If we were to bring UK income taxes closer into line with those in Europe’s major economies, it would cost the average taxpayer £1,015 per year. One argument often stated nowadays is that Britain should move towards European-style taxation. But given this cost to the taxpayer, it is certainly not a policy I would advocate. […]
Economic comparisons have been made in recent months with the 1970s, with fears of an energy crisis and talk of stagflation. But it’s worth focusing instead on the Thatcher revolution of the 1980s and the sea-change that then gripped the economy, with enterprise, home ownership, risk-taking and a can-do attitude to the fore. While many […]
The war in Iran has brought into sharp focus a central challenge for UK energy policy: how to deliver the green transition while maintaining energy security and ensuring that costs remain affordable for households and businesses. Getting this balance right is now critical not just for energy policy but for the UK’s economic performance. In […]
Thinking ahead about the City of London should be high up on the policy agenda, given the City’s importance to the UK economy in terms of jobs, tax revenues, trade performance and inward investment. It is easy to take a relaxed and optimistic view of what lies ahead for the UK’s financial sector. London is, […]
During the Thatcher premiership, popular capitalism came to the fore, focused on boosting home ownership and broadening share participation. It was a period when the City was growing and finance was helping drive economic success, and there was a desire for more people to share in this. The Big Bang reforms of 1986 transformed London’s […]
One word describes this Budget: bad, but it can be used three times, bad, bad, bad. Bad in terms of its fiscal consequences, economic impact and the incentives it embeds. Because so much of the Budget was trailed in advance, the initial impact of it may be seen as neutral. It’s not. The Red Book […]
‘Unleashing capitalism to ignite innovation’ – the original title of this essay – goes to the heart of the current economic debate. In the space of five words, it confronts a key challenge facing the UK economy, as well as focusing attention on a major opportunity. The opportunity is that innovation is necessary for economic […]
Sitting in the Mansion House on Wednesday evening, it was welcome to hear the Chancellor unveil a suite of proposed measures aimed at boosting the attractiveness of the City and its relevance for the UK economy. Some of these include areas that the Centre for Policy Studies (CPS) has been at the forefront of advocating, […]
The country is living beyond its means. The budget deficit is high and national debt is set to rise significantly. That’s the main take-away from today’s two-yearly risk assessment report from the Office for Budget Responsibility (OBR). Ideally, such risk reports should be annual and become the centrepiece of our policy debate on the fiscal […]
One of the most surprising aspects of yesterday’s Spring Statement is that in 2029, according to the Office for Budget Responsibility (OBR), the size of the economy will be bigger than it previously expected, reaching £3,433 billion. This compares with the £3,367bn that the OBR forecast last October. This is largely because the OBR is […]
Defence spending needs to be materially higher. It is now 2.3% of GDP. Yesterday, the Prime Minister announced an increase to 2.5% of GDP by 2027, paid for by a cut in overseas aid, and that it would rise to 3% over the next decade. This reflects the changing geopolitical landscape and US pressure for […]
The rise of the economic technocrat has transformed our policy landscape. In 1997, the New Labour Government made the Bank of England independent. Then, in 2010, the Cameron-Clegg coalition created the Office for Budget Responsibility (OBR). Now, both the Bank and the OBR have grown in importance, with their decisions permeating across the economy and […]
During his first term as US president, Donald Trump adopted a forthright approach to the issue of Nato funding. It had been an issue that concerned previous presidents too, but Trump forced it into the open and demanded that member states pay their fair share on defence. An inconvenient truth is that his approach worked, […]
This was a tax, borrow and spend Budget. Taxes and borrowing are up to fund increased public spending and higher public investment. The Budget contained 70 specific tax and spending measures. The net fiscal boost over six fiscal years is a sizable £208 billion, with a net boost of £24.7bn this year and £33bn in […]
Debt is high and the public finances are in poor shape. Yet it looks set to be a borrow, tax and spend Budget, with increased borrowing to fund public investment, and higher taxes to pay for more government spending. The Budget is also expected to unveil a significant change in the target measure for the […]
Addressing the UK’s growth problem is paramount and underpins virtually everything when it comes to public policy. Rejoining the EU, its Single Market (SM) or its Customs Union (CU) will not provide a solution to the UK’s growth challenge and should not be part of any pro-growth strategy. As Keir Stamer said in his BBC […]
How the fiscal sums add up is an ongoing feature of the policy and political debate. Into this arena has stepped the issue of whether interest should be paid on the reserves of banks at the Bank of England (BOE). As it stands, this is costing us a huge amount of money. But to assess […]
