IEA: Osborne’s Living Wage Hits Poor, Young, Minorities, Consumers, Taxpayers

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George Osborne’s Living Wage is likely to see those it is supposed to help lose out, according to a new report from the Institute of Economic Affairs. The IEA finds that modest minimum wage increases may not cause higher unemployment, but large increases will. Who are the losers? The young, unskilled, minorities and those in the regions:

“Minimum wage increases are always potentially a trade-off, between raising pay for those fortunate enough to keep their jobs and hours against the potential reduction in labour demand. Any significant reduction in demand will hit young and unskilled workers, particularly those from minority groups, hardest. It is also likely to have a bigger impact in some parts of the country than others… the ‘bite’ of the National Minimum Wage has been considerably deeper in Northern Ireland and the East Midlands than in London.”

Higher unemployment is a long-term consequence:

“the longer-run impact of the minimum wage might be to generate larger reductions in employment”

And low-paid earners don’t actually benefit as they lose out in other ways:

“firms such as B&Q and Waitrose have been accused of lowering premium pay for weekends and other ‘unsocial hours’, while Caffe Nero staff seem to have lost the perk of free paninis – showing that minimum wage increases are no ‘free lunch’. Those gaining from pay increases therefore lose out in other ways than jobs or hours lost”

The report concludes that someone ultimately has to pay for any sharp minimum wage increase:

“the cost can only be borne by consumers paying more, shareholders getting reduced dividends, or taxpayers paying more”

The Living Wage might make political sense – it leaves Labour with nowhere to go – but the evidence is it hinders those it is supposed to help…

Vote Leave Chief Launching New Brexit Site, Taxpayers’ Alliance Reshuffles

Vote Leave chief Matthew Elliott is back at Business for Britain post-referendum, and Guido hears he will be setting up a new website called BrexitCentral. Former Lobby journalist Jonathan Isaby is leaving the Taxpayers’ Alliance to join as editor. It sounds like the site will offer plenty of comment and analysis – there is a gap in the market for some proper wonkish insight making sure Brexit means Brexit. It launches in September and Guido wishes them well, readers of this site will no doubt await with interest…

Isaby’s departure from the TPA means a reshuffle in wonk world. Tufton Street veteran John O’Connell, who has been at the TPA since 2009, will be the new CEO, another well-deserved appointment. They’ve also hired Tom Banks, who ran Vote Leave’s ground operation in Yorkshire, as their new grassroots campaign manager. More jobs created by voting to Leave…

May Hires Top IoD Wonk

SPADS

Theresa May has hired Institute of Directors wonk Jimmy McLoughlin to lead Downing Street’s business relations. McLoughlin, who worked on May’s leadership campaign, will replace Cameron’s arch-Remain SpAd Dan Korski. It’s a smart hire – May’s ‘reforming capitalism’ shtick means she’ll need help bolstering relations and McLoughlin is one of the most likeable people in SW1. Here’s the SpAd list as it stands:

Send any further updates to team@order-order.com

Action Dan’s Wealth Tax Plan

Dan Jarvis has written a supportive foreword for a Fabian pamphlet backing a “one off” wealth tax aimed at the rich. The pamphlet attacks hedge funds for their high rates of return available only to rich investors. The left-wing authors have found a new pot of gold to replace the middle-class terrifying mansion tax – which was basically a tax on homeowners in the South East where family homes easily exceed £2 million. The Tories mail-shotted the hell out of the issue to homeowners in the general election…

The evil Fabians’ plan is to levy the one-off tax on those with assets over £10 million or who use “aggressive tax avoidance”. Those with over £20 million in assets will suffer an even bigger expropriation of their wealth. The authors of this plan think this will avoid losing votes as it will hit only the 0.1%. Only the likes of Guido apparently think the super-rich have suffered enough…

The problems with the idea – apart from the immorality of confiscating justly acquired wealth arbitrarily – are manifest and obvious. The type of people who use aggressive tax avoidance strategies (a) don’t admit they do, (b) won’t stay around to see themselves financially gouged. The idea that people who go to the trouble of parking their money offshore will have a change of heart is laughably naive. It will also hit entrepreneurs who build successful companies which bring jobs and taxes to Britain. Why would an entrepreneur choose to base herself in a country that punishes her success?

Why is Jarvis aligning himself with such a crazy, job-destroying, entrepreneur-deterring, unworkable left-wing policy? Could it be he wants to be able to defend himself with a policy shield in a leadership contest when the subject of his donations from hedge-fund tycoons comes up?

Owen Jones’ Think Tank Helps Pay Off Deficit

The union funded CLASS think tank Owen Jones helped found has been fined £1,000 by the Electoral Commission. Unite veteran Steve Hart was stung with the bill after the Centre for Labour and Social Studies failed to deliver not one but two donation reports on time. “Any penalties that are imposed by the Commission go into the Consolidated Fund. This is managed by HM Treasury.” OJ’s band of deficit deniers are forced to help pay it off…

Nanny Osborne’s Tax On The Poor

Nanny George Osborne

George Osborne’s sugar tax extends the reach of the nanny state, it is a punitive, regressive tax that will hit the poorest hardest. The Chancellor told the House: “We understand that tax effects behaviour. So let’s tax the things we want to reduce”. This is a naked attempt to coerce individuals into behaving how the state desires, making them pay if they don’t conform.

Extensive research from the Institute of Economic Affairs shows that sugar taxes are a highly regressive tax on the poor. They take a considerably greater share of income from the poor than the rich. Lower income consumers are also less responsive to price changes than the rich. This massively exacerbates the regressive impact.

Research also shows that rather than encouraging consumers to cut sugary drinks out of their diets, sugar taxes force them into buying cheaper, inferior products, sometimes switching to higher calorie drinks in the process. Sugar taxes have been tried in various US states, France, Hungary, Finland, Mexico and Denmark. No impact on obesity or health has ever been found as a result of a sugar tax.

Another point: a pint of cider can contain 20 grams of sugar, yet Osborne is freezing cider duty. Will he then be slapping cider drinkers with a stealth sugar tax instead? Millionaire Jamie Oliver won’t notice the sugar tax hit him in the pocket, the families to whom he preaches on telly will…

Sinister Nexus of ‘Eurosceptic’ Think Tank Staff (Who Actually Back Remain)

iea indy 2

“Exposed”, screamed the Indy’s front page last Thursday, dramatically claiming the Institute for Economic Affairs is part of a sinister axis of think tanks conspiring to help the Vote Leave campaign. The spirited piece told of a revolving door culture and an ominous-sounding nexus of right-of-centre organisations whose staff, board members and even offices are linked”, with the IEA at the centre. All good fun, but does it ring true?

In response, the IEA polled their staff to find out if they are indeed a conspiratorial bunch of secret Eurosceptics. It transpires that 37.5% of IEA employees actually support Remain, and another 12.5% are undecided. The IEA confirm they have

“no corporate position on whether Britain should stay in the European Union and a wide range of views are held by the Institute’s staff, trustees and wider supporters”

Hope the Indy’s track-record of rigorous investigative journalism continues in its online offering…

Cracknell’s Coke Confession

Former Olympic rower James Cracknell, the thinking man’s Sol Campbell, has put his name to a new Policy Exchange report calling for a tax on sugary drinks. Cracknell, PX’s “Senior Research Fellow for Obesity and Physical Activity”, praises Mexico’s tax on sugar-sweetened drinks which caused purchases to fall by 12%, concluding:

“The human misery and drain on the public finances is so great that the government has no option but to intervene… [a sugary drinks tax] is on balance a sensible intervention to help prevent the rise in obesity”

Ironically this nannying tax would hit Cracknell himself. Three years ago, the failed Tory candidate confessed to Men’s Health his two “worst vices“:

“I used to put ketchup on everything… Now I just drink a lot of coke.”

Diet, presumably.

Of course, a tax on sugary drinks would disproportionately hit poorer families. And wouldn’t be noticed by multi-millionaire coke fiends like Cracknell…

H/T Christopher Snowdon

Interchangeability of Third Sector Lefties

Darling of the lefty wonk world Faiza Shaheen made her name at the New Economics Foundation, the think tank-cum-charity whose new CEO is former Miliband speechwriter Marc Stears.

She then became Head of Inequality at Save the Children, a charity which was until last week run by ex-Gordon Brown spinner Justin Forsyth.[…]

+ READ MORE +

Wonk Watch: Kate Andrews From ASI to IEA

The wonk world transfer window is open and Guido hears the Institute of Economic Affairs are about to make a show-stopping signing. Readers will recognise 25 year-old Kate Andrews from her regular crusades for the cause of freedom on Sky News, which have made her something of a wunderkind of the right.[…]

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More EU Sockpuppetry From IPPR

GDFS

The Institute for Public Policy Research (IPPR) has today released a pro-European briefing outlining the minor renegotiations on Britain’s EU membership that it thinks would warrant staying in the EU. Titled “Unlocking the EU Free Movement Debate”, the document suggests small reforms in EU policy in five key areas are more than enough to stave off Brexit.[…]

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Osborne Jokes About Leadership Coup

The Chancellor has been caught joking about bringing down the PM.

Steady on Gideon…[…]

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EU Delete Damning Transparency Report From History

The EU has curiously removed from the internet a report on lobbying transparency that they themselves wrote. ‘Lobbying in the EU: the cost of a lack of transparency‘ was published this month and could be found on the EU’s website until two days ago.[…]

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Will Straw’s Spinning Swingometer

will-straw

Will Straw is one of the editors of a pamphlet from the Fabians – Never Again” – which basically argues that under Ed Miliband their policy offer was too left-wing. It also boasts that in the seat in which he was standing – Rossendale and Darwen – he increased Labour’s vote by 2,000.[…]

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Digital Government Boss Regrets Lack of Women

mike bracken

The biggest mistake Government Digital Service has made in recent years is failing to hire more women according to Mike Bracken, the head of GDS. Speaking to an audience at Policy Exchange yesterday, Bracken repeatedly refused to say what GDS should have done differently during his four year tenure other than to have diversified its workforce more.[…]

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IPPR: Tax the Poor

ippr-tax-the-poor2

Labour wonkshop IPPR have published a list of policy proposals today that aim to tackle the adverse affects of the government’s low-carbon programme on low-income groups. That would be the same IPPR who have spend years pushing for the decorbonisation policies that have disproportionately screwed over Britain’s poor…

The IPPR’s solutions to the problem include public ownership of new nuclear capacity and lifting the moratorium on onshore wind farms.[…]

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Quote of the Day

Heather Wheeler talks to Burton Mail about her tweet…

“It was a tongue in cheek pop after the European Parliament tweet – it was purely that. I also wanted to congratulate Team GB on a brilliant result and thirdly congratulate the Commonwealth countries who also did very well. Fourth, I am also looking forwarded to establishing new trade agreements. That was it – nothing more. Let’s just enjoy the summer!”

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