Brian Dixon
- Location: Dover
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Guest 716- Registered: 9 Jun 2011
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Living standards to be lower in 2015 than in 2010, IFS warns
Delivering its judgment on George Osborne's autumn statement, Institute for Fiscal Studies backs claims by Ed Balls that family budgets are being squeezed hard
Britain's leading experts on tax and spending have said that living standards would be lower at the end of the current parliament than at the start, as they backed claims by the shadow chancellor, Ed Balls, that family budgets were being squeezed hard under the coalition.
Delivering its judgment on George Osborne's autumn statement, the Institute for Fiscal Studies took issue with the way Labour had calculated its estimate of a £1,600 loss to the average family in the three years since the coalition came to power in 2010 but said it was "pretty consistent" with survey data showing a big drop in household incomes between 2009-10 and 2011-12.
Paul Johnson, the IFS's director, said there was a lack of reliable figures for the current year, but added: "We do know from household surveys that income fell sharply in 2010 and 2011. It is almost certainly significantly lower now than it was in 2010.
"And while it should start to grow, it will surely still be below its 2010 level by the time we get to the election in 2015."
Guest 716- Registered: 9 Jun 2011
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Autumn Statement 2013: George Osborne's business rates plan would 'create instability', says IFS
IFS says Chancellor George Osborne's use of quick-fix policies risked making firms dependent on a form of subsidy
Paul Johnson of the IFS raised questions about Mr Osborne's use of the disposable income figure
George Osborne said he would 'discuss with business options for longer-term administrative reform of business rates p
Government measures to ease business rates would "create instability" for firms if they are not matched by fundamental reforms, the Institute for Fiscal Studies (IFS) has warned.
The IFS said that although the temporary measures introduced by Chancellor George Osborne in the Autumn Statement, including a move to cap business rate rises next year at 2pc instead of the higher retail prices index (RPI), were welcome, using quick-fix policies risked making firms dependent on a form of subsidy.
"Forever extending temporary reliefs has two effects," said Paul Johnson, director of the IFS. "First, it increases uncertainty for business. Will the relief exist next year? What will my tax bill be next year?
"Second, the more businesses get used to the relief, the harder it becomes to undo it. An unavowedly temporary measure becomes a permanent one."
James Browne, a senior IFS research economist, said the Government's decision to delay a regular revaluation of rates until 2017 could potentially store up more problems. "[The delay] creates more certainty in the short term because premises aren't going to be valued as quickly, but a greater degree of uncertainty in the longer term about exactly what the policy is going to be. The effect of all of this has made it much harder for firms to predict what tax liabilities are going to be in a few years."
Mr Browne also branded the temporary changes a "dead-weight" giveaway that would "complicate the system" and do very little to regenerate British high streets.
"This will not lead to any increase in property development," he said.
The IFS previously has argued that business rates should be replaced by a land value tax, an annual levy on the underlying value of land that would mean businesses would not be penalised for improving properties.
The IFS also said it was illogical that the Government used RPI to calculate business rate increases. "The RPI is almost certainly overstating the true rate of inflation, so the Government might think about moving to a different measure in the longer term," said Mr Browne
Full story Telegraph
Guest 716- Registered: 9 Jun 2011
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Consumers to foot the bill for Mr Osborne's 'lost' £12bn
Households face a new round of tax rises or welfare cuts after the election to fill a £12 billion hole in the Chancellor's austerity plans, a leading think-tank has warned.
The Institute for Fiscal Studies questioned the credibility of George Osborne's tax and spending plans yesterday, suggesting that he would have difficulty making his sums add up.
The Chancellor is relying on "uncertain revenues" from a crackdown on tax avoidance and increase in the bank levy to fund a series of giveaways, the IFS said. Mr Osborne denied accusations yesterday that he was inflating the property market and using a debt-fuelled consumer boom to refloat the economy, saying that his plan is working
Full story The Times
Brian Dixon- Location: Dover
- Registered: 23 Sep 2008
- Posts: 23,940