tag:theconversation.com,2011:/ca/topics/george-osborne-4883/articlesGeorge Osborne – The Conversation2023-10-03T15:57:38Ztag:theconversation.com,2011:article/2147472023-10-03T15:57:38Z2023-10-03T15:57:38ZEd Balls and George Osborne’s new podcast is essential listening – but not for the reasons they think<p>In an apparent attempt to “talk across the political divide”, former chancellor George Osborne and former shadow chancellor Ed Balls have launched a podcast. </p>
<p>Political Currency has been billed as a behind-the-scenes glimpse into the rooms and minds where the key decisions are made. But what is perhaps more evident from the opening episodes is not how politicians of different parties can communicate so much as how they can collude.</p>
<p>It hasn’t taken long for the two men to use the podcast to celebrate their joint achievements. This began with the current Labour party “sticking with the two-child limit on welfare, which I [Osborne] introduced.”</p>
<p>Balls’s response was telling: </p>
<blockquote>
<p>Well, that takes you to an interesting thing in British politics which is that in the end, however contested things are, the only things that last are the things that become consensual. So, the Conservatives opposed the minimum wage in 1997, you [Osborne] ended up boasting about raising it. The Conservatives opposed Central Bank independence in 97/98, you ended up being a champion of it. The trade union reforms of the 1980s, which many Labour People hated at the time – clearly Tony Blair and Gordon Brown carried on with them. So, things which are contested can become consensual and when people agree, that is often how our county moves forward.</p>
</blockquote>
<p>Issues on which Balls and Osborne appear to happily agree have so far included setting a very low minimum wage for huge numbers of workers and greatly curtailing the ability of trade unions to protest and organise.</p>
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<p>Those of us who listened on learnt how cross-party consensus was achieved in Westminster on the policy to restrict benefits so that parents can only claim support for <a href="https://theconversation.com/welcome-to-the-uk-land-of-the-two-child-policy-44756">two children</a> – not a third or any subsequent child. </p>
<p>This policy has been a <a href="https://cpag.org.uk/news-blogs/news-listings/official-statistics-reveal-1-10-children-hit-two-child-limit#:%7E:text=The%20policy%2C1%20which%20took,are%20affected%20by%20the%20limit.">key driver of child poverty</a> in England and Wales, where a majority of children who have two or more siblings <a href="https://www.dannydorling.org/books/shatterednation/slides_all_files/page5-1055-full.html">go hungry several times a month</a>. The policy does not apply in Scotland and Northern Ireland, which are now the two places in the UK where child poverty rates are <a href="https://endchildpoverty.org.uk/child-poverty/">lowest</a>. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/551438/original/file-20231002-27-j7ca92.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="A chart showing the ups and down of child poverty figures over the years." src="https://images.theconversation.com/files/551438/original/file-20231002-27-j7ca92.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/551438/original/file-20231002-27-j7ca92.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=363&fit=crop&dpr=1 600w, https://images.theconversation.com/files/551438/original/file-20231002-27-j7ca92.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=363&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/551438/original/file-20231002-27-j7ca92.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=363&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/551438/original/file-20231002-27-j7ca92.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=456&fit=crop&dpr=1 754w, https://images.theconversation.com/files/551438/original/file-20231002-27-j7ca92.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=456&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/551438/original/file-20231002-27-j7ca92.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=456&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Child poverty, 2014-2022.</span>
<span class="attribution"><a class="source" href="https://endchildpoverty.org.uk/child-poverty/">End Child Poverty Coalition</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span>
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<p>And yet poverty itself has so far only been mentioned once on the podcast, around halfway through episode one. Even then, our hosts were talking about pensioner poverty – an issue that matters, they explained, because so many votes are involved. </p>
<p>In the same episode, Osborne <a href="https://podcasts.apple.com/gb/podcast/hs2-in-doubt-china-spies-and-the-triple-lock/id1706536336?i=1000627908059">revealed</a> how the New Labour and Conservative parties had colluded (or “worked together”, as he put it) to “see the state pension age go from 65, to 66, to 67, to 68”. He continued with another example of how key issues were agreed by both sides rather than being put to the electorate: </p>
<blockquote>
<p>I remember Peter Mandelson coming to me before the 2010 general election, he was the [Labour] deputy prime minister, and saying “we want to put up student fees, tuition fees, but we can’t do that before an election, its too difficult for Labour, why don’t we set up a report, and while you as Conservatives hopefully want to see the tuition fees go up so that the universities are better funded, why don’t you sign up to this commission and it can report after the election?”</p>
</blockquote>
<p>Balls agreed that this was the right way to go about things, that the two main political parties of the UK should agree policy between themselves, as the “grown-ups in the room” while ensuring that it appeared as if each election mattered.</p>
<p>The two men appear to agree on almost everything of any substance. Or if they don’t, they’ll work out their differences between themselves and tell us the result later.</p>
<h2>Listen to the ‘grown-ups’</h2>
<p>So far, Balls and Osborne have been in a celebratory mood in their discussions. They appear very happy with the current state of British politics and the people in charge. There is much bile disguised as banter. </p>
<p>Both have particular contempt for Boris Johnson, Ed Miliband and Jeremy Corbyn, with most of their anger directed at Miliband, who they linked, at length and unfairly, to Russell Brand. They both disagree with Brexit but accept it. For them, in 2023, the grown-ups are back in charge again – and that includes their gaining air time. </p>
<p>Listening to them, I’ve thought of how the austerity policies they speak about have led to deprivation in the UK on such a scale that many children no longer grow up properly, physically or mentally. How the <a href="https://www.thelancet.com/journals/lancet/article/PIIS0140-6736(20)31859-6/fulltext">average height</a> of five-year-old boys in the UK has risen and fallen since 1990.</p>
<p><strong>Average height of five-year-old boys, 1990-2020:</strong></p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/551386/original/file-20231002-29-2m1yli.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="A chart showing the average height of male children had been increasing after 1990 but then suddenly started to decline in 2010." src="https://images.theconversation.com/files/551386/original/file-20231002-29-2m1yli.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/551386/original/file-20231002-29-2m1yli.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=322&fit=crop&dpr=1 600w, https://images.theconversation.com/files/551386/original/file-20231002-29-2m1yli.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=322&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/551386/original/file-20231002-29-2m1yli.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=322&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/551386/original/file-20231002-29-2m1yli.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=405&fit=crop&dpr=1 754w, https://images.theconversation.com/files/551386/original/file-20231002-29-2m1yli.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=405&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/551386/original/file-20231002-29-2m1yli.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=405&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">Average height of five-year-old boys.</span>
<span class="attribution"><span class="source">The Lancet/ITV</span>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span>
</figcaption>
</figure>
<p>If Balls or Osborne have an explanation other than child deprivation for the above trends, it would be interesting to hear it. The most convincing explanation I have heard as to why we have tolerated such high inequality and poverty in the UK for so long was reportedly given at a <a href="https://conservativehome.blogs.com/centreright/2008/04/making-history.html">private dinner in Hampshire in 2002</a>, when Margaret Thatcher was asked what her greatest achievement had been. She replied: “Tony Blair and New Labour. We forced our opponents to change their minds.”</p>
<p>There is an older parallel to be drawn, too. In 1940, three journalists of three different political persuasions wrote a book together: <a href="https://www.oxforddnb.com/display/10.1093/ref:odnb/9780198614128.001.0001/odnb-9780198614128-e-70401">The Guilty Men</a>. They were Michael Foot, Peter Howard and Frank Owen and their targets were the British public figures who appeased 1930s Germany. </p>
<p>A similar book could be written today about the appeasers of market forces who promised that we could live with “tough decisions” under austerity and that children would not go hungry or grow up stunted.</p>
<p>But instead we have the two-men-talking-to-each-other podcast format. In every episode, Balls and Osborne happily outline the thinking behind their actions – the actions that just a few in my generation, given the best starts in life, have taken and have caused such harm to others. </p>
<p>I am grateful to them for using their show to put so much on the record about their time in charge, years before their cabinet papers and other secret documents will be <a href="https://www.nationalarchives.gov.uk/about/our-role/transparency/20-year-rule/">released to the public</a>.</p><img src="https://counter.theconversation.com/content/214747/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Danny Dorling does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The former chancellor and shadow chancellor have revealed how their parties collaborated on devising some of the most damaging policies of the past 20 years.Danny Dorling, Halford Mackinder Professor of Geography, University of OxfordLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1199442019-07-05T15:17:13Z2019-07-05T15:17:13ZGeorge Osborne is a bad fit for the IMF – top economist takes a close look at his bid for the job<p>George Osborne, the former UK Chancellor of the Exchequer, is touting himself as the next head of the International Monetary Fund. He is hoping to fill the forthcoming vacancy as the current managing director, Christine Lagarde has been nominated to be the next president of the European Central Bank. </p>
<p>According to the <a href="https://www.ft.com/content/b690fdb6-9db2-11e9-9c06-a4640c9feebb">Financial Times</a>, Osborne told friends that the IMF requires a “skilled political communicator and operator … not a technocrat”. But Osborne’s interest in running one of the world’s most powerful international organisations has been met with widespread criticism from <a href="https://www.theguardian.com/business/2019/jul/04/george-osborne-ambitions-over-imf-top-job-prompt-criticism">across the political spectrum</a> and among professional economists over his record at the helm of the UK economy. </p>
<p>For example, Danny Blanchflower, a former member of the Bank of England’s monetary policy committee, described Osborne as the worst UK chancellor in 300 years. </p>
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<h2>Well qualified?</h2>
<p>On a superficial level, Osborne is well qualified to lead the IMF. First, as a European he passes the nationality test. The World Bank and the IMF stitch up their top jobs so that the president of the bank is decided by the United States and the managing director of the IMF is a European. It’s one of the traditions of <a href="https://www.nytimes.com/2019/07/03/us/politics/lagarde-imf-successor.html">international economic governance</a>.</p>
<p>Second, Osborne’s economic philosophy, as shown in his role as the <a href="https://theconversation.com/how-george-osborne-fell-into-the-deficit-gap-35006">architect of austerity in the UK</a>, is closely aligned with the IMF’s. The fund’s <a href="https://www.newstatesman.com/politics/economy/2019/04/why-world-needs-new-financial-order">traditional core belief</a> is that there should be minimal state intervention in the economy and that countries that receive financial help are required to implement privatisation, deregulation and other pro-market policies.</p>
<p>Digging deeper into Osborne’s job application, however, shows that he does not tick all the boxes. According to the <a href="https://www.imf.org/en/About/Factsheets/Managing-Director-Selection-Process">IMF’s selection criteria</a>: “The successful candidate for the position of Managing Director will have a distinguished record in economic policymaking at senior levels.” </p>
<p>The main distinguishing feature of Osborne’s policy record was presiding over the worst economic recovery in British history <a href="https://theconversation.com/the-graph-george-osborne-doesnt-want-you-to-see-38925">since the Industrial Revolution</a>. Osborne was a passionate advocate of austerity policies which led to a retrenchment of the state at exactly the time <a href="https://theconversation.com/fact-check-has-austerity-held-back-economic-growth-40578">when the UK economy needed a fiscal boost</a>. </p>
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Read more:
<a href="https://theconversation.com/fact-check-has-austerity-held-back-economic-growth-40578">Fact Check: has austerity held back economic growth?</a>
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<p><a href="https://theconversation.com/uk-growth-numbers-highlight-the-gap-between-rhetoric-and-reality-on-recovery-26078">Masked by the need for “prudence”</a>, Osborne’s uncompromising approach to cutting public spending in an ideological bid to reduce the deficit and national debt led to depressed output and stagnant real wages. It was the Bank of England that <a href="https://theconversation.com/forget-super-thursday-the-bank-of-england-can-only-offer-mildly-useful-thursday-63423">tried to pick up the slack</a>. </p>
<p>An aggressively loose monetary policy, including <a href="https://theconversation.com/the-regressive-politics-of-quantitative-easing-18585">quantitative easing</a>, has helped the economy stagger along. But extremely low interest rates and readily available cash for investors has had the knock on effect of inflating assets such as house prices.</p>
<p>Ironically, despite his austerity policies and focus on <a href="https://theconversation.com/all-this-talk-about-balancing-the-budget-is-35448">“balancing the budget”</a>, Osborne consistently overshot his public borrowing targets. This is because slow growth leads to lower-than-expected tax revenues. Plus, Osborne’s austerity damaged the long-term growth potential of the economy due to a lack of investment <a href="https://theconversation.com/the-challenges-ahead-for-britains-new-chancellor-philip-hammond-62516">in infrastructure, skills and innovation</a>.</p>
<h2>Time for a new direction</h2>
<p>It is not just economic competence that lets Osborne down, his economic philosophy is becoming out of kilter with the direction of travel of the IMF. Slowly but surely, the IMF is moving away from its strict adherence to orthodox pro-market policies as it recognises the damage they have caused to many economies. </p>
<p><a href="https://www.imf.org/external/pubs/ft/fandd/2016/06/ostry.htm">Economists at the IMF</a> have criticised neoliberal policies that they recognise “have increased inequality, in turn jeopardising durable expansion”. Even outgoing chief, <a href="https://www.theguardian.com/business/2016/apr/17/imf-urges-spending-boost-growth">Christine Lagarde</a> has called for greater public spending by governments to boost growth.</p>
<p>The last things that the IMF needs now is “a skilled political communicator and operator”. It needs someone to accelerate the use of more pluralist policies, which distributes power among more groups instead of dictating policies from the top. It must completely jettison its historic “one policy fits all” approach that has so often failed countries that the fund exists to help, from <a href="https://www.theguardian.com/business/2013/jun/05/imf-underestimated-damage-austerity-would-do-to-greece">Greece</a> to <a href="https://www.iatp.org/news/blame-the-imf-crowd-the-one-size-fits-all-globalization-model-just-didnt-work">Argentina</a>.</p>
<p>It is also about time that the European monopoly on leadership of the IMF comes to an end. The balance of world economic power is shifting from West to East, with China already the largest economy if measured in purchasing power parity. The major international institutions must embrace this new global reality instead of taking a step backwards and hiring a candidate like George Osborne.</p><img src="https://counter.theconversation.com/content/119944/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Michael Kitson has received funding from BIS, HEFCE, EPSRC, ESRC, AHRC, NERC and the MRC.</span></em></p>The main distinguishing feature of Osborne’s policy record was presiding over one of the worst economic recoveries in British history.Michael Kitson, University Senior Lecturer in International Macroeconomics, Cambridge Judge Business SchoolLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1191162019-06-20T14:39:01Z2019-06-20T14:39:01ZWho should pay for TV licences for the over 75s?<figure><img src="https://images.theconversation.com/files/280475/original/file-20190620-149851-q25fda.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">in 2016, George Osborne told the BBC it would have to cover the cost of free licences for over 75s introduced by Gordon Brown in 2001.</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/old-couple-watching-television-on-couch-263011691?studio=1">Shutterstock</a></span></figcaption></figure><p>Nobody wants to appear hard on pensioners, least of all politicians. And certainly not Conservative ones.</p>
<p>So it’s not surprising that several of those vying to become the next prime minister have <a href="https://www.pressandjournal.co.uk/lifestyle/tv/1772138/the-over-75s-tv-licence-fee-debate-so-far/">happily denounced</a> the BBC’s decision to restrict free television licences only to over 75s receiving <a href="https://www.ageuk.org.uk/information-advice/money-legal/benefits-entitlements/?gclid=EAIaIQobChMI7L-trbX14gIVDJ3tCh2f7QoWEAAYAiAAEgIqNvD_BwE&gclsrc=aw.ds">pension credit</a>, a benefit available to retired people with limited resources.</p>
<p>In 2018 the BBC picked up almost <a href="https://www.barb.co.uk/viewing-report/updated-insight/">a third of all television viewing in the UK</a> and with the other terrestrial broadcasters – ITV, Channel 4 and Channel 5 – <a href="https://www.barb.co.uk/download/?file=/wp-content/uploads/2019/05/Barb-Viewing-Report-2019_32pp_FINAL-1.pdf/">over two thirds of viewers</a>. The two publicly owned services – Channel 4 and the BBC – managed 41% between them. But they all struggle on the resource front.</p>
<p>This is particularly the case with the BBC since the Conservative-led government elected in 2010 significantly <a href="https://www.independent.co.uk/voices/bbc-licence-fee-over-75s-tory-party-pensions-credit-manifesto-pledge-a8953306.html">eroded the licence fee</a>. George Osborne, then chancellor, required the corporation to pay the full cost of <a href="http://www.s4c.cymru/en/about-us/">S4C</a>, the Welsh-language channel – until then funded mostly by the government and in the form of programming from the BBC. It also had to start funding the <a href="https://www.bbc.co.uk/news/world-radio-and-tv-12759931">World Service</a> (previously paid for by the Foreign Office) and to take responsibility for some other costs.</p>
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<h2>Playing politics with the Beeb</h2>
<p>What is astonishing is the utterly spineless way in which the BBC’s senior management and trustees <a href="https://www.ft.com/content/240a1ab8-db4c-11df-ae99-00144feabdc0">accepted these changes without a fight</a>. When Osborne told the BBC of his proposals, the trust could have demanded that the matter be taken to the House of Commons, since the changes were being made in the middle of a period for which the scope of the licence fee had already been agreed. If this was refused, the trust could have resigned collectively, making the question of how the BBC should be financed an extremely difficult issue for the government.</p>
<p>But that did not happen and the government concluded it was dealing with an organisation that was a pushover. So it was not surprising in 2016 when the chancellor told the BBC it would have to bear the cost of the free licences for over 75s, <a href="https://www.theguardian.com/commentisfree/2018/nov/23/the-guardian-view-on-the-bbc-and-the-elderly-a-burden-too-far">introduced</a> by the Labour chancellor, Gordon Brown, in 2001, and financed directly by government. The corporation was handed a poisoned chalice in the power to abolish or limit the concession – the political calculation being that any resulting outrage would hit the BBC, not the government. Which is exactly <a href="https://www.dailymail.co.uk/news/article-7125753/Pensioners-risking-prison-sentence-refuse-pay-TV-licence.html">what has happened</a>.</p>
<p>When the BBC announced its decision at the beginning of May, a decision which will impact on programming, the prime minister’s official spokesperson was quoted as expressing “deep disappointment”, indicating that the government had expected that free licences for all households with someone over 75 <a href="https://www.telegraph.co.uk/news/2019/06/10/bbc-link-free-over-75s-tv-licences-pension-credit/">would continue</a>.</p>
<p>But it’s hard to see how the BBC could have done that without a huge cut – three quarters of a billion pounds – in its annual budget, weakening its programme-making ability at a time of intense competition from Sky and online services Netflix and Amazon, which are all investing huge amounts of money. If the government really means what it is saying, then clearly it wishes the UK’s major public service broadcaster to be diminished in power and influence.</p>
<h2>BBC problems</h2>
<p>But the corporation has done itself no favours in recent years by <a href="https://www.pressgazette.co.uk/itv-news-tom-bradby-hits-out-at-bbc-paying-andrew-marr-600k/">paying exorbitant salaries</a> to senior executives and performers (as, curiously, do other broadcasters, but without the same level of criticism). And when it argues that a relatively modest cap on these salaries would mean a saving of only <a href="https://www.bbc.co.uk/news/uk-48647548">£25m</a>, it is doing so to a public that is sick of the increasing wealth gap in the UK. </p>
<p>Charity AgeUK says that TV is the main source of company for more than a million elderly Brits. <a href="https://campaigns.ageuk.org.uk/page/34266/petition/1?ea.tracking.id=1unr39mb">A petition it is running</a> has attracted over half a million signatures protesting the move. The charity does argue that the government <a href="https://www.ageuk.org.uk/our-impact/campaigning/save-free-tv-for-older-people/">should</a> “take back responsibility for funding free TV licenses for everyone over 75”, showing sensitivity to the very difficult situation in which the BBC has been placed.</p>
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<img alt="" src="https://images.theconversation.com/files/280479/original/file-20190620-149806-14yjy09.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/280479/original/file-20190620-149806-14yjy09.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/280479/original/file-20190620-149806-14yjy09.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/280479/original/file-20190620-149806-14yjy09.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/280479/original/file-20190620-149806-14yjy09.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/280479/original/file-20190620-149806-14yjy09.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/280479/original/file-20190620-149806-14yjy09.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">AgeUK says that TV is the main source of company for more than a million elderly Brits.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/elderly-man-watching-tv-lunch-600277274?studio=1">Shutterstock</a></span>
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</figure>
<p>But perhaps there is an underlying public policy issue that needs to be addressed. Retirees have done not too badly in recent years as a consequence of the so-called <a href="https://www.theguardian.com/money/2017/apr/27/pensions-triple-lock-questions-answered">triple lock</a> on the basic state pension, under which the benefit rises by the highest of 2.5%, average earnings growth or the rate of inflation. They also qualify for free bus travel, discounted cinema and theatre tickets plus other benefits. Should Brown ever have introduced free licences in the first place, other than perhaps for people in receipt of pension credit?</p>
<p>There is also a potential irony in this situation. If the BBC is compelled to stick with what it has proposed, an unintended consequence may well be that the large number of pensioners entitled to, but currently not claiming, pension credit, will now do so. A million UK households do not take up the benefit. If they did, the bill could hit <a href="https://www.pensionspolicyinstitute.org.uk/research/pension-facts/table-11/12">£3 billion annually</a> – rather more than the sum the treasury is saving by offloading the responsibility for over 75s’ licences on the BBC.</p><img src="https://counter.theconversation.com/content/119116/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>David Hutchison does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>When the government shunted its responsibility on to the BBC, it turned the national broadcaster into a welfare agency – now it can’t afford it.David Hutchison, Honorary Professor in Media Policy, Glasgow Caledonian UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1089342018-12-20T10:42:49Z2018-12-20T10:42:49ZCould George Osborne have helped Britain avoid a no-deal Brexit?<p>It’s nearly two and a half years since the moment which will, I am increasingly certain, be seen as a key turning point in British political history. Forget Brexit. I am talking, of course about Theresa May’s decision to sack George Osborne as chancellor of the exchequer on July 13, 2016. This moment was only conceivable because of that other moment, three weeks earlier, but it has shaped quite profoundly the political implications of the vote to leave the European Union.</p>
<p>I teach a course on economic policy-making, and my students will testify to the fact that I am mildly obsessed with the former chancellor. Barely a lecture goes by without me mentioning his enormous influence on the recent development of British economic policy, during a seismically significant period for the economy.</p>
<p>Let us be clear: Osborne’s economic stewardship was <a href="https://www.theguardian.com/commentisfree/2018/dec/14/nine-jobs-george-poverty-british-workers-failing-wages">ruinous</a>. Yet he is substantially better at politics than he ever was at policy. May’s decision to sack Osborne also had little to do with his record as chancellor, or indeed his opposition to Brexit. He was replaced by Phillip Hammond, who is as committed as Osborne to both austerity and EU membership.</p>
<h2>Osborne’s Brexit</h2>
<p>What Britain lost when Osborne was sacked was a focal point, within government, for soft Brexit. Hammond lacks the political skills, or alliances, to play this role. Osborne was never really loved by Conservative Party members – but he was respected. Had David Cameron decided against holding the EU referendum, as Osborne <a href="https://www.ft.com/content/e4267e06-ea33-11e7-bd17-521324c81e23">advised</a>, then Osborne would have been the only serious candidate to succeed him as leader.</p>
<p>Osborne’s vision for the future of the British economy is, however, largely the same as that of the leading Brexiters. He was keen to recast the UK-EU relationship as an economic one. As Chancellor, he pursued “Global Britain” through the internationalisation of the City, and saw the EU’s new zeal for bilateral trade deals, enforcing deregulation, as consistent with, and indeed central to, his agenda.</p>
<p>Osborne’s understanding of the chaos that Brexit would cause explains his support for Remain, but as May’s chancellor, he would undoubtedly have seized the opportunity to push for a firm decoupling of the UK from the eurozone’s political integration, while situating Britain as the leading member of an emerging outer ring of the European single market.</p>
<p>This perspective has been thoroughly marginalised within the Conservative Party since 2016. But many of the party’s 2010 and 2015 intake of MPs – remainers and leavers alike – owe their careers to Osborne. It’s not difficult to imagine Osborne acting as a vital conduit between the prime minister and the parliamentary party.</p>
<p>Brexiters such as Boris Johnson know as well as anyone that leaving the EU will do little to advance the <a href="https://theconversation.com/why-brexit-is-really-about-competing-visions-of-capitalism-100274">ideological agenda</a> he shares with Osborne. He chose to lead the Leave campaign purely for political expediency, because rebranding himself as an authentic eurosceptic was his only hope of beating Osborne to the leadership or, more likely, once the referendum had been lost, securing a top job in a future Osborne cabinet.</p>
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<img alt="" src="https://images.theconversation.com/files/250944/original/file-20181217-185255-obbbzj.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/250944/original/file-20181217-185255-obbbzj.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=600&fit=crop&dpr=1 600w, https://images.theconversation.com/files/250944/original/file-20181217-185255-obbbzj.JPG?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=600&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/250944/original/file-20181217-185255-obbbzj.JPG?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=600&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/250944/original/file-20181217-185255-obbbzj.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=754&fit=crop&dpr=1 754w, https://images.theconversation.com/files/250944/original/file-20181217-185255-obbbzj.JPG?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=754&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/250944/original/file-20181217-185255-obbbzj.JPG?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=754&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Well, Osborne the construction firm does, at least.</span>
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</figure>
<p>Johnson has created a beast he lacks the werewithal to control. By leading the Leave campaign, he lent euroscepticism a veneer of centrist, cosmopolitan respectability. But without a coherent plan for soft Brexit emerging from the Conservative ranks, Johnson and co. have been increasingly caught between the rock of Theresa May’s vacuous vision and doomed leadership, and the hard place of Jacob Rees-Mogg’s jingoistic and economically illiterate ultra-Brexit.</p>
<h2>The genesis of ‘no deal’</h2>
<p>And thus we arrive at the absurdity of a no-deal Brexit. It has quickly become a political cliché, but it is worth restating that nobody voted for “no deal”. What the Leave campaign offered was a very comprehensive free trade deal as an alternative to EU membership. It was essentially an accelerated version of the path Britain was on anyway, as long as it remained outside the eurozone.</p>
<p>No deal was a fringe agenda, peddled only by marginal figures such as John Redwood. It only really entered the lexicon of mainstream politics after May’s Lancaster House <a href="https://www.gov.uk/government/speeches/the-governments-negotiating-objectives-for-exiting-the-eu-pm-speech">speech</a> in early 2017, in which she argued that “no deal is better than a bad deal”. How quickly we have forgotten what she was actually talking about. The “no deal” of the speech was referring to the prospect of a future trade arrangement – not the prospect of leaving the EU without a withdrawal agreement. The speech was a misguided and futile attempt to encourage the EU to negotiate both deals at the same time.</p>
<p>It was quickly consigned to irrelevance, as the EU understandably pointed out that unless Britain agreed an orderly withdrawal from the union, there could be no prospect of agreeing a new trade relationship. The EU cannot negotiate a trade deal with a country that is still a member of the bloc.</p>
<p>An orderly withdrawal meant, above all, finding a way to prevent Brexit wrecking the Irish economy, and jeopardising the Northern Ireland peace process – hence the need for an insurance policy (or “backstop”) should the trade deal take longer than two years to agree. Given that the Brexiters have frequently claimed that a new UK-EU trade agreement would be “<a href="https://www.bbc.co.uk/news/av/uk-40667879/eu-trade-deal-easiest-in-human-history">one of the easiest in human history</a>”, their indignation over the backstop is either senseless or duplicitous.</p>
<h2>The lesser evil</h2>
<p>In the absence of a genuine leader, coupled with a failure to communicate the difference between the withdrawal process and a subsequent trade deal, May has been cast as the chief advocate of soft Brexit, and vilified as a result. Yet her <a href="https://theconversation.com/theresa-mays-deal-is-almost-exactly-the-brexit-the-uk-voted-for-107040">opposition to free movement of labour</a> makes her vision for life outside the EU a lot “harder” than anything most of her Brexiter critics, who have few concerns about immigration, would have advocated.</p>
<p>Crashing out of the EU may be unthinkable, but that does not mean it will not happen. Osborne deserves his political wilderness, since his policies did so much to <a href="https://theconversation.com/how-austerity-took-britain-to-brexit-61761">cause the divisions</a> which produced the Brexit vote. His soft Brexit would, over the long term, probably have been just as destructive. But set against the avoidable tragedy of no deal, it might have been the lesser of two evils.</p><img src="https://counter.theconversation.com/content/108934/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Craig Berry is a member of the Labour Party</span></em></p>The former Chancellor was no economist, but he was better at politics than Theresa May.Craig Berry, Reader in Political Economy, Manchester Metropolitan UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1002742018-07-26T11:57:16Z2018-07-26T11:57:16ZWhy Brexit is really about competing visions of capitalism<p>Since the resignation of Boris Johnson and David Davis, ostensibly in response to Theresa May’s <a href="https://www.theguardian.com/politics/2018/jul/06/what-the-cabinet-has-agreed-at-chequers-brexit-meeting">Chequers plan</a> for the next phase of Brexit negotiations, many have quite understandably wondered: where’s your alternative, then?</p>
<p>This is a fair question, but the wrong question. May’s lack of a parliamentary majority makes little difference to her ability to shape the focus and resources of the civil service across all departments. It has taken the UK government this long to come up with one half-baked plan, so the prospect of May allowing officials to spend time on an alternative is almost nonsensical.</p>
<p>It is also the wrong question because the Brexiters do in fact have a plan, albeit one which is literally unspeakable in British politics. It is a plan for a different kind of capitalism.</p>
<h2>Osbornomics</h2>
<p>The UK is not a country comfortable discussing big questions on economic order. The stock-in-trade of critical political economists, like me, is the dissection of things like <a href="https://cup.columbia.edu/book/the-market/9781911116615">“the market”</a>, <a href="http://speri.dept.shef.ac.uk/2017/01/11/brexit-and-free-trade-fallacies-part-one/">“free trade”</a> and <a href="https://www.palgrave.com/gb/book/9781137590091">“public finances”</a>: abstract economic concepts that bear little relation to how our capitalist economy actually functions. It’s easy to forget that outside our ivory towers, this stuff is implicitly, and entirely uncritically, imbibed with the same solidity with which we might discuss natural systems like the weather or cellular reproduction.</p>
<p>Try to imagine David Dimbleby fielding a query on Question Time about how the panel feels about <a href="https://www.palgrave.com/gb/book/9781137360502">the failure of Anglo-liberal capitalism</a>. Exactly.</p>
<p>The Brexiter plan that dare not speak its name is actually the completion and internationalisation of <a href="http://speri.dept.shef.ac.uk/2015/03/31/osbornomics-blowing-bubbles/">“Osbornomics”</a>, although former chancellor George Osborne campaigned for Remain. While he was in government, Osborne’s vision was for a low-tax, low-welfare, lightly-regulated and highly-globalised economy. He labelled it <a href="https://www.palgrave.com/gb/book/9781137590091">“austerity”</a>, at a stroke both validating neoliberal notions of individual self-reliance, while diverting all public scrutiny to rather marginal questions around deficit reduction.</p>
<p>Leaving the European Union is not necessary to this project, but it does accelerate it. Osborne was a Remainer because he foresaw that it would be difficult for any incumbent government to survive the political and economic shock of withdrawal.</p>
<p>But he also recognised that the EU was itself already moving in this direction. That much is clear from its ever <a href="http://speri.dept.shef.ac.uk/2017/12/06/can-the-eurozone-resolve-its-macroeconomic-imbalances-before-the-next-crisis/">stricter macroeconomic rules</a>, which will enforce fiscal conservatism, and, above all, its zest for new trade deals such as the <a href="https://www.wiley.com/en-gb/TTIP%3A+The+Truth+about+the+Transatlantic+Trade+and+Investment+Partnership-p-9781509501021">Transatlantic Trade and Investment Partnership</a>, and similar agreements with Canada and Japan. The latter represent a race to the regulatory bottom across a large number of industries. The notion that the EU is a trading “bloc” with a protectionist orientation towards non-members, peddled consistently by the Brexiters, had already been largely consigned to history.</p>
<h2>Seizing the moment</h2>
<p>The EU is positioning itself in the emerging capitalist order, dominated by American tech companies, the Chinese state and, to a lesser extent, the Indian middle class. In government, Osborne sought to position the UK as the financial centre of this worldwide economy (albeit with low-value services providing mass employment).</p>
<p>Membership of the EU, but not the eurozone, was central to this strategy. But this awkward status <a href="http://journals.sagepub.com/doi/pdf/10.1177/1369148117710431">could not have persisted indefinitely</a>. And, ironically, a <a href="http://speri.dept.shef.ac.uk/2017/12/19/the-next-brexit/">leaner and meaner post-Brexit EU</a> will be liberated to pursue its own anglicised foreign economic policy (including <a href="http://speri.dept.shef.ac.uk/2018/06/26/frankfurt-and-paris-as-financial-centres-after-brexit/">challenging the City of London’s role</a>). The only real difference between Osborne, when he was chancellor, and the Brexiters is that the former favoured a gradual detachment from Europe, as EU-wide single market rules softened in favour of fiscal disciplining applicable only within the eurozone, while the latter seek a quicker break.</p>
<p>Ironically, of course, it was only the deleterious consequences of Osborne’s austerity that <a href="https://theconversation.com/how-austerity-took-britain-to-brexit-61761">made the Brexit vote possible</a> in the first place, as elite euroscepticism combined perversely with popular discontent on June 23, 2016. </p>
<p>Ultimately, the Brexiters are merely taking Osbornomics to its logical conclusion. Johnson is its mouthpiece but the rightful heir is new home secretary, Sajid Javid, an Osborne acolyte, and a <a href="https://www.ft.com/content/8b803eb0-dc73-11e5-a72f-1e7744c66818">very reluctant Remainer</a> who now <a href="https://www.newstatesman.com/politics/uk/2018/05/how-sajid-javid-helped-brexiteers-scupper-theresa-may-s-eu-customs-plan">embraces hard Brexit</a>. Their philosophy is one of Schumpeterian capitalism, underpinned by the forces of <a href="https://en.wikipedia.org/wiki/Capitalism,_Socialism_and_Democracy">“creative destruction”</a>. You want them to come up with a plan for leaving the EU? That’s the destruction bit: leaving is the whole plan. </p>
<p>But do not expect the Brexiters to instead articulate the creative side of things (that is, their strategy for the UK’s post-Brexit economy) any time soon. That would involve an impossible degree of honesty about the kind of capitalism they envisage. It would mean going beyond empty cant about <a href="https://www.telegraph.co.uk/politics/2018/07/15/rest-world-believes-britain-time-did/">“Global Britain”</a>, based on 19th-century ideas about trade, and actually outlining what will change about the British economy. </p>
<p>The language needed to do that has long been suppressed in British political discourse. But we should be in no doubt that the trade deals which the Brexiters crave would be designed to cement their vision of how the UK can serve the emerging global order, with a single, globalised city – London – functioning as a financial centre. The rest of the economy would be subject to the whims of the business strategies of global firms, enticed to the UK by promises of low tax and light regulation.</p>
<h2>Soft Brexit</h2>
<p>Where can we position May in relation to this agenda? Why is she so much keener on (but not necessarily capable of) concocting a plan for EU withdrawal? May has a quite different vision of British capitalism. It’s far more continental in orientation, centred around the revival of industrial policy and the development of new advanced manufacturing industries.</p>
<p>In other political circumstances, there would be the makings of a broad and durable coalition around this essentially <a href="https://www.economist.com/britain/2010/01/14/white-heat-redux">Brownite agenda</a>, embracing one-nation conservatives, the soft left, Vince Cable’s Liberal Democrats and large parts of the Corbynite left. Given the integration of European production networks, the strategy depends absolutely on <a href="https://theconversation.com/timid-industrial-strategy-means-britain-could-still-end-up-with-a-soft-brexit-71585">securing a soft (or pseudo) Brexit</a>. Hence May’s willingness to negotiate, and the emphasis on goods trade at the expense of services in the Chequers plan.</p>
<p>Paradoxically, while the supersonic Osbornomics of Johnson et al depends on maintaining high levels of immigration to expand the low-paid workforce as the UK-born population ages, May’s industrial strategy-based soft Brexit is more amenable to stricter border controls. It perhaps even depends economically on a less liberal immigration regime so that firms are compelled to upskill their existing workforce. Even <a href="https://www.newstatesman.com/politics/uk/2017/01/why-its-time-end-eu-free-movement">Cable</a> and <a href="https://www.instituteforgovernment.org.uk/blog/brexit-speech-jeremy-corbyn-customs-union">Jeremy Corbyn</a> have counter-intuitively (and some would say disgracefully) accommodated the end of free movement within their Brexit policies.</p>
<p>However, even if such a coalition could be constructed, its vision would be no less illusory or <a href="https://mainlymacro.blogspot.com/2018/01/brexit-is-fantastic-project.html">fantastical</a> than that of the Brexiters. The moment has passed. There is little the UK can realistically do now to reposition its economy at the forefront of the so-called <a href="https://www.newstatesman.com/politics/business-and-finance/2018/05/britain-s-problem-not-too-many-robots-it-s-too-few">fourth industrial revolution</a>. May’s vision is more coherent but, sadly, the Brexiters’ vision, while destructive, is more credible.</p>
<p>We will still end up, for now, with a soft Brexit, of sorts. Big business is beginning to flex its muscles – the short-term interests of capitalists are not synonymous with the long-term trajectory of capitalism. Even mavericks like Johnson will be brought to heel. Johnson of course expected to lose the 2016 referendum, allowing him to succeed David Cameron as Conservative leader while sticking closely to Osborne’s long game when he was chancellor. Yet here we are. Even the best laid plans cannot control for capitalism’s capacity for chaos.</p><img src="https://counter.theconversation.com/content/100274/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Craig Berry is a member of the Labour Party.</span></em></p>There’s a good reason why Brexiters aren’t coming up with an alternative to Theresa May’s Chequers plan.Craig Berry, Reader in Political Economy, Manchester Metropolitan UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/782222017-05-25T12:40:48Z2017-05-25T12:40:48ZHow George Osborne is still making his political voice heard<p>The appointment of the former Conservative chancellor as the editor of a major British newspaper was <a href="http://www.dailymail.co.uk/news/article-4323582/George-Osborne-appointed-EDITOR-Evening-Standard.html">big news</a>. And even after George Osborne decided to give up his job as an MP, his new role at the helm of London’s Evening Standard was still controversial. As the latest politician to land a job through the <a href="https://theconversation.com/george-osborne-at-the-evening-standard-the-latest-through-a-long-revolving-door-74783">revolving door</a> of British elite employment, there were questions over how he would direct the paper’s political coverage. </p>
<p>With the announcement of the 2017 general election just days after his appointment, this interest only increased. Would Osborne’s debut election campaign – an editorial baptism of fire – show him up as a true blue Tory conformist?</p>
<p>Surprisingly, his paper’s electoral coverage so far has been anything but. The editorial on his first day in charge immediately criticised Theresa May and the Conservative’s approach to Brexit as <a href="https://www.theguardian.com/media/2017/may/02/george-osborne-first-evening-standard-edition-shows-resolve-to-take-on-may">offering nothing more than a slogan</a>. The whole idea of Brexit, it added, was “an historic mistake”. It did not pay Labour any favours either, saying that the party’s “desperately weak” leadership was doing nothing for democracy. It was a debut which made it difficult to argue that Osborne was exhibiting any pro-party bias.</p>
<p>And this punchy start was not an exception. A glance across Osborne’s subsequent pages as Standard editor show that his paper has no problem taking issue with significant Conservative election moves. One leading <a href="http://www.standard.co.uk/comment/comment/evening-standard-comment-it-s-time-to-scrap-the-tory-migration-cap-a3541346.html">comment piece</a> heavily criticised the prime ministers’s intentions to impose a migration cap. </p>
<p>Labelling it simply a “bad policy”, the Standard urged May to abandon her position due to its economic and ideological lack of sense. Which sections of the migrant workforce, the paper wondered, would be forced to leave to hit the supposed immigration targets? How could we call ourselves a “global Britain’” if EU students are turned away? Far from conforming, Osborne was blatantly ruffling Tory feathers.</p>
<p>Those feathers were ruffled further with the paper’s recent <a href="http://www.standard.co.uk/comment/comment/evening-standard-comment-uturn-on-social-care-is-neither-strong-nor-stable-a3545186.html">response</a> to May’s reversal of the proposed “dementia tax” outlined in her party’s manifesto. Deriding a “weekend of wobbles”, the U-turn was proclaimed “neither strong nor stable” in the headline, alongside accusations that the party was having to already flounder and rewrite its manifesto, with several MPs shown up as struggling under press questioning. It is hard to counter such editorial content with ideas of a complicit party stooge being in charge. </p>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"866646406555193345"}"></div></p>
<p>Historically however, the Evening Standard is a Conservative-leaning paper, including right up to the <a href="http://www.standard.co.uk/news/politics/vote-for-london-ahead-of-knife-edge-election-the-standard-urges-readers-to-think-of-whats-best-for-10225590.html">last general election</a>. It is not surprising then, that amid this sometimes fiery critique of the Tories, Labour is also given a rough ride. While praising their manifesto’s honesty regarding <a href="http://www.standard.co.uk/comment/comment/evening-standard-comment-at-least-labour-is-being-honest-about-taxation-a3540346.html">tax increases</a>, it dismisses them as potential evidence of Britain being “an enemy of aspiration and opportunity” and that they would, if implemented, ultimately leave millions of people poorer. </p>
<p>Even less complimentary is the paper’s take on the overall Labour manifesto, which it negatively labels “<a href="http://www.standard.co.uk/comment/comment/evening-standard-comment-this-socialist-manifesto-leaves-labour-no-excuse-a3536381.html">socialist</a>” and “likely to produce a rise in poverty, inequality and insecurity”. It also almost sadistically welcomes the likelihood of Labour’s defeat, saying that a loss for hard-left politics at the polls will bring on a welcome move to the centre by Labour, akin to the <a href="https://theconversation.com/from-wannabe-to-president-how-emmanuel-macron-beat-marine-le-pen-to-win-the-french-election-77302">rise of Emmanuel Macron</a> in France.</p>
<p>The end result of this glance across Osborne’s early days at the helm is that, in the eyes of those on both the left and right, he is doing something wrong. Some see his attacks against May and the Conservatives not as editorial duty, but a chance at personal revenge against a prime minister who both ousted him from the cabinet, and has promised a positive approach to the Brexit he was so against. </p>
<p>Others, typically more to the left of the political spectrum, cannot see past Osborne’s political past and the potential of collusion between him and his former party. For all his stances against May, he is still seen by some as a party loyalist, and the paper’s critiques of Labour so far – and the likelihood this traditional Tory paper will side with the government come polling day – will not change their minds.</p>
<p>So far then, Osborne as editor has struck a middle ground between being a party conformist and a vocal press critic. His approach has been reviled by people on both sides. He is critical of both leading parties, and is yet accused of bias by one side towards the other.</p>
<p>He is annoying, questioning and provoking everyone.</p>
<p>In short, he is behaving like something many people thought he couldn’t properly be, something I myself doubted he could be. He is behaving, despite a lack of experience, like a decent journalist.</p><img src="https://counter.theconversation.com/content/78222/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Christopher Shoop-Worrall does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The former chancellor is walking a path between critic and conformist.Christopher Shoop-Worrall, PhD Researcher in Journalism History, University of SheffieldLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/747962017-03-17T17:45:19Z2017-03-17T17:45:19ZGeorge Osborne, the Evening Standard and the Conservative media establishment<p>The appointment of George Osborne, a Conservative MP and former chancellor of the exchequer, as editor of the Evening Standard was, to put it mildly, a surprise to many. But the move only makes more explicit the newspaper’s close ties to the <a href="http://www.mediareform.org.uk/blog/bias-objectivity-evening-standard-not-neutral-mayoral-race-editor-claimed">Conservative Party</a></p>
<p>I carried out research on the Standard when it was edited by Sarah Sands, who had vowed to be “<a href="https://www.theguardian.com/media/2016/apr/03/sarah-sands-evening-standard-evgeny-lebedev">scrupulous</a>” in providing equal coverage in the run-up to the 2015 mayoral election. I found that the Standard gave Conservative Zac Goldsmith more favourable coverage than his opponent, Labour candidate Sadiq Khan. The same dog-whistle politics that were coming out of Goldsmith’s campaign could also been seen on the pages of the London <a href="http://www.standard.co.uk/news/london/exposed-sadiq-khans-family-links-to-extremist-organisation-a3179066.html">daily.</a></p>
<p>The fact that the Evening Standard has a monopoly position in left-leaning London, where it is distributed, free, on London transport, should alone be reason to steer clear of such nakedly political decision-making as appointing a sitting Tory MP as editor. But its owner, Evgeny Lebedev has form. The Independent newspaper, admittedly in its death throes at the time, came out for the Conservatives at the 2015 election, a move that directly contradicted both its <a href="http://www.politics.co.uk/blogs/2015/05/05/why-have-the-independent-endorsed-the-coalition">editorial line</a> and the expectations of its young Liberal readership.</p>
<p>According to Adam Bienkov, deputy editor of <a href="http://www.politics.co.uk/information/about-politics-co-uk">politics.co.uk</a>, that was a decision “<a href="http://www.politics.co.uk/blogs/2015/05/05/why-have-the-independent-endorsed-the-coalition">dictated by Lebedev</a>” who, he maintains, is very close to the Conservative foreign secretary, Boris Johnson (then Mayor of London).</p>
<p>Now Osborne, a beneficiary of the Conservative <a href="http://www.tandfonline.com/doi/full/10.1080/1461670X.2016.1171163">bias</a> in the British news media in print and online, will be at the helm of a Lebedev newspaper that is the only provider of London-wide news in print.</p>
<p>With Osborne running his own newspaper will we see the Evening Standard focusing on the continuing row within the Conservatives about the handling of Brexit? How will the paper, under his stewardship, report efforts to correct the impact of damaging housing policies that have seen the disappearance of genuinely affordable housing in the capital? Those are policies which he not only backed but, in some cases, initiated.</p>
<p>Khan was quick to tweet his congratulations, despite his treatment by the paper in the past. It doesn’t do for the Mayor of London to step out of line. He knows he is totally at the mercy of the London news ecosystem – which the Evening Standard dominates – for any reporting of his work at County Hall.</p>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"842699604596576256"}"></div></p>
<p>The UK already has a Conservative-dominated news media so it could be said that Osborne’s appointment will make little difference. But it goes hand in hand with two other changes.</p>
<p>The first is the slightly more subtle politicisation of the BBC. The post that Osborne takes up, only became free because Sands, who is widely seen as <a href="https://www.ft.com/content/f5fcbf5c-e6e5-11e6-893c-082c54a7f539">supporting the Conservatives</a>, has been recruited to run the BBC’s flagship radio show, the Today Programme. The BBC’s head of news, James Harding, is an ex-editor of the Conservative-supporting newspaper the Times (which is part of the Murdoch empire). He is also a close personal friend of George Osborne. </p>
<h2>Music to Murdoch’s ears</h2>
<p>While all this could be mere coincidence, there is a third issue of concern. Twentieth Century Fox, owned by Rupert Murdoch, is in the process of trying to take over Sky TV. This is <a href="http://www.mediareform.org.uk/author/infomediareform-org-uk">controversial</a> because of the dominant position, online, in print and on social media, of Murdoch-owned (and Conservative supporting) news outlets: the Sun and the Times. The takeover is being referred to the Competition Commissioner.</p>
<p>Sky is one of the only three organisations currently producing TV news in the UK. Currently, it lags well behind ITN and the BBC in terms of audience but a merger could change all that. Cross-platform promotion across The Times and The Sun could bring in considerably more viewers.</p>
<p>Sky, like all broadcasters, is required to be balanced in its news coverage, thanks to regulations. However that was also the situation in the US, until a relentless campaign by right-wing Republicans to repeal the “<a href="https://global.oup.com/academic/product/echo-chamber-9780195398601?cc=gb&lang=en&">Fairness Directive</a>” in the late 1980s. Since then, American radio and TV has become more and more polarised. Fox TV (owned by Murdoch) cheerleads for the Republicans and dismisses all other mainstream American media as “liberal” and untrustworthy. </p>
<p>If Sky becomes a wholly owned part of Twentieth Century Fox and the BBC is dominated by Conservative supporters and ex-employees of Murdoch, where will any opposition to further changes to the laws governing plurality come from?</p>
<p>That might sound like conspiracy theory but, had those who watched the rise of the <a href="https://www.asc.upenn.edu/news-events/publications/kathleen-hall-jamieson-joseph-n-cappella-echo-chamber-rush-limbaugh-and">conservative media establishment</a> in the US predicted that it would lead to the presidency of Donald Trump, they would have been dismissed as conspiracy theorists too.</p><img src="https://counter.theconversation.com/content/74796/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Angela Phillips is a member of the Media Reform Coalition and the Labour Party.</span></em></p>The former chancellor has no experience of journalism, but that hasn’t prevented him from taking over London’s most important newspaper.Angela Phillips, Professor, Goldsmiths, University of LondonLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/747832017-03-17T16:27:02Z2017-03-17T16:27:02ZGeorge Osborne at the Evening Standard: the latest through a long-revolving door<p>In <a href="https://inews.co.uk/essentials/culture/media/email-sent-evening-standard-staff-george-osborne-appointed-editor-full/">announcing</a> the former chancellor, George Osborne, as its new editor, the London Evening Standard continues a strong tradition of political elites having easy access to employment within the media elite. They sometimes nab these jobs after their political careers have ended and, sometimes, they just do them on the side.</p>
<p>In Osborne’s case, it’s hard to believe that his <a href="https://www.theguardian.com/politics/2011/nov/28/real-george-osborne">unremarkable year</a> as an aspiring journalist in the early 1990s was what attracted the Standard. He, like others, has been given a job many professional journalists dream of, not because of his experience in the field but because of his career in politics.</p>
<p>Others who have recently trodden the path between political and media elite can at least be said to have some professional merit to warrant the roles they received. Most notably, former education minister and sitting MP Michael Gove has worked for and is once again in the employment of The Times. Boris Johnson did a stint as Spectator editor, too, before becoming foreign secretary. Johnson also notably served as the Brussels correspondent for The Telegraph, a stint which likely prepared him well for his later frontline role campaigning for Brexit.</p>
<p>Osborne however, in terms of professional merit for such a prestigious media job, has more in common with LBC’s Nigel Farage than his Conservative Party colleagues. Farage – famously a commodities trader before turning his hand to politics – cannot be rationally explained as having deserved influential job in broadcasting without considering the appeal of his political reputation. Yet he finds himself at the helm of a <a href="http://www.lbc.co.uk/radio/presenters/nigel-farage/">hour-long nightly radio show</a> on LBC.</p>
<h2>A fine line</h2>
<p>So Osborne is by no means the first (or likely the last) member of the political elite to slide effortlessly across the line into the media elite. Indeed, even a cursory glance across British history sees that line being frequently crossed. Politicians used to have much more access to media than isolated jobs as columnists or editors. As the historian JA Thomas once <a href="https://books.google.co.uk/books/about/The_House_of_Commons_1906_1911.html?id=bDJAjwEACAAJ&redir_esc=y">noted</a>, the newly elected parliament in 1906 was home to dozens of MPs who also owned their own newspapers.</p>
<p>Just over a decade later, David Lloyd George – Britain’s last Liberal prime-minister – would actually buy a daily newspaper, <a href="http://www.jstor.org/stable/175660?seq=1#fndtn-page_scan_tab_contents">the Chronicle</a>, to try to ensure a favourable press outlet for his politics. Going further back, the British press of the early 19th century was only classed as legal if it had government approval in the form of paying certain taxes and stamp duties. Anyone wishing to work on or launch a newspaper had to quite literally get the government stamp of approval.</p>
<figure class="align-left ">
<img alt="" src="https://images.theconversation.com/files/161346/original/image-20170317-6094-49xezn.png?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/161346/original/image-20170317-6094-49xezn.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=450&fit=crop&dpr=1 600w, https://images.theconversation.com/files/161346/original/image-20170317-6094-49xezn.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=450&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/161346/original/image-20170317-6094-49xezn.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=450&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/161346/original/image-20170317-6094-49xezn.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=566&fit=crop&dpr=1 754w, https://images.theconversation.com/files/161346/original/image-20170317-6094-49xezn.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=566&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/161346/original/image-20170317-6094-49xezn.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=566&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Beaverbrook and Churchill.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/ninian_reid/27588373763/in/photolist-5p4cLW-BYX2Q-5p4c3L-5sD38b-qGaMuc-c8Wvj7-HGKfi-8Hjr2Z-HGEtG-4Z1227-q5aM72-6At6rW-q5aLNM-BA9sP-6Ab9vj-c6bseJ-6LcgHS-2otbg-AN6q6d-Cb6Qco-PkR5qN-9A3sg2-HGKht-5FnU3-fhFkmr-HGELm-Db6X5-Db6TY-fh">Ninian Reid</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span>
</figcaption>
</figure>
<p>Into more recent history, it is often forgotten that a newspaper owner was part of Winston Churchill’s wartime government. First as minister of aircraft production and later as lord privy seal, Baron Beaverbrook (<a href="http://www.thecanadianencyclopedia.com/en/article/max-aitken-lord-beaverbrook/">then owner of the Daily Express</a>) served alongside the likes of Clement Attlee to help Britain win World War II. For everyone who bemoans the political influence of Rupert Murdoch, at least they could be thankful he does not have a seat in cabinet.</p>
<h2>Will it backfire?</h2>
<p>In the wider historical context of political actors landing powerful roles in the media, Osborne’s appointment to the Standard sits uncomfortably in the middle. Thankfully, his hiring does not mark a return to a time when politicians were often to be found buying, selling and controlling media outlets for personal political gain. However, his <a href="https://en.wikipedia.org/wiki/George_Osborne">glaring lack of journalistic training</a> and experience is a heavy indication that, like Farage, he has been given this job based solely on past political rank and reputation. </p>
<p>Besides the obviously dour message this may send to aspiring journalists – all those shorthand exams and hard freelancing hours can’t match up to having experience and chums in Whitehall – Osborne’s appointment may prove to be a double-edged sword for the Standard.</p>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"842713111484383233"}"></div></p>
<p>The justifications for hiring him – because he is such a big personality – may make sense to some, and he may well prove to be a fine editor of one of Britain’s <a href="https://www.abc.org.uk/product/5341">most-read print publications</a>. Indeed, he may well have delivered the best job interview performance of all time, and dissuaded any doubts over his lack of experience in journalism. But it sends out a powerful public message that a newspaper (one that often claims to represent all Londoners) would rather have a high-profile politician than an experienced journalist as its next chief.</p>
<p>This may not be a return to an age of direct political patronage of the British press, but come the next major political event, it will be hard to ignore Osborne’s long shadow over his new newspaper’s political content.</p><img src="https://counter.theconversation.com/content/74783/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Christopher Shoop-Worrall has received funding from the Royal Historical Society. </span></em></p>The former Chancellor is by no means the first to walk the line between media and political elite.Christopher Shoop-Worrall, PhD Researcher in Journalism History, University of SheffieldLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/653572016-09-13T11:16:10Z2016-09-13T11:16:10ZWhat the David Cameron resignation tells us about Theresa May’s plans<p>On a day when the <a href="http://www.theguardian.com/politics/blog/live/2016/sep/12/tuc-leader-says-labour-must-start-focusing-on-what-voters-want-politics-live?page=with:block-57d69113e4b013613fffc6f7#block-57d69113e4b013613fffc6f7">latest poll</a> gave the Conservative Party 41% and a 13 percentage point lead, over the Labour Party, the man who was once the future chose to consign himself to the political and parliamentary past.</p>
<p>Announcing his resignation from parliament, David Cameron <a href="http://www.independent.co.uk/news/uk/politics/david-cameron-resigns-resignation-statement-in-full-mp-witney-former-prime-minister-a7238671.html">claimed</a> that “with modern politics, with the circumstances of my resignation, it isn’t really possible to be a proper backbench MP as a former prime minister”.</p>
<p>Previously, Cameron had spoken of the “enormous privilege” of serving his constituents. He indicated his intention not only to <a href="http://www.theguardian.com/politics/2016/mar/10/david-cameron-intends-stand-re-election-mp-in-2020">continue as an MP</a>, but to seek re-election in 2020.</p>
<p>However, the operative words in Cameron’s statement were “the circumstances of my resignation”. Those circumstances were his humiliating defeat in the EU referendum. </p>
<p>Cameron’s presence on the backbenches at Westminster would have served as a constant reminder to his party, political opponents and, above all, himself of his responsibility for the political and economic turmoil unleashed by Brexit. He had to go.</p>
<p>Cameron <a href="http://www.independent.co.uk/news/uk/politics/david-cameron-resigns-resignation-statement-in-full-mp-witney-former-prime-minister-a7238671.html">claimed</a> he would have become “a big distraction and a big diversion” from the work of the current government had he remained in parliament. However, the timing of his resignation statement could not have been more distracting or diversionary. His announcement coincided with (and overshadowed) education secretary Justine Greening’s own statement to parliament on the new government’s plan to bring back grammar schools.</p>
<p>Cameron never hid his opposition to new grammar schools in England. In 2007 he identified this issue as a <a href="http://news.bbc.co.uk/1/hi/uk_politics/6679005.stm">key test</a> for the Conservatives. Did they want to be “an aspiring party of government” or “a right-wing debating society”? He argued that selective education was unpopular with parents because they didn’t want children “divided into successes and failures at 11”.</p>
<p>But the political and ideological distance between Cameron and May has already gone well beyond the issue of grammar schools. Indeed, one of the definitive characteristics of the May government during its early weeks in office has been the new prime minister’s determination to distance herself from the agenda of her predecessor at Number 10, and his closest political ally, George Osborne.</p>
<p>The former chancellor was the principal casualty of May’s immediate ministerial reshuffle but even before sacking him, she had already abandoned his target of reaching a fiscal surplus by 2020.</p>
<p>Add to that <a href="https://www.theguardian.com/business/2016/jul/28/hinkley-point-c-to-go-ahead-after-edf-board-approves-project">the backtracking</a> over the Hinkley Point C power station and the plan to impose elected mayors on English regions, as well as the refashioning of the Northern Powerhouse agenda into an industrial strategy to drive nationwide productivity, and the dismantling of Osborne’s <a href="http://www.ft.com/cms/s/0/c04690ae-58dd-11e6-9f70-badea1b336d4.html#axzz4JyNfMACZ">political legacy</a> is complete. RIP the “long-term economic plan”.</p>
<h2>A new vision</h2>
<p>At the launch of her campaign to become Conservative Party leader, May <a href="http://www.independent.co.uk/news/uk/politics/theresa-mays-tory-leadership-launch-statement-full-text-a7111026.html">spoke</a> of “a bold, new, positive vision … a vision of a country that works not for a privileged few but for every one of us”.</p>
<p>That theme of working for the many, and not the few has been the most frequent mantra of May’s speeches as prime minister. A politics founded on meritocracy and grammar schools is seeking to distance itself from the <a href="http://www.bbc.co.uk/news/uk-politics-17815769">Old Etonian sense of privilege</a> and entitlement associated with the “two arrogant posh boys”.</p>
<p>On the day she became leader, May <a href="http://press.conservatives.com/post/147947450370/we-can-make-britain-a-country-that-works-for">claimed</a> her vision for Britain constituted “a different kind of Conservatism” that “marks a break with the past”.</p>
<p>However, she may find it harder than she imagines to distance herself from her predecessor. Lest it be forgotten, May served as home secretary throughout the Cameron-Clegg coalition and the Cameron government. She may wish to engineer a break from the past, but she was an important part of it.</p>
<p>Previously, May had <a href="http://www.conservativehome.com/platform/2016/07/full-text-of-theresa-mays-speech-we-will-win-by-being-the-party-for-all.html">argued</a> that, to become the “party for all”, the Conservative Party should occupy the common ground. In deciding where that ground is, she could follow Nigel Lawson’s <a href="http://www.ft.com/cms/s/0/6cb84f70-6b7c-11e6-a0b1-d87a9fea034f.html#axzz4JyNfMACZ">advice</a> to seize Brexit as the opportunity “to make the UK the most dynamic and freest country in the whole of Europe: in a word, to finish the job that Margaret Thatcher started”.</p>
<p>But recent <a href="http://opinium.co.uk/wp-content/uploads/2016/09/Dead-Centre-British-politics4_lr.pdf">research</a> once again points to the fact that 45% of people locate themselves firmly on the centre ground of politics. Only 30% identify with the right-of-centre ground occupied by Thatcherism. </p>
<p>With a parliamentary majority of only 12 seats, and with both cabinet ministers and rebellious backbenchers already showing signs of fractiousness and impatience over Brexit delays, the the temptation must be to opt for more radical Thatcherite domestic reforms that would please the parliamentary party. But limiting party dissent in the short term may come at the price of broader electoral appeal to centre ground floating voters in 2020.</p>
<p>Whether May now chooses to occupy that right-of-centre common ground, or steers her government towards the centre, will be one of the defining choices of her premiership.</p><img src="https://counter.theconversation.com/content/65357/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Simon Lee does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The former PM appears to be distancing himself from the policies of the new government.Simon Lee, Senior Lecturer in Politics, University of HullLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/647682016-09-02T13:32:28Z2016-09-02T13:32:28ZHow to ditch corporation tax and grow government income at the same time<figure><img src="https://images.theconversation.com/files/136278/original/image-20160901-1061-1eey8jl.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Ta-dah!</span> <span class="attribution"><a class="source" href="http://www.shutterstock.com/pic-66896299/stock-photo-cute-dappled-rabbit-sitting-in-a-black-magicians-hat.html?src=qs85WiM528xGp22KAFwv8Q-1-14">Volkova</a></span></figcaption></figure><p>Another day, another tax headline. This week, <a href="http://www.bbc.co.uk/news/world-europe-37242357">it’s Apple</a>, which faces a €13 billion (£11bn) tax bill in Ireland from the EU. Everyone says there must be a better way to make business pay its way. I support boosting the tax take, too, though not by punishing companies. Earlier this year, I <a href="https://theconversation.com/corporation-tax-the-progressive-case-for-getting-rid-of-it-56452">argued</a> in The Conversation that it was time for progressives to think the unthinkable and get rid of corporation tax. </p>
<p>UK politicians remain to be convinced, alas. The All Party Parliamentary Group’s <a href="http://www.appgresponsibletax.org.uk/wp-content/uploads/2016/08/Sticking-Plaster-APPG-Responsible-Tax-Report.pdf">recent report</a> on the global tax system stated:</p>
<blockquote>
<p>Some experts have argued that we should stop trying to tax the profits of global companies. We disagree. Governments need a range of taxes to fund public services and corporate profits form one part of that range.</p>
</blockquote>
<p>They haven’t recognised that you could bring in much the same revenue for the state by shifting the burden to shareholders. How? By fully taxing company dividends – and reaping the tax proceeds of people selling UK shares that have risen because of companies becoming more profitable after being freed from corporation tax.</p>
<p>But here I want to propose another carrot: charge companies an annual fee to be registered in the UK. </p>
<h2>Ever-decreasing corporation tax</h2>
<p>Corporation tax <a href="https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/539194/Jun16_Receipts_NS_Bulletin_Final.pdf">brings in</a> around 6% (net of dividend allowance) of UK tax revenues. Former chancellor George Osborne <a href="http://www.bbc.co.uk/news/business-36699642">intended</a> in the wake of Brexit to cut UK rates from the current 20% to 15% of companies’ pre-tax profits. Philip Hammond, his replacement, has yet to announce a policy but <a href="http://www.dailymail.co.uk/news/article-3704195/Hammond-cut-corporation-VAT-tax-economy-stalls-Chancellor-raises-expectations-revealing-plans-reset-policy.html">has signalled</a> he may move in the same direction. </p>
<p>Coupled with further erosions to the corporate tax base due to internet trading and the relocation of intellectual property to more favourable tax regimes, the day is soon likely to arrive when the UK struggles to raise 4% of its tax revenues from corporation tax. What’s this in money terms? Say £20bn (<a href="https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/539194/Jun16_Receipts_NS_Bulletin_Final.pdf">compared to</a> £30bn, net of tax credits, in 2015-16).</p>
<p>So how much corporation tax would be raised on average from UK companies each year if tax revenues fell to £20bn? <a href="https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/545611/StatisticalReleaseIncorporatedCompaniesUKJune2016_V1.1.pdf">There are</a> 3.5m limited companies in the UK. But 2m are dormant, so only 1.5m are actively trading. This means that each company would be paying just over £13,000 each year to HMRC on average. </p>
<p>I don’t know the average cost of a company complying with corporation tax each year, but it won’t be far removed from £13,000 (much higher for multinationals, much lower for small companies). And while companies only pay taxes when they make profits, they must make tax returns either way. It’s also worth remembering that many companies are subject to investigations, make appeals and sometimes end up in court – more costs. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/136281/original/image-20160901-1036-trc8kf.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/136281/original/image-20160901-1036-trc8kf.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/136281/original/image-20160901-1036-trc8kf.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=480&fit=crop&dpr=1 600w, https://images.theconversation.com/files/136281/original/image-20160901-1036-trc8kf.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=480&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/136281/original/image-20160901-1036-trc8kf.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=480&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/136281/original/image-20160901-1036-trc8kf.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=603&fit=crop&dpr=1 754w, https://images.theconversation.com/files/136281/original/image-20160901-1036-trc8kf.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=603&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/136281/original/image-20160901-1036-trc8kf.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=603&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Profit-seeking missile.</span>
<span class="attribution"><a class="source" href="http://www.shutterstock.com/pic-202197343/stock-vector-businessman-running-away-from-rocket-tax.html?src=j3kNoH3ShB-AEWRsra4UMA-1-78">BoBaa22</a></span>
</figcaption>
</figure>
<h2>Plan B</h2>
<p>Now suppose we charged an annual fee for the privilege of being a UK company, using a fee scale based on company size. While companies would now be paying to be UK-registered, most would save more by not having to comply with corporation tax. </p>
<p>You could set the fee levels to bring in roughly what the government lost in corporation tax. In addition, the government would still have the revenue from the higher dividends and capital gains I mentioned earlier. In total, the income for the state would have risen substantially. </p>
<p>Collection of this fee would be simple. Companies would pay it when they deliver their <a href="https://www.gov.uk/government/publications/confirmation-statement/confirmation-statement">confirmation statement</a> (the replacement for the annual return). Penalties and interest would apply if payments were late – another source of money for government. </p>
<p>More information would be required to determine the number of fee bands and the charge per band for these new company fees, but below is a possible structure. Though the rates would of course be much higher for big companies, these are probably still comparable to what they spend on dealing with their tax affairs. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/136277/original/image-20160901-1023-1hwrc3n.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/136277/original/image-20160901-1023-1hwrc3n.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/136277/original/image-20160901-1023-1hwrc3n.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=156&fit=crop&dpr=1 600w, https://images.theconversation.com/files/136277/original/image-20160901-1023-1hwrc3n.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=156&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/136277/original/image-20160901-1023-1hwrc3n.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=156&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/136277/original/image-20160901-1023-1hwrc3n.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=196&fit=crop&dpr=1 754w, https://images.theconversation.com/files/136277/original/image-20160901-1023-1hwrc3n.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=196&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/136277/original/image-20160901-1023-1hwrc3n.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=196&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption"></span>
</figcaption>
</figure>
<p>I’ve spoken to a few people who run or are involved with companies about how they would react to a system like this. What was their reaction? They’d bite your hand off to sign up, basically.</p>
<p>And a final thought. If the UK abolished corporation tax, where do you think Apple, Google and others would consider relocating given the problems the EU has created for Ireland?</p><img src="https://counter.theconversation.com/content/64768/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Grahame Steven does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Arguments about reducing the tax burden of companies tend to get associated with rabid neoliberals. Here’s why they needn’t be.Grahame Steven, Lecturer in Accounting, Edinburgh Napier UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/620112016-07-08T07:32:50Z2016-07-08T07:32:50ZCould a corporation tax rate of 15% work for the UK?<figure><img src="https://images.theconversation.com/files/129587/original/image-20160706-12746-1gupg20.jpg?ixlib=rb-1.1.0&rect=0%2C44%2C1024%2C665&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Do the Chancellor's sums add up.</span> <span class="attribution"><a class="source" href="https://www.flickr.com/photos/fairtomiddling/4388010872/in/photolist-7FKGKS-tNqSoR-4dTchT-4dTcb2-69yHQa-4dXbJG-3gi5Xo-4dTcex-ngcnDG-wEXhf-6XgqcB-bjA1qz-5eXXH-bjA1jF-7Fikp7-fmeAzJ-4dXbFL-8noDKP-7JiyY-5rhwgv-bjA1h2-aDGgn8-5TumkC-bjzX4g-4KD6HV-E5MPx9-awz6oL-dzHdMu-FpToUL-bjzXbZ-bjzX9Z-bjzX8P-bjzX6c-bjA1bX-6dv6AX-6HRCJD-9ejWzz-8Y2j5w-7DmLiG-bjzWNM-5aUurf-7HNZ3n-fboCKM-bjA1NT-eC1X7-bjzWQi-cHAH1d-bjA1RP-5mzkHd-5EE5Vq">Sean McGee Hicks/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc/4.0/">CC BY-NC</a></span></figcaption></figure><p>Britain’s chancellor of the exchequer, George Osborne, has proposed a significant <a href="https://next.ft.com/content/d5aedda0-412e-11e6-9b66-0712b3873ae1">cut in the main rate of corporation tax</a>. The move has largely been seen as an attempt to soothe the concerns of UK businesses struggling to understand the implications of the EU referendum vote and has been <a href="http://www.independent.co.uk/news/world/europe/corporation-tax-cut-george-osborne-brexit-eu-leaders-uk-economy-a7124386.html">met with some scepticism</a>.</p>
<p>A tax cut for companies is sometimes perceived as something that only helps the businesses directly affected, but the economic reality is that it has a far greater impact. With all taxes, regardless of whether they are charged on an organisation, it is only individuals that bear the burden. A company is not a living entity; it cannot be made worse off. </p>
<p>Setting aside the benefits of public spending for a moment, there are three groups that bear the burden of corporation tax: employees (in the form of reduced wages and layoffs), customers (in the form of higher prices), and the shareholders (due to reduced dividends). Cutting the headline rate of corporation tax will not only increase the incomes of these three groups, the subsequent effect on behaviour should increase revenues in other taxes. The hope will be that those changes offset any revenues lost through a cut in the main rate. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/129580/original/image-20160706-12753-1sfimgo.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/129580/original/image-20160706-12753-1sfimgo.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/129580/original/image-20160706-12753-1sfimgo.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=450&fit=crop&dpr=1 600w, https://images.theconversation.com/files/129580/original/image-20160706-12753-1sfimgo.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=450&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/129580/original/image-20160706-12753-1sfimgo.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=450&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/129580/original/image-20160706-12753-1sfimgo.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=566&fit=crop&dpr=1 754w, https://images.theconversation.com/files/129580/original/image-20160706-12753-1sfimgo.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=566&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/129580/original/image-20160706-12753-1sfimgo.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=566&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">The economics works, in theory.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/jaimelondonboy/4211613257/in/photolist-7qaBTF-9Tjrgs-9Tjro7-94ECPR-9TgCar-7g7Yh2-8gAR9-7qewBN-hnn5My-CQw8sZ-qC1iKh-94ECt4-7qewfj-7XDDD-7xLz8m-grtEd-4ignkL-4pHT4j-C1K9EX-7qexzy-8MjrPZ-vs61A-8amXDB-7qexcY-7qazrB-7qexo7-7qaABz-7qaBtB-7qevaU-7qeCHj-7qaC7p-8aqcqS-7qaCUt-7qazDV-7qew4j-7qaAqz-7qaA3B-7qazRg-7g7WRV-dH18hq-7gbTf9-7XDDA-dEGuYD-7XDpJ-7gbSrN-7XDDB-8aqcu7-g2bY-7XDDz-uYMajv">Jai'me/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc-nd/4.0/">CC BY-NC-ND</a></span>
</figcaption>
</figure>
<p>Put simply, if you get higher wages after your company factors in a tax cut, you will pay income tax and national insurance on the increase, but will still be better off than before. You might then choose to use the net increase to buy that slightly-too-expensive toaster you’ve had your eye on alongside other goods which incur sales taxes such as VAT and other duties. If it all works unhindered, then this subsequently increases the income of the business producing the goods – and the cycle continues. </p>
<p>So, as well as potentially raising revenues through other taxes, the reduction in the corporation tax rate could help stimulate enough growth to raise revenues of corporation tax revenues in the medium-to-long term to the same levels as before the cut. </p>
<h2>Investment case</h2>
<p>This has certainly been the case for the UK over the past 35 years. Since 1983, the main rate of corporation tax has decreased from 52% to its current rate of 20%, but revenues have remained generally buoyant – corporation tax receipts consistently <a href="https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/532373/May16_Receipts_NS_Bulletin_Final2.pdf">make up about 9-10% of all HMRC receipts</a>. The <a href="http://www.ifs.org.uk/wps/wp0404.pdf">Institute for Fiscal Studies</a> has explained this by pointing out other changes in tax law which offset the cuts, an increase in the size of the corporate sector and economic conditions which have boosted profitability.</p>
<p>However, it is not known at this stage whether changes in the main rate will be accompanied by other measures. These may include reductions in the annual investment allowance, which lets a company deduct its spending on fixed assets like machinery or vehicles from its taxable profits. This is a great help to smaller firms considering investment in new equipment. </p>
<p>The government has changed the level of the allowance <a href="https://www.gov.uk/capital-allowances/annual-investment-allowance">several times over the last six years</a> and could conceivably do so again. Any reduction in allowances increases the tax base (the revenues liable for taxation) and therefore increases revenue for the Treasury. Before the merits of any corporation tax rate change can be fully analysed, issues such as this need to be taken into account. </p>
<h2>Growth fears</h2>
<p>While there is an economic argument to reduce the corporation tax rate, it is less certain how much this could boost the damaged confidence in the UK as a marketplace. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/129591/original/image-20160706-12727-zuvg.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/129591/original/image-20160706-12727-zuvg.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/129591/original/image-20160706-12727-zuvg.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=450&fit=crop&dpr=1 600w, https://images.theconversation.com/files/129591/original/image-20160706-12727-zuvg.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=450&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/129591/original/image-20160706-12727-zuvg.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=450&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/129591/original/image-20160706-12727-zuvg.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=566&fit=crop&dpr=1 754w, https://images.theconversation.com/files/129591/original/image-20160706-12727-zuvg.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=566&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/129591/original/image-20160706-12727-zuvg.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=566&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">The pound’s decline is a continuing risk.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/59937401@N07/5474185981/in/photolist-9kJCLV-9VAgWk-9VDM5N-7W8QqN-9VzJ8p-9VyHut-9VAQQG-9VByc5-9VAnRw-9VDaWY-9VBzSG-9VC3iE-9VAwVp-9VCzps-9VBgGi-9kNZEL-6Nfq1h-9VBaMr-9VCwLq-9VB7jC-9Vzk46-9VALmE-9VwzJV-9VAQ4b-9kP1zQ-9VAuME-bRAZ3H-9kP2U7-9kJE8x-9VAub5-9kMGKG-9VxCXn-9VzHe8-9VAn7m-9VxFgX-9VAMK9-9VAF9B-9VDxpf-9Vy2Q6-9VANzf-9VzeFx-bACF1-in6yLn-9VxWEK-6SF8Ar-9VxN1g-6SKbxo-9VDwno-9VD4DS-c9g7k1">Images Money/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span>
</figcaption>
</figure>
<p>Financial markets have largely stabilised after the immediate post-Brexit fluctuations – with the exception of sterling’s <a href="http://www.telegraph.co.uk/business/2016/07/06/what-does-a-falling-pound-mean-for-the-british-economy/">worrying downward trajectory</a>. The prime fear now is a short-term reduction in growth resulting from cautious markets. This week, Bank of England governor <a href="https://twitter.com/BBCNews/status/750270078889828352">Mark Carney pointed to</a>: </p>
<blockquote>
<p>…growing evidence that uncertainty about the referendum has delayed major economic decisions such as business investment, construction and housing market activity.</p>
</blockquote>
<p>Should there be a substantial short-term decline in growth resulting from a “wait-and-see” policy, this may cause a recession in itself and the negative consequences that brings. </p>
<h2>Tax lag</h2>
<p>To assess whether a corporation tax cut would help offset this, it is worth looking at a hypothetical example. Suppose a multinational company currently posts a pre-tax annual profit of £100m. The current corporate tax rate of 20% would give the company a net profit of £80m. Now let’s assume a future tax rate of 15%. In order to achieve the same net profit of £80m the company would have to post a pre-tax profit of just over £94m (with the tax liability at £14m). So if a recession dented that company’s profits by just 6%, that would immediately negatively offset the benefits of a reduction in the tax rate for both the company and the government. </p>
<p>Should a further recession occur, a corporation tax cut could prove to be something of a reckless gamble. Some economists argue that it would be possible to build a robust and equitable tax system without corporate taxes – where the increase in incomes of the three groups mentioned above create increased revenues in other taxes. But defenders of corporation tax highlight the timing benefits. Simply put, the treasury gets the money sooner rather than waiting for it to trickle down through the three groups. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/129684/original/image-20160707-30685-1ln3qip.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/129684/original/image-20160707-30685-1ln3qip.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/129684/original/image-20160707-30685-1ln3qip.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=399&fit=crop&dpr=1 600w, https://images.theconversation.com/files/129684/original/image-20160707-30685-1ln3qip.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=399&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/129684/original/image-20160707-30685-1ln3qip.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=399&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/129684/original/image-20160707-30685-1ln3qip.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=501&fit=crop&dpr=1 754w, https://images.theconversation.com/files/129684/original/image-20160707-30685-1ln3qip.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=501&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/129684/original/image-20160707-30685-1ln3qip.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=501&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">A question of timing.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/hyku/3632644702/in/photolist-6x1fHd-4c5Wcy-6NcytT-nQhoxb-7NVqen-hcu5v-7tHPnq-aoGKZj-JnUSkL-eJ8Y5c-dGaWcW-enVRfk-5Wg1ZW-6zVvbt-df5oWz-6kScb9-pTq9J7-4GwdmZ-7sNZob-a23E8y-8Tv4Nj-GB9Ze5-u5MgD-6qmvxQ-6wW5Lc-7UbYc7-89gSq-5gpork-51NmPZ-bvp63w-6Fmkka-521cip-4sFE4v-8fvPqs-y7dxCu-ydcr5P-qCnVkS-dD5P2R-cXe3v9-egmRk6-reT6Yr-4YuiuM-q5aDH2-4f3RNr-6WSFR4-pMtmJX-nvbKHq-pdGqQA-aEzGnw-huX3Lt">Josh Hallett/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span>
</figcaption>
</figure>
<p>This is a key reason why, in a recession, corporation tax revenues are usually the first to be negatively affected and the last to recover. When the economy does improve, companies could still offset any losses incurred during a recession while the economy recovers. Reducing the rate of tax could jeopardise any immediate, much-needed revenue for the government.</p>
<p>As well as the economic argument for reducing corporation tax, the government will have to tackle the political argument. The example given earlier highlighted the three groups affected by corporation tax, but most people still look on corporation tax as something paid by wealthy companies, rather than passed on to employees, consumers and pension fund holders.</p>
<p>At the same time as proposing this tax cut, Osborne also warned of further austerity measures – and it would be easy for political opponents to draw parallels between the two issues to highlight wealth inequality. It risks being a debate about “haves” and the “have nots”, so great care will need to be taken over how proposed cuts are framed to the public.</p><img src="https://counter.theconversation.com/content/62011/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Gavin Midgley does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Rates of corporation tax have a very human impact.Gavin Midgley, Teaching Fellow in Accounting, University of SouthamptonLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/606842016-06-30T14:12:02Z2016-06-30T14:12:02ZAmid Brexit chaos, the government pushes ahead with plans to privatise the Land Registry<figure><img src="https://images.theconversation.com/files/128868/original/image-20160630-30625-1d0xa1b.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.flickr.com/photos/wwwuppertal/13993060429/sizes/l">wwwuppertal/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc/4.0/">CC BY-NC</a></span></figcaption></figure><p>It’s a busy time in UK politics; the nation is still getting to grips with the fallout from Brexit, both major parties are facing bitter leadership contests, and the union is looking more fragile than ever. Yet amid this turmoil, MPs carry on with the business of government, while Brexit threatens to act as a smokescreen, shielding other important topics from public scrutiny. </p>
<p>One such matter is the move to privatise the Land Registry, which has been in state hands for hundreds of years. <a href="http://www.legislation.gov.uk/ukpga/Geo5/15-16/21/contents">Established in 1925</a>, the Land Registry is a record which holds and maintains the data for <a href="https://www.gov.uk/government/organisations/land-registry/about">24m property titles</a> across England and Wales. It provides vital information about the ownership of 87% of land, which is worth a total of £4 trillion – including £1 trillion in mortgages. </p>
<p>In <a href="https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/443249/Land_Registry_Annual_Report_2015_7_7_15_small.pdf">2014/15 alone</a>, the Land Registry cost almost £261m to run – but it also generated £297m of revenue from fees for the use of its services, such as title searches. As such, it’s no longer seen just as a function of government, but as an important asset in a world where data – and the ability to leverage data – is very valuable. </p>
<h2>Short term thinking</h2>
<p>As MPs gather to discuss the issue, Labour MP David Lammy <a href="http://www.theguardian.com/politics/2016/jun/30/land-registry-sell-off-short-term-profit-labour-mp-david-lammy">has warned that</a> the government is “looking to sell off the family silver to turn a short-term profit, to try and make their sums add up”. And he’s not entirely wrong. </p>
<p>UK Chancellor George Osborne is looking to sell up to £5 billion of corporate and financial assets by March 2020, to help reduce the nation’s deficit. Despite the failure of previous attempts, the government <a href="http://www.theguardian.com/politics/2016/mar/24/land-registry-faces-privatisation">has pressed ahead</a> with consultations to move Land Registry’s operations to the private sector from 2017. <a href="https://www.gov.uk/government/consultations/land-registry-moving-operations-to-the-private-sector">The consultation</a> closed at the end of May, and the responses which have been made public were less than enthusiastic about the prospect. </p>
<p>For one thing, private sector leaders and city lawyers have warned that any buyer would surely seek to retain exclusive rights to the Land Registry data for themselves, rather than continuing to make it accessible to all. On a more positive note, ideas about how to improve the service have also been put forward.</p>
<p>The Conveyancing Association, for instance, <a href="http://www.conveyancingassociation.org.uk/conveyancing-association-announces-opposition-to-land-registry-privatisation/">suggested</a> a “land registration tax” (perhaps an unfortunate use of words, given the public’s dislike of taxation) as a way of increasing the Land Registry’s revenue. </p>
<p>This would “immediately” double the Land Registry’s income, which could also cover the recent shortfall from the <a href="http://www.fridaysmove.com/property-law-blog/tonyl/homebuyers-benefit-50-land-registry-fee-cut">halving of fees</a> for electronic registrations. According to the trade association, such a tax would be “a relatively small burden for the homebuyer in amongst the other costs and charges involved in the process”. </p>
<h2>If it ain’t broke…</h2>
<p>The feedback from the consultation makes a strong case against privatisation – as does <a href="https://www.theguardian.com/business/2016/may/25/land-registry-privatisation-petition">the petition</a> signed by 250,000 members of the public, which was handed to Business Secretary Sajid Javid in May.</p>
<p>Moreover, it’s unclear why the government feels it necessary to privatise the Land Registry in order to achieve efficiency. Those working at the Land Registry have significant experience and expertise in that field (excuse the pun). They have presided over a period of great change in the delivery of their service, and built a valuable, state-owned asset in the process. </p>
<p>There is a great fear that privatisation will lead to redundancies among the Land Registry’s 4,578 staff, who are based in 14 offices across England and Wales. Unsurprisingly, trade unions have come out against the proposals warning that job cuts will result from any purchase by a private enterprise. </p>
<p>If – as the government acknowledged in its consultation – “data can be a real driver of innovation and growth”, then why not retain ownership of the operation and increase revenue for the good of the nation?</p>
<h2>Dodgy deals?</h2>
<p>As well as causing concerns for staff, 65 cross-party MPs have signed <a href="http://www.theguardian.com/politics/2016/jun/03/scores-of-mps-demand-land-registry-privatisation-be-called-off">a letter</a> warning that the sale would enable “shady offshore entities to buy up property” in the UK. Approximately 40,000 properties in London alone are registered in the names of offshore companies, whose ultimate ownership is unclear. Ministers are concerned that privatising the Land Registry would make it even harder to regulate property ownership in the UK. </p>
<p>Then there is the question of data security; it’s not obvious that privatisation will lead to a better service, particularly given the <a href="https://www.theguardian.com/business/2016/jun/09/scandal-of-g4s-run-medway-youth-jail-deepens-as-five-further-people-arrested">recent trials and tribulations</a> of G4S in the case of the prison service. The Land Registry contains publicly accessible information such as property prices. But it also holds private data such as mortgage account numbers. The question is, can we trust a commercial organisation with this sensitive data?</p>
<p>Even if the prospective buyer’s security is up to scratch, there’s still a risk that this data would be exploited to make larger profits. The government has said that it will still prescribe fees for the Land Registry; although this will keep costs down for users, it means that the only ways for a commercial organisation to increase its profits is through “efficiencies” (job cuts or branch closures), or by exploiting the data by other commercial means. Either way, it’s bad news for the public.</p>
<p>At this stage, no final decisions have been made: the government still has a chance to listen to the concerns voiced by the general public and leading experts alike. Here’s hoping it’s brave enough to recognise when it has made a mistake, and arrive at the right decision.</p><img src="https://counter.theconversation.com/content/60684/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Nigel Hudson does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The Land Registry is a valuable asset – so why not keep it in state hands, for the public good?Nigel Hudson, Senior Lecturer in Law, Nottingham Trent UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/608712016-06-10T13:59:50Z2016-06-10T13:59:50ZEuro 2016 could turn EU referendum result upside down<figure><img src="https://images.theconversation.com/files/126160/original/image-20160610-29205-zeup4b.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">A political football?</span> <span class="attribution"><a class="source" href="http://www.shutterstock.com/pic-48946444/stock-photo--d-soccer-ball-with-europe-team-flag-world-football-cup-isolated-on-white.html?src=csl_recent_image-3">Karen Katriyan</a></span></figcaption></figure><p>When historians look back at the fact that the Euro 2016 group phase ended the day before the UK’s Brexit vote on June 23, they will think it almost deliberately mischievous. These could turn out to be the finals where British teams entered as fully fledged members of the European Union and then departed in more ways than one. </p>
<p>Inevitably people have begun to wonder whether the football results could affect the outcome of the referendum. There are arguably precedents. In the quarter final of the Mexico World Cup of 1970, England lost 3-2 to West Germany just four days before the country voted in a general election. Harold Wilson’s Labour had at one stage held a double-digit lead in the polls, and its capitulation to Edward Heath’s Conservatives has <a href="https://books.google.co.uk/books?id=N-qzCwAAQBAJ&pg=PT169&lpg=PT169&dq=Labour+election+1966+World+Cup&source=bl&ots=0sEOaOlGee&sig=XoDDQta27huWFxl1WRTelOFIaGU&hl=en&sa=X&ved=0ahUKEwilp7HImZ3NAhXDzxQKHYf4CuQQ6AEIRTAG#v=onepage&q=Labour%20election%201966%20World%20Cup&f=false">sometimes been linked</a> to the mood created by the defeat. </p>
<p>Various studies <a href="https://www.newscientist.com/article/mg20727683-400-football-results-influence-voters/">indicate</a> a link between sporting and electoral success. The direction of cause and effect <a href="http://blogs.discovermagazine.com/notrocketscience/2010/07/06/sports-results-can-affect-election-results/#.V1qu0q32bIU">usually runs</a> something like this: team does well, which puts fans in a good state of mind. This leads them to perceive an incumbent party more favourably, judge their record more favourably and make them more predisposed towards accepting the status quo. This might well prompt David Cameron and his chancellor, George Osborne, to lead the cheer for the home nations on the terraces in France.</p>
<p>Yet Brexiters such as Michael Gove and Nigel Farage shouldn’t panic just yet. Some <a href="http://www.wired.com/2010/07/sports-influence-politics/">researchers say</a> the electoral effects of sporting success are overplayed and may in fact be nothing more than a coincidence. One study <a href="http://phys.org/news/2015-10-football-doesnt-affect-voting-patterns.html">found</a> no influence from sports results in a year where a country held multiple elections with different incumbent parties in each – the UK would perhaps fall into this category, given this year’s Scottish, Welsh and London mayoral elections. </p>
<h2>The Great Escape</h2>
<p>Unfortunately there are two problems with all the existing research: it is usually in relation to elections and not referendums; and it has tended to come out of the US. The EU referendum coinciding with Euro 2016 is a unique combination of events so sensitively aligned that previous findings cannot really tell us much. What follows therefore has to be quite speculative. </p>
<p>England has 38m registered voters and a national team often ranked in the <a href="http://int.soccerway.com/teams/rankings/fifa/?ICID=TN_03_05_01">FIFA top ten</a>, so it seems reasonable to argue Euro 2016 could have most impact in that country. Wales and Northern Ireland may disagree, with their respective 2.2m and 1.2m voters and FIFA rankings in the mid-20s, but let us assume this is the case. </p>
<p><strong>Home nations group fixtures</strong></p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/126141/original/image-20160610-29219-3ioa7o.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/126141/original/image-20160610-29219-3ioa7o.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=234&fit=crop&dpr=1 600w, https://images.theconversation.com/files/126141/original/image-20160610-29219-3ioa7o.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=234&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/126141/original/image-20160610-29219-3ioa7o.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=234&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/126141/original/image-20160610-29219-3ioa7o.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=294&fit=crop&dpr=1 754w, https://images.theconversation.com/files/126141/original/image-20160610-29219-3ioa7o.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=294&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/126141/original/image-20160610-29219-3ioa7o.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=294&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption"></span>
</figcaption>
</figure>
<p>England fans are <a href="http://www.goal.com/en-gb/news/6815/hyundai/2014/06/10/4859618/why-englands-band-play-the-theme-from-the-great-escape-movie">famous for</a> playing the theme tune from World War II prisoner-of-war film <a href="http://www.imdb.com/title/tt0057115/">The Great Escape</a>. One hopes that the English hooliganism with its racial undercurrents <a href="http://news.bbc.co.uk/1/hi/sport/football/113158.stm">that we saw</a> the last time the national team played tournament football in France <a href="http://www.fifa.com/worldcup/archive/france1998/index.html">in 1998</a> is now behind us. But as one football website <a href="http://www.goal.com/en-gb/news/6815/hyundai/2014/06/10/4859618/why-englands-band-play-the-theme-from-the-great-escape-movie">said in relation to</a> the supporters’ Great Escape fixation: “The movie’s key message is around English resilience and ingenuity in the face of hostility – and it is one which still resonates with fans of the national team.”</p>
<p>When it comes to England’s relationship with its national team, this suggests foreigners are still viewed as somehow alien to the residents of the island nation – distrusted by some, kept at arm’s length by others. This could give us a clue as to how Euro 2016 might influence the vote on June 23. </p>
<p>Should England dominate their group and qualify for the knockout phase, it may confirm the perceptions of some people that the country is different to the rest of Europe, and strong and capable enough to go it alone. Should the team lose, it will have been embarrassed on continental soil – albeit Russians or Slovaks are not usually the European nations that most irritate the English. But in either case, it could foreseeably cause problems for the remain campaign. This suggests Euro 2016 may have come at precisely the wrong time for it. </p>
<p>An alternative view is that when the whistle blows, the politics stops. At many sporting events, after all, performances on the field rightfully take precedence over whatever controversy surrounds them. The remain campaign will certainly be hoping that the results can somehow be sealed off in this way – if, of course, the scenario of a feelgood factor leading to a vote for the status quo actually does prove to be right. </p>
<p>Whatever the case, you suspect both sides could rather do without this capricious unknown so close to polling day. It will help make it a tense Euro 2016 for the British – both on the field and off it.</p><img src="https://counter.theconversation.com/content/60871/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Simon Chadwick works for UEFA. He helped develop and teaches on its Certificate in Football Management. The views expressed in this piece are entirely his own.
</span></em></p>How will the football influence the vote? Here are the possibilities …Simon Chadwick, ‘Class of 92’ Professor of Sports Enterprise, University of SalfordLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/598532016-05-24T11:22:15Z2016-05-24T11:22:15ZThree men and a vote: EU referendum is turning into a Tory boys’ own story<p>It would have come as something of a surprise to a fair few of the Mail on Sunday’s readers when they opened their copy of the May 22 edition and found the headline “<a href="http://www.dailymail.co.uk/debate/article-3602912/MAIL-SUNDAY-COMMENT-Brexiteers-logic-begins-crumble.html">Brexiteers’ logic begins to crumble</a>” over a story that said that the leave camp had failed to make its economic case properly. Or this one in the same edition: “Battered Out camp is on the back foot”, which highlighted the fact that so many important global figures have indicated Britain is much better off remaining in the EU. </p>
<p>When you compare that with the longstanding 24/7 eurosceptic stance of the paper’s stablemate, the Daily Mail, this can only be seen as remarkable and begs the question as to whether internal politics at the two papers is driving this division. We may never know.</p>
<p>Although the referendum campaign formally began more than a month ago it is only in the last two weeks that political debate has really turned to focus on the issue of the UK’s future in the European Union. Having <a href="http://blog.lboro.ac.uk/crcc/eu-referendum/media-coverage-eu-referendum-report-1/">drilled down into media coverage</a> of the campaign we can make one main observation: the campaign has so far been dominated by the “boys in blue” – in other words, Conservative males. </p>
<h2>Main players</h2>
<p>Conservative politicians, and internal party rivalries, have dominated the campaign according to our analysis of media coverage since May 5, polling day for the recent elections. Tory spokespeople are dominant on both sides of the debate while the representatives of other parties have been receiving considerably less or no attention. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/123639/original/image-20160523-11020-s5xkco.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/123639/original/image-20160523-11020-s5xkco.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/123639/original/image-20160523-11020-s5xkco.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=447&fit=crop&dpr=1 600w, https://images.theconversation.com/files/123639/original/image-20160523-11020-s5xkco.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=447&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/123639/original/image-20160523-11020-s5xkco.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=447&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/123639/original/image-20160523-11020-s5xkco.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=562&fit=crop&dpr=1 754w, https://images.theconversation.com/files/123639/original/image-20160523-11020-s5xkco.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=562&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/123639/original/image-20160523-11020-s5xkco.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=562&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">‘Top Ten’ by frequency of appearance.</span>
<span class="attribution"><span class="source">Loughborough University</span>, <span class="license">Author provided</span></span>
</figcaption>
</figure>
<p>Three figures have come to the fore: David Cameron and two of his potential successors, Boris Johnson and George Osborne. It is ironic that these politicians have been trying to convince voters to leave or remain in the EU in recent weeks yet were reluctant to state their own position on the in/out question at the beginning of this year. The prime minister, the only one of the three to have taken a definitive position then, or so it seemed, had actually hedged his bets a little, saying <a href="http://www.bbc.co.uk/news/uk-politics-32695399">he would campaign for Brexit</a> if he didn’t get the reforms he wanted. </p>
<p>But the prominence of these leaders – and the media’s preoccupation with process stories surrounding the referendum’s conduct – reflect how this campaign is not only about UK involvement in the EU but also about the future of the present British government.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/123638/original/image-20160523-11004-1pkhai.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/123638/original/image-20160523-11004-1pkhai.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/123638/original/image-20160523-11004-1pkhai.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=536&fit=crop&dpr=1 600w, https://images.theconversation.com/files/123638/original/image-20160523-11004-1pkhai.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=536&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/123638/original/image-20160523-11004-1pkhai.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=536&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/123638/original/image-20160523-11004-1pkhai.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=673&fit=crop&dpr=1 754w, https://images.theconversation.com/files/123638/original/image-20160523-11004-1pkhai.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=673&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/123638/original/image-20160523-11004-1pkhai.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=673&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Most prominent issues (May 6-18 2016).</span>
<span class="attribution"><span class="source">Loughborough University</span>, <span class="license">Author provided</span></span>
</figcaption>
</figure>
<p>By contrast with these top Tories, longstanding leave/remain campaigners from other parties such as UKIP’s Nigel Farage and Labour’s Alan Johnson have been comparatively marginalised according to our figures. And, compared to Cameron and his putative successors, Labour leader Jeremy Corbyn’s profile has been similarly modest during the debate. </p>
<p>But these male politicians have at least received some attention. Women representatives have been seldom heard, seen or reported in this stage of the campaign. Our analysis shows that men received 91% of the coverage in newspapers and 84% of the coverage on broadcast media:</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/123641/original/image-20160523-11012-1k61v6t.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/123641/original/image-20160523-11012-1k61v6t.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=169&fit=crop&dpr=1 600w, https://images.theconversation.com/files/123641/original/image-20160523-11012-1k61v6t.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=169&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/123641/original/image-20160523-11012-1k61v6t.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=169&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/123641/original/image-20160523-11012-1k61v6t.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=212&fit=crop&dpr=1 754w, https://images.theconversation.com/files/123641/original/image-20160523-11012-1k61v6t.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=212&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/123641/original/image-20160523-11012-1k61v6t.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=212&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Gender divide is becoming increasingly apparent.</span>
<span class="attribution"><span class="source">Loughborough University</span>, <span class="license">Author provided</span></span>
</figcaption>
</figure>
<p>According to our analysis of the 2015 general election, the most prominent female politician was SNP leader Nicola Sturgeon, so her absence from the news reporting of the EU referendum that we consider here is quite striking. Moreover the dearth of coverage given to the SNP, now the third largest party in the House of Commons, reflects the marginalisation by the media of the constitutional implications of a vote for Brexit. </p>
<p>Other parties with parliamentary representatives such as the Liberal Democrats, Greens, Plaid Cymru and those from Northern Ireland have barely registered in reporting. Trade unionists have been similarly marginalised although those speaking for business have had a small but significant presence.</p>
<p>The presence of business representatives reflects the prominence of the debate on trade and other economic topics in news coverage during this phase of the campaign. This is good for the remain camp as <a href="http://www.telegraph.co.uk/news/2016/05/23/eu-referendum-david-cameron-and-george-osborne-warn-brexit-would/">pro-EU strategists believe</a> (<a href="https://yougov.co.uk/news/2016/04/28/campaign-memo-its-economy-versus-immigration/">and YouGov polling figures suggest</a>) – the economy is central to its chances of winning the vote, particularly among undecided voters. </p>
<p>Economics received double the coverage afforded to immigration and border controls – another important dimension to the EU debate. This is bad news for the leave campaign given that leave spokespeople, <a href="https://yougov.co.uk/news/2016/04/28/campaign-memo-its-economy-versus-immigration/">backed up by polling evidence</a>, have consistently highlighted immigration is a key issue in making the case for Brexit.</p>
<h2>What the papers say</h2>
<p>The results of analysis of whether news media organisations are supporting or opposing either side of the campaign are mixed. There are clearly differences between broadcasters, obliged to be impartial, and the partisan press. TV news coverage was more favourable to the remain campaign <a href="http://blog.lboro.ac.uk/crcc/eu-referendum/media-coverage-eu-referendum-report-1/">according to a range of measures</a>. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/123622/original/image-20160523-11004-gcsuy.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/123622/original/image-20160523-11004-gcsuy.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/123622/original/image-20160523-11004-gcsuy.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=436&fit=crop&dpr=1 600w, https://images.theconversation.com/files/123622/original/image-20160523-11004-gcsuy.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=436&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/123622/original/image-20160523-11004-gcsuy.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=436&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/123622/original/image-20160523-11004-gcsuy.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=547&fit=crop&dpr=1 754w, https://images.theconversation.com/files/123622/original/image-20160523-11004-gcsuy.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=547&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/123622/original/image-20160523-11004-gcsuy.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=547&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Conservatives dominate broadcast media.</span>
<span class="attribution"><span class="source">Loughborough University</span>, <span class="license">Author provided</span></span>
</figcaption>
</figure>
<p>But what is clear from both analysis of TV and press reporting of the debate is that this is still very much a story about the Conservative Party. Labour trail massively in the coverage so far, while the Lib Dems, UKIP, the SNP and other smaller parties have yet to find their voice.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/123624/original/image-20160523-11010-1kljl5u.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/123624/original/image-20160523-11010-1kljl5u.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/123624/original/image-20160523-11010-1kljl5u.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=415&fit=crop&dpr=1 600w, https://images.theconversation.com/files/123624/original/image-20160523-11010-1kljl5u.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=415&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/123624/original/image-20160523-11010-1kljl5u.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=415&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/123624/original/image-20160523-11010-1kljl5u.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=522&fit=crop&dpr=1 754w, https://images.theconversation.com/files/123624/original/image-20160523-11010-1kljl5u.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=522&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/123624/original/image-20160523-11010-1kljl5u.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=522&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Conservative divisions increasingly apparent.</span>
<span class="attribution"><span class="source">Loughborough University</span>, <span class="license">Author provided</span></span>
</figcaption>
</figure>
<p>But when you take an overall look at news coverage, including all actors in the debate: politicians, campaigners, business, academic experts and citizens, it’s clear that it is impossible, so far, to state with any confidence that either side is definitively winning the media war. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/123757/original/image-20160524-19272-1gnbffm.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/123757/original/image-20160524-19272-1gnbffm.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/123757/original/image-20160524-19272-1gnbffm.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=331&fit=crop&dpr=1 600w, https://images.theconversation.com/files/123757/original/image-20160524-19272-1gnbffm.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=331&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/123757/original/image-20160524-19272-1gnbffm.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=331&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/123757/original/image-20160524-19272-1gnbffm.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=415&fit=crop&dpr=1 754w, https://images.theconversation.com/files/123757/original/image-20160524-19272-1gnbffm.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=415&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/123757/original/image-20160524-19272-1gnbffm.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=415&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Overall coverage is too close to call.</span>
<span class="attribution"><span class="source">Loughborough University</span>, <span class="license">Author provided</span></span>
</figcaption>
</figure>
<p>But there is a way to go. In the remaining time will a more varied range of speakers from the in/out campaigns be heard? Will women feature in any significant way? And will the SNP and UKIP, having emerged as <a href="http://blog.lboro.ac.uk/crcc/general-election/media-coverage-of-the-2015-campaign-report-5/">major players in the 2015 general election</a>, emerge to play a similarly prominent role in the referendum? </p>
<p>It will be intriguing to see if and when the media move on from their current preoccupation with the Conservatives’ leave and remain factions – each of which has, on its own, received greater coverage than all other party representatives put together.</p><img src="https://counter.theconversation.com/content/59853/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Dominic Wring has previously received funding from the Electoral Commission, The Guardian and the British Academy/Leverhulme Trust for media analysis of electoral and referendum coverage in past campaigns</span></em></p><p class="fine-print"><em><span>David Deacon has previously received funding from the Electoral Commission, The Guardian and the British Academy/Leverhulme Trust for media analysis of electoral and referendum coverage in past campaigns</span></em></p><p class="fine-print"><em><span>John Downey has previously received funding from the Electoral Commission, Office of Communication, The Guardian, the British Academy and the Economic and Social Research Council for media analysis of electoral and referendum coverage in UK and the EU. </span></em></p>Media coverage of the debate has so far been dominated by Conservative menDominic Wring, Professor of Political Communication, Loughborough UniversityDavid Deacon, Professor of Communication and Media Analysis, Loughborough UniversityJohn Downey, Professor of Comparative Media Analysis, Loughborough UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/598492016-05-23T14:53:26Z2016-05-23T14:53:26ZUK Treasury Brexit report is overly negative<p>Over 90 pages, the British Treasury’s latest <a href="https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/524967/hm_treasury_analysis_the_immediate_economic_impact_of_leaving_the_eu_web.pdf">report on the EU referendum</a> attempts to identify the short-term economic effects of a vote to leave on June 23 – aka Brexit. When the Treasury tweeted the publication late on the morning of May 23 it was billed a “detailed and rigorous analysis on the immediate impact of leaving the EU”. So how does it stack up?</p>
<p>Not surprisingly, the department of George Osborne, chancellor of the exchequer, is forecasting an economic downturn in the days and weeks after a Brexit vote. As the chancellor writes in his foreword to the report:</p>
<blockquote>
<p>A vote to leave would represent an immediate and profound shock to our economy. That shock would push our economy into a recession and lead to an increase in unemployment of around 500,000, GDP would be 3.6% smaller, average real wages would be lower, inflation higher, sterling weaker, house prices would be hit and public borrowing would rise compared with a vote to remain.</p>
</blockquote>
<p>A companion to the Treasury’s <a href="https://theconversation.com/can-we-believe-what-the-treasury-says-about-the-cost-of-brexit-58015">report on long-term effects</a> published last month, it models two scenarios for what could happen on Brexit: a “shock scenario” and a “severe shock scenario”. It models for a 12% fall in the exchange rate or a more severe 15% fall, for instance. Inflation could be 2.3% higher or 2.7% higher; while GDP would be 3.6% lower in the shock scenario but 6% lower if it’s more severe. House prices are modelled to drop by either 10% or 18%. </p>
<p>These effects definitely look plausible, particularly the exchange rate depreciation. In September 1992, the month of <a href="https://www.theguardian.com/business/2012/sep/13/black-wednesday-20-years-pound-erm">Black Wednesday</a>, when Britain was forced to withdraw from the European Exchange Rate Mechanism, sterling <a href="http://www.bankofengland.co.uk/boeapps/iadb/fromshowcolumns.asp?Travel=NIxIRxSUx&FromSeries=1&ToSeries=50&DAT=RNG&FD=1&FM=Jan&FY=1963&TD=23&TM=May&TY=2016&VFD=Y&html.x=22&html.y=15&CSVF=TT&C=IIN&Filter=N">dropped</a> 10.5%. </p>
<p>I can’t fault the Treasury’s econometric methodology either. It uses a technique called <a href="https://www.otexts.org/fpp/9/2">vector autoregressive analysis</a>, which jointly estimates equations for eight indicators of UK economic conditions: economic uncertainty, consumption, business investment, GDP price deflator, the Bank of England base rate, and financial risk indicators related to household borrowing, business borrowing and the stock market. </p>
<p>The technique takes into account how these variables have been affected over the longer term and the possible effect of global financial conditions. It is also the perfect case study for econometrics students answering exam questions on whether it is worth estimating models such as these because, as we teach them, these models either overlook or fail to accurately measure all the necessary variables and are therefore wrong. </p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/123608/original/image-20160523-10986-zdm3j3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/123608/original/image-20160523-10986-zdm3j3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/123608/original/image-20160523-10986-zdm3j3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=795&fit=crop&dpr=1 600w, https://images.theconversation.com/files/123608/original/image-20160523-10986-zdm3j3.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=795&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/123608/original/image-20160523-10986-zdm3j3.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=795&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/123608/original/image-20160523-10986-zdm3j3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=999&fit=crop&dpr=1 754w, https://images.theconversation.com/files/123608/original/image-20160523-10986-zdm3j3.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=999&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/123608/original/image-20160523-10986-zdm3j3.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=999&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Ignore her ladyship?</span>
<span class="attribution"><a class="source" href="http://www.shutterstock.com/cat.mhtml?lang=en&language=en&ref_site=photo&search_source=search_form&version=llv1&anyorall=all&safesearch=1&use_local_boost=1&autocomplete_id=&searchterm=bank%20of%20england&show_color_wheel=1&orient=&commercial_ok=&media_type=images&search_cat=&searchtermx=&photographer_name=&people_gender=&people_age=&people_ethnicity=&people_number=&color=&page=1&inline=387259570">Johnsey</a></span>
</figcaption>
</figure>
<h2>Bank managing</h2>
<p>Having said that, a possible criticism of the methodology is that it implicitly assumes that the impact of the Brexit shock is independent of the “state” of the economy. It does not allow for any intervention by the Bank of England, for instance. It assumes that the bank remains a passive spectator, conveniently hiding behind the <a href="https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/524967/hm_treasury_analysis_the_immediate_economic_impact_of_leaving_the_eu_web.pdf">excuse that</a> the Treasury should not “pre-suppose how monetary policymakers would balance higher inflation from the fall in sterling with the reduction in demand and supply”. </p>
<p>Ignoring the possibility of the Bank of England attempting to stave off the recession by cutting the base rate below zero and/or authorising additional quantitative easing arguably leads the Treasury to a more negative view of Brexit than would otherwise have been the case. </p>
<p>So while forecasting major economic upheaval seems reasonable, the validity of the Treasury’s estimates could definitely have been strengthened by factoring in what the Old Lady of Threadneedle Street might do. Brexit supporters will probably seize on this point. But hold on a second. Have they not <a href="http://news.sky.com/story/1696463/carney-defends-brexit-recession-warning">repeatedly argued</a> against Mark Carney, the BoE governor, talking about Brexit and considering its effects? Stand by while they probably try to have their cake and eat it.</p><img src="https://counter.theconversation.com/content/59849/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Costas Milas does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Part two of British chancellor George Osborne’s case for staying put is realistic but flawed.Costas Milas, Professor of Finance, University of LiverpoolLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/583722016-05-06T12:50:33Z2016-05-06T12:50:33ZPoliticians should not be able to sidestep money-laundering scrutiny<figure><img src="https://images.theconversation.com/files/121365/original/image-20160505-19844-1qiotfv.jpg?ixlib=rb-1.1.0&rect=9%2C0%2C2038%2C1045&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Cleaning up?</span> <span class="attribution"><a class="source" href="https://www.flickr.com/photos/thepreiserproject/11732169633/in/photolist-iSJrhM-phbmfo-9VAmAB-xY4eL-9VDebQ-e8C8V2-ehLS2P-boZ7FK-qbqa1z-qsRL8Z-qqzAEf-bDNHus-cYUMtq-qbqame-559zLS-pWDep6-hTsWGd-9VAqRa-qbqa6e-qbrFeX-d5T4ju-cNakWm-dSh77r-o1Bkfo-4fEEuA-8iYhV2-m8Yc4T-gXi2Q2-w7D2L-dVhGE7-5koRnU-nB45bb-3rry4A-2FS3k-dSCerw-9Wfiui-dHu6PV-jHXsxL-mw6pcM-cfQgH-4Lq9Yy-cBKHzJ-9VDh7N-o8Dfuc-ac55u-psuZVo-psuZUS-8wfv3d-dSCd4W-qYPJAD">The Preiser Project/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span></figcaption></figure><p>Efforts to scrutinise potential money-laundering in Britain are hitting some last-minute lumps in the road. The <a href="http://services.parliament.uk/bills/2015-16/bankofenglandandfinancialservices/stages.html">Bank of England and Financial Services Bill</a> has been making its way through parliament since October last year and is now in the so-called “ping-pong” stage of trade-offs and amendments between the House of Commons and House of Lords before it becomes law. </p>
<p>One part of the bill tackles the extent to which politicians and those around them are watched for signs of anything untoward. But political resistance to this idea is throwing up a genuine risk. Former US President Ronald Reagan once said the most terrifying words in the English language were “I’m from the government, and I’m here to help”. This described the subtle miscalculations, unintended consequences and ironies that follow from political actions. Of course, the ironies become starker when politicians appear to be “helping” themselves.</p>
<p>Banks typically monitor politicians for potential money laundering activity as part of their general monitoring requirements for tackling <a href="http://www.fatf-gafi.org/documents/documents/peps-r12-r22.html">politically exposed persons</a> (PEPs) – who are entrusted with prominent public functions. Yet, in discussing amendments to the bill, Chancellor of the Exchequer George Osborne expressed his concern:</p>
<blockquote>
<p>Banks are at risk of going too far and being disproportionate when applying their rules to politically exposed persons in Britain, and their families in particular.</p>
</blockquote>
<p>Pushed by <a href="http://www.charleswalker.org/">Tory backbencher Charles Walker</a>, Osborne came to accept a new clause with a series of amendments which addressed this point. The technical reading of the amendments is rather alarming. This is not because they contain any preposterous assertions, nor do they exempt politicians from money-laundering monitoring altogether. But they do create all the necessary conditions for a watered-down monitoring of politicians (and their families).</p>
<h2>PEP talk</h2>
<p>Banks, and other institutions that need to comply with anti-money laundering regulations, will be pushed to take a softer approach to monitoring PEPs. For instance, banks may be fined if they’re overdoing it (concerns will be reported, assessed and adjudicated by the City regulator the Financial Conduct Authority). The amendments also demand very specific categories to be included and excluded from any definitions of PEPs. </p>
<p>Put simply, an MP could be designated as a PEP but a member of his immediate family might be excluded. If excluded from the definition this person would not receive increased scrutiny for money laundering. </p>
<p>But the question of who is a PEP and who is not cannot be put into such a straitjacket. If we had a strict answer to the question of who is suspicious for money-laundering purposes and who is not, then the whole anti-money laundering regime would collapse. Simply put, those that would know they were being monitored less, would be more likely to engage with money laundering. If anything, we should impose more oversight on those who might wield or have access to political power and influence. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/121216/original/image-20160504-22761-37g25v.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/121216/original/image-20160504-22761-37g25v.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/121216/original/image-20160504-22761-37g25v.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/121216/original/image-20160504-22761-37g25v.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/121216/original/image-20160504-22761-37g25v.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/121216/original/image-20160504-22761-37g25v.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/121216/original/image-20160504-22761-37g25v.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/121216/original/image-20160504-22761-37g25v.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Sun sets on money laundering scrutiny?</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/garryknight/16037087689/in/photolist-qr9grT-ebTQYW-6VZ5Lr-dq2qjE-proyLg-oVH1Dd-ebQKvb-ch6CPu-cAMNF3-nyk3BG-e3TKoS-bhwuhk-qK4tnM-pYbKss-gVgAXk-DWz3y-hkn2MC-GYR47-9iLD2N-ebQKuL-r2kdAt-aEzGnw-9M7qvc-ed8u5o-rSSjsv-dJbzbp-dX5Wsk-eeM3QK-r68j2x-nryHRg-nMaU3Z-5WQjQB-7Th2q8-7SoJRT-4MhHuy-gGZTVL-4fi1zf-oGeGPH-qwQpME-e7jANe-ixDuVK-4Zm5zt-oo3Ewf-svxkCj-oCcgGL-hz4Ani-7ZU3Ab-4sVjb6-4fcn8L-dPfQQ9">Garry Knight/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span>
</figcaption>
</figure>
<h2>Absurd thinking</h2>
<p>The first reason for that is that many of us that have been conducting research on anti-money laundering, have always pointed out the travesty of politicians excluding themselves from monitoring. This lasted for more than two decades, with the <a href="http://www.fatf-gafi.org/about/">Financial Action Task Force</a> (FATF) that had set the global guidelines for anti-money laundering, considering only the risk of foreign PEPs for money laundering. </p>
<p>When the task force finally acknowledged how absurd this was, it changed its recommendations and included domestic PEP monitoring under <a href="http://www.fatf-gafi.org/media/fatf/documents/recommendations/pdfs/FATF_Recommendations.pdf">Recommendation 12</a>. Through this change, the FATF now requires financial institutions to apply “enhanced ongoing monitoring of the business relationship” when the customer is a domestic PEP. The FATF explicitly extends these requirements to all types of PEPs and says that they “should also apply to family members or close associates”. </p>
<p>This was done for a very good reason. What Osborne failed to mention is that the families of domestic PEPs are exposed themselves. In fact, family members are more risky. Time after time, money laundering cases and considerations on PEPs, reported in the <a href="http://www.emeraldinsight.com/action/doSearch?AllField=PEPs&SeriesKey=jmlc">academic literature</a> and in FATF’s analysis of red-flags for PEP-monitoring (<a href="http://www.fatf-gafi.org/media/fatf/documents/recommendations/Guidance-PEP-Rec12-22.pdf">see Annex 1 here</a>), indicate that husbands, wives, fathers, mothers, siblings, children, close business associates, and even in-laws actively participate in the money laundering process. </p>
<p>They do this to reduce the risk of detection for corrupt politicians that are in the public eye, and of course, because they have immediate financial interest in doing so. It is why all domestic PEPs should be subject to more scrutiny and monitoring, not less. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/121367/original/image-20160505-19848-s4sat3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/121367/original/image-20160505-19848-s4sat3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/121367/original/image-20160505-19848-s4sat3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=401&fit=crop&dpr=1 600w, https://images.theconversation.com/files/121367/original/image-20160505-19848-s4sat3.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=401&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/121367/original/image-20160505-19848-s4sat3.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=401&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/121367/original/image-20160505-19848-s4sat3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=504&fit=crop&dpr=1 754w, https://images.theconversation.com/files/121367/original/image-20160505-19848-s4sat3.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=504&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/121367/original/image-20160505-19848-s4sat3.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=504&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Scutiny.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/featheredtar/2949748121/in/photolist-5uEeme-c5gFGy-pdeaF8-oNnKXQ-e5ap1v-ps9Vjm-psbxE8-5YrZkq-rfCuUm-paBjj6-6c1jve-9NDgMs-nY6C7x-9U8dH5-mYDZL4-paEJuo-bcyxGZ-e5g1FN-qFqN8-CYdQh-dcaBvR-ptYD8z-4qUs8F-5YnL7r-dcazQy-pc9Z1q-4Pja4u-7LCmSR-dcaAXA-8FTLVn-9kQrtz-9NJbtw-pcaAMV-9Xm5NB-aDf6gb-nQpbyn-yP8Ni-cX5cA1-9NFmxc-ejZfVN-e5aq78-7LAwHr-wghQ-d39L8Q-9U7Hkj-dcazVN-pyeBd8-scCRJZ-9U6Y1s-dcazfK">Joel Penner/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span>
</figcaption>
</figure>
<h2>Suspicious minds</h2>
<p>When banks monitor such activity, their “highest course” of action after their own analysts review a client’s transaction records and profile is the submission of a suspicious activity report to the government’s Financial Intelligence Unit. This agency can request additional data from other institutions and may or may not forward for prosecution. </p>
<p>It seems highly unlikely that a PEP or a relative will be “disadvantaged” and not be able to use banking services. If it is made clear that banking services cannot be refused to an individual due to suspicion of money laundering then why should specific PEP-categories be excluded from increased scrutiny? It is, in any case better for anti-money laundering efforts if all activity is kept where we can see it.</p>
<p>It is also worth noting that banks are already regulated by the Financial Conduct Authority and under this regulation, they apply a risk-based approach to detect money laundering. It may not be perfect, but if politicians start to dictate the exact conditions of “proportionate” monitoring, then who guards us from the guardians?</p><img src="https://counter.theconversation.com/content/58372/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Dionysios Demetis has received funding from three past research grants: a) Spotlight EU AGIS Fund on Anti-Money Laundering Research, b) FIDIS project EU 6th Framework on information-society related research., c) Next Generation Anti-Terrorist Financing Methods (GATE), funding from PASR EC Programme. </span></em></p>The government should resist the temptation to soften monitoring efforts aimed at MPs and their families and associates.Dionysios Demetis, Lecturer in Management Systems, University of HullLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/580862016-04-20T10:48:02Z2016-04-20T10:48:02ZFact Check: do the Treasury’s Brexit numbers add up?<p><em>If we take as a central assumption that the UK would seek a negotiated bilateral agreement, like Canada has, the costs to Britain are clear. Based on the Treasury’s estimates, our GDP would be 6.2% lower, families would be £4,300 worse off and our tax receipts would face an annual £36 billion black hole. This is more than a third of the NHS budget and equivalent to 8p on the basic rate of income tax.</em></p>
<p><strong>EU referendum: <a href="https://www.gov.uk/government/news/eu-referendum-treasury-analysis-key-facts">HM Treasury analysis</a></strong></p>
<p>The UK Treasury has published a <a href="https://www.gov.uk/government/news/eu-referendum-treasury-analysis-key-facts">much anticipated analysis</a> of the long-term impact of EU membership on the economy. My guiding questions were: how reliable are these estimates? How much can one trust the headline figure that households will be £4,300 worse off each year if we choose Brexit? Is the methodology appropriate, are the assumptions fair, and are the results credible? And above all, if the answer to all of these is positive, why are the Treasury’s figures so much bigger than the <a href="https://www.iwkoeln.de/en/_storage/asset/277416/storage/master/file/9171406/download/Brexit_meta_study_IW_report.pdf">current consensus</a>, which puts the decline at between 1% and 3% of GDP? </p>
<p>Overall, the Treasury report contains serious analytical work. It is comprehensive, clear and rigorous. The first and second sections lay down the facts about UK membership in the EU and the alternatives. The three alternatives it presents are joining the <a href="http://www.efta.int/eea">European Economic Area</a> (like Norway); reaching a bilateral agreement with the EU (like Switzerland); and relying purely on the trading arrangements within the World Trade Organisation (WTO) (like Russia or Brazil). There are reasoned discussions on regulation, migration and future changes in the EU with and without Brexit; though ultimately the report argues that the economic effects of these are small in comparison to those from trade and foreign investment. </p>
<p>The three main scenarios are estimated using appropriate and sophisticated econometric techniques (in section three and the annexes). The report does a very careful job at comparing and relating each of its main findings to the existing empirical evidence. The message the alternative scenarios deliver is clear: in all three cases, Brexit will entail significant and substantial economic losses. </p>
<p>The smallest losses are for the EEA model and amount to a reduction in annual GDP by 2030 of 3.8%. The intermediary case corresponds to the “Swiss” model and amounts to a reduction of 6.2%, while the WTO option is estimated at a 7.5% drop. These figures are also presented per person and per household, as well as in losses of tax receipts. With the Swiss route, for example, the estimated range is between -4.6% and -7.8%. This corresponds to a loss of about £1,800 per person – about £4,300 per household. This is the also the source of the headline figure given by the Treasury and equates to a loss of UK tax receipts of £36 billion. </p>
<h2>Why the more negative figures?</h2>
<p>This report may not be the last word we hear on the matter, but it will surely set the bar higher for the economic argument. Yet why are these estimates so much higher than the majority of the previous estimates? I think there are at least two reasons.</p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/119435/original/image-20160420-25592-1fyzopp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/119435/original/image-20160420-25592-1fyzopp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/119435/original/image-20160420-25592-1fyzopp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=633&fit=crop&dpr=1 600w, https://images.theconversation.com/files/119435/original/image-20160420-25592-1fyzopp.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=633&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/119435/original/image-20160420-25592-1fyzopp.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=633&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/119435/original/image-20160420-25592-1fyzopp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=795&fit=crop&dpr=1 754w, https://images.theconversation.com/files/119435/original/image-20160420-25592-1fyzopp.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=795&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/119435/original/image-20160420-25592-1fyzopp.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=795&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">In or out?</span>
<span class="attribution"><a class="source" href="http://www.shutterstock.com/s/Brexit/search.html?page=2&thumb_size=mosaic&inline=382701964">Aaz Zys</a></span>
</figcaption>
</figure>
<p>The first is that when the Treasury considers how the change in trade and foreign investment will affect the UK’s productivity, it combines the annual effect over a number of years (the so-called “dynamic” or “rate” effects). The rest of the literature has tended to estimate a one-off step change in productivity (“static” or “level” effect) rather than this cumulative impact. The Treasury’s broader, more encompassing (and more realistic if you are studying the long-term) approach makes its estimates of the losses from Brexit to be bigger than the rest.</p>
<p>But there may be another reason that makes all those other estimates so much smaller. It has <a href="https://www.cer.org.uk/sites/default/files/pb_js_regulation_3feb16.pdf">to do with regulation</a>. Regulation may be burdensome and “imposed by Brussels”, yet providing serious and reliable estimates of its costs and benefits is no easy task. The larger your estimate, the better Brexit looks. The Treasury numbers include them but treat them as smaller than the other estimates do. One major problem is that the econometric evidence for very large regulation costs is non-existent. </p>
<h2>Verdict</h2>
<p>In short, the Treasury estimates are credible. Yet they are conservative: there are at least two ways in which the estimated losses from Brexit could increase. The report could have factored in the <a href="https://www.gov.uk/government/speeches/pm-commons-statement-on-eu-reform-and-referendum-22-february-2016">EU reforms</a> being pushed by the UK government into the main numbers. It could also have used a definition of productivity that didn’t flatter the UK (like GDP per hour worked rather than GDP per capita). These are both included in section three, part three of the report, if anyone wanted to look at them. But I think the decision was correct to downplay these, given the uncertainty.</p>
<h2>Review</h2>
<p>*<em>Jonathan Perraton, Senior Lecturer in Economics, University of Sheffield
*</em></p>
<p>This piece notes that a key reason the Treasury study estimates a larger impact is that it models the impact of Brexit over the medium to long run. If the effect of Brexit leads to lower productivity <a href="https://theconversation.com/how-brexit-would-reduce-foreign-investment-in-the-uk-and-why-that-matters-57909">through</a> lower trade and foreign direct investment, this will lead to a cumulative relative loss of income. As the author notes, all such estimates are subject to major uncertainties, but the Treasury results are based on solid econometric analysis from standard approaches. </p>
<p>Another possible reason for the Treasury results is that they model both a larger impact of Brexit on trade and foreign investment and a larger negative from this impact on UK productivity growth. Overall, though, the author rightly notes that the Treasury has provided a systematic assessment of the possible effects.</p><img src="https://counter.theconversation.com/content/58086/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Nauro Campos has several papers that are referenced in the Treasury report.</span></em></p><p class="fine-print"><em><span>Jonathan Perraton does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>New report says households will be £4,300 worse off if we leave the EU. Here’s the verdict.Nauro F. Campos, Professor of Economics and Finance, Brunel University LondonLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/570032016-04-01T11:47:35Z2016-04-01T11:47:35ZWhy finding a real alternative to sugar is so difficult<figure><img src="https://images.theconversation.com/files/116777/original/image-20160330-28455-1j1phef.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Sweets for my sweets ...</span> <span class="attribution"><a class="source" href="http://www.shutterstock.com/cat.mhtml?lang=en&language=en&ref_site=photo&search_source=search_form&version=llv1&anyorall=all&safesearch=1&use_local_boost=1&autocomplete_id=&searchterm=spoonful%20of%20sugar&show_color_wheel=1&orient=&commercial_ok=&media_type=images&search_cat=&searchtermx=&photographer_name=&people_gender=&people_age=&people_ethnicity=&people_number=&color=&page=1&inline=237309733">Kozlenko</a></span></figcaption></figure><p>So much for the decades in which fats and oils were public enemy number one on our dinner plates. There is <a href="http://www.actiononsugar.org/index.html">more and more evidence</a> that sugar – or more precisely, carbohydrate – is behind our increasing rates of <a href="http://www.healthdata.org/news-release/nearly-one-third-world%E2%80%99s-population-obese-or-overweight-new-data-show">obesity</a> and <a href="https://www.sciencedaily.com/releases/2015/04/150402101410.htm">heart disease</a>. Even if the mechanisms by which this occurs are still not well defined, there are endless <a href="http://www.who.int/mediacentre/news/releases/2015/sugar-guideline/en/">calls for</a> reducing its quantities in the foods we eat. Most recently in the UK this led to the chancellor, George Osborne, <a href="https://theconversation.com/sorry-jamie-oliver-id-be-surprised-if-sugar-tax-helped-cut-obesity-56471">announcing</a> a tax on sugary soft drinks. </p>
<p>Had we ever come up with a proper substitute for sugar, of course, we wouldn’t need to have this debate. In <a href="https://theconversation.com/heres-what-happens-to-your-brain-when-you-give-up-sugar-for-lent-37745">our sweetness-addicted era</a>, it is one of science’s greatest challenges. So why has it eluded us for so long, and are we any closer to a solution?</p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/116984/original/image-20160331-31093-1gmtfqu.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/116984/original/image-20160331-31093-1gmtfqu.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/116984/original/image-20160331-31093-1gmtfqu.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=587&fit=crop&dpr=1 600w, https://images.theconversation.com/files/116984/original/image-20160331-31093-1gmtfqu.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=587&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/116984/original/image-20160331-31093-1gmtfqu.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=587&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/116984/original/image-20160331-31093-1gmtfqu.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=738&fit=crop&dpr=1 754w, https://images.theconversation.com/files/116984/original/image-20160331-31093-1gmtfqu.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=738&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/116984/original/image-20160331-31093-1gmtfqu.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=738&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Saccharine on sale.</span>
<span class="attribution"><a class="source" href="http://www.shutterstock.com/cat.mhtml?lang=en&language=en&ref_site=photo&search_source=search_form&version=llv1&anyorall=all&safesearch=1&use_local_boost=1&autocomplete_id=&searchterm=saccharine&show_color_wheel=1&orient=&commercial_ok=&media_type=images&search_cat=&searchtermx=&photographer_name=&people_gender=&people_age=&people_ethnicity=&people_number=&color=&page=1&inline=240640765">Lunasee Studios</a></span>
</figcaption>
</figure>
<p>Replacing the sweetness of sugar in foods is actually relatively straightforward. The first synthetic sweetener, saccharine, was <a href="http://www.todayifoundout.com/index.php/2014/05/saccharin-discovered-accident/">discovered accidentally</a> by a young Russian chemist named Constantin Fahlberg in 1879 while studying coal-tar derivatives, when he unknowingly got it on his hands and licked his fingers. Saccharine became widely used around World War I, when natural sugar was in short supply. In the 1960s scientists discovered several more artificial sweeteners in similarly serendipitous ways, including aspartame and acesulfame K.</p>
<p>As well as these discoveries, there are naturally occurring sweeteners that we have actually known about for much longer (see table below). The <a href="http://linguistics.byu.edu/classes/ling450ch/reports/Guarani1.html">Guarani</a> peoples of modern-day Brazil and Paraguay have been using the leaves of the <a href="https://theconversation.com/a-rose-by-any-other-name-the-low-down-on-healthy-coke-33552">stevia</a> plant as a sweetener for about 1,500 years. And the seeds of the West African katemfe fruit, which contain a sweet chemical called thaumatin, have been on our radar since the 19th century. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/116771/original/image-20160330-9712-1frvkxu.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/116771/original/image-20160330-9712-1frvkxu.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=185&fit=crop&dpr=1 600w, https://images.theconversation.com/files/116771/original/image-20160330-9712-1frvkxu.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=185&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/116771/original/image-20160330-9712-1frvkxu.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=185&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/116771/original/image-20160330-9712-1frvkxu.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=233&fit=crop&dpr=1 754w, https://images.theconversation.com/files/116771/original/image-20160330-9712-1frvkxu.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=233&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/116771/original/image-20160330-9712-1frvkxu.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=233&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">‘Sweetness’ is relative to sugar – stevia is 275 times as sweet.</span>
</figcaption>
</figure>
<h2>Sweet but sour</h2>
<p>Yet while we have plenty of options for sweetness, there are several difficulties associated with using non-sugar sweeteners in foods. There have been various cancer scares over the years, which have affected <a href="http://drrichswier.com/2015/05/25/fda-generated-stevia-myth/">stevia</a>, <a href="http://www.ncbi.nlm.nih.gov/pmc/articles/PMC1637197/">saccharine</a> and <a href="http://www.mercola.com/article/aspartame/hidden_dangers.htm">aspartame</a>, among others. Some artificial sweeteners have <a href="http://www.nhs.uk/news/2014/09September/Pages/Do-artificial-sweeteners-raise-diabetes-risk.aspx">also been</a> linked to type 2 diabetes. </p>
<p>To compound this, governments class all non-sugar sweeteners as additives, which means they are assigned an E-number – even stevia and thaumatin. In an era where consumers have become increasingly wary of these numbers even when there aren’t specific health risks, manufacturers have been moving towards so-called “clean-label” products that are free of them. This puts these sweeteners at a disadvantage. </p>
<p>Aside from health and labelling, sugars have chemical functions in foods that make them difficult to replace. Sugar solutions freeze at a lower temperature than pure water, for instance. In products like ice cream, this is critical to maintaining a soft texture at freezer temperatures. </p>
<p>Sugars play an important role in giving products like bread, cakes and even wine their darker colour, through what chemists call <a href="http://www.scienceofcooking.com/browning_of_foods.htm">non-enzymatic browning reactions</a>. Artificial
sweeteners are not good at reproducing either of these. </p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/116781/original/image-20160330-28472-616nos.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/116781/original/image-20160330-28472-616nos.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/116781/original/image-20160330-28472-616nos.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=900&fit=crop&dpr=1 600w, https://images.theconversation.com/files/116781/original/image-20160330-28472-616nos.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=900&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/116781/original/image-20160330-28472-616nos.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=900&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/116781/original/image-20160330-28472-616nos.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1130&fit=crop&dpr=1 754w, https://images.theconversation.com/files/116781/original/image-20160330-28472-616nos.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1130&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/116781/original/image-20160330-28472-616nos.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1130&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">‘Mmmm aspartame.’</span>
<span class="attribution"><a class="source" href="http://www.shutterstock.com/pic-12164185/stock-photo-man-checking-food-labelling-on-supermarket-products.html?src=csl_recent_image-1">Monkey Business Images</a></span>
</figcaption>
</figure>
<p>Then there is aftertaste. This arises from the mechanism by which sweetness is detected in the taste buds. One problem is that the structural features of any sweet molecule that allow them to bind to the sweetness receptors on the tongue are <a href="http://www.sciencedirect.com/science/article/pii/S0092867403000710">similar to</a> the ones that bind to our bitterness receptors. This is why some sweeteners leave a bitter aftertaste, which is of course undesirable to some consumers. </p>
<p>But looking at the previous table again, for sweeteners that don’t have a bitter aftertaste there is another issue. Artificial sweeteners bind more strongly to the sweetness receptors and have a different and longer-lasting taste profile to sugar, and so are perceived as tasting different by consumers. </p>
<p>All in all, although non-sugar sweeteners are a multi-billion-pound industry, these drawbacks help to explain why they are nowhere near eclipsing sugar. In 2014 sugar (sucrose) <a href="http://www.preparedfoods.com/articles/114720-alternative-sweeteners-gain-12-share-of-734-billion-market">accounted for</a> 78% of all sweetener sales. Artificial sweeteners made up 8%, with acesulfame k the market leader. Natural alternatives like stevia, which was <a href="https://www.acefitness.org/certifiednewsarticle/1644/the-truth-about-stevia-the-so-called-quot-healthy/">banned</a> in the US and EU until fairly recently, made up 1%. (The rest of the market comprises everything from glucose to syrups). </p>
<h2>Where sweeteners go from here</h2>
<p>The cancer evidence against non-sugar sweeteners has turned out to be thinner than feared. <a href="http://www.cancerresearchuk.org/about-cancer/causes-of-cancer/diet-and-cancer/food-controversies#food_controversies1">Cancer Research UK</a> and the US <a href="http://www.cancer.gov/about-cancer/causes-prevention/risk/diet/artificial-sweeteners-fact-sheet">National Cancer Institute</a> both say there is no increased risk regarding artificial sweeteners. Stevia’s years in the wilderness were the result of an anonymous complaint about the cancer risks to the US authorities <a href="https://health.thefuntimesguide.com/2014/08/what-is-stevia.php">commonly thought</a> to have come from artificial-sweetener producers, but it has since been rehabilitated. As for type 2 diabetes, the <a href="http://www.nature.com/nature/journal/v514/n7521/full/nature13793.html">evidence linking it</a> to artificial sweeteners is <a href="http://nutritionreviews.oxfordjournals.org/content/71/7/433">inconclusive</a> and we need more research – so far it has all been done on animals. </p>
<p>On the physical issues, food scientists have had to think creatively. When it comes to texture, for instance, manufacturers add protein texturisers instead – <a href="http://www.clextral.com/food-feed-2/food/extured-protein/">soy</a>, for example. Or you can turn to other substances that have a similar effect as sugar on the freezing properties of water – the sugar alcohol erythritol is one option. </p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/116779/original/image-20160330-28443-133low5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/116779/original/image-20160330-28443-133low5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/116779/original/image-20160330-28443-133low5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=792&fit=crop&dpr=1 600w, https://images.theconversation.com/files/116779/original/image-20160330-28443-133low5.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=792&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/116779/original/image-20160330-28443-133low5.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=792&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/116779/original/image-20160330-28443-133low5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=995&fit=crop&dpr=1 754w, https://images.theconversation.com/files/116779/original/image-20160330-28443-133low5.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=995&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/116779/original/image-20160330-28443-133low5.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=995&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Stevia wonder?</span>
<span class="attribution"><a class="source" href="http://www.shutterstock.com/cat.mhtml?lang=en&language=en&ref_site=photo&search_source=search_form&version=llv1&anyorall=all&safesearch=1&use_local_boost=1&autocomplete_id=&searchterm=stevia&show_color_wheel=1&orient=&commercial_ok=&media_type=images&search_cat=&searchtermx=&photographer_name=&people_gender=&people_age=&people_ethnicity=&people_number=&color=&page=1&inline=99968267">Olivier le Moal</a></span>
</figcaption>
</figure>
<p>Manufacturers seek to overcome the aftertaste issue by mixing sweeteners. We perceive the aftertaste of different sweeteners over differing timescales, so one sweetener can be used to mask the aftertaste of a second. It is common to use stevia in combination with acesulfame K, for instance. </p>
<p>Another increasingly common ploy is to mix sugar and other sweeteners together. This helps explain why the use of non-sugar sweeteners in new product launches <a href="http://www.mintel.com/press-centre/food-and-drink/stevia-set-to-steal-intense-sweetener-market-share-by-2017-reports-mintel-and-leatherhead-food-research">rose from</a> 3.5% in 2009 to 5.5% in 2012. It also explains why stevia is rocketing. Food analysts Mintel and Leatherhead forecast it will have become the most widely used non-sugar sweetener by as early as next year. </p>
<p>In the absence of a Holy Grail for sugar replacement, this could be as good as it gets any time soon. No wonder the authorities are beginning to intervene to save us from our sweet tooth instead.</p><img src="https://counter.theconversation.com/content/57003/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Stephen Euston has received research funding from BBSRC, EPSRC, Innovate UK and EC Horizon2020, though the views in this piece are entirely his own. He is also a committee member of the Agri-Food group of the Society of Chemical Industry. </span></em></p>If only it were as simple as sweetness.Stephen Euston, Professor, Heriot-Watt UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/566472016-03-24T13:45:37Z2016-03-24T13:45:37ZEverything you need to know about mini nuclear reactors<figure><img src="https://images.theconversation.com/files/116212/original/image-20160323-28182-10hagh7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Because knowledge is power</span> <span class="attribution"><span class="source">FooTToo/Shutterstock</span></span></figcaption></figure><p>Nuclear power can be a touchy subject, one that seems to divide opinion. Many people believe it is unclean, controversial and costly – and the <a href="http://www.world-nuclear.org/information-library/safety-and-security/safety-of-plants/fukushima-accident.aspx">2011 Fukushima disaster</a> showed the world just how unsafe nuclear can be; the meltdown of the power plant was the worst nuclear disaster since <a href="http://www.world-nuclear.org/information-library/safety-and-security/safety-of-plants/chernobyl-accident.aspx">Chernobyl in Ukraine</a>, 25 years earlier. </p>
<p>On the other hand we <a href="https://theconversation.com/the-case-for-nuclear-power-despite-the-risks-41552">still need nuclear power</a>. It has decreased the UK’s dependence on fossil fuels such as gas, coal and oil, which are in limited supply. And nuclear is a much more reliable energy source – for the same amount of fuel, nuclear produces much more energy than its carbon-based counterparts. And, as well as being cost effective, it also produces little waste.</p>
<p>The chancellor of the exchequer, George Osborne, now wants the UK to be a “global leader in innovative nuclear technologies”. Part of this plan involves <a href="https://www.gov.uk/government/collections/small-modular-reactors">spending £250m</a> on a research and development programme to put the UK in with a chance of “winning” the race to develop <a href="http://www.telegraph.co.uk/finance/newsbysector/energy/12017695/UK-plans-small-modular-nuclear-reactor-in-2020s.html">small modular reactors</a> (SMR).</p>
<p>In the recent Budget, Osborne launched a <a href="https://www.gov.uk/government/publications/small-modular-reactors-competition-phase-one">competition</a> for the “best value” design of small modular reactors for use in the UK. The government has also said it plans to publish a small modular reactor delivery “roadmap” later this year and will allocate at least £30m for an <a href="https://www.energylivenews.com/2016/03/22/1-5m-awarded-for-nuclear-waste-disposal-research/">advanced manufacturing programme</a> to develop nuclear skills.</p>
<p>All of which will pave the way towards <a href="https://www.gov.uk/government/publications/spending-review-and-autumn-statement-2015-documents/spending-review-and-autumn-statement-2015">building</a> one of the world’s first small modular reactors in the UK in the 2020s.</p>
<p>Given the amount of investment, it’s clear SMRs are big business for government – and for good reason: experts suggest that small nuclear reactors may be <a href="https://theconversation.com/small-nuclear-reactors-may-be-the-key-to-a-low-carbon-future-28994">the key</a> to a low-carbon future.</p>
<h2>What are small modular reactors?</h2>
<p>Small modular reactors are essentially scaled down versions of full-sized nuclear reactors. They are defined by the <a href="https://www.iaea.org/">International Atomic Energy Agency</a> as having a power output of up to 300MW – which is enough to power around 428,000 700-watt washing machines. This compares to a full sized nuclear power reactor which boast around 1,000MW – more than three times as much.</p>
<p>Each person in the UK <a href="http://shrinkthatfootprint.com/average-household-electricity-consumption">uses an average of 226 Watts</a> throughout the year, and a <a href="http://www.westinghousenuclear.com/New-Plants/Small-Modular-Reactor">typical SMR</a> can theoretically produce enough power for roughly 1m people using 226 Watts. </p>
<p>Compare this to the <a href="http://www.4coffshore.com/windfarms/turbine-mhi-vestas-offshore-wind-v164-8.0-mw-tid89.html">largest</a> commercially available wind turbine installed in Denmark which usually runs at 26% of capacity. This equates to supplying 9,203 people – making the difference in output huge.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/116215/original/image-20160323-28182-1bi0l3y.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/116215/original/image-20160323-28182-1bi0l3y.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=450&fit=crop&dpr=1 600w, https://images.theconversation.com/files/116215/original/image-20160323-28182-1bi0l3y.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=450&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/116215/original/image-20160323-28182-1bi0l3y.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=450&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/116215/original/image-20160323-28182-1bi0l3y.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=566&fit=crop&dpr=1 754w, https://images.theconversation.com/files/116215/original/image-20160323-28182-1bi0l3y.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=566&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/116215/original/image-20160323-28182-1bi0l3y.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=566&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Could large nuclear reactors become a thing of the past?</span>
<span class="attribution"><span class="source">Petr Louzensky/Shutterstock</span></span>
</figcaption>
</figure>
<p>At the other end of the size scale, the new nuclear power station which will be built at <a href="https://www.edfenergy.com/energy/nuclear-new-build-projects/hinkley-point-c">Hinkley point C</a> over the next decade or so will have a capacity of 3,200MW – which will be able to provide energy for more than 14m people, more than ten times the power of any SMR. But what SMRs lack in size and output they make up for in accessibility and the small amount of time it takes to build them.</p>
<h2>Why should we use them?</h2>
<p>The main benefit of SMRs compared to full-sized reactors is probably financial – the capital start-up costs are <a href="http://www.sciencedirect.com/science/article/pii/S036054421200093X">far lower</a>, reducing the cost risk for any interested builder.</p>
<p>Another advantage over full-sized reactors is that most countries are better equipped for smaller power loads than bigger ones – the national electricity grid of some countries cannot handle the huge power load from a full-sized power station – they would simply overload and shut down – so SMRs would be ideal in these circumstances.</p>
<p>The modular design of the SMRs also ensures they can be manufactured and assembled at a central factory then sent to their new location where they can be installed relatively easily. This is particularly useful in remote locations which might not have the best manufacturing facilities. </p>
<p>SMRs also have <a href="http://www.saimm.co.za/Journal/v072n03p093.pdf">good safety features</a> including a natural cooling feature which comes via an underground cooling mechanism. This can continue to function without external power because the primary coolant system uses <a href="http://www.sciencedirect.com/science/article/pii/S0149197015000050">natural circulation</a> so there are no pumps required – making it an ideal safety feature against <a href="http://www.scientificamerican.com/article/nuclear-energy-primer/">core meltdown</a> – which was the problem in Japan when the 2011 tsunami hit.</p>
<p>Then there is also the advantage of being able to locate the reactor underground, providing more security and protection from natural hazards, such as high winds.</p>
<h2>What about the disadvantages?</h2>
<p>The obvious drawback is the increased running costs – each kilowatt hour (kWh) of electricity from an SMR would be expected to cost between <a href="http://www.scirp.org/journal/PaperInformation.aspx?PaperID=45669">15% and 70% more</a> than a kWh of electricity produced in a full-sized nuclear power station, due to economies of scale. This means power output decreases while other costs stay constant.</p>
<p>There are also the usual public fears surrounding nuclear power generation and nuclear waste – which can make SMRs a hard sell, although some of the designs use a “<a href="http://www.energy.gov/ne/nuclear-reactor-technologies/small-modular-nuclear-reactors">breeder facility</a>”, which helps to reduce the waste output. Design features such as this combined with an increase in knowledge surrounding SMRs should help to avert public fears over safety. </p>
<p>There are already a number of SMRs in operation around the world including in <a href="https://www.uxc.com/smr/uxc_SMRDetail.aspx?key=Indian%20220%20MWe%20PHWR">India</a> and <a href="https://www.uxc.com/smr/uxc_SMRDetail.aspx?key=CNP-300">China</a>. There are also numerous other SMRs in various states of completion too, from the <a href="http://www.world-nuclear-news.org/newsarticle.aspx?id=13250">35 MWe KLT-40s</a> which is under construction in Russia, to the <a href="http://www.the-weinberg-foundation.org/2014/11/13/the-uks-forgotten-molten-salt-reactor-programme/">Molten salt-based reactor</a> still in the design stage in the UK. </p>
<p>The government’s SMR competition is a great step forward in taking things closer to development. Once funding has been allocated to a preferred design then there’s just a small matter of building one. So while the use of SMRs may be one step closer, it is still going to be some time before these smaller nuclear reactors are in widespread use across the UK.</p><img src="https://counter.theconversation.com/content/56647/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Stephen Monk has at some point received funding from EPSRC, the NDA and the NNL</span></em></p>Small nuclear reactors are one step closer to powering the UK’s future energy requirements.Stephen Monk, Lecturer, Lancaster UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/489112016-03-21T18:09:59Z2016-03-21T18:09:59ZFour simple steps the UK government follows to make you really, really rich<figure><img src="https://images.theconversation.com/files/115819/original/image-20160321-30912-j1jk4j.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Cash in hand. Start rich to get richer.</span> <span class="attribution"><a class="source" href="https://www.flickr.com/photos/59937401@N07/5857426536/in/photolist-9VAQQG-9VByc5-9VDaWY-9kNZEL-9VBgGi-9VBzSG-9VCzps-9VwzJV-9VCwLq-9VBaMr-9VALmE-9VB7jC-9VDKoY-6Nfq1h-9Vzk46-9VAQ4b-9kP1zQ-9VAuME-9kJE8x-9kP2U7-9VAub5-9kMGKG-9VxCXn-9VAMK9-9VzHe8-9VAn7m-9VxFgX-9VAF9B-9VDxpf-9VANzf-bRAZ3H-in6yLn-9Vy2Q6-bACF1-9VzeFx-9VxWEK-6SF8Ar-9VxN1g-9VDwno-c9g7k1-9VD4DS-7W8S5L-8tHQUr-9VB5fh-9Vy4xV-9VDkGC-5LEiQ7-9VAwVp-9VC2s1-9VAoEj">Images Money/Flickr</a></span></figcaption></figure><p>Can your government help make you wealthier? If so, UK chancellor of the exchequer, George Osborne, and the prime minister, David Cameron, have ticked all the boxes with their latest budget. The <a href="https://theconversation.com/why-iain-duncan-smith-resignation-registers-a-six-on-the-political-richter-scale-56574">departure of Iain Duncan-Smith</a> and a <a href="https://theconversation.com/sorry-jamie-oliver-id-be-surprised-if-sugar-tax-helped-cut-obesity-56471">new sugar tax</a> may have dominated discussion over the past few days, but it is the extension of a generous tax system, less penalties on capital income and less tax liabilities for corporations which mark out the fundamental ideology at play.</p>
<p>There is only one catch. The budget will only make you better off if you are already better off than the majority of UK residents.</p>
<p>With the term “inequality” thrown about quite a bit of late, a budget like this offer an ideal chance to see inequality in action: to see how the gap between rich and poor is maintained or worsened, and what its social consequences are. Government policy plays an important part in this. Here is how it works, in four simple steps. </p>
<p><strong>1. Shift the tax burden from the best to worst off</strong></p>
<p>Capital gains are a <a href="http://piketty.pse.ens.fr/files/capital21c/en/pdf/F3.1.pdf">key income component</a> of the wealthy. Disposing of profitable assets such as shares carries a charge, the top rate of which is now reduced in this budget <a href="https://www.gov.uk/government/publications/budget-2016-documents/budget-2016">from 28% to 20%</a>. This is great news for early entrants to the property market, especially those in London where property price growth rates <a href="http://data.london.gov.uk/housingmarket/#regprice">marginally exceeded</a> the English average last year. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/115824/original/image-20160321-30908-1uwd83m.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/115824/original/image-20160321-30908-1uwd83m.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/115824/original/image-20160321-30908-1uwd83m.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/115824/original/image-20160321-30908-1uwd83m.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/115824/original/image-20160321-30908-1uwd83m.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/115824/original/image-20160321-30908-1uwd83m.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/115824/original/image-20160321-30908-1uwd83m.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/115824/original/image-20160321-30908-1uwd83m.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Ramping up the property ladder.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/digallagher/4880167882/in/photolist-hs8KyG-a7ZnoY-8rf8Ty-4JMJA7-ovyqJr-cTLZt-7xP5CY-onwqwr-oLZDbw-8SZuYZ-9jZ3qt-9bTXKk-7MeJ4g-rvgxg-6VzkFz-5PEux-bNqJs2-e7cciH-e7cbZR-e7cbET-rreomS-gvvbLF-oYvpWK-di8QQy-ae67S8-awuoHx-fEtAjo-dSMqSo-9or5z2-dSFBwM-c9qgbQ-atpcZU-a8v8r7-rv7QA3-aCxYfc-dSFBEr-dSMbwq-dSFBCV-dSFByT-dSMbzU-dSFBBD-dSMbvy-9LJ3RK-dSFBwZ-dSFBDP-dSFByx-dSMbyA-a5uRL9-dSMqSL-dSMbzE">Diana Parkhouse/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span>
</figcaption>
</figure>
<p>With financial sector growth now recognised as a key contributor to the rising gap between rich and poor, this measure looks set to drive a wedge further between those dependent on earned income, and those with access to “rentier” income sources such as property. And better-off people without access to capital are not forgotten. With the higher income tax threshold raised to £45,000, those on above-average earned incomes will reap substantial benefits. </p>
<p>It is also well established that indirect consumption taxes <a href="http://journals.cambridge.org/abstract_S0007123407000348">disproportionately harm</a> the less well-off. While direct taxes such as capital gains lend themselves better to income redistribution, consumption taxes such as VAT – and now the sugar tax – take a greater percentage of the income of low earners. Rather than pursuing the producers, this government has chosen to hit the consumer. </p>
<p><strong>2. Lower taxes on corporations</strong></p>
<p>The direct effects of this measure are more difficult to see. The secret to its negative effects rests in the practice of <a href="http://www.forbes.com/2010/06/24/tax-finance-multinational-economics-opinions-columnists-lee-sheppard.html">transfer pricing</a> by multinationals. In a higher-tax regime (such as the US) compared to a low-tax one (such as the Republic of Ireland, and now increasingly the UK), minimal policing of tax avoidance encourages some very creative accounting. In Ireland, recorded Gross National Income (GNI) over the last ten years has been up to 15% lower than Gross Domestic Product (GDP). GNI typically excludes the effect of multinational transfers. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/115829/original/image-20160321-30929-5qltbh.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/115829/original/image-20160321-30929-5qltbh.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/115829/original/image-20160321-30929-5qltbh.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=349&fit=crop&dpr=1 600w, https://images.theconversation.com/files/115829/original/image-20160321-30929-5qltbh.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=349&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/115829/original/image-20160321-30929-5qltbh.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=349&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/115829/original/image-20160321-30929-5qltbh.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=439&fit=crop&dpr=1 754w, https://images.theconversation.com/files/115829/original/image-20160321-30929-5qltbh.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=439&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/115829/original/image-20160321-30929-5qltbh.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=439&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">All is not what it seems…</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/dennis_matheson/3647166332/in/photolist-6yhFu9-a2grdq-qDmv1J-g9rbv-bDydoh-6SsMUs-qG62Td-g9raP-f9o9TQ-574bHL-aDnFee-5UxchZ-6SsN3L-579Sn5-aDnGer-g9r8H-aDrxRA-aDryiw-8B2rL4-641acw-VxBP-8FKJfM-62yi9W-pDE5fR-qJnPAF-bSsWvi-2eDwf-bDycXN-bSsWn8-g9r9X-8yKGcC-bSsWjc-g9rcp-bW3b6r-54cjvP-nfZvxc-ynLBKq-bSsWHZ-bDydFG-91BVHk-xQ3Xi-5dz1Zn-piRWm3-2BB46k-66jegG-ikhUzd-bDydxo-bDydCN-g9rd7-adHLWD">Dennis Matheson/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span>
</figcaption>
</figure>
<p>This means nothing for the real economy – there are no jobs or local spin-offs associated with this false output. Yet our reliance on GDP to measure social progress is flawed as a result, and could encourage complacency on more important policy goals such as quality job creation. It is great for corporate share prices however – and thanks to that reduction in capital gains tax, the long-term combined pay-off could be substantial.</p>
<p><strong>3. Cut benefits</strong></p>
<p>The negative public and political <a href="http://www.independent.co.uk/news/uk/politics/stephen-crabb-to-formally-drop-curbs-to-pip-disability-payments-as-david-cameron-attempts-to-defend-a6943721.html">reaction to the proposal to cut Personal Independence Payments</a> has been encouraging – and perhaps a sign of the mask slipping. While it may be easy to dress core benefit cuts in the guise of “labour activation”, cuts to disability payments are ethically (never mind economically) unjustifiable. So unconscionable was this particular proposal, that <a href="https://theconversation.com/iain-duncan-smith-and-george-osborne-a-battle-for-the-conservative-soul-56651">Duncan-Smith</a> had the <a href="http://www.theguardian.com/politics/2016/mar/18/iain-duncan-smith-resignation-letter-in-full">decency to resign</a> (we won’t get mired in discussion about his motivations here) and the idea <a href="http://news.yahoo.com/british-pm-drops-welfare-cut-sparked-ministers-resignation-173339117.html;_ylt=AwrC0ww8NfBW2BoAgLLQtDMD;_ylu=X3oDMTByOHZyb21tBGNvbG8DYmYxBHBvcwMxBHZ0aWQDBHNlYwNzcg--">eventually got dropped</a> entirely. </p>
<p>Social transfers play a key role in minimising the gap between rich and poor, but this effect is only realised in a system where those who can most afford it pay their fair share and acknowledge that their wealth is at least partly dependent on the cheap and unregulated labour of others. With no sound economic justification (how can you cut benefits in the name of austerity whilst simultaneously shrinking the tax base after all?), this perverse logic can only be ideological. A commitment to the longstanding caricature of the undeserving poor and a parallel commitment to looking after privileged constituents. In IDS’ own words: </p>
<blockquote>
<p>It looks like we see benefits as a pot of money to cut because they don’t vote for us.</p>
</blockquote>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/115831/original/image-20160321-30912-ofqdmv.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/115831/original/image-20160321-30912-ofqdmv.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/115831/original/image-20160321-30912-ofqdmv.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=402&fit=crop&dpr=1 600w, https://images.theconversation.com/files/115831/original/image-20160321-30912-ofqdmv.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=402&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/115831/original/image-20160321-30912-ofqdmv.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=402&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/115831/original/image-20160321-30912-ofqdmv.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=505&fit=crop&dpr=1 754w, https://images.theconversation.com/files/115831/original/image-20160321-30912-ofqdmv.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=505&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/115831/original/image-20160321-30912-ofqdmv.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=505&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">IDS plays the room.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/cabinetoffice/14726270562/in/photolist-kpWzZR-qnhQqp-bq4jS1-pLHdRD-aQRUUz-r4ypdQ-dwz9wW-e7ufVa-dwz9Z3-uGTQqR-qiW5fg-oriZbA-bnUg1G-9iVw79-qJuJcL-8HuZTX-B1Q8jt-ueXiv3-q2dBiy-qiHyTw-q2kn8K-sow97M-xe2WEY">Cabinet Office/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span>
</figcaption>
</figure>
<p><strong>4. What else?</strong></p>
<p>It doesn’t stop with the budget. If successful, the <a href="http://www.theguardian.com/politics/2015/jul/15/trade-unions-conservative-offensive-decades-strikes-labour">Trade Union Bill</a> will restrict the ability of labour to strike by introducing new rules on balloting, advance notice periods, mid-strike ballots and stricter regulation of pickets. This will further reduce worker’s bargaining power and produce a more favourable environment for employers better able to discipline labour costs, which will do no harm to share prices.</p>
<p>Implementation of the full range of benefit cuts will be spread across the lifetime of this government, compounding the pain year-by-year, while capital-rich individuals enjoy a windfall. Low-income individuals now face a squeeze from a number of directions. Their income security has been threatened through benefit cuts such as the now rejected proposed reduction to Personal Independence Payments, reduced benefit cap thresholds and freezes on working-age benefit rates. With a 15% rise, to 801,000, in the number of people on <a href="http://www.theguardian.com/uk-news/2016/mar/09/uk-workers-on-zero-hours-contracts-rises-above-800000">zero-hours contracts</a> since 2014 and a sustained assault on unions eliminating a key line of resistance to casualisation, these are likely to be trying years. </p>
<p>Worst of all, perhaps, is the frustrating insidiousness of the way these changes are justified through the government’s unremitting austerity mantra. They fly in the face of <a href="http://www.theguardian.com/business/ng-interactive/2015/apr/29/the-austerity-delusion">empirical evidence</a>; force former cheerleaders like IDS to resign; and spark <a href="http://www.theguardian.com/uk-news/2015/nov/25/george-osborne-u-turn-scrap-tax-credit-cuts-autumn-statement">embarrassing U-turns</a>. At least Margaret Thatcher had the decency to wear her ideology on her sleeve.</p><img src="https://counter.theconversation.com/content/48911/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Eoin Flaherty does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>When the excitement over cabinet resignations and the sugar tax subsides, the 2016 Budget acts as a blueprint for making the wealthy wealthier.Eoin Flaherty, Lecturer in Sociology, Queen's University BelfastLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/566512016-03-21T17:53:18Z2016-03-21T17:53:18ZIain Duncan Smith and George Osborne: a battle for the Conservative soul<p>The dramatic <a href="http://www.bbc.co.uk/news/uk-politics-35848687">resignation of Iain Duncan Smith</a> has plunged the Tories into their gravest political crisis in a very long time. In fact, the last time it found itself in this much turmoil was when Duncan Smith was ousted as leader in 2003. </p>
<p>There, in that moment, lie the origins of the current civil war. This isn’t primarily about welfare cuts, Europe or a clash of personalities. This is a battle of ideas that has come to split the Conservative Party. It boils down to the compassionate conservatism championed by Duncan Smith against the economic liberalism defended by chancellor George Osborne.</p>
<p>Duncan Smith was among the rebels who opposed the Maastricht Treaty in 1993. For their efforts to block the closer integration of Europe, party leader John Major famously labelled these rebels “bastards”. The group opposed the EU on the Thatcherite grounds that it was not enough pro-free market.</p>
<p>But following a visit to the deprived housing estate of Easterhouse in Glasgow in 2002, Duncan Smith began to undergo a profound transformation from economic Thatcherism to compassionate conservatism. That year, he <a href="http://www.theguardian.com/politics/2002/oct/10/conservatives2002.conservatives2">acknowledged</a> that: “people too often remember the hurt we [the Tories] caused and the anger they felt” and that: “we believe that the privileges of the few must be turned into the opportunities of the many”.</p>
<p>He was part of a small group that set up the <a href="http://www.centreforsocialjustice.org.uk/">Centre for Social Justice</a> in 2004. The think tank has since established a track record for developing ideas to improve the lot of the poor. Instead of relying on either the central state or the free market, the CSJ has consistently argued for community-based solutions to address the five causes of poverty: family breakdown, lack of education, unemployment, addiction and personal indebtedness.</p>
<h2>Change of heart</h2>
<p>In government, Duncan Smith has tried to adopt some of the CSJ ideas. He has pushed for early intervention to help families who struggle and encouraging those who can work to return to work. He believes the <a href="https://www.gov.uk/universal-credit/overview">universal credit</a> would radically simplify the benefits system, even though its introduction has been blighted by terrible IT problems.</p>
<p>Duncan Smith has also publicly supported many measures that went directly against his stated social purpose, including welfare cuts, the bedroom tax and the withdrawal of benefits from people who now rely on food banks. But it is equally true that he and his allies have been saying for some time that deficit reduction has hurt the poor disproportionately while maintaining the privileges of the affluent middle classes and wealthy pensioners.</p>
<p>That’s the main motivation for resigning over the proposed cuts to disability benefits. If the EU referendum was the real reason, Duncan Smith could and probably would have left the government before now. This much is clear from the fact that he remained in the cabinet even after the prime minister announced his underwhelming renegotiated <a href="https://theconversation.com/the-uk-deal-with-the-eu-explained-what-it-says-and-what-it-means-55052">EU membership terms</a>. The fact that he chose not to resign at that stage suggests that Europe was not the final straw.</p>
<p>That said, Duncan Smith will still have to answer why he remained in office after the bedroom tax or the tax credit fiasco, which were fundamentally incompatible with his commitment to compassionate conservatism.</p>
<h2>Meanwhile, at Number 11</h2>
<p>Since his meteoric rise from new MP in 2001 to chancellor of the exchequer in 2010, George Osborne has stuck to a very different political philosophy. His position is a mix of social and economic modernisation that reflects his metropolitan liberal outlook.</p>
<p>That has put him at odds, not just with the Conservative grassroots, but also with large parts of the country, for whom globalisation has not been an unmitigated success – including many working-class communities that have experienced a drop in wages (exacerbated by low-skilled immigration) and whose local economies are disappearing. Many of them are small “c” conservatives who feel similarly betrayed by the Tories and Labour and have <a href="https://theconversation.com/bye-bye-swivel-eyes-how-ukip-transformed-to-woo-the-masses-34671">switched to UKIP</a>.</p>
<p>By contrast with his friend Osborne, Cameron shares some of Duncan Smith’s commitment to social reform. As opposition leader he embraced the idea of building a <a href="https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/78979/building-big-society_0.pdf">Big Society</a>, which was to be about strengthening civic institutions alongside the state and the market and empowering community-based solutions.</p>
<p>But after the 2008 financial crash, Cameron performed a <a href="http://www.theguardian.com/society/2015/jan/20/the-big-society-civil-exchange-audit-shows-coalition-contempt-and-hypocrisy">u-turn</a> and adopted the austerity agenda that dominated his first term as prime minister. To the regret of compassionate conservatives, the Big Society was hollowed out and derided by Thatcherites as garbage.</p>
<p>Following his unexpected victory in the 2015 general election, Cameron renewed his commitment to the social reform agenda. Under the banner of one-nation conservatism, his speeches on domestic politics have focused on social mobility, fighting racism, and working towards equality of opportunity, pursuing what he calls “progressive ends” with “conservative means”.</p>
<p>Even Osborne seemed to get in on the act, announcing in his July 2015 budget the introduction of a <a href="http://www.livingwage.org.uk/what-living-wage">national living wage</a>, apprenticeships funded by business and city devolution.</p>
<p>But Osborne has played personal politics with the national budget – and burned his fingers repeatedly, especially with the bedroom tax and cuts to disability benefits. If he wants to stand any chance of being elected Tory leader and even prime minister, he needs to develop a political vision that can command the support of Conservative voters and the wider electorate.</p>
<p>The only way he’ll get a chance to rebuild his reputation is if the country votes to remain in the EU. Thus the key to Osborne’s future lies in No 10. Cameron has to broaden his case for Britain’s membership of the EU beyond economic and national security arguments to include patriotic reasons for staying in. Otherwise the remain campaign will struggle to mobilise enough voters to turn out on June 23. Osborne’s fate now rests with the nation, not his party.</p><img src="https://counter.theconversation.com/content/56651/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Adrian Pabst does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Behind this spat lie two very different ideas about what it means to be a Tory in the 21st Century.Adrian Pabst, Senior Lecturer in Politics, University of KentLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/565232016-03-21T12:37:17Z2016-03-21T12:37:17ZFizzy drinks tax alone won’t solve childhood obesity nightmare<figure><img src="https://images.theconversation.com/files/115599/original/image-20160318-4432-19epx22.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Hola cola</span> <span class="attribution"><a class="source" href="http://www.shutterstock.com/s/child+soda/search.html?page=2&thumb_size=mosaic&inline=296920880">Monkey Business Images</a></span></figcaption></figure><p>George Osborne’s <a href="http://news.sky.com/story/1660913/osborne-defends-credibility-after-budget">sugar levy</a> on soft drinks seems to acknowledge, at long last, that the food industry should be regulated to help consumers adopt healthier diets. A substantial body of evidence strongly supports a “soda tax”. Regularly consuming sugary drinks is associated with growing rates of <a href="http://www.sciencedirect.com/science/article/pii/S0140673600040411">obesity</a>, <a href="http://www.sciencedirect.com/science/article/pii/S0031938410000600">diabetes</a> and <a href="http://link.springer.com/article/10.1631/jzus.B0820245">tooth decay</a>, particularly among children. Since <a href="http://www.oecd.org/health/Obesity-Update-2014.pdf">price influences consumption</a>, the tax aims to help steer consumers towards healthier options. </p>
<p>The soft-drinks industry has <a href="http://www.huffingtonpost.com/peter-dreier/the-soda-tax-wars_b_544898.html">loudly objected</a> to the tax on the grounds that it is an intrusion of the “nanny state” on individual choice. But this ignores the fact that consumer choice is shaped to a large extent by the marketing efforts of the soft-drinks manufacturers. In truth this is the health-motivated state taking back some ability to influence consumers from the profit-motivated corporations, finally living up to its responsibility to protect public health and do something about childhood obesity. </p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/115601/original/image-20160318-4456-vy5bby.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/115601/original/image-20160318-4456-vy5bby.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/115601/original/image-20160318-4456-vy5bby.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=758&fit=crop&dpr=1 600w, https://images.theconversation.com/files/115601/original/image-20160318-4456-vy5bby.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=758&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/115601/original/image-20160318-4456-vy5bby.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=758&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/115601/original/image-20160318-4456-vy5bby.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=952&fit=crop&dpr=1 754w, https://images.theconversation.com/files/115601/original/image-20160318-4456-vy5bby.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=952&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/115601/original/image-20160318-4456-vy5bby.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=952&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Breathe in …</span>
<span class="attribution"><a class="source" href="http://www.shutterstock.com/pic-281904083/stock-photo--childhood-obesity.html?src=csl_recent_image-1">Oleg Malyshev</a></span>
</figcaption>
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<p>Soft-drinks manufacturers also argue that food taxes disproportionately affect poor people, since they spend a larger share of their income on food, particularly unhealthy food. The move will therefore exacerbate inequality, they claim. Yet this is a short-term view of inequality: while poorer consumers may spend proportionately more of their income on unhealthy drinks, they <a href="https://nutritionreviews.oxfordjournals.org/content/67/suppl_1/S36">are more likely</a> to be overweight. They may therefore see the greatest health benefits in the longer term. </p>
<h2>Complex problem</h2>
<p>Public support for the soda tax will be higher if the tax is framed as a health-promotion tool, and if the revenues are specifically allocated to obesity-prevention programmes. We should therefore welcome the <a href="http://www.bbc.co.uk/news/health-35824071">chancellor’s announcement</a> that the £520m he expects to raise in year one will be spent on increasing sports funding in primary schools. </p>
<p>Yet the success of this tax will ultimately depend on how effectively it has been designed. Here Osborne still has a lot of thinking to do. His decision to exclude milk-based drinks and pure fruit juices, even though they can be high in sugar, may work against the tax’s health objectives. This is particularly the case if it results in sweetened drinks being substituted for milk-based drinks. </p>
<p>The <a href="http://www.sciencedirect.com/science/article/pii/S0140673614617451">literature</a> suggests these kinds of interventions are most effective when they target the problem precisely and don’t allow consumers unhealthy alternatives. At present the government’s message also appears confused: is the tax designed to discourage consumers from buying so many soft drinks or encourage the manufacturers to reduce their sugar content – or both? The bottom line is that if the soda tax is going to work, it must incentivise consumers to shift from sugary soft drinks to less sugary ones. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/115600/original/image-20160318-4417-1s3p8r.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/115600/original/image-20160318-4417-1s3p8r.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/115600/original/image-20160318-4417-1s3p8r.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/115600/original/image-20160318-4417-1s3p8r.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/115600/original/image-20160318-4417-1s3p8r.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/115600/original/image-20160318-4417-1s3p8r.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/115600/original/image-20160318-4417-1s3p8r.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/115600/original/image-20160318-4417-1s3p8r.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Milky pleasures.</span>
<span class="attribution"><a class="source" href="http://www.shutterstock.com/pic-248233210/stock-photo-raspberry-smoothie.html?src=csl_recent_image-1">magdanatka</a></span>
</figcaption>
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<p>The debate surrounding this soda tax highlights that developing effective obesity-prevention strategies is complex. If the government genuinely wants to tackle the problem, it needs to comprehensively address the multiple aspects of childhood obesity. Sugary drinks are an important part of that, but still only a part. The government’s long-awaited and much delayed <a href="http://www.theguardian.com/society/2016/feb/26/childhood-obesity-strategy-delayed-sugar-tax-unlikely">strategy on</a> childhood obesity, promised for this summer, may well build on the soda-tax announcement. Certainly the government still needs to do far more than it has proven willing to do so far to reverse obesity trends.</p><img src="https://counter.theconversation.com/content/56523/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Amandine Garde often advises governments, international organisations and NGOs on the role that legal instruments can play in promoting healthier lifestyles. She currently acts as a consultant to the World Health Organization and UNICEF on the regulation of food and alcohol marketing, particularly to children, on the plain packaging of tobacco products and on other policies on the prevention of non-communicable diseases. She does not accept any funding from the food, the tobacco or the alcohol industries.
She received some research funding from the Economic and Social Research Council for a project on the marketing of food and non-alcoholic beverages to children in 2013.</span></em></p><p class="fine-print"><em><span>Kirsten Ward and Oliver Bartlett do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>George’s medicine for health crisis is welcome, but not marvellous.Oliver Bartlett, Lecturer in Law, University of LiverpoolAmandine Garde, Professor of Law, University of LiverpoolKirsten Ward, Pre-doctoral researcher, University of LiverpoolLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/565742016-03-20T14:20:11Z2016-03-20T14:20:11ZWhy Iain Duncan Smith resignation registers a six on the political Richter Scale<p>If there were a Richter Scale of Political Resignations, then prime ministers such as Margaret Thatcher, Harold Wilson and Harold Macmillan would register at the very top – on nine.</p>
<p>Big beasts such as Conservative Chancellor <a href="http://www.itv.com/news/2015-10-10/lord-howe-and-the-speech-which-ulimately-destroyed-margaret-thatcher/">Geoffrey Howe</a> and Defence Secretary <a href="https://www.youtube.com/watch?v=YXUfM2LRDIQ">Michael Heseltine</a> would register at about seven. <a href="http://www.bbc.co.uk/news/uk-politics-35855616">Iain Duncan Smith’s departure</a>, on the other hand, would probably score around six.</p>
<p>The work and pensions secretary’s departure is the sort of earthquake that would only inflict slight to moderate damage on solid structures but is capable of causing more severe problems for less stable edifices. Unfortunately for the Conservative Party, at least in the run up to the EU referendum, it fits all-too-easily into the latter category .</p>
<p>Duncan Smith can hardly claim to be in the same league as Geoffrey Howe – a genuinely quiet man who altered the economic and social destiny of his country. His resignation has clearly resonated, crystallising the antipathy many Tories feel toward a chancellor they see as too clever by half and a prime minister they regard as far too desperate to keep the UK in the EU. But Howe’s resignation really detonated, blowing a decade of British politics to kingdom come by triggering the defenestration of an icon and the eventual defeat of the Conservatives by New Labour a few years later.</p>
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<p>Still, while Duncan Smith’s departure doesn’t represent a direct threat to a sitting prime minister, like Howe’s did, it is nonetheless a direct hit on the prime minister’s entire political project. It strikes at the heart of Cameron’s attempt to persuade the country that it can trust the Conservatives to combine competence with compassion and that it should vote to stay in the EU.</p>
<p>The critique that came through in Duncan Smith’s resignation letter rams home the Out campaign’s portrayal of David Cameron and George Osborne as disingenuous out-of-touch toffs who don’t give a monkey’s for ordinary people. And that is one of the few narratives, along with the idea that Britain will be overrun by foreigners unless it gets out of the EU, that stands a chance of overwhelming the In campaign’s message that Brexit is a leap in the dark that will endanger Britain’s prosperity and security.</p>
<h2>Who to believe</h2>
<p>Blogs, newspaper columns and the airwaves have been running hot with analyses of Duncan Smith’s <a href="http://www.theguardian.com/politics/2016/mar/20/iain-duncan-smith-resigned-eu-not-benefit-cuts-altmann">“real reasons”</a> for going. But motives in these cases are always myriad and mixed. They are one part long-felt frustration (in this case over Osborne’s game-playing and determination to achieve savings without hitting those voters the Tories need most), one part eye on the main chance (in this case kicking one of the guys who is key to battling Brexit while he’s down).</p>
<p>It is impossible at this stage to tell whether, by resigning, Duncan Smith has inflicted a flesh wound – superficially nasty but no risk to the Remain camp in the long term – or something a whole lot more serious.</p>
<p>Which kind of wound it turns out to be will depend partly on the Conservative Party itself but also on the public, too. And when it comes to the latter, political junkies would always do well to remind themselves that most people aren’t paying anywhere near as much attention to all this as they are. By the time the referendum rolls round, pollsters will be lucky to find a majority of ordinary voters who not only know some Tory guy resigned back in March but that his name was Iain Duncan Something.</p>
<p>This weekend, then, has been a bad one for Cameron, and especially for Osborne, but earthquakes, even moderately severe ones, are very often survivable.</p><img src="https://counter.theconversation.com/content/56574/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Tim Bale does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The general public isn’t paying nearly as much attention to this spat as political junkies think – and that’s what matters in the referendum.Tim Bale, Professor of Politics, Queen Mary University of LondonLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/564522016-03-18T10:03:57Z2016-03-18T10:03:57ZCorporation tax: the progressive case for getting rid of it<p>George Osborne, the UK chancellor, announced that corporation tax <a href="https://www.gov.uk/government/news/budget-2016-some-of-the-things-weve-announced">will be cut to 17% in 2020</a>. But why stop there? There’s a very good case for thinking the unthinkable and getting rid of corporation tax altogether. </p>
<p>For one thing, corporation tax does not bring in huge tax receipts. Last year the onshore component <a href="https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/501040/Jan16_Receipts_NS_Bulletin_Final.pdf">brought in</a> 8% of all UK tax. And this is a gross figure, which excludes the <a href="https://www.gov.uk/tax-on-dividends/how-dividends-are-taxed">tax credits</a> that taxpayers receive on dividends (to be replaced in April by a <a href="https://www.gov.uk/government/publications/dividend-allowance-factsheet/dividend-allowance-factsheet">tax-free allowance</a>). By my reckoning, the true contribution that corporation tax makes to the tax take is more like 6%. </p>
<p>Corporation tax <a href="https://data.oecd.org/tax/tax-on-corporate-profits.htm">has been</a> raising less and less money worldwide in recent years because governments have been competing with one another to reduce rates. Having peaked at 13% of global GDP in 2006, it was down to 7% by 2014. There’s every reason to assume that this trend will continue, particularly as multinationals become better at avoiding tax liabilities in any one country. Why fight this race to the bottom?</p>
<p>But there’s another important argument for why corporation tax matters less than you think: get rid of it and the money would still reach the government in other ways. Suppose a company with 100m shareholders has decided to distribute all its after-tax profit of £50m to its shareholders - a dividend of £0.50 a share would be paid. That means that a shareholder with 10,000 shares would receive a £5,000 dividend. Assuming this was their only dividend income that year, they would pay no tax on it because of the <a href="https://www.gov.uk/government/publications/dividend-allowance-factsheet/dividend-allowance-factsheet">£5,000 dividend allowance</a>. </p>
<p>Now consider what would happen if there was no corporation tax and no dividend allowance. The person receiving the dividend would be taxed on it as if it were any other income. Instead of the tax liability disappearing, it simply shifts from company to individual. Assuming they were a basic-rate taxpayer being taxed at 20%, this would mean that the company would have to pay them a dividend of £6,250 for them to receive £5,000. It makes you realise that under the current system, corporation tax is effectively a pre-paid income tax. </p>
<h2>FAQs</h2>
<p>Yet if you were going to shift the tax liability to the person receiving the dividend in this way, you might have spotted an issue. Most companies do not distribute all of their profits to shareholders. UK companies pay out about <a href="http://www.telegraph.co.uk/finance/personalfinance/investing/12006273/The-chart-that-shows-UK-dividends-are-reaching-breaking-point.html">50%</a> of profits as dividends. And some, such as Ryanair, don’t pay dividends at all. So would HMRC lose out?</p>
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<span class="caption">Going up?</span>
<span class="attribution"><a class="source" href="http://www.shutterstock.com/cat.mhtml?lang=en&language=en&ref_site=photo&search_source=search_form&version=llv1&anyorall=all&safesearch=1&use_local_boost=1&autocomplete_id=&searchterm=share%20chart&show_color_wheel=1&orient=&commercial_ok=&media_type=images&search_cat=&searchtermx=&photographer_name=&people_gender=&people_age=&people_ethnicity=&people_number=&color=&page=1&inline=391272478">Mclek</a></span>
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<p>The answer is no. Get rid of corporation-tax liability and the share prices of companies would rise to reflect their extra net worth. The lower the dividend payout, the higher the share price. When shareholders sell their shares, this means they will make a higher capital gain, which means greater income-tax receipts for HMRC.</p>
<p>You might be wondering whether in a system like this, people would be more likely to invest in something other than shares and that the tax receipts would therefore be lost. I suspect companies would still look like a good investment overall, particularly because they would have become worth more and investors value the protection afforded by limited liability.</p>
<p>There is still the problem that governments want their money sooner rather than later since they have to fund public expenditure. Relying on tax receipts from dividend/share-sale income would potentially be slower than getting them from corporation tax. You could get around this by levying a withholding tax of say 20% on companies when they pay dividends – meaning the dividend income would be paid net of the withholding tax, which the company would be responsible for paying to HMRC – in a similar way to how VAT works. And levying a withholding tax, say 2%, when a shareholder sells shares.</p>
<p>You would then have to adjust the individual’s tax liability to take account of these withholding taxes. This would encourage taxpayers to declare all their income and complete tax returns, since they may be entitled to a tax refund. If you wanted to encourage them further, you could set the withholding tax at a higher rate – say 40% for dividends. </p>
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<a href="https://images.theconversation.com/files/115502/original/image-20160317-30244-8n85tq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/115502/original/image-20160317-30244-8n85tq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/115502/original/image-20160317-30244-8n85tq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=424&fit=crop&dpr=1 600w, https://images.theconversation.com/files/115502/original/image-20160317-30244-8n85tq.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=424&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/115502/original/image-20160317-30244-8n85tq.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=424&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/115502/original/image-20160317-30244-8n85tq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=533&fit=crop&dpr=1 754w, https://images.theconversation.com/files/115502/original/image-20160317-30244-8n85tq.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=533&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/115502/original/image-20160317-30244-8n85tq.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=533&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">‘One for you, 19 for me.’</span>
<span class="attribution"><a class="source" href="http://www.shutterstock.com/cat.mhtml?lang=en&language=en&ref_site=photo&search_source=search_form&version=llv1&anyorall=all&safesearch=1&use_local_boost=1&autocomplete_id=&search_tracking_id=adhRP5br16s7ZkObDspxjQ&searchterm=tax%20liability&show_color_wheel=1&orient=&commercial_ok=&media_type=images&search_cat=&searchtermx=&photographer_name=&people_gender=&people_age=&people_ethnicity=&people_number=&color=&page=1&inline=389062894">Ho Yeow Hui</a></span>
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<p>Yes this system brings its own complexities, but they are not insurmountable. There is no perfect tax system. And shifting the corporation-tax burden to the individual would have other benefits. HMRC would transfer resources devoted to corporation tax to income taxes, which should bring in more tax receipts. Many people, including Labour leader <a href="http://labourlist.org/2015/07/you-just-cannot-cut-your-way-to-prosperity-jeremy-corbyn-outlines-plans-to-make-large-reductions-in-93bn-of-corporate-subsidies/">Jeremy Corbyn</a>, argue that a better-resourced tax authority would benefit in this way. </p>
<p>Companies would save money since they wouldn’t have to pay their accountants to deal with corporation tax. Needless to say it would create a more business-friendly environment, which would make the UK a more attractive place for companies to invest – and I say all this as a believer in public services and progressive taxation. Once you recognise that doing away with corporation tax doesn’t mean losing tax revenues, these benefits hopefully become more persuasive.</p><img src="https://counter.theconversation.com/content/56452/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Grahame Steven does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Why stop at 17%?Grahame Steven, Lecturer in Accounting, Edinburgh Napier UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/564712016-03-17T21:58:12Z2016-03-17T21:58:12ZSorry Jamie Oliver, I’d be surprised if sugar tax helped cut obesity<p>It was Benjamin Franklin <a href="http://www.phrases.org.uk/meanings/death-and-taxes.html">who said</a> only two things in life are certain: death and taxes. Actually taxes are anything but certain, and what is definitely not certain is how people will respond to them. </p>
<p>Unintended consequences are the bane of those looking to develop innovative ways of raising money from taxes. Look no further than the UK government’s decision to introduce a system of local taxation in the 1980s known as the community charge, aka the poll tax. It led to over 200,000 people protesting in London’s Trafalgar Square in 1990. The riots that ensued <a href="http://www.telegraph.co.uk/news/politics/margaret-thatcher/9980361/Margaret-Thatcher-Refusal-to-back-down-on-poll-tax-that-cost-the-leader-dear.html">precipitated</a> the end of Mrs Thatcher’s time in office and her successor John Major scrapped the tax. </p>
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<p>In our era the bedroom tax is very unpopular and has been ditched in <a href="http://www.dailyrecord.co.uk/news/scottish-news/bedroom-tax-hated-tory-tax-3116020">Scotland</a>, while as I write the contentious 5% tampon tax is <a href="http://www.bbc.co.uk/news/uk-politics-35834142">about to be</a> scrapped in a deal with the EU. </p>
<p>Yet more often than not we become habituated to the taxes we pay. The standard rate of VAT <a href="https://www.gov.uk/vat-rates">is 20%</a>, which increased in 2011 from 17.5% – but I think none of us protested, and few probably even remember the increase. Over the years we have come to expect taxes to increase on “sin” products such as alcohol and cigarettes, but the evidence that such taxes reduce how much of them we consume <a href="http://www.nber.org/papers/w18326">is sparse</a>. </p>
<p>With cigarettes what seems to have been more important is that through the bans in public places, smoking has gradually become an antisocial activity. Certainly having to be part of a group of furtive smokers outside an office in the cold is not appealing. </p>
<h2>The sweet hereafter</h2>
<p>So what of the sugar tax? A day after the Budget it is difficult to say what impact it will have but let’s be clear, the likes of Jamie Oliver <a href="http://www.theguardian.com/australia-news/2016/mar/17/jamie-oliver-urges-australia-to-pull-your-finger-out-and-implement-sugar-tax">think</a> it will be the start of reducing childhood obesity. I would be less sure. One only needs to look to Denmark – which <a href="http://www.bbc.co.uk/news/world-europe-20280863">attempted to</a> introduce a fat tax a few years ago – to see the consequences may not be intended. It raised the price of a wide range of products and put small businesses such as grocers selling cheese particularly at risk. Consumers found ways to circumvent the tax, for example by buying products in Germany. </p>
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<span class="caption">Thirst quencher?</span>
<span class="attribution"><a class="source" href="http://www.shutterstock.com/cat.mhtml?lang=en&language=en&ref_site=photo&search_source=search_form&version=llv1&anyorall=all&safesearch=1&use_local_boost=1&autocomplete_id=&search_tracking_id=iPGotKFpNoaxd-TZKyRR9w&searchterm=soda&show_color_wheel=1&orient=&commercial_ok=&media_type=images&search_cat=&searchtermx=&photographer_name=&people_gender=&people_age=&people_ethnicity=&people_number=&color=&page=1&inline=391513633">Joshua Resnick</a></span>
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<p>In January the British Medical Journal <a href="http://www.bmj.com/company/wp-content/uploads/2014/07/sugar-tax-mexico.pdf">reported</a> research from Mexico which suggested that its 10% sales tax on sweetened drinks had resulted in something like a 12% reduction in sales. But beware of direct comparisons: this was a simple sales tax passed on to consumers in a country where food <a href="http://www.telegraph.co.uk/news/health/news/12085408/Children-aged-five-eating-own-weight-in-sugar-every-year.html">accounts for</a> a larger proportion of a person’s income than in the UK. </p>
<p>In contrast, the UK version looks like being levied on the manufacturers. The problem is that they can avoid being penalised if they pass on the cost to consumers – assuming it’s not enough to make consumers choose different products. On the other hand if the companies do absorb the cost, what difference will it have to the obesity and other health issues caused by too much sugar? The companies pay a bit more tax and consumers still get their sugar fix. </p>
<p>Ultimately I do not think we will see the behaviour change that some hope for from this one tax, especially as there are so many other products with just too much sugar and above all too many calories on the market. As I <a href="https://theconversation.com/a-sugar-tax-is-needed-to-kickstart-companies-into-action-not-consumers-49785">have said before</a>, what we need is for companies to reformulate their products. All we can hope for is that this might be a nudge in the right direction.</p><img src="https://counter.theconversation.com/content/56471/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Isabelle Szmigin does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Why Britain’s obesity crusader could be heading for disappointment.Isabelle Szmigin, Professor of Marketing, University of BirminghamLicensed as Creative Commons – attribution, no derivatives.