Jonathan Portes's picture
Affiliation: 
National Institute of Economic and Social Research
Credentials: 
Director

Voting history

Greece’s elections and the future of the Eurozone

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Question 1: Do you agree that a Syriza victory on 25 January would lead to a significant or sustained escalation in spreads for other peripheral Eurozone countries?

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Answer:
Disagree
Confidence level:
Confident
Comment:
The reductions in spreads since late 2012 observed in peripheral Eurozone members were not the result of "successful" fiscal consolidations, but the direct consequence of the commitment of the ECB to do "whatever it takes" to preserve the euro. Similarly. as long as the ECB maintains this commitment, there is no reason for spreads to widen again. Certainly, a sensible renegotiation of the misconceived and poorly implemented Greek adjustment programme would not in itself lead a a widening of spreads - any such widening would be the result of renewed mishandling of the situation by eurozone policymakers.

2014 Autumn Statement

 

Question 2: Do you agree that the underperformance of tax receipts in recent years, provides a strong case for higher taxes?

Answer:
Strongly Agree
Confidence level:
Very confident
Comment:
The projections in the Autumn Statement for the tax/GDP level show it remaining stable at levels that are low by historical standards. There will be ncreasing pressures on pensions and health from demographic trends. These will (and should) be accommodated - a richer, older society ought to spend more on health and pensions. So either taxes need to go up, or more financing for health and pensions needs to come from private provision; or, more likely, and probably most sensible, both.

Question 1: Do you agree that the scale of this planned reduction in total managed expenditure is credible?

Answer:
Strongly Disagree
Confidence level:
Extremely confident
Comment:
Even the Office of Budget Responsibility - whose mandate effectively precludes it from questioning the projections - has made it clear that it expect a future government, of any party or combination to revise these plans. The detailed analysis published by the IFS explains why. This is particularly unfortunate in the run-up to the election In retrospect, it would have been far better if each of the main parties had been asked to provide their own fiscal plans and the OBR had published 3 (or more) separate projections; that would at least have provided the basis for informed public debate on the fiscal choices we face.

Devolving Income Tax Powers within the UK

Question 2: Do you agree that that there is a clear economic case for establishing "English votes for English laws" with the same tax and spending powers as the Scottish Parliament?

Answer:
Strongly Disagree
Confidence level:
Extremely confident
Comment:
The UK is an extremely centralised state. The case for devolving tax and spending powers from Westminster is strong. But the case for simply having "English votes for English laws" in the Westminster Parliament, simply with Scottish (and sometimes Welsh) MPs excluded, is weak and incoherent. It would not mean a significant decrease in centralisation. It would be incredibly difficult to define, particularly given the non or only partial hypothecation of tax revenues; and the fact that London already has some devolved powers and other regions (like Greater Manchester) are shortly going to acquire more (on plans that have all-party support). When London and Greater Manchester, as well as Scotland, have powers over skills policy and spending, financed from general taxation, (as seems inevitable under any government) how on earth will it be decided what "English Votes for English Laws" actually means? Far more sensible and sustainable would be a proper programme of decentralisation of power (over some taxation, especially property tax and business rates; and of some areas of spending, like skills and welfare to work programmes) to local authorities and groupings of local authorities (as proposed by the Local Government Finance Commission and City Growth Commission).

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:
Very confident
Comment:
Scotland already has a very large degree of freedom over public spending, both in terms of how the spending is allocated and how it is spent. So giving it more control over taxation - where the money comes from -makes sense. But giving it complete control over income taxes seems the wrong place to start, either from an economic or political point of view. The arguments against setting income tax purely at a sub-national level from an economic perspective are well rehearsed. Moreover, given that the Scottish people have, for better or worse, decided to remain part of the UK, there is a strong argument against complete devolution of income tax. There are some functions - defence, foreign affairs, etc - that will always remain at UK level. If income tax is devolved completely, then Scots will be paying nothing directly from their incomes to finance these quintessentially state-level functions. It is difficult to see how a nation-state is politically sustainable under such circumstances.

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