Remainers were leaping on an article by Newsnight policy editor Chris Cook earlier this week which claimed that the Institute of Economic Affairs had fluffed their calculations for their alternative Brexit ‘PlanA+’. Cook attempted to replicate Shanker Singham’s models but found himself unable to do so, concluding that the IEA “need to do their homework”.
Today it turned out that it was Cook who needed to do a bit more homework, as he admitted that he had belatedly managed to replicate Singham’s results after finding mistakes in his own coding:
Remainers haven’t been sharing the correction quite as vigorously. Will Cook be apologising to the IEA?
Boris has given his backing to the IEA’s alternative Brexit plan launched this morning, telling Channel 4 News that it is a “very good piece of work” which “shows the flaws with Chequers” and deals with some of the “difficult questions” around the Irish border.
Brexiteers have been on the back foot since Chequers because of the accusation that they did not have a credible alternative. Now they believe they do…
Brexiteers have released their much-vaunted alternative Brexit plan this morning. Dubbed “Plan A+”, the plan attempts to set out a viable alternative to Chequers and respond to the common critiques of a Canada+ model.
The paper is written by Shanker Singham and Radomir Tylecote of the IEA and will be launched later this morning by a panel including David Davis and Jacob Rees-Mogg. Read for yourself here…
Wonk world transfer news: the Institute of Economic Affairs is making some staff changes. Nerissa Chesterfield is being promoted to the role of Head of Comms from the role as Comms Officer following Steph Lis moving to work for Dominic Raab. Nerissa previously worked at Vote Leave and Business for Britain. Kate Andrews has been appointed as the IEA’s Associate Director, overseeing communications, digital outreach, public affairs, and the FREER initiative. Kate has served as News Editor of the IEA for the past two and a half years. Big promotion for 28 year-old Kate Andrews…
Andy Mayer is joining the senior management at the Institute of Economic Affairs as Chief Operating Officer. Andy joins the IEA after 7 years doing public affairs for BASF plc. What will confuse remainiac conspiracy theorists even more is that Andy previously worked for the European Movement, voted Remain and is a former LibDem activist. Evidence of his hard commitment to the EU can be seen in these decades old pictures…
Newsnight’s Chris Cook comparing the IFS, Kings Fund and the Institute for Government accused the Institute of Economic Affairs of being in a category of think tank that was “more likely to employ and publish people with more limited expertise.”
Let’s check out that ‘limited experience’…
Published 13 Nobel Laureates.
Research team includes 7 PhDs and 2 Professors.
Books and briefings that in the past year alone have been translated 23 times.
Credited with changing the approach to monetary management to defeat inflation.
Can BBC Newsnight boast anything close to that quality?
Cook praised the young Institute for Government, which is an establishment packed, civil service friendly talking shop which may have some interesting output but has no plans to shake up the world. It is the latest political play thing for billionaire centrist Lord Sainsbury of Turville, who previously has funded such outfits as the Social Market Foundation and Progress. Guido has searched in vain for one single nobel prize winning writer on their books…
Guido can reveal two big new hires for the Institute of Economic Affairs. Congratulations to rising star Darren Grimes, the Brexit hero who set up the successful BeLeave campaign before writing for BrexitCentral. Darren was in much demand, is one of the most effective right-leaning millennials on Twitter and is a very astute hire for the IEA as their new Digital Manager.
The IEA has also appointed Jon Moynihan to its board. The venture capitalist was another important Brexit figure, who chaired the Vote Leave Finance Committee and was the first chair of its Campaign Committee.Carole Cadwalladr could get a whole flowchart out of these two…
This Sky debate between Stella Creasy and the IEA’s Kate Andrews, and the ensuing Twitter spat, is quite something. Kate noted that conflating equal pay with the gender pay gap is problematic, and criticised the attempt to piggyback on the #MeToo campaign. Stella did not take it well, wrongly demanding Kate apologise for “misquoting” the ONS:
With no meaningful comeback, Stella instead blocked Kate, going on to tweet that she had been “brainwashed” and, bizarrely, that Kate had mocked her disability (she hadn’t). As anyone who has ever interacted with Stella on Twitter knows, she really doesn’t like being proved wrong…
Shanker Singham has resigned from the Legatum Institute as Director of Economic Policy and is taking his three-strong team with him from Mayfair to Westminster to join the Institute of Economic Affairs (IEA). This is the wonk-land equivalent of Manchester City signing Manchester United’s top strikers…
Guido sources say Shanker resigned on Wednesday and the board of the IEA agreed to take him and his team pretty swiftly. The IEA is creating a new International Trade and Competition Unit for Shanker’s team, bringing with him lawyer Victoria Hewson; economist Catherine McBride; and research analyst Dr Radomir Tylecote. The three – who have a wealth of experience from the legal, technology, business and think tank worlds – will take up their roles later this month. Shanker’s team are widely recognised as the top Brexit wonks outside government.
The IEA’s Mark Littlewood tells Guido:
“I have huge admiration for the work Shanker and his team have done at the Legatum Institute. Under Philippa Stroud’s leadership, Legatum have gone from strength to strength, becoming thought leaders in crucial policy areas of which trade is only one. I look forward to continuing our strong relationship with them, and to Shanker and his team continuing their work at the IEA.”
Shanker Singham says: “We look forward to being a resource to all who need us in the trade, competition and regulatory policy space.” It is fair to say that the philanthropists who back Legatum were extremely uncomfortable with the critical political attention that the polarising Brexit work was bringing them and that this was distracting from their greater philanthropic endeavours on other issues. At the IEA Shanker will be at liberty to engage with the Westminster debate and key players more directly…
As Alan Johnson and Anna Soubry blindly defended the NHS despite being confronted with dire statistics on its health outcomes, Kate Andrews of the Institute of Economic Affairs made a compelling case for reform on This Week.Soubs and Johnson showing politicians see the NHS as a religion as they treated Kate’s sensible suggestions as heresy…
“It’s tempting to laugh at today’s speech but really it was quite sad. The Tories seem to have no idea what to do about housing, because they’re so afraid of alienating their base that they won’t do any substantive policy that could properly boost the supply of new homes. Again and again this week people asked how to connect with younger voters – the simple answer is to give them somewhere to live… Planning is the huge bottleneck here that is stopping millions of new houses from being built privately and affordably, and if the Conservatives are going to bury their heads in the sand about that then eventually voters will punish them for it.”
Institute of Directors:
Stephen Martin, Director General, said:
“You have a Conservative Party which talks about the importance of markets, but then tinkers around with help to buy and energy price caps. What are business leaders meant to make of it all? At this pivotal moment in this country’s history, far too little time has been spent explaining the plan for how we leave the European Union, or debating how we tackle the long-term challenges that face our economy. We have had positive messages on the importance of skills, and more funding for transport in the North, but we need to see serious proposals at the Budget to boost what is now wavering confidence in the wider economy.”
John O’Connell, Chief Executive said:
“Despite claiming to be the ‘party of low taxes’, the current government plans to increase the tax burden to levels unseen since the 1960s. If the government is serious about solving the housing crisis then it needs to take on vested interests and NIMBYs, but sadly there’s little sign that that they have the courage to do so. The Prime Minister is right that families are struggling to cope with the rise in energy bills, and this is due to green taxes and subsidies. Instead of intervening in the market, the Government should stand up to the green lobby and slash unnecessary taxes and subsidies that artificially inflate the cost of energy for families.”
Institute of Economic Affairs:
Mark Littlewood, Director General, said:
“The Prime Minister’s encouraging rhetoric was followed up with the wrong policies… we have heard from leading Conservatives this week how free market capitalism is so beneficial. But we haven’t heard a single coherent policy that would make the UK a more free market economy. Rather we’ve had a string of announcements about how the Tories wish to place greater power in the hands of the state. May’s comments about being a supporter of free markets should at best be taken with a pinch of salt, but at worse look to be untrue.”
The coughing and prankster arguably a welcome distraction from the Ed Miliband-lite policies…
You would have thought the pundits with a pretence to economic authority* would be a bit more modest after joining in with Project Fear and predicting all manner of calamities the day after the Brexit vote. Remember 70% of economists predicting the UK would be in recession by last Christmas?
The usual suspects have gone apoplectic at the idea of unilaterally introducing zero tariffs. The EU’s Common External Tariff comprises 12,651 different taxes and quotas imposed on goods from the rest of the world. This is what the Customs Union amounts to in reality, a protectionist barrier to free trade with the 162 countries outside the EU. Don’t fall for the hype that it reduces trade barriers.
The surprise is that some self-identified free traders have had a spasm about the IEA’s call for, err, free trade. Alan Beattie in the FTsays it pains him as a free trader to say it, but…
The theory is fine as far as it goes, which is to say a wonderland, or two wonderlands, of competitive markets where technology is fixed and it is quick and cheap to move capital and labour from one sector to another. In the real world where the goods sold across borders become ever more sophisticated — and where services take a growing share of world trade — regulations are generally more important than tariffs.
We live in wondrous times, has it ever been easier to move capital quicker and more cheaply? Labour is also in plentiful supply and sourceable globally too. This is to be fair not his main argument, regulatory barriers are he says the real problem in that unharmonised regulations are the main barrier to trade:
It’s an unpleasant thing for a free-trader to accept, but these days, to trade is to regulate — or, for most countries, to accept regulation. When the UK is exporting to behemoths like the EU and the US, it will need either a bureaucratic process to show it is meeting the rules of the destination economy or to sign a deal trying to get its own standards recognised instead. The idea of pursuing unilateral free trade is not absurd. As it happens, it has delivered some of the biggest advances in liberalisation in emerging markets over the past few decades. But pushing it as a reason for the UK to eschew future trade deals after Brexit in an increasingly sophisticated and regulated economy shows a serious dislocation from reality.
British exporters manage to trade with most of the world already without state negotiated trade deals. That is the existing position with most of the world, Brexit or no Brexit. Trade happens without international agreements or harmonised regulations. That won’t change on the day Britain Brexits…
For example the UK has no trade deal with the USA. Yet they buy British made Jaguars and Rolls Royces as eagerly as Brits buy Teslas, despite some important product differences, like where to put the steering wheel. Products are sold all over the world in different local packages with instructions in different languages running on different power supplies. Computers have different keyboards everywhere. Manufacturers cope. Traders localise their products without regulatory prompting if they want to make a profit. Regulatory barriers don’t halt trade, they just complicate it. Have some faith that exporters can cope. Consumers will love the lower price competition…
Guido hears today’s new Institute of Economics Affairsreport on trade policy has been well-received by ministers. It argues that no deal with the EU on trade would not be a disaster for the UK, recommending Britain commits to a policy of unilateral free trade with the rest of the world, eliminating all barriers to imports regardless of whether other countries impose tariffs on their imports from the UK. It would then be up to the EU if it wanted to impose tariffs, which would hurt EU consumers by raising prices. In such a scenario, the IEA report concludes the UK would likely be given tariff free access to the single market:
“There are many myths being perpetuated about trade policy – and more specifically about the UK’s relationship with the EU – that must be debunked. Many people believe that disaster will befall us if we do not forge a deal with the EU. In fact, we could unilaterally eliminate all import tariffs, which would give us most of the benefits of trade, and export to the EU under the umbrella of the WTO rules. Then we can seek free trade deals with all major trading partners, including the EU.”
If a bad deal is offered by the EU, the UK should say thanks but no thanks, walk away and unilaterally set tariffs at zero…
Today we learn that smokers are a net benefit to the UK economy to the tune of £14.7 billion per year. A report into ‘sin taxes’ by the Institute of Economic Affairs examines the net effect of smoking on the taxpayer. It finds:
“In the absence of smoking, the government would spend an extra £9.8 billion annually in pension, healthcare and other benefit payments (less taxes forgone). Duty paid on tobacco products is £9.5 billion a year. In total, the gross financial benefit to the government from smoking therefore amounts to £19.3 billion. Subtracting the £4.6 billion of costs produces an overall net benefit of £14.7 billion per annum.”
Tell that to the next healthy living campaigner who piously tells you smokers are a drain on the NHS…
The report is one in a series looking at Britain’s ‘sin taxes’. The studies conclude:
“Taken together, Britain’s public finances would be £22.8 billion worse off if there were no drinking, smoking or obesity.”
The public cost argument is often used to justify government meddling in people’s lifestyle choices. In fact, as this study shows, blaming smokers, drinkers and fast-food-lovers for spiralling healthcare costs is just a moral fable employed in an effort to control behaviour rather than to actually save money. Freedom of choice is not only right morally, it makes fiscal sense…
Kate Andrews schooled Chavista Cheerleader-in-Chief Owen Jones last night on Sky. He came close to losing his rag – again…
Incidentally Owen did not tell the truth about the other socialst Latin American regimes; Uruguay, Bolivia and Ecuador have had falling GDP per capita for the last 2 years, they’re all getting poorer under socialism. Ow-end…
Philip Hammond’s brutal Budget attack on Britain’s army of hardworking self-employed is going down like a cup of cold sick in the wonk world.
Centre for Policy Studies:
“Changes around national insurance and the tax-free dividend allowance will have an impact on UK competitiveness.”
Institute of Economic Affairs:
“It is right that the self-employed and employed should pay similar National Insurance Contributions – the Government should not set tax rates that artificially favour one form of employment over another. However, it would have been better to level the playing field by cutting NICs for the employed rather than raising those for self-employed. NICs are a tax on jobs and wages and reducing their burden would help many lower-income households.”
“This should be done by cutting rates rather than hiking taxes on entrepreneurs.”
The Association of Independent Professionals and the Self-Employed:
“If you are one of the hardworking self-employed people who face a significant increase on your tax bill, you might feel that the Chancellor has it in for you. When you look at the additional support offered for business rates it appears as if the Chancellor is supporting SMEs by hitting entrepreneurs and the smallest of businesses.
“Adding in the reduction in Dividend Tax allowance, whether you work as a sole trader or through limited company you will be facing higher bills. The Chancellor shouldn’t forget that growth in self-employment has driven our labour market in recent years and punitive rises in tax will make many people have second thoughts about striking out on their own.”
Centre for Economics and Business Research:
“People who work for themselves and who set up and run companies should be encouraged. Instead the Chancellor has singled this group out for a £1,425m tax hike on the misleading ground that they pay less tax, ignoring the risks they take. Disdain to this group is a typical Treasury attitude. Many of the self employed are IT consultants and are especially critical to the economy.”
Institute of Directors:
“The ‘nothing to see here’ approach adopted by the Chancellor will only fly for so long. The Chancellor’s jokes may have been funnier than anybody expected, but it’ll be business leaders’ resilience that’ll be needed to ensure we’re still smiling in November.”
Institute of Economic Affairs advisory council member Dr Ted Malloch is being interviewed by Donald Trump this week for the role of his EU ambassador. Theodore Roosevelt Malloch, to give his full name, is a distant relative of President Roosevelt who Maggie Thatcher once dubbed a “global sherpa” thanks to his decades of work at various economic conferences and institutions. It’s good news for Britain if Anglophile Malloch gets the job, he tells City AM:
“In the UK, Brexiteers can take heart from the victory of another anti-establishment figure. His political sympathies for Brexit could lead him to prioritise a trade agreement with the UK once the country leaves the EU. It will also ensure a stronger US-UK Special Relationship.”
And his views on Brussels are sound too. He told Brexit Central last year:
“The elite that dominates EU decision-making is managerial, bureaucratic and socialist,” he says, “with a view to higher taxation and redistribution of wealth — all qualities the EU elite tout proudly, despite growing populist sentiment among an increasingly economically pressed middle class in virtually every EU-participating country. The US and the UK have cast their lot in the same direction and the Anglosphere will not only survive but thrive…
Would they want the United States to join anything like the EU — a federal superstate that curtails sovereignty? Of course the answer is NO! We wouldn’t want that in any way, shape or form. And the British already decided not to become part of the flawed euro currency and the European Central Bank. So here’s an interesting and novel alternative no pundit is yet suggesting, and I say it only half facetiously: why not hook up our horses together?”
The big Autumn statement announcement pre-briefed to today’s papers is that the government is banning letting fees. This is yet another u-turn by Theresa May – just 8 weeks ago her housing minister Gavin Barwell publicly dismissed the proposal as a “bad idea”.[…] Read the rest