major towns.

– Devolving powers out of Whitehall in order to stimulate growth.

It is very difficult not to see this as A Very Good Thing.

The Independent takes up the story:

Up to 20 major towns and cities will today be offered extra

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Stephen Tall

“We’re not in recession”. Last July’s headline comes true (belatedly).

By Stephen Tall | Thu 25th October 2012 - 8:05 pm

Four months ago, just after the last set of quarterly figures published by the ONS showed a sharp contraction in the UK economy, I highlighted economist Hamish McRae’s very public assertion that the UK was in actual fact no longer in recession. Pointing to the second-highest rate of job creation ever in the private sector, combined with falling inflation, he declared: ‘pull all the other data together and the figures would be consistent with an economy growing at around 1 per cent a year’.

Here’s what he has to say about the latest quarterly growth figures of +1.0%, which …

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Bill le Breton

Opinion: Mind the gap – a sceptical view of the need for cuts

By Bill le Breton | Sun 21st October 2012 - 9:50 am

The UK’s economic position has deteriorated, government revenues are lower and welfare expenditure higher than anticipated, worsening the deficit so that austerity must continue further into this decade. Because of this deterioration a combination of increased taxes or cuts must be identified in the Autumn Spending Statement in December.

That is the orthodox view. It is based on the generally accepted proposition that the structural deficit should be eliminated. This has set off widespread debate as to whether the increased scale of the structural deficit should be eliminated by increased taxes (such as a Mansion Tax) or expenditure reductions and where these should be identified, with the Conservatives placing welfare cuts at the top of their agenda.

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Posted in Op-eds | Also tagged and | 25 Comments
Phil Ling

Opinion: Two ways to help fix the global crisis

By Phil Ling | Sat 20th October 2012 - 10:50 am

It has long become clear that the financial crisis has been on a scale deeper and larger than many people have suspected. It has also been exacerbated by muddled policy responses from all Governments and policy makers. Whilst the need to control debt is not in doubt, capital expenditure projects should be pursued and tighter bank regulations need introducing (with much clearer splits between retail and investment banks); all economies are still struggling.

Step one: better Quantitative Easing

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Stephen Tall

The politics of sluggish growth: good for the Tories, bad for Labour, and as for the Lib Dems we’ll see

By Stephen Tall | Tue 9th October 2012 - 11:10 pm

Today saw the publication by the IMF of its latest growth forecasts. UK growth prospects are downgraded once again. Growth in 2012 is now forecast to be -0.4% (the most recent quarter’s strong showing is anomalous) and an anaemic 1.1% in 2013. As The Spectator’s Jonathan Jones observes, the only thing new here is that the IMF is falling ‘into line with the consensus’.

On the face of it this is bad news for the Coalition, further evidence that the economic strategy of deficit reduction driven forward by David Cameron and George Osborne, and endorsed by Nick …

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NewsHound

Vince Cable: No to Tory plans for further spending cuts

By NewsHound | Fri 21st September 2012 - 8:25 am

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Jonathan Portes

The Independent View: Low borrowing rates signal economic weakness, not strength

By Jonathan Portes | Thu 20th September 2012 - 2:00 pm

As the head of an independent economic research institute, it’s not my job to attend the Liberal Democrat conference (or indeed that of any other party). But, following up this FT article, I’d like to share some thoughts on this line from a motion you will be debating at conference:

Conference recognises that the difficult decisions taken by the Coalition Government have ensured the credibility of the UK government’s position in the financial markets allowing the UK to borrow at record low rates.

and on an amendment to the motion which you’ll also debate:

Conference also notes that it would be a mistake

…

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Bill le Breton

Opinion: New World Economics

By Bill le Breton | Sun 16th September 2012 - 9:25 am

Bloomberg flickered on the screen as the Chairman of the Federal Reserve, Ben Bernanke, set out his policy before the world’s press:

To support a stronger economic recovery and to help ensure that inflation, over time, is at the rate most consistent with its dual mandate the Committee agreed today to increase policy accommodation by purchasing additional agency mortgage-backed securities at a pace of $40 billion per month.

That’s open-ended Quantitative Easing (QE) to you and me; monetary stimulus a l’outrance designed to expand the money base until unemployment drops below 7% or PCE (personal consumption expenditure) core inflation increases above 3%.

In …

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Geoff Crocker

Opinion: Why austerity is the wrong answer to debt

By Geoff Crocker | Tue 11th September 2012 - 4:28 pm

Austerity policy continues to be embraced by the UK coalition government as well as by governments across the world. This is causing predictable political unrest with large demonstrations and riots in Spain and Greece. The pain to UK households is substantial and set to increase. This is clearly socially undesirable, but more importantly is based on a technically incorrect analysis of the current economic crisis.

It is fashionable and great sport to blame bankers for the crisis, to say that the developed world has ‘lived beyond its means’ and that we ‘cannot afford’ economic growth and therefore must cut our economic output …

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Stephen Tall

How much should we tax? How much should we spend? The great unanswered questions in British politics

By Stephen Tall | Mon 10th September 2012 - 8:45 am

A few weeks ago I took David Laws to task for proposing the UK needs to reduce public spending to 35% of GDP: it currently stands at 43%.

I stand by the three points I made then:
1) Just because public spending is higher in the C.21st than in Gladstone’s day is not in itself a sufficient argument.
2) Proposals for public spending cuts should be backed up by specific examples. (It’s a favourite trick of Conservative right-wingers in particular, for example, to preach spending restraint while also wanting to build new prisons and buy new weapons systems.)
3) There is no evidence …

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David Thorpe

Opinion: Danish economy shows now is not the time for Plan B

By David Thorpe | Wed 5th September 2012 - 8:54 am

Critics of the coalition’s economic policy come from many and diverse perspectives, from those such as John Redwood who advocate the traditional Tory neo-classical approach of cutting taxes and spending until growth is achieved to those who advocate forgetting the deficit and spending until growth occurs.

The traditional Tory arguments were largely demolished by the great Liberal economist JM Keynes in the 1930s, and their reheated version disproved by JK Galbraith in the 1980s.

The arguments of those who wish to see stimulus spending are more cogent but the latest data concerning the Danish economy should provide them with food for thought.

In …

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Duncan Stott

Opinion: Monetary policy is political, so where’s the democracy?

By Duncan Stott | Mon 3rd September 2012 - 8:56 am

We are in extraordinary economic times, which have led to extraordinary measures from the Bank of England in its attempt to help steer us out of the storm. The Bank appears to be terrified at the prospect of deflation and the depressive effect it could have. Not only have base interest rates been pinned to a historical low of 0.5% for well over three years, the Bank has also used Quantitative Easing to pump £325 billion of newly created money into the economy.

We now know more about the effect that QE is having and it should send shivers down the …

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Daniel Furr

Opinion: Britain has become a corporate state, not a free society

By Daniel Furr | Fri 24th August 2012 - 8:52 am

In the months after the financial crisis in 2008, I recall a conversation with an American friend of mine; we discussed the fallout and numerous rescue packages by countries. Financial media outlets, such as Bloomberg and CNBC, described the capital injections into financial institutions as a sign we are “all socialists now” – according to my American companion, this was far from the truth. In reality, Western economies have turned the page to fascism, not socialism.

When he mentioned this to me, I confess, it was rather amusing to listen to; very sceptical of such claims, until the request to research the facts myself led me to a worrying conclusion. The truth of matter is that we are not far off from what British fascists in the 1930s thought the financial sector should administrate to the rest of society.

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Robin McGhee

Opinion: It’s not such a bad thing if we’re a nation of idlers

By Robin McGhee | Thu 23rd August 2012 - 2:25 pm

An extract from a forthcoming book appeared in the Evening Standard last week. The book the Standard quotes from is Britannia Unchained, a collection of essays by senior backbench Tories. Dominic Raab, Priti Patel and Chris Skidmore might not be household names yet, but they are young, right-wing and tremendously ambitious for themselves and the Conservative Party.

According to the Standard article, the authors believe Britons today need more “graft, risk and effort” in order to make Britain part of the “superleague” of nations. “Once they enter the workplace”, the young Tories argue, “the British are among the worst …

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NewsHound

LibLink: John Pugh MP – With hindsight, Cable’s deficit reduction plan looks better than Osborne’s

By NewsHound | Tue 21st August 2012 - 1:20 pm

Lib Dem MP John Pugh has written a thoughtful, balanced piece on economic policy for the New Statesman website. He freely admits he has voted for every part of George Osborne’s economic strategy brought before the Commons (“I did not know if it would achieve all its major objectives but I certainly did not know it would not”) but says the facts are plain: it’s not working. Here’s an excerpt:

Yes, jobs are being created in the private sector, unemployment is not moving upwards, the deficit is down, our export markets are engaging with the emerging economies, inflation is low and

…

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Adam Corlett

Opinion: Is this the start of Plan A+?

By Adam Corlett | Sun 12th August 2012 - 9:25 am

It looks like the coming months will see new initiatives to boost the economy, following the second quarter contraction (now revised up slightly to -0.5%) and a record trade deficit.

As The Spectator reports,

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Caron Lindsay

Vince v Osborne – the battle for RBS’s future

By Caron Lindsay | Thu 2nd August 2012 - 2:26 pm

The future of the Royal Bank of Scotland is back in the headlines today.

The Financial Times reports that ministers are discussing buying the remaining shares in RBS, bringing it fully under state control. This would allow them to force it to lend more to viable small and medium-sized businesses  without having to worry about other shareholders challenging such a direction in the courts.

The Guardian reports that Liberal Democrat   Vince Cable is the driving force behind this plan. He believes that it’s the only way to get money to businesses.

What we do know, and Vince Cable confirmed when taking …

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Caron Lindsay

Nick Clegg says no to Tory plans for more welfare cuts

By Caron Lindsay | Tue 31st July 2012 - 10:58 am

Newspapers have been reporting for months that the Liberal Democrats were not prepared to sign up to Tory plans for £10 billion of welfare cuts in a spending review that would draw up plans for spending into the next Parliament. Today’s Independent says that Nick Clegg himself will ensure that this Government only produces spending plans for 2015-16. The electorate will then decide in the 2015 election whether they want to pursue further cuts in welfare or a heavier burden of tax on the wealthy.

 The report says;

The Liberal Democrats’ opposition means the review will have to be watered down. Before the

…

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Mark Pack

Vince Cable on the economy, George Osborne and his own ambitions

By Mark Pack | Thu 26th July 2012 - 9:14 am

From last night’s Newsnight:

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