Project Davos: what’s the single best way to close the world’s wealth gap?

As political and business leaders gather for their annual summit on the global economy, we want to know what key step you think they should prioritise to tackle inequality

Donald Trump and Angela Merkel will join 2,500 world leaders, business executives and charity bosses at the World Economic Forum (WEF) in Davos, Switzerland which kicks off on 23 January. High on the agenda once again will be the topic of inequality, and how to reduce the widening gap between the rich and the rest around the world.

The WEF recently warned that the global economy is at risk of another crisis, and that automation and digitalisation are likely to suppress employment and wages for most while boosting wealth at the very top.

Continue reading…

Already thinking positively about economic alternatives | Letters

Tom Kibasi on proposals for a ‘digital commons’ and increasing worker ownership, Andy Chapman on Common Good Balance Sheets, and Peter Taylor-Gooby on better education, more training and decent cheap childcare

In introducing his welcome new series on economic alternatives, Aditya Chakrabortty rightly castigates those who continue to promote the failed economic ideas of the past (It’s time to take on the zombies, 17 January). But he underestimates the extent to which a vibrant network of thinktanks, academics, campaigning and community organisations are now “rethinking capitalism” in pursuit of a society fit for the future.

Here at IPPR we are working on everything from new approaches to macroeconomic policy to the proper taxation of wealth, from proposals for a “digital commons” to devolved economic governance, from increasing worker ownership to a new framework for environmental policy.

Continue reading…

No-deal Brexit would cost EU economy £100bn, report claims

Trading bloc would suffer more in lost output than thought, although lack of trade deal would cost UK around £125bn

A no-deal Brexit would cost the remaining 27 EU nations €112bn (£99.5bn) in lost economic output, according to research by a UK-based thinktank.

Although the UK would still be the biggest loser from crashing out of the EU single market and customs union without a new trade deal – with a cost to the economy of £125bn by 2020 – the EU would also suffer a bigger economic hit than previously thought by the end of the decade, according to the consultancy Oxford Economics.

A hard Brexit would take Britain out of the EU’s single market and customs union and ends its obligations to respect the four freedoms, make big EU budget payments and accept the jurisdiction of the ECJ: what Brexiters mean by “taking back control” of Britain’s borders, laws and money. It would mean a return of trade tariffs, depending on what (if any) FTA was agreed. See our full Brexit phrasebook.

Continue reading…

Brexit could cost Scottish economy £16bn a year – report

Nicola Sturgeon says updated analysis strengthens case for UK staying in the EU single market

The Scottish economy faces losing up to £16bn a year as a result of leaving the EU, according to a Scottish government forecast.

The updated analysis warns that a hard Brexit, in which the UK falls back on World Trade Organisation trading rules, would cost Scotland up to £12.7bn and cause real household incomes to fall by 9.6%, or £2,263 a head.

Continue reading…

Brexit: UK could lose half a million jobs with no deal, says Sadiq Khan

Analysis commissioned by London mayor predicts ‘lost decade’ of slump and lower employment with hard Brexit

A no-deal Brexit could cause the UK to lose half a million jobs and nearly £50bn in investment by 2030, according to an economic forecast commissioned by the mayor of London, Sadiq Khan.

The report, which models five possible scenarios for leaving the EU ranging from a near-status quo situation to leaving on World Trade Organisation terms without any transition agreement, warns that the worst option could be a “lost decade” of economic slump.

Staying in the single market and customs union

Continue reading…

The strong case for a citizens’ wealth fund | Letters

Professor Steve Schifferes says a citizens’ wealth fund in the UK could be the key to boosting productivity, tackling inequality, and giving citizens a new sense of control over their lives. Plus Michael Gold says that if the tech giants paid tax properly there would be no $1tn company on the horizon

I strongly endorse your editorial (30 December) suggesting that a UK citizens’ wealth fund could make a major contribution to reversing the worrying growth in inequality, particularly wealth inequality, in the last few decades. The estimates by my project team suggest that it would be feasible to create a £1tn citizens’ wealth fund within a generation, partly based on making better use of our estimate of £3tn in publicly owned assets. In our view, such a “Next Generation Fund” could make an important contribution to reducing intergenerational inequality as well, and ensure that an increased level of public spending and public investment can be afforded in the future when the revenue that can be raised from taxation will be constrained by the increase in the number of older people relative to those in work.

As well as the successful implementation of such schemes in countries as diverse as Norway, Singapore and Australia, they also exist on a smaller scale in the UK, including the Shetland and Orkney trusts and the crown estate. I believe that introducing a citizens’ wealth fund in the UK – not run by the government but by the people – could be the key to boosting productivity, tackling inequality, and giving citizens a new sense of control over their lives. The idea deserves cross-party support.
Professor Steve Schifferes
City, University of London; Director, UK Social Wealth Fund Project

Continue reading…

Brexit: government urged to stop cost of VAT rule change hitting UK firms

Treasury committee chair Nicky Morgan demands clarification on how British businesses can avoid paying VAT upfront when they import goods post-Brexit

The government has come under pressure to reveal the impact on more than 130,000 UK firms of rules due to take effect after Brexit that will force them to pay VAT upfront for the first time on all goods imported from the European Union.

Nicky Morgan, the Tory chair of the influential Treasury select committee, has demanded to know what contingency plans were being made to avoid the extra cost of the rule change hitting UK firms.

Staying in the single market and customs union

Continue reading…

UK services sector points to faster growth at end of 2017

Forecast slowdown in sector not as bad as feared with business optimism growing although many British firms say growth is sluggish

Britain’s services sector, including hotels and banks, grew at a faster rate than expected last month, setting the economy on-course for its strongest quarter in 2017 despite mounting fears over the challenges ahead from Brexit.

A hard Brexit would take Britain out of the EU’s single market and customs union and ends its obligations to respect the four freedoms, make big EU budget payments and accept the jurisdiction of the ECJ: what Brexiters mean by “taking back control” of Britain’s borders, laws and money. It would mean a return of trade tariffs, depending on what (if any) FTA was agreed. See our full Brexit phrasebook.

Inflation is when prices rise. Deflation is the opposite – price decreases over time – but inflation is far more common.

Continue reading…