This may sound like heresy to many, not least my former colleagues at the Treasury, but I’m coming around to the view that fiscal rules are overrated. Of course, fiscal credibility is important and must be protected. But fiscal rules are often more of a hindrance than a help. For a start, rules on borrowing and debt have been […]
It’s increasingly seen as trendy and progressive to criticise GDP as a measure of the success of an economy. Indeed, New Zealand’s ‘Wellbeing Budget’ of 2019 was widely praised as a ‘world first’ for its emphasis on a range of other metrics. It wouldn’t surprise me if Rishi Sunak is encouraged to adopt similar language […]
Today has provided some welcome clarity on the Brexit process. Both the UK and the EU have now set out their opening positions for the next stage of negotiations, covering the long-term relationship after the transition period. At first sight, the two sides may appear far apart. But I believe there’s enough common ground – […]
Ever since the 2016 referendum, economists have attempted to estimate what Brexit ‘has already cost’ the UK economy and households. It wouldn’t be a surprise to see some of the most depressing numbers dusted off this week to mark our departure from the EU. But all these studies should be taken with a large pinch […]
Almost all the commentary ahead of the Bank of England’s monetary policy meeting at the end of the month has focused on whether interest rates should be cut, or left on hold. In contrast, I would be itching to vote for a hike. There does at least appear to be an emerging consensus that the […]
The forecasts for 2020 suggest another lacklustre year in store for the British economy. The median prediction for GDP growth, according to the latest survey of independent forecasters compiled by HM Treasury, is just 1%. That would be the weakest annual figure since the recession of 2008-09. In particular, investment is expected to remain sluggish, largely because […]
Nato’s birthday celebrations were marred by a row between two of the guests, Presidents Macron and Trump, over both the health of the military alliance and France’s decision to hit US firms with a new digital tax. This row has at least drawn attention to the potential conflict between tech taxes and international rules that […]
The Conservative manifesto launch launch was dominated by the theme of getting Brexit done to allow the Government to refocus on the ‘people’s priorities’, including the NHS, schools, policing and investment in infrastructure. The latest opinion polls suggest this is an attractive pitch. But can we afford it? I’d give the Conservatives’ fiscal plans two cheers, based […]
One of the main takeaways from Labour’s manifesto launch was the lack of any strong economic justification for many of the party’s policies. Jeremy Corbyn chose to emphasise that the proposals were ‘popular’, rather than actually sensible, and to argue that critics were motivated by self-interest instead of genuine concern about the wider economic and […]
Boris Johnson’s decision to postpone next year’s planned cut in corporation tax is risky – both as a piece of politics and as economics. If anyone can sell it, I suspect that he can, but it’s still not necessarily a good move. To recap, the main rate of corporation tax was 28% in 2010 and […]
The latest fiscal pledges from Sajid Javid and John McDonnell are similar in some respects, but very different in others. In short, both are planning to ramp up government spending, especially on investment, and have proposed new fiscal rules which should allow them to do so. However, Labour’s plans are much bolder – verging on […]
On Sunday Labour announced ‘Warm Homes for All’, touted as ‘the largest scale upgrade of UK housing since post-war reconstruction’. The accompanying press release promised that ‘Labour will create 450,000 jobs by installing energy saving measures such as loft insulation and double glazing, renewable and low carbon technologies in almost all of the UK’s 27 million […]
It seemed appropriate that the Labour Party launched its election campaign on Halloween. Jeremy Corbyn conjured up a host of bogeymen to scare the voters into supporting policies that would actually harm the very people he says he is trying to help. Apparently, there’s an enchanted forest of magic money trees to pay for all […]
The chaos in Westminster has given fresh impetus to the campaign to lower the voting age to 16 for UK-wide elections and referendums. Opposition parties and Remainers backing a ‘Confirmatory Referendum’ on Brexit all appear to view extending the franchise as an opportunity to pick up votes from younger people and ‘break the deadlock’. This […]
The UK government and the EU have finally agreed a new Brexit deal. Of course, Prime Minister May had already got us to this stage and there are still plenty of hurdles to clear. Everything may look different again after Parliament votes on Saturday. But let’s assume that a negotiated withdrawal along these lines is […]
I’ve finally finished the IFS/Citi Green Budget published on Tuesday. All 253 pages of it. Like every IFS reports this is a serious piece of work. But it also deserves a far more critical assessment than most journalists have managed so far. Let’s begin with the headline that even a ‘relatively benign’ no-deal Brexit would push UK public debt […]
The details of Sajid Javid’s conference pledges to boost the National Minimum Wage, aka the National Living Wage (NLW), look more sensible than those of Labour’s John McDonnell, but that’s not a high bar. Indeed, this could be another political bidding war that any responsible party should be happy to lose. To recap, Javid has […]
John McDonnell has promised that a Labour government would reduce the average full-time working week to 32 hours within a decade, with no loss of pay. This would allow many people to work four days a week, rather than five or more, and enjoy a better quality of life. What’s not to like? Unfortunately, rather […]
‘Common ownership of the means of production’ may be about to stage a comeback. Labour is proposing to set up a working group to review the language of Clause IV of its constitution, which sets out the party’s aims and values. Many activists want to return to the wording first adopted in 1918. Jeremy Corbyn himself has […]
I’ve just read for the umpteenth time that ‘crashing out of the EU without a deal’ would inevitably lead to ‘shortages of food, medicines and petrol’. But the fact that many people take this as a given still does not make it a fact. Back to basics. A ‘no deal’ scenario is one where the […]
