Adam Lent's Archive — Page 3
Adam Lent was Head of the Economic and Social Affairs Department from late 2007 – early 2011 and is now Director of Programmes at the RSA.
Adam Lent
It looks increasingly likely that VAT will rise to help pay down the public deficit. The first of the TUC’s new regular Tax Briefings tells you everything you need to know about this controversial tax but were afraid to ask. Why is VAT regressive? Why is it contributing less to tax revenues than it used to? And, most importantly, should it rise?
Adam Lent
The FT reports today (registration required) that the Treasury is now actively considering whether to revoke almost 100 government contracts with private sector firms as part of its review of all “state support” granted since January. Sectors which may be in the firing line include the auto industry, offshore wind and civil nuclear power. It’s possible that the decisions on these contracts could be reported as soon as the Emergency Budget on 22nd June. The FT also reports that the Ministry of Defence is reviewing procurement projects worth £10 billion. The report suggests this could hit both UK and overseas firms.
Adam Lent
The credit rating agency Fitch has just cut Spain’s credit rating from AAA to AA. Have they done this because they think Spain is not getting to grips with its public finances? No. They’ve cut the rating because the Spanish Government’s efforts to reduce their budget deficit through cuts:
will materially reduce the rate of growth of the Spanish economy over the medium term.
This is an important development that blows out of the water claims by European governments, including the UK’s, that cuts are the best way to avoid loss of credibility with the markets. It is a vindication of those who have been pointing out recently that austerity packages will not only damage economic performance but do nothing to calm the markets.
Adam Lent
I have a piece on Comment is Free today lamenting the “cuts-mania” afflicting Europe and the UK. And here’s a very good article by US economist Thomas Palley on what the ECB and European Governments should really be doing which he calls the “green cheese” solution or possibly the “bear squeeze”!
Adam Lent
Lovely presentations of data on the UK public finances since the war by The Guardian here. Scroll down to the table near the bottom and you notice something interesting: the period between 1946 and 1979, when the post-war social democratic consensus reined, saw only five years when the public finances were in deficit. However, since 1979 there have only been seven years when the public finances weren’t in deficit.
Unlike orthodox neo-classical economists, I prefer empirical evidence and history to theoretical models and I think that counts as a pretty strong data set. It suggests two things:
Adam Lent
Fresh from wrongly predicting that the bankers’ bonus tax and the 50p rate would generate no extra revenues to reduce the deficit, the Adam Smith Institute is bravely risking a hat-trick of own goals by claiming the same thing about Government plans to raise the rate for capital gains tax. This could really blow Madsen Pirie’s chances of being called up for the England World Cup squad!
Adam Lent
The TUC’s Labour Market report tries to make sense of the latest jobs and earnings data. The latest issue (number 3) is published today.
Adam Lent
It was predictable that Osborne would claim to have found further cases of fiscal irresponsibility once he got in to No.11. But given that the Tories have spent the last year or more telling us that the markets are on the brink of ramping up interest rates to compensate for the higher risks of UK debt, surely these comments are deeply irresponsible and will only damage the economy further. Or maybe they don’t really think the markets are that concerned.
Adam Lent
I almost fell off my chair when I read the headline above in The Observer. Could it be that the Lib-Cons were about to break the taboo and look at the real cause of poverty - low pay? No such luck unfortunately: one review of public sector pay and a separate one on poverty.
