| From | Institute of Economic Affairs <[email protected]> |
| Subject | A step in the right direction, not a leap |
| Date | November 26, 2023 10:30 AM |
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The Autumn Statement contained many welcome measures. The headlines were dominated by two significant tax cuts - the reduction in ...
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The Autumn Statement contained many welcome measures. The headlines were dominated by two significant tax cuts – the reduction in National Insurance contributions and the permanent extension of ‘full expensing’ for certain types of business investment.
There was also a raft of less newsworthy but still important supply-side reforms – including measures to speed up planning approvals, rejuvenate capital markets, and help those on benefits to return to work – which are also baby steps in the right direction.
Some other decisions were more questionable. In particular, the further large increases in the national minimum wage are testing the limits of what small businesses can afford at a time when the labour market is already starting to weaken.
The real problems, though, are the three elephants in the room.
The first, of course, is that the tax burden is still going up. The cuts in National Insurance gave back only part of the Chancellor’s windfall from the failure to index the thresholds at which people pay higher rates of tax in line with inflation. And full expensing only returns some of the costs of the large hike in the main rate of corporation tax, from 19% to 25%.
The second is the tight squeeze on public spending from 2025 onwards. This is not unrealistic, especially given the scope for improving public service productivity. But many parts of government are already stretched to breaking point.
The third is the lack of economic growth. Indeed, even the OBR’s low forecasts of 0.6% for 2023 and 0.7% for 2024 were flattered by the surge in net immigration. Digging deeper, per capita GDP is forecast to fall by 0.3% this year and rise by just 0.1% next year.
These three elephants have left an awful lot of mess. Clearing it up will require a relentless focus on boosting the economy's productive potential. Lower, simpler and more predictable taxes will be an important part of that. But there is still a long way to go.
Julian Jessop
IEA Economics Fellow
[link removed]
Autumn statement: A step in the right direction, not a leap, says IEA’s Mark Littlewood ([link removed])
IEA’s Mark Littlewood, GB News ([link removed]) , The Telegraph ([link removed]) , Daily Express ([link removed]) , Politico ([link removed]) , ConservativeHome ([link removed]) & Matthew Lesh on LBC News ([link removed]) & Julian Jessop on Times Radio ([link removed])
An autumnal feeling… There is far more work to be done to reduce the tax burden, decrease spending, cut red tape, and reform public services.
[link removed]
Does the Autumn Statement end 'Big Government'? ([link removed])
IEA’s Matthew Lesh and Julian Jessop,IEA YouTube ([link removed])
Too little too late… The Chancellor declared the Autumn Statement the end of ‘Big Government’ — but do his claims stack up in the detail?
[link removed]
** The Case For Markets in Defence:
------------------------------------------------------------
** Driving Efficiency and Effectiveness in Military Spending
------------------------------------------------------------
The greater use of outsourcing in national defence could encourage efficiency, innovation and better services and equipment for military personnel, argues Professor Keith Hartley in the latest IEA Paper.
* The military is “characterised by inefficiency” because it is a public sector monopoly lacking competitive pressures or incentives to cut costs. Military commanders are rewarded for winning wars, not for delivering the best value for taxpayers.
* Outsourcing more military functions – such as housing and catering, training, and repairs – through a competitive bidding process could encourage innovation and deliver cost savings.
* The UK has been generally successful in using the private sector in national defence. In 1983, the Ministry of Defence began outsourcing the likes of laundry, vehicle maintenance and air traffic control. By 1989, the Ministry reported £50m annual cost savings.
* The Ministry of Defence has used private-sector financing for capital projects like accommodation and military satellite communications; and search and rescue and flying training. National Audit Office analysis of over 50 such projects found most to have been delivered on time and within budget.
* Weapons procurement has been characterised by “cost overruns, delays and performance failures”. A potential solution would be an “open market,” meaning govert shopping worldwide for equipment from friendly nations rather than relying on BAE Systems and Rolls-Royce.
* The paper critically assesses more radical possibilities for private sector involvement in combat missions. It concludes, however, that mercenaries would raise ethical, personnel and contractual difficulties that would make their adoption highly challenging.
* There are other options to embrace markets in defence, such as competition between the military branches, armed forces and private contractors and firms seeking defence business.
* Economics has an important role to play in the military. Resources remain scarce, while demands and costs are rising, so choices will be required.
Press Release ([link removed])
Full Publication ([link removed])
The Telegraph ([link removed]) : “The Armed Forces should be empowered to buy more foreign weapons to save money, a think tank has said. The Ministry of Defence should take more bids from foreign weapons contractors and get private companies to manage jobs like housing troops, the Institute of Economic Affairs (IEA) has said.”
[link removed]
IEA Latest.
[link removed]
Can Javier Milei save Argentina?
IEA’s Matthew Lesh interviews Axel Kaiser, IEA YouTube ([link removed])
First libertarian president?… Javier Milei, a self-described libertarian economist, has won a decisive victory in the Argentinian presidential election. But what are his policies, and can he solve Argentina’s economic crisis?
[link removed]
New Zealand’s tobacco ban u-turn ([link removed])
IEA’s Christopher Snowdon, The Critic ([link removed]) , The Telegraph ([link removed]) , Daily Mail ([link removed])
Sunak stands alone… New Zealand and Malaysia have abandoned plans to introduce a generational tobacco ban, leaving Rishi Sunak standing alone.
[link removed]
Britain cannot afford to forget the benefits of migration ([link removed])
IEA’s Matthew Lesh, CapX ([link removed])
Immigration’s upsides… Immigration is not a problem to be solved, but something to be embraced in ways that make Britain more prosperous.
[link removed]
What’s the problem with high migration? ([link removed])
IEA’s Kristian Niemietz, GB News ([link removed])
Border control… The public sector can’t cope, the health system can’t cope, the housing market can’t cope, but these sectors are either nationalised or the state controls supply.
[link removed].
The NHS is not underfunded ([link removed])
Head of Political Economy, Kristian Niemietz, The Critic
The truth about the NHS… A part of what makes a good system “good” is its ability to procure the equipment it needs, and even more so, to recruit, motivate, and retain the staff it needs. If the NHS cannot do that, then that is very much part of the problem.
IEA Insider.
** The nannying state of the nation
------------------------------------------------------------
This week, our Communications Officer & Linda Whetstone Scholar Reem Ibrahim appeared on a panel hosted by FOREST, alongside Baroness Fox, Henry Hill (ConservativeHome), Ella Whelan (Academy of Ideas), and Simon Clark (FOREST) to discuss government plans to prohibit the next generation from purchasing tobacco.
** Tech Turmoil: Does the Digital Markets Bill threaten Britain’s economy?
------------------------------------------------------------
mailto:[email protected]?subject=Tech%20Turmoil%3A%20Does%20the%20Digital%20Markets%20Bill%20threaten%20Britain%E2%80%99s%20economy%3F&body=Hello%2C%20I%20would%20like%20to%20attend%20'Tech%20Turmoil%3A%20Does%20the%20Digital%20Markets%20Bill%20threaten%20Britain%E2%80%99s%20economy%3F'%20on%20Monday%2C%2027%20November.
Date: Monday, 27th November
Time: 17.30 – 19.30
Location: 2 Lord North Street, SW1P 3LB
RSVP: Spaces are limited and will be given on a first-come-first-serve basis. Please RSVP to [email protected] (mailto:[email protected]) or call 020 7799 8910
The IEA is hosting a panel to discuss the government’s Digital Markets and Competition Bill, building on the recent publication of Digital Overload: How the Digital Markets, Competition and Consumers Bill’s sweeping new powers threaten Britain’s economy ([link removed]) .
Panellists
* Matthew Lesh (Chair)
* Bim Afolami (MP for Hitchen & Harpenden)
* Stephen Hammond (MP for Wimbledon)
* Matt Sinclair (Senior Director at the Computer & Communications Industry Association)
* Verity Egerton-Doyle (Antitrust & Foreign Investment Counsel at Linklaters)
* Dirk Auer (Director of Competition Policy International Centre at Law and Economics)
** Prohibition 2.0: The Future of UK Tobacco ([link removed]) Policy
------------------------------------------------------------
mailto:[email protected]?subject=Tech%20Turmoil%3A%20Does%20the%20Digital%20Markets%20Bill%20threaten%20Britain%E2%80%99s%20economy%3F&body=Hello%2C%20I%20would%20like%20to%20attend%20'Tech%20Turmoil%3A%20Does%20the%20Digital%20Markets%20Bill%20threaten%20Britain%E2%80%99s%20economy%3F'%20on%20Monday%2C%2027%20November.
Date: Wednesday 29th November
Time: 17:30 – 19:30
Location: 2 Lord North Street, SW1P 3LB
RSVP: Spaces are limited and will be given on a first-come-first-serve basis. Please RSVP to [email protected] (mailto:[email protected]) or call 020 7799 8910
The IEA is hosting a panel to discuss government plans to introduce a generational ban. Where does this leave smokers today and in the future? Is the government opening a new front in the war on drugs and what are the implications for crime, tax and personal liberty?
The discussion starts at 18:00 and will be preceded by drinks from 17:30.
Panellists
* Reem Ibrahim (Chair)
* Craig Whittaker (Member of Parliament for Calder Valley)
* Christopher Snowdon (Head of Lifestyle Economics)
* Madeline Grant (Assistant Comment Editor and Parliamentary Sketchwriter at The Telegraph)
* Paul North (Director of Volteface)
[link removed] [link removed] [link removed] [link removed] [link removed] [link removed] [link removed]
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© 2023 Institute of Economic Affairs. All rights reserved.
You are receiving this email from the Institute of Economic Affairs
Registered in England 755502, Charity No. CC/235 351, Limited by Guarantee
View in browser ([link removed]) | Update ([link removed]) | Unsubscribe ([link removed])
Logo
The Autumn Statement contained many welcome measures. The headlines were dominated by two significant tax cuts – the reduction in National Insurance contributions and the permanent extension of ‘full expensing’ for certain types of business investment.
There was also a raft of less newsworthy but still important supply-side reforms – including measures to speed up planning approvals, rejuvenate capital markets, and help those on benefits to return to work – which are also baby steps in the right direction.
Some other decisions were more questionable. In particular, the further large increases in the national minimum wage are testing the limits of what small businesses can afford at a time when the labour market is already starting to weaken.
The real problems, though, are the three elephants in the room.
The first, of course, is that the tax burden is still going up. The cuts in National Insurance gave back only part of the Chancellor’s windfall from the failure to index the thresholds at which people pay higher rates of tax in line with inflation. And full expensing only returns some of the costs of the large hike in the main rate of corporation tax, from 19% to 25%.
The second is the tight squeeze on public spending from 2025 onwards. This is not unrealistic, especially given the scope for improving public service productivity. But many parts of government are already stretched to breaking point.
The third is the lack of economic growth. Indeed, even the OBR’s low forecasts of 0.6% for 2023 and 0.7% for 2024 were flattered by the surge in net immigration. Digging deeper, per capita GDP is forecast to fall by 0.3% this year and rise by just 0.1% next year.
These three elephants have left an awful lot of mess. Clearing it up will require a relentless focus on boosting the economy's productive potential. Lower, simpler and more predictable taxes will be an important part of that. But there is still a long way to go.
Julian Jessop
IEA Economics Fellow
[link removed]
Autumn statement: A step in the right direction, not a leap, says IEA’s Mark Littlewood ([link removed])
IEA’s Mark Littlewood, GB News ([link removed]) , The Telegraph ([link removed]) , Daily Express ([link removed]) , Politico ([link removed]) , ConservativeHome ([link removed]) & Matthew Lesh on LBC News ([link removed]) & Julian Jessop on Times Radio ([link removed])
An autumnal feeling… There is far more work to be done to reduce the tax burden, decrease spending, cut red tape, and reform public services.
[link removed]
Does the Autumn Statement end 'Big Government'? ([link removed])
IEA’s Matthew Lesh and Julian Jessop,IEA YouTube ([link removed])
Too little too late… The Chancellor declared the Autumn Statement the end of ‘Big Government’ — but do his claims stack up in the detail?
[link removed]
** The Case For Markets in Defence:
------------------------------------------------------------
** Driving Efficiency and Effectiveness in Military Spending
------------------------------------------------------------
The greater use of outsourcing in national defence could encourage efficiency, innovation and better services and equipment for military personnel, argues Professor Keith Hartley in the latest IEA Paper.
* The military is “characterised by inefficiency” because it is a public sector monopoly lacking competitive pressures or incentives to cut costs. Military commanders are rewarded for winning wars, not for delivering the best value for taxpayers.
* Outsourcing more military functions – such as housing and catering, training, and repairs – through a competitive bidding process could encourage innovation and deliver cost savings.
* The UK has been generally successful in using the private sector in national defence. In 1983, the Ministry of Defence began outsourcing the likes of laundry, vehicle maintenance and air traffic control. By 1989, the Ministry reported £50m annual cost savings.
* The Ministry of Defence has used private-sector financing for capital projects like accommodation and military satellite communications; and search and rescue and flying training. National Audit Office analysis of over 50 such projects found most to have been delivered on time and within budget.
* Weapons procurement has been characterised by “cost overruns, delays and performance failures”. A potential solution would be an “open market,” meaning govert shopping worldwide for equipment from friendly nations rather than relying on BAE Systems and Rolls-Royce.
* The paper critically assesses more radical possibilities for private sector involvement in combat missions. It concludes, however, that mercenaries would raise ethical, personnel and contractual difficulties that would make their adoption highly challenging.
* There are other options to embrace markets in defence, such as competition between the military branches, armed forces and private contractors and firms seeking defence business.
* Economics has an important role to play in the military. Resources remain scarce, while demands and costs are rising, so choices will be required.
Press Release ([link removed])
Full Publication ([link removed])
The Telegraph ([link removed]) : “The Armed Forces should be empowered to buy more foreign weapons to save money, a think tank has said. The Ministry of Defence should take more bids from foreign weapons contractors and get private companies to manage jobs like housing troops, the Institute of Economic Affairs (IEA) has said.”
[link removed]
IEA Latest.
[link removed]
Can Javier Milei save Argentina?
IEA’s Matthew Lesh interviews Axel Kaiser, IEA YouTube ([link removed])
First libertarian president?… Javier Milei, a self-described libertarian economist, has won a decisive victory in the Argentinian presidential election. But what are his policies, and can he solve Argentina’s economic crisis?
[link removed]
New Zealand’s tobacco ban u-turn ([link removed])
IEA’s Christopher Snowdon, The Critic ([link removed]) , The Telegraph ([link removed]) , Daily Mail ([link removed])
Sunak stands alone… New Zealand and Malaysia have abandoned plans to introduce a generational tobacco ban, leaving Rishi Sunak standing alone.
[link removed]
Britain cannot afford to forget the benefits of migration ([link removed])
IEA’s Matthew Lesh, CapX ([link removed])
Immigration’s upsides… Immigration is not a problem to be solved, but something to be embraced in ways that make Britain more prosperous.
[link removed]
What’s the problem with high migration? ([link removed])
IEA’s Kristian Niemietz, GB News ([link removed])
Border control… The public sector can’t cope, the health system can’t cope, the housing market can’t cope, but these sectors are either nationalised or the state controls supply.
[link removed].
The NHS is not underfunded ([link removed])
Head of Political Economy, Kristian Niemietz, The Critic
The truth about the NHS… A part of what makes a good system “good” is its ability to procure the equipment it needs, and even more so, to recruit, motivate, and retain the staff it needs. If the NHS cannot do that, then that is very much part of the problem.
IEA Insider.
** The nannying state of the nation
------------------------------------------------------------
This week, our Communications Officer & Linda Whetstone Scholar Reem Ibrahim appeared on a panel hosted by FOREST, alongside Baroness Fox, Henry Hill (ConservativeHome), Ella Whelan (Academy of Ideas), and Simon Clark (FOREST) to discuss government plans to prohibit the next generation from purchasing tobacco.
** Tech Turmoil: Does the Digital Markets Bill threaten Britain’s economy?
------------------------------------------------------------
mailto:[email protected]?subject=Tech%20Turmoil%3A%20Does%20the%20Digital%20Markets%20Bill%20threaten%20Britain%E2%80%99s%20economy%3F&body=Hello%2C%20I%20would%20like%20to%20attend%20'Tech%20Turmoil%3A%20Does%20the%20Digital%20Markets%20Bill%20threaten%20Britain%E2%80%99s%20economy%3F'%20on%20Monday%2C%2027%20November.
Date: Monday, 27th November
Time: 17.30 – 19.30
Location: 2 Lord North Street, SW1P 3LB
RSVP: Spaces are limited and will be given on a first-come-first-serve basis. Please RSVP to [email protected] (mailto:[email protected]) or call 020 7799 8910
The IEA is hosting a panel to discuss the government’s Digital Markets and Competition Bill, building on the recent publication of Digital Overload: How the Digital Markets, Competition and Consumers Bill’s sweeping new powers threaten Britain’s economy ([link removed]) .
Panellists
* Matthew Lesh (Chair)
* Bim Afolami (MP for Hitchen & Harpenden)
* Stephen Hammond (MP for Wimbledon)
* Matt Sinclair (Senior Director at the Computer & Communications Industry Association)
* Verity Egerton-Doyle (Antitrust & Foreign Investment Counsel at Linklaters)
* Dirk Auer (Director of Competition Policy International Centre at Law and Economics)
** Prohibition 2.0: The Future of UK Tobacco ([link removed]) Policy
------------------------------------------------------------
mailto:[email protected]?subject=Tech%20Turmoil%3A%20Does%20the%20Digital%20Markets%20Bill%20threaten%20Britain%E2%80%99s%20economy%3F&body=Hello%2C%20I%20would%20like%20to%20attend%20'Tech%20Turmoil%3A%20Does%20the%20Digital%20Markets%20Bill%20threaten%20Britain%E2%80%99s%20economy%3F'%20on%20Monday%2C%2027%20November.
Date: Wednesday 29th November
Time: 17:30 – 19:30
Location: 2 Lord North Street, SW1P 3LB
RSVP: Spaces are limited and will be given on a first-come-first-serve basis. Please RSVP to [email protected] (mailto:[email protected]) or call 020 7799 8910
The IEA is hosting a panel to discuss government plans to introduce a generational ban. Where does this leave smokers today and in the future? Is the government opening a new front in the war on drugs and what are the implications for crime, tax and personal liberty?
The discussion starts at 18:00 and will be preceded by drinks from 17:30.
Panellists
* Reem Ibrahim (Chair)
* Craig Whittaker (Member of Parliament for Calder Valley)
* Christopher Snowdon (Head of Lifestyle Economics)
* Madeline Grant (Assistant Comment Editor and Parliamentary Sketchwriter at The Telegraph)
* Paul North (Director of Volteface)
[link removed] [link removed] [link removed] [link removed] [link removed] [link removed] [link removed]
Logo
© 2023 Institute of Economic Affairs. All rights reserved.
You are receiving this email from the Institute of Economic Affairs
Registered in England 755502, Charity No. CC/235 351, Limited by Guarantee
View in browser ([link removed]) | Update ([link removed]) | Unsubscribe ([link removed])
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