Christopher Martin's picture
Affiliation: 
University of Bath
Credentials: 
Professor of economics

Voting history

Devolving Income Tax Powers within the UK

Question 1: Do you agree that the economic benefits of devolving full income tax powers to the Scottish Parliament and Welsh Assembly outweigh the possible costs?

Answer:
Strongly Disagree
Confidence level:
Confident
Comment:
I disagree for 3 main reasons: 1) Experience with devolving tax-and-spend in other countries is not impressive; I cannot think of an example where one could make a convincing argument that this this type of devolution has had unambiguous net benefits 2) This goes to the heart of what constitutes a nation state; devolution of power over income tax would undermine the nation state. I do not see strong support for this; even in Scotland, I felt the majority wanted the power to vary tax rates a bit but not to set them independently. There seems to be very little support for this idea in Wales. 3) Economic theory suggests regional devolution of tax raising powers is not ideal if there are spillovers between regions. There are spillovers: we have seen them in English concern (I put it mildly) at lower University fees and lower costs of caring for the elderly in Scotland.

Migration and the UK economy August 2014

Question 2: Do you agree that current government policies with respect to non-EU migration (including policies on students, skilled workers, and family migration) are effective in maximizing the gains to the economy from migration while minimizing any possible negative impact to specific groups?

Answer:
Strongly Agree
Confidence level:
Very confident
Comment:
The social and economic pressures caused by the doubling of the migrant population over the past 5 years mean that all leading politicians feel the need to support further restrictions on unskilled immigration. Low skilled migrants are perceived (the evidence suggests, wrongly) as taking jobs from UK workers, holding down wages and increasing pressure on social services. Given this, support for high-skilled workers is the best way forward. Although the current government has an official policy of supporting skilled immigration,I doubt that this how it feels to many would-be high skill migrants

Question 1: Do you agree that migration to the UK can be expected to be beneficial for the average income of current UK inhabitants in the upcoming decade?

Answer:
Strongly Agree
Confidence level:
Very confident
Comment:
History shows that migrations tend to benefit the host country so long as skilled workers comprise a substantial part of the new migrants. This is true of the current large wave of migraton to the UK, where the migrant population has doubled over the past five years and now comprises over 10% of the population. The pace of globalisation is unlikely to slow down. With globalisation, either workers move to where the best jobs are, or jobs move to where the best workers are. Stopping migration into the UK, even if that were possible, would result in a migration of high skill jobs out of the country. That would be a disaster.

Economic Consequences of an Independent Scotland June 2014

Question 2

Assuming that Scotland becomes an independent country, do you agree that the UK government's position of ruling out a monetary union is in the economic interests of the continuing UK? 

Answer:
Disagree
Confidence level:
Very confident
Comment:
Economic theory suggests that a currency union benefits both parties so long as labour and capital markets are highly integrated, business cycles are synchronised and there is a mechanism to equalise wealth across areas. The residual UK and an independent Scotland seems as close as anyone to satisfying the first three conditions. No currency union between states has ever satisfied the fourth. At a less abstract level, Scotland would be a significant export market for the UK rump, similar in size to Belgium. Imposing a separate currency would damage this. This conclusion is contingent on it being clear that the UK rump is not responsible for the debts of an independent Scotland and on credible mechanism for the exit of Scotland from the currency union. A Scottish exit (Scexit?) would be unfortunate but probably not critical for the rest of the UK.

Euro Area Deflation and Risk for UK Economy May 2014

Question 2

Do you agree that a deflation in the Euro area (as defined in Question 1) would pose a considerable risk to the UK recovery?

Answer:
Agree
Confidence level:
Not confident
Comment:
Deflation in the Eurozone would affect the UK in two main ways. The depressed level of demand that caused deflation would clearly have an adverse impact on aggregate demand in the UK. And deflation implies falling asset values and rising levels of real debt that will hit the balance sheets of financial institutions. This may well spill over into increasing risk premia and a more general reluctance to lend in the UK. It is difficult to assess the severity of the risk. By itself, it would not be enough to push a robust recovery off track. But if the UK recovery reflects excessive borrowing by over-extended households, the impact of Eurozone deflation on financial markets may be more serious. Until I see evidence of a strong and sustained increase in investment by the ever-reluctant UK corporate sector, I lean towards the latter view.

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