In this note, the authors examine how we might measure the fiscal stance in terms of the scale of the public deficit. They show the path the gap between state income and expenditure has taken since 1946. The paper also tries to isolate the effects of government policy as opposed to the economic cycle.
The main measure of inflation in the UK is the retail price index (RPI). One way to think of the RPI is as a measure of the changing cost of buying a very large shopping basket containing all of the purchases of a typical UK household. There is, of course, no such thing as a typical household. As a result, inflation varies across the household population, and it would be remarkable if the RPI were a good measure of inflation for every household. This IFS commentary explores the issues surrounding the extent and the implications of differences in inflation rates between households.
In this commentary, the authors examine the effect of stamp duty on the stock market, on business investment and on merger and acquisition activity. They consider possible threats to the long-run sustainability of stamp duty revenues. The commentary goes on to assess the potential revenue implications of abolition for the government and to examine various means by which the revenues could be recouped. Each of these involves its own potential economic distortions and possible additional administrative costs.
This paper presents a revealed preference method for calculating a lower bound on the virtual or reservation price of a new good and suggests a way to improve these bounds by using budget expansion paths.
Following the 2002 Budget, this Briefing Note examines some of the Chancellor's changes to business taxation. A number of Budget measures, including the research and development tax credit for large companies and the exemption of capital gains on the sale of subsidiaries, are welcome and should improve the efficiency of the UK's tax system. All of these measures were subject to extensive prior consultation. A number of other measures were not foreshadowed in the Pre-Budget Report. Three of these are examined here - the new 0% rate of corporation tax, the changes to North Sea taxation and the new anti-avoidance measures for stamp duty.
Before the 2001 election the Treasury said that `tax and benefit reforms announced in this Parliament will lift over 1.2 million children out of relative poverty. But official figures released on 11 April show a smaller fall in child poverty, of only 0.5 million since 1996-97. This commentary attempts to explain the discrepancy.
This IFS book (March 2002) reveals that mothers still face substantial hurdles in undertaking paid employment. For those who do manage to work, childcare arrangements are a diverse mixture of carers, cost and quality. Government initiatives to increase the availability of childcare places have a substantial shortfall to address while measures to increase the
The government intends to introduce a new research and development (R&D) tax credit, which will be open to larger firms, in Budget 2002. It has issued a second consultative note, Designs for Innovation, on the design of the new credit. This Briefing Note discusses which firms are likely to benefit from the new credit, and the likely costs and effectiveness of the designs under consideration.
In Autumn 2001, the government finalised its proposals for the introduction of the Pension Credit in 2003. Since the initial plans, the Government has significantly changed the way in which pensioners' savings will be treated by the new benefit, and has also decided to couple the reform to significant increases in the generosity of housing benefit for pensioners. This paper updates earlier IFS research evaluating these modified proposals, asking who is likely to gain, and assessing the likely effect on pensioner poverty, on savings incentives and on the public finances. We conclude that modifications to the reform leave the policy better able to reward saving and fitting in better with the rest of UK pension policy. In the longer-term, however, there large questions about the eventual cost and effects of the reform that remain unanswered.
Since the November 2001 Pre-Budget Report, there has been much speculation surrounding how much the UK spends on health and how much more it would need to spend in order to reach the average level of spending seen across European Union countries. An aspiration to increase UK health spending to the average European level was first made by the Prime Minister in January 2000. In addition, the Labour Party manifesto states that 'over time we will bring UK health spending up to the EU average'. More recently, the Prime Minister has confirmed that he would like to see UK health spending reach the European average by 2005. This short note compares the level of health spending in the UK with that overseas and discusses how much more the UK is likely to need to spend on health if it is to meet the Prime Minister's stated target.
The Labour government has been at pains to stress the importance of public investment. A large portion of Spending Review 2000 was devoted to explaining why we should care about public investment: it provides the infrastructure that is a prerequisite for improvements in output and growth and is necessary both to supply and to enhance public services. This notes looks at public investment over the last 25 years and identifies trends in the various spending areas.
