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
Institute for fiscal studies
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
Up to 100,000 children to miss out on free school meals because of government threshold, study finds
Up to 100,000 children from low-income families will lose out on free school meals because of the government’s method for setting the threshold at which pupils qualify, a new study has found, prompting accusations the Conservatives are “consciously” targeting poor children. The Institute for Fiscal Studies (IFS) said the decision to discount inflation when freezing the threshold for the next four years means thousands of children miss out. Ministers announced in February that the threshold for free school meals for children whose parents receive universal credit will be set at £7,400 a year before benefits are taken into account. This will be frozen until 2021-22, despite inflation currently being at 2.5 per cent. If the threshold was instead allowed to rise with inflation or earnings, between 80,000 and 100,000 more children respectively would be entitled to free school meals in 2021-22, the IFS said. Read more Children to lose free school meals under … [Read more...] about Up to 100,000 children to miss out on free school meals because of government threshold, study finds
Economists overwhelmingly reject Brexit in boost for Cameron
Nine out of 10 of the country’s top economists working across academia, the City, industry, small businesses and the public sector believe the British economy will be harmed by Brexit, according to the biggest survey of its kind ever conducted. A poll commissioned for the Observer and carried out by Ipsos MORI, which drew responses from more than 600 economists, found 88% saying an exit from the EU and the single market would most likely damage Britain’s growth prospects over the next five years. A striking 82% of the economists who responded thought there would probably be a negative impact on household incomes over the next five years in the event of a Leave vote, with 61% thinking unemployment would rise. Those surveyed were members of the profession’s most respected representative bodies, the Royal Economic Society and the Society of Business Economists, and all who replied did so voluntarily. Paul Johnson, director of the independent Institute for Fiscal Studies, … [Read more...] about Economists overwhelmingly reject Brexit in boost for Cameron
5 Brexit studies and what they said about leaving the EU
Before the EU referendum vote, then Chancellor George Osborne’s gloomy prediction of what leaving Europe would mean to the UK backfired as it became labelled ‘Project fear’ by Leave supporters. Has the former Chancellor’s predictions been borne out by subsequent studies? It is now less than one year until ‘Brexit Day’ - March 29 2019. Here we take a look at five major studies into the impact of Brexit and what they said. 1. George Osborne’s pre-referendum prediction It’s worth looking back to 2016 when Chancellor George Osborne said Britain would be “permanently poorer” if voters choose to leave the EU. Osborne said a Treasury study claimed the economy would shrink by 6% by 2030, costing every household the equivalent of £4,300 a year. Osborne warned that the option favoured then by Boris Johnson – a deal along the lines of the EU-Canada arrangement – would lead to an economic contraction of 6% by 2030. 2. The … [Read more...] about 5 Brexit studies and what they said about leaving the EU