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 […]
From international trade to interest rates, macroeconomics is in yet another tail spin
Fifty years ago, the Euro area accounted for 30 per cent of the world’s economy. Since then, there has been a steady fall; now, its share of world output has halved. In contrast, the Asia-Pacific economies have grown much faster. These trends are well established, and this region will increasingly dominate the world economy. Yet, […]
China’s zero-Covid policy must be a cautionary tale for the UK
As we greet the new year with the hope of more serene times ahead, some might do it with a measure of doubt and trepidation for a variety of reasons, one of them being the government’s decision to resurrect Covid-19 restrictions. Admittedly, it is in a very limited form and only affects arrivals from China. For […]
Sunak’s flexibility has been curtailed by our undue reverence for the Bank of England
Rishi Sunak will deliver an updated Autumn Statement next week, after Liz Truss’ so-called “mini-budget” triggered her demise. His freedom for manoeuvre has been sharply contained by the new found reverence being accorded to the Bank of England and the Office for Budget Responsibility. The Bank of England has forecast a long recession, which could […]
How Truss pays for her plan for energy prices is just as important as what she does
Our new prime minister already has a long list of detractors. Yet something many are failing to take notice of is how well she grasps the fundamental importance of generating economic growth. This is the central issue facing the economy and it will determine how, ultimately, we pay for an intervention in the energy market. […]
As we look back on pandemic mistakes, we need to count livelihoods in our losses
Ministers don’t need to face the inquiry into the Covid-19 pandemic until next spring, the chair of the probe, Heather Hallet, announced this week. As part of its mandate, the inquiry will “listen to and consider carefully” the experiences of those who lost family members or “have suffered hardship or loss” as a result of […]
Politicians and voters must learn that every policy has a cost and an impact on growth
The runners and riders battling for leadership of the Conservative Party are setting out their stalls. Tax, lockdown, defence and Brexit are all key issues which have been raised. On some of these, at least, there are marked differences between the candidates. But there is an elephant in the room: how to raise the underlying […]
The mountain of debt cannot be ignored no matter how much the economy grows
Politicians and regulators are increasingly concerned about one phenomenon: buy-now-pay-later (BNPL). Nearly a year ago, the government agreed to regulate BNPL lenders, with an independent review chaired by City expert Christopher Woolard warning the sector represented a “significant potential consumer harm”. A Treasury consultation on BNPL only closed at the end of last year. It […]
Britons squeamish to spend their savings are jeopardising our economic recovery
The economic recovery is under threat. British consumers are saving and not spending. The Office for Budget Responsibility (OBR) estimates that during lockdown, households accumulated a massive £180bn of so-called “excess savings”. Earlier in the year, most economic forecasts assumed that these would be run down. Lockdown had constrained people’s normal behaviour and with the […]
From taxes to cats, May’s government has been an affront to Tory ideology
Theresa May has finally announced her resignation. How can we capture the flavour of her tenure in office? This can be found in the dry and measured content of the Economic and Fiscal Outlook from the Office for Budget Responsibility (OBR). The OBR stated in its latest publication in March 2019 that: “the tax receipts-to-GDP […]
