Wonks Praise Tax Cuts, Warn There’s Still More to Be Done

Wonk world has reacted to Hunt’s Autumn Statement, the general consensus from the free market think tanks being that there’s  a few positive announcements, though not enough to be excited about. Guido gives you the run down…

The Institute of Economic Affairs’ Mark Littlewood welcomes the NI cut and permanent full expensing, though cautions that there is far more work to be done to reduce the tax burden and decrease spending. He called the statement “a step in the right direction, not a leap”…

The Taxpayers’ Alliance called the statement a “mixed bag” of good and bad news. Chief executive John O’Connell said, “Cuts to taxes for businesses and workers will be warmly welcomed, but the fiscal drag of frozen thresholds means the UK is still on track for an even bigger tax burden by the end of this decade.” Not a huge cheer from the TPA…

The Growth Commission points out that “while the cut in National Insurance Contributions by 2 percentage points will add 0.6% to GDP per capita after 20 years, it needs to be borne in mind that the freezing of tax allowances had already cost 1.3% of GDP”. Co-chairman Douglas McWilliams says the measures “are falling short of getting us out of economic stagnation”.

The Centre for Policy Studies welcome the permanent full expensing, something they’ve been campaigning for for many years. However, they warn against the decision to maintain the triple lock which “prioritises older people at the expense of younger workers”. Robert Colvile, CPS Director, cautioned: “The economy, and our long-term growth prospects, are still far from where they need to be.” Still much work to be done…

The Adam Smith Institute‘s Maxwell Marlow says “there is much to be positive about this statement“, praising the announcement of “a number of pro-business measures”. Though he cautions that Hunt will still need to “plan for public spending restraint”. The invisible hand will do its work… 

The campaigners over at Stop the Taxi Tax say that Hunt’s pledge to consult on the 20% non-Black cab taxi VAT is “good news, but there’s no time to waste to stop this damaging tax“.

Director of Onward, Sebastian Payne welcomed the measures, saying, “Today’s Autumn Statement showed the best of moderate conservatism – combining bold measures to boost growth and slash taxes, with support for struggling workers and families.” Optimistic tone from the wets…

Douglas McWilliams, Co-Chairman of the Growth Commission says

“… there was little acknowledgement of just how high the public spending bill now is – and the impact such a large state has on the prospects for economic growth. My overall sense of this statement is that the Chancellor has taken a loaf of bread from the taxpayer and given us back a couple of slices.”

Not a full return to tax-cutting Tories…

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UK-EU Trade Not Affected by Brexit, Despite Dire Predictions

According to a report from the Institute of Economic Affairs, despite all the gloomy predictions by Remainers and the chaos tales associated with Brexit, EU-UK trade failed to show a “Brexit effect” between 2016 and 2020. UK goods exports had a notable 13.5% boost when heading to EU countries, and an impressive 14.3% increase for non-EU countries from 2019 to 2022.UK services exports posted a remarkable 14.8% rise to EU countries and an impressive 22.1% leap to non-EU countries during the same period. This is despite Remoaners at the OBR predicting a 15% trade volume drop due to Brexit barriers. Not the first time they’ve got things wrong…

Business and Trade Secretary Kemi Badenoch is expected to point to the IEA’s report today at the International Trade Week’s launch event as a reason why she “doesn’t agree with the narrative that Brexit has ‘severely damaged’ our economy.”

Another report shows London continues to reign as the top global destination for those looking to move to start a new job. Three years on, and that supposed exodus of talent is yet to materialise…

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Tom Clougherty Appointed Executive Director of Institute of Economic Affairs

Tom Clougherty has been appointed the new Executive Director of the Institute of Economic Affairs. He will succeed IEA veteran Mark Littlewood in December, having beaten a strong final shortlist of four other candidates to the role earlier this week. Littlewood will become Senior Economics Fellow. Clougherty is currently Research Director & Head of Tax at the Centre for Policy Studies (CPS). The CPS say they’re sorry to lose him:

‘The IEA could not have made a better choice. During his time at the CPS, Tom has been a hugely valued colleague, friend and leader. On the policy front, his work on tax and investment has set the agenda both inside and outside government. We are very sorry to lose him, but wish him every possible success.”

Clougherty was previously the executive director of the Adam Smith Institute, and then editorial director in the Cato Institute’s Centre for Monetary and Financial Alternatives. He will have no doubt impressed the board with his work on pro-growth tax policy. Guido congratulates Tom on taking what is undoubtedly one of the biggest jobs in Westminster Wonk World…

Read Clougherty’s full statement below:

Read More

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Institute of Economic Affairs Director General Shortlist Whittled Down

Guido understands that the shortlist for IEA Director General, one of the biggest jobs in Westminster wonk-land, is down to five. In no particular order:

  • Kate Andrews
  • Tom Clougherty
  • Victoria Hewson
  • Lord Frost
  • John O’Connell

Matt Sinclair dropped out to take a senior position at the Computer & Communications Industry Association. A strong field to succeed Mark Littlewood…

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Free Market Wonks Back Rishi’s Net Zero Rethink

As the dust settles on Rishi’s Net Zero rollback, the prevailing sentiment among the majority of Tory MPs, think tanks, and industry leaders alike is mostly positive – apart from a few squawky outliers. While the likes of Zac Goldsmith and Chris Skidmore aren’t happy, Guido hears most Tory MPs see it as a pragmatic move. One told Guido “it’s been relatively well received so far [and] they’ve got the tone right”As always, Guido brings you the low down on the reactions over in Wonk World:

The Taxpayers’ Alliance Chief John O’Connell reacted as expected, saying the TPA is pleased that Brits won’t have to dig deeper into their pockets: “Brits will be relieved by these sensible moves to take the heat off household budgets. Families and businesses want solutions to the real problem of climate change that go beyond asking them to dig ever deeper into shrinking pockets. The prime minister is right to approach this issue with hard-pressed households in mind.

The Institute of Economic Affairs’ Andy Mayer welcomed the changes, whilst hinting that he’d like to see more, saying they’re “a welcome step but could go further“.

The Adam Smith Institute’s Imogen Yates points out that “arbitrary top-down targets” are a poor strategy: “We should focus on a carrot rather than a stick approach – instead of having stringent regulations and outright bans, we should harness the power of the free-market to encourage innovation in cleaner technology and limit negative externalities. The government must also now concentrate on building the infrastructure such as EV charging points, and ensuring that our national grid will be able to cope.” Where there’s a will there’s a free market way…

Inevitably the GMB Union weren’t overwhelmingly supportive, attacking the government for not having a “credible plan to tackle climate change“. They did note that their calls to scrap the ban on gas boilers were heeded…

The Countryside Alliance were more sympathetic, saying “The PM is right to provide significantly more time for people to transition to heat pumps, understanding that in some circumstances it just won’t work.

Toyota also came out in favour of the move, calling the “welcome” changes “pragmatic“. Jaguar Land Rover also agreed. This is despite Ford’s furious comments that the roll back would undermine the government’s “ambition, commitment and consistency”. As Kemi Badenoch rightly pointed out, the auto industry “certainly does not always speak with one voice…”

Driving the agenda…

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Left-of-Centre Think Tanks Dwarf Tufton Street in Terms of Money and Manpower

Contrary to the Twitterati narrative that a conspiracy of think tanks clustered in Tufton Street wields the most influence in wonk world, it’s actually the centre-left think tanks that have the most money and manpower. Guido’s crunched the numbers. 

The Tony Blair Institute, Resolution Foundation, New Economics Foundation, Institute for Government and the Institute for Public Policy Research have a combined headcount of 497. This compares to Tufton Street’s more modest headcount of 116. 

The top 5 centre-left think tanks had a combined turnover of £79,814,431 last year. In comparison, their top 5 right-of-centre rivals – the Centre for Policy Studies, Institute of Economic Affairs, Centre for Social Justice, Onward and Policy Exchange – had a combined turnover of a mere £9,032,646. The high media profile of the right-of-centre wonks is to their credit given by how much they are outnumbered and out-gunned in everything except the persuasiveness of their arguments.  Nevertheless, the myth of the insidious influence of “Tufton Street” lives rent-free in the minds of conspiracy theorists. 

It should be noted that the Tony Blair Institute for Global Change (TBI) alone has a whopping 337 staff, with an eye-watering turnover of £65,247,459. Arguably the TBI is a do-tank, and consulting for foreign governments is a big source of revenue which allows it to nurture the next generation of Labour SpAds and future Labour Party MPs. One senior New Labour source reckons that the TBI is about selling Larry Ellison’s Oracle databases to African developing countries – Ellison has given Blair’s institute over $80 million in recent years. Blair has known Ellison since his time in Downing Street, when Oracle became a significant supplier of software to the government. 

mdi-timer 13 September 2023 @ 15:19 13 Sep 2023 @ 15:19 mdi-twitter mdi-facebook mdi-whatsapp mdi-telegram mdi-linkedin mdi-email mdi-comment View Comments
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