Commenting on the Chancellor's economic planning
for a potential 'no-deal' scenario, Economics Fellow at the
Institute of Economic Affairs
Jessop said:
"Even if MPs vote tonight to take 'no-deal' off the
table, it would remain a possibility.
"In planning for such an event, the Chancellor's instinct
consistently seems to be to spend money rather than cut taxes,
despite the fact that the UK's tax burden is now at an almost
50-year high.
"The £39 billion saved from leaving with 'no-deal' could fund a
one percentage point cut in the basic rate of income tax, a one
percentage point cut in standard rate of VAT, and a further one
percentage point in the main rate of corporate tax - for three
years - helping employers and already hard-pressed
families."
Commenting on the Chancellor's move to exempt
PhD-level roles from the visa cap, the IEA's Head of
Political Economy Kristian
Niemietz said:
"The Chancellor has moved in the right direction by
exempting PhD-level roles from the visa cap. There is no reason
to have arbitrary restrictions on skilled migrants, who
contribute hugely to the economy, not to mention the UK’s tax
revenue.
"But this should mark the beginning of a much more radical change
around the treatment of skilled migrants. All migrants who enter
the UK via the Tier 2 work visa route are highly skilled, whether
they have a PhD or not. The cap on Tier 2 visas should therefore
be abolished entirely, and immediately.
"Highly-skilled migrants are a very popular immigration group in
the UK. There is no need for a cap on talented workers who
clearly contribute to UK finances and our economy."
On the £3 billion Affordable Homes Guarantee
scheme, Kate Andrews, Associate Director of the
IEA said:
"Having tried and failed in their top-down approach,
the Government is still trying to address the housing crisis
through central planning, which the Chancellor himself estimates
will only add tens of thousands of homes to the market.
"People of all ages are struggling, not simply to get on the
housing ladder tomorrow, but even to imagine when they might be
in a financial position to buy a home. And those who want to move
house or downsize are prohibited by distortionary taxes such as
stamp duty.
"Politicians must get serious about tackling this crisis
by liberalising the planning sector and tackling
classification for non-desirable parts of the green
belt."
On the review of global tech giants, the IEA's
Economics Fellow Jessop:
"The proposed review of the digital economy should focus on
measures that are likely to strengthen competition and empower
consumers, rather than increase the burden of taxation. Fiscal
policy is not the right tool to address problems in the sector
and there is little evidence that tech giants are paying less
than their fair share of tax.
"If the Government is committed to increasing competition in the
sector, it should scrap the planned Digital Services Tax, which
involves a lot of effort to raise a relatively small amount of
money and risks keeping smaller and newer players out of the
market."
On the Chancellor's UK economic forecasts , the
IEA's Economics Fellow Jessop
said:
"The downward revision to UK growth in 2019 needs to be
seen in context. Many other economies have also slowed sharply,
including Germany, France and Italy. The UK has actually held
relatively up well and is likely to outperform the euro area as
and when Brexit uncertainty clears. Indeed, the ONS has already
revised up the forecasts for growth in later years."
