Conservative MPs are threatening to block Theresa May’s plan for a “customs partnership” with the EU – claiming it would stop the UK doing meaningful trade deals with other countries after Brexit. Brexiteers have claimed that other countries are “queueing up” to strike trade agreement with Britain after it leaves the bloc and that the supposed benefits of leaving the EU would not be realised under the PM’s plan. In reality though, the situation is more complicated. First of all, there isn’t a lot of evidence that signing new free trade agreements would deliver an economic boost anything like enough to compensate for the hit from leaving the EU single market and customs union. The Institute for Fiscal Studies says “simple arithmetic” and “a basic understanding of trade” show the gains from such FTAs are likely to be small. But another problem is that countries aren’t exactly queueing up to do deals with … [Read more...] about Brexit: Are countries really ‘queueing up for trade deals’ with Britain?
Institute for fiscal studies
Government spending is back in the black after Treasury runs surplus for first time since 2002
GOVERNMENT day-to-day spending is back in the black for the first time in 16 years, official figures have revealed. Yesterday’s latest public finance figures revealed the Treasury ran a surplus of £112m last year for the first time since 2002. The numbers – which exclude borrowing for investment - are a major boost to the Chancellor’s ongoing fight to bring down the nation’s huge deficit. Mr Hammond heaped praise on “the hard work of the British people” for agreeing to spending cuts and tax rises for the last eight years. He added: “Our economy is at a turning point with debt starting to fall and people’s wages rising, as we build an economy that truly works for everyone”. Public borrowing in March 2018 came in at £1.3bn, the lowest it has been in any March since 2004. MOST READ IN POLITICSSNUBBED AGAIN The Queen refuses to give Tony Blair honour usually given to ex PMs WAGE WAR Get the lowdown on the National Living Wage … [Read more...] about Government spending is back in the black after Treasury runs surplus for first time since 2002
Keeping Barnett formula ‘not appropriate’ after Brexit, warns Institute for Fiscal Studies
With the Scottish Parliament's Finance and Constitution Committee currently gathering evidence on post-Brexit funding, the IFS warned that the Barnett formula is unsuitable as a replacement funding mechanism, arguing that it takes no account of differences in funding needs or population growth between nations, or of the different outcomes achieved by funding. When Scotland loses access to EU funding for agriculture, economic development and innovation, the IFS recommended that funding decisions should be taken at a UK-wide level, rather than by allocating all replacement funding to the Scottish Government to distribute to specific projects. David Phillips, associate director at the Institute for Fiscal Studies, said: “The UK is set to receive around €8 billion a year from the EU budget over the next 3 years. But big choices loom about how much to spend on programmes to replace the EU's agriculture, regional development and research and innovation funding after 2020, and how … [Read more...] about Keeping Barnett formula ‘not appropriate’ after Brexit, warns Institute for Fiscal Studies
People don’t save enough for retirement because they live longer than they think they will, research finds
People live longer than they think they will, potentially harming their ability to save adequately for their retirement, new research has found. It is increasingly important to plan for the future because recently introduced pension freedoms have given people more control over their retirement funds, the Institute for Fiscal Studies said. People in their 50s and 60s underestimate their chances of survival to age 75 by around 20 percentage points and to 85 by around five to 10 percentage points, the study found. For example, men born in the 1940s who were interviewed at age 65 reported a 65 per cent chance of making it to age 75, whereas the official estimate was 83 per cent. For women, the equivalent figures were 65 per cent and 89 per cent. Read more Pensioners paying £4,300 each to bankroll children and grandchildren However, as people get older they become increasingly optimistic about their chances of living longer. Individuals in their late 70s and 80s … [Read more...] about People don’t save enough for retirement because they live longer than they think they will, research finds
Tax on sugary drinks will only be partly effective, claims study
The new sugar tax on soft drinks may see young people switch to healthier beverages, but it is unlikely to help those who have a high-sugar diet, a new study finds. Three economists at the Institute for Fiscal Studies – Pierre Dubois, Rachel Griffith and Martin O’Connell – have raised questions about the efficacy of the government’s soft drinks industry levy. Drinks makers who do not cut sugar levels will have to pay 18p a litre on drinks that have more than 5g of sugar per 100ml and 24p a litre on those that have 8g or more of sugar per 100ml. Already about half of makers have reduced sugar content. According to the economists’ modelling, recently presented at the Royal Economic Society’s annual conference at the University of Sussex and which simulates the effects of a 25p per litre tax, the tax will lead young people to reduce the amount of sugar they buy via soft drinks by about 80% more than the average consumer. “Our results show that … [Read more...] about Tax on sugary drinks will only be partly effective, claims study