Jonathan Portes's picture
Affiliation: 
KIng's College, London
Credentials: 
Professor of Econoics and Public Policy

Voting history

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.

Secular Stagnation

Question 2: Do you think that current structural and fiscal policies should place a considerably greater emphasis on pushing the natural rate into positive territory?

Answer:
Agree
Confidence level:
Not confident
Comment:
In the eurozone, absolutely; regardless of precisely what "secular stagnation" is, the eurozone desperately needs more expansionary policy (extraordinary monetary policy and coordinated fiscal expansion). In the US (and UK), the arguments are much more nuanced. The US would benefit from a substantial increase in public investment, as well as from structural policies (tax, spending, and others) to reduce inequality. The UK needs to boost investment as well, both public and private, particularly in housing supply.

Question 1: Do you agree- making your own definition of secular stagnation clear if you disagree with that offered here- that it is more likely than not that the advanced Western economies have entered into a period of secular stagnation?

Answer:
Disagree
Confidence level:
Not confident at all
Comment:
I do not think we have a clear enough definition of "secular stagnation" to say with any confidence that we in such a period. Moreover, the major Western economies are in very different positions - the US has seen growth, although income and wealth inequalities are at historically very high levels and employment has been weak; meanwhile, the UK has seen strong employment growth alongside very weak productivity; and the eurozone is on the verge of deflation. It is not clear how a vague concept like "secular stagnation" can be applied to such very different economic environments.

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:
Disagree
Confidence level:
Very confident
Comment:
Taking the categories in the question in turn. 1) On students, policy changes have resulted in significant reductions in international students in the FE sector; while there was undoubtedly some abuse, this also translates into lower exports. In HE, universities have largely adapted to the new system for undergraduates, but the abolition of the Post-Study Work Route means the UK is deliberately excluding a significant group of potential highly skilled and well integrated immigrants with good labour market prospects; this is entirely irrational from both an economic and social perspective. 2) On skilled workers, the system is now considerably more bureaucratic, although the expansion of the ICT route and the avoidance of a binding numerical constraint has mitigated the direct economic consequences so far. 3) On family migration, new income rules have probably increased the average income/skill level of family migrants, although obviously some UK citizens have suffered serious personal consequences. More broadly, of course, the obvious contradiction between the government's "open for business" rhetoric and its rhetoric and policy on non-EU migration has clearly not helped efforts to deepen economic links with some non-EU countries (India, in particular) although it is not possible to quantify any such impacts.

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