Politicians must understand that taxation is not a substitute for economic growth
In a speech last week, the leader of the Scottish Labour Party provided a ray of sunshine. I am not taking bets, by the way, on the number of times this particular sentence has been written. But Anas Sarwar was making a serious point which is of critical importance not just for Scotland, but for […]
A windfall tax raised by a money-hungry government will scare off our businesses
Rishi Sunak’s windfall tax on energy firms – what he called a “temporary targeted profits levy” – has gone down well with voters. The tax makes it look like money is raised from someone else and given to them through subsidies to their bills. Despite claims that the tax will yield an additional £5bn in […]
As Johnson squirms, his party must remember the roots of Conservatives values
Boris Johnson’s government now has a penchant for embracing policies which, to many, have a distinctively non-conservative feel. High taxes, a big state. What’s next? An old idea which is currently being given new legs is that of a universal basic income (UBI). The basic concept is that all citizens of a country receive from […]
Hikes to national insurance funds a level of public services we can’t afford
The government’s plan to increase National Insurance has sparked the predictable furore. The pressures to raise taxes to pay for the level of public services the electorate have come to expect is hardly new. The welfare state was created immediately after the Second World War. For a time, the financial demands were held in check. […]
Burnley and Asda are unlikely warnings of debt-driven troubles
It has been a week of mixed messages. Not just on the release from lockdown, but on the economy. The Bank of England indicated that banks have been given six months to prepare for negative interest rates. The Monetary Policy Committee was quick to clarify that this did not mean that they would necessarily cut […]
In the case of sugar, the nanny state really does know best
Boris Johnson created a furore last week by announcing that he was considering getting rid of the so-called sugar tax. Was he right to question the levy, or does it serve a purpose? Introduced in April 2018, manufacturers now have to pay more tax if their drinks contain a high amount of sugar. The producers […]
Emojis are a better metric for wellbeing than traditional data methods
HMRC’s programme to make tax digital continues to roll out. Anyone with a small business will know about the imminent deadline of 1 April, when VAT returns become digital. Quick to seize an opportunity, several companies have developed software to ease the task. The digitisation of tax raises the wider issue of whether technology will […]
Hyperbolic discounting explains why the French are revolting over Macron’s fuel tax
Economists have long argued that an effective way of reducing carbon emissions is by increasing taxes on energy consumption. This year’s Nobel laureate, Bill Nordhaus, advocated a global carbon tax over 40 years ago. The scientific logic is impeccable. But the practical politics of it are fraught with difficulties. To say that energy taxes, and […]
Corbyn and McDonnell’s delusional tax plan would cut revenue and harm growth
The income tax system in the UK is highly progressive. Not many people know that, to use a catch phrase attributed, rightly or wrongly, to the great actor Michael Caine. The top one per cent of earners contribute 27 per cent of all income tax receipts. To put it in context, just 300,000 people pay […]
Less austerity will always mean more tax
There is a great deal of discussion, following the election, of relaxing or even abandoning austerity. There is an equal amount of confusion about this, because the same word is being used to describe two quite separate concepts. The consequences of the government changing its policy on austerity are dramatically different, depending on which one […]
