How severe will the cuts due to be outlined in the Comprehensive Spending Review (CSR) actually be? This short, opinion-free briefing that aims to answer this question, by examining the spending totals outlined in June's Emergency Budget.
Privatisation Revisited
This report calls on the government to undertake a radical new programme of privatization. There are still many attractive commercial operations in the public sector that should be privatized – for instance, Channel 4, BBC Worldwide, Scottish Water, Network Rail and many other firms. The report also calls for the government’s shares in RBS and Lloyd’s TSB to be sold off gradually over the term of the current government. Together, these privatizations would raise up to £90billion over a period of several years.
The report argues that many benefits would accrue if its proposals were implemented in full – particularly in terms of operational efficiencies. The major privatization wave under the Thatcher government opened up much of Britain’s industry to competition and helped the British economic miracle of the 1980s. In times like this, a return to this approach is required to rejuvenate parts of the British economy.
Britain’s national debt is approaching one trillion pounds and interest repayments are nearly £120 million every day. With this report, the government now has an instruction manual in how to begin paying down this debt and simultaneously jumpstarting the flagging British economy.
Welfare Reform: The importance of being radical
Our response to the Department of Work & Pensions' '21st Century Welfare' consultation argues in favour of radical welfare reform, endorsing the 'universal credit' subsequently adopted by the government. Its authors note that piecemeal reform of the welfare system is unsuited to overcoming its two chief failings – failing to provide a safety net for the needy and creating perverse incentives against work – and instead suggest sweeping away the existing welfare system and introducing a Universal Credit that pays initial benefits at 50% of the median income, and tapers at 55%.
Reforming the Regulators
This briefing paper, by ASI fellows Tim Ambler and Keith Boyfield, notes the extraordinary growth of the UK's regulatory agencies since 1997 and the deleterious consequences for the UK economy. They argue that the UK's regulators should first be restricted to their original, purely economic role, and subsequently merged into a single, competition-focused Office of Fair Trading.
Access to Justice: Balancing the Risks
This briefing paper, by lawyer and medical practitioner Anthony Barton, argues that both the legal aid and the Conditional Fee Agreement (CFA) systems are flawed in that they give rise to situations which are not economically sustainable or politically acceptable. This paper suggests scrapping civil legal aid in almost all cases, and reforming the CFA system to deter risk-free speculative litigation.
Austrian Economics - A Primer
Austrian School economists gave us the ideas of marginal utility, opportunity cost, and the importance of time and ignorance in shaping human choices and the markets, prices and production systems that stem from them. 'Austrian' economics has revolutionised our understanding of what money is, why economic booms invariably turn to damaging busts, why government intervention in the economy is a mistake, the importance of time and information in economic decision-making, the crucial role of entrepreneurship, and how much economic policy is just plain wrong. Eamonn Butler explains these ideas in straightforward, non-technical language, making this Primer the ideal introduction for anyone who wants to understand the key insights of the Austrian School and their relevance and importance to our economic situation today. Now updated with an additional chapter on Contemporary Austrian thinking.
Global Player or Subsidy Junkie? Decision time for the BBC
This report, by media expert and former BBC producer David Graham, argues that the TV Licence Fee should be abolished, and that the BBC should instead become a subscription service. The report makes a number of points against the Licence Fee, but also makes a more positive case for reform, suggesting that shifting to a voluntary subscription model would encourage the BBC to compete with the big US studios, export more high quality content overseas, and spark significant growth in the UK broadcasting industry and its contribution to the wider economy.
Taxpayer Value: Rolling back the state
'Taxpayer Value: Rolling back the state' urges the government to reduce the number of people employed by Whitehall departments and their QUANGOs by almost 27 percent. This would equate to almost 270,000 public sector job losses and deliver estimated savings of £55bn a year. However, the emphasis of this report is not on cutting for cutting's sake. Rather, the goal is to make the concept of 'taxpayer value' central to government activity and, in so doing, deliver better services at a lower cost. Among other recommendations, the report suggests that job centres be privatized and the tax and benefit systems integrated, that the military take over procurement from the MoD and purchase equipment 'off the shelf', and the Departments for International Development and Communities and Local Government be abolished.
Response to the Emergency Budget
The ASI’s emergency budget response welcomes the fiscal consolidation proposed by the government and praises the changes to the personal allowance and corporation tax, while also pointing out that the Chancellor could have gone further on spending cuts, and should not have raised VAT and Capital Gains Tax. It goes on to argue that cuts should be achieved by fundamentally re-thinking the role of the state rather than salami slicing, and advocates radical welfare reform as an urgent priority.
Estimated revenue losses from CGT increases
International evidence suggests clearly that increases in capital gains taxes above a very modest level result in decreases in revenue. Similarly, if capital gains tax rates are set above a relatively modest level, then their reduction will involve an increase in revenues. This paper uses new evidence from Ireland, Sweden and Switzerland combined with existing analysis from America, Australia and Britain to try and identify more precisely the revenue consequences of CGT increases in the UK. It looks at both revenue losses from capital gains tax and from other taxes.