Ben Southwood debates corporation tax in City AM

Head of Policy at the Adam Smith Institute, Ben Southwood, wrote a debate piece for City AM arguing that all corporation tax should be abolished as soon as possible.

Read the debate piece here.

"Cutting corporation tax on small businesses is a start, but it would be better to get rid of it altogether."

ASI's guest lecturer appears on BBC Radio 4's Today programme

Prof. Scott Sumner, who delivered the speech at the Adam Smith Institute's annual lecture, appeared on BBC Radio 4's Today programme to discuss the importance of nominal GDP targeting. Listen to the interview here. (start time 8:14)

Press Release: Central banks can revive the global economy, says economist who inspired QE3

Professor Scott Sumner will be hosted by the Adam Smith Institute from 17th June - 21st June. To arrange an interview with Prof. Sumner, contact Kate Andrews, Communications Manager: kate@adamsmith.org / 07584 778 207

Central banks can revive the global economy by targeting spending levels instead of inflation, Prof. Scott Sumner said this evening (TUESDAY 17TH JUNE) at the 2014 Adam Smith Lecture held by the free market Adam Smith Institute in Westminster.

Prof Sumner said that:

• Cuts and hikes to government spending are economically irrelevant when the central bank is trying to hit a target
• Central bank policy is highly effective even when interest rates hit zero
• Central banks should abandon inflation targeting and instead guarantee the stability of the total amount of spending in the economy

Prof Sumner added that nearly all top monetary economists agreed how to deal with recessions in 2008, but they appear to have forgotten what they knew then, despite events since the crisis highlighting the power of monetary policy and the irrelevance of fiscal policy.

Prof Sumner argued that, done right, monetary policy can totally offset the macroeconomic cost of government spending cuts. The Nobel Prize-winning economist Paul Krugman said that the US economy's performance in 2013 was a 'test' of this – Sumner argued that the US's economic revival that year following QE3 was evidence that central banks have enormous power to stabilise the economy, far more than most politicians realise.

The best monetary policy, said Sumner, was for central banks to target nominal GDP instead of inflation. This would mean that after a shock, like an oil crisis, central banks would pledge to keep the level of spending constant along its growth path. Even though the real spending power would fall, it would avoid the 'musical chairs' problem created where spending levels fall and, combined with wages that take time to fall in nominal terms, leads to widespread unemployment.

Sumner, who is a professor of economics at Bentley University in the US, was called 'the blogger who saved the US economy' by The Atlantic (his blogging at themoneyillusion.com was a major factor behind QE3), and in 2012 Foreign Policy ranked him 15th in their Global Thinker index – joint placed with then-Chairman of the US Federal Reserve Ben Bernanke. He is considered the father of the 'Market Monetarist' school of macroeconomics, which argues that economic stability can be safeguarded if central banks target the level of nominal GDP instead of inflation.

Sam Bowman, Research Director of the Adam Smith Institute, said: "If anyone doubts the importance of monetary policy, they should compare the plight of the Eurozone with that of Japan. The Eurozone was driven into a second recession after the ECB raised interest rate hikes, while Japan is booming after Shinzo Abe's government began to pursue a policy of easy money through low rates and quantitative easing.

"Scott Sumner is one of the most brilliant economists of his generation, and his speech last night should be listened to carefully by policymakers around the world."

The Adam Smith Institute is an independent libertarian think tank based in London. It advocates classically liberal public policies to create a richer, freer world.

Philip Salter writes for City AM on angel investors

Director of The Entrepreneurs Network, Philip Salter, writes for City AM.

Read the op-ed here.

ASI research on tax featured in the Sunday Telegraph

Research from the Adam Smith Institute on flat taxes was featured in the Sunday Telegraph.

Read the article here.

"A flat tax is radical but not impossible to implement. Back in 2005, Chancellor George Osborne spoke out in favour of a flat tax, while a study by the Adam Smith Institute suggested introducing it at 22pc, supported by a higher personal allowance of £12,000 (up from £4,740), would yield long-term benefits despite an initial £40bn black hole. More recently, the 2020 Tax Commission called for a 30pc flat rate of income tax, with National Insurance, inheritance tax and stamp duty on shares scrapped altogether."

Charlotte Bowyer is quoted in City AM

The Adam Smith Institute's Head of Policy, Charlotte Bowyer, was quoted in City AM, commenting on the black cab protest against Uber.

Read the article here.

"Charlotte Bowyer of the Adam Smith Institute, a think-tank based near the area in which the protest was held, added: “Black cab drivers argue that they are regulated to within an inch of their lives, which may be true – so it’s sad that they just want others to face the same treatment.”

Press Release: Black cab protests are a desperate move from an outmoded industry

Contact Kate Andrews, Communications Manager, for further comments or to arrange an interview: kate@adamsmith.org / 07584 778 207.

Commenting on the London cab driver strike, Charlotte Bowyer, Head of Digital Policy at the Adam Smith Institute, said:

"Today's black cab driver protests in London against taxi-app Uber are a blatant exercise in rent-seeking. The strike is pointless, because the issues drivers are protesting against have already been referred to the courts for a decision. This is a desperate move by an industry that has been protected from competition for too long.

"Services like Uber are cheaper in part because they use new technology to circumvent bad regulations, reduce prices and increase choice for consumers. Many of these regulations exist to protect drivers from competition, rather than to help consumers.

"Black cab drivers claim they are protesting about regulatory inconsistency, but striking on such trivial matters as whether a smartphone app constitutes a taxi meter only shows that cab drivers' real concerns are that of genuine competition in the face of an innovative new entrant.

"Black cab drivers argue that they are regulated to within an inch of their lives, which may be true – so it's sad that they just want others to face the same treatment, instead of calling for more freedom for themselves.

"It is TfL's responsibility to improve London's travel network, not to protect old industries and vested interests. Consumers, and certainly not business rivals should be the judge of an acceptable, effective and safe service.

"We might expect to see such bolshy behaviour in France, but certainly not in London. Londoners and their elected representatives should say no to black cab bullying and let Uber, and others like it, innovate free from intimidation."

For further comments or to arrange an interview, contact Kate Andrews, Communications Manager, at kate@adamsmith.org / 07584 778 207.

The Adam Smith Institute is an independent libertarian think tank based in London. It advocates classically liberal public policies to create a richer, freer world.

Dr Madsen Pirie's comments on Queen's Speech featured in over 60 local newspapers

Dr Madsen Pirie, President of the Adam Smith Institute, was quoted in over sixty local newspapers, applauding the Queen's Speech for its "modesty". Read a few of the articles here, here and here.

Press Release: Queen's Speech modesty is very welcome, says Adam Smith Institute

Contact Kate Andrews, Communications Manager, for further comments or to arrange an interview: kate@adamsmith.org / 07584 778 207. Commenting on the Queen's Speech, President of the Adam Smith Institute, Dr Madsen Pirie, said: 

"Given the pressures on government by lobbies and interest groups, the government has shown good sense by going instead for measures that will target individuals and groups with specific and useful help.  Welcome, too, is the absence of measures to replace individual choices with new regulations. Critics might describe this as a modest Queen's Speech, but in this instance it is a very welcome modesty."

Commenting on the mention of childcare subsidies, Director of the Adam Smith Institute, Dr Eamonn Butler, said:

“There is a case for subsidising childcare, if it makes parents able to take a job, rather than depending on state benefits. A paying job is the best welfare programme for families yet devised. But such support should go to the parents who need it, rather than in subsidies for the childcare industry.

“If we are to make childcare available to all, instead of trapping poorer families on benefit dependency, then we need to address the costs of regulation and taxation, and to employ market principles and competition rather than dash towards indiscriminate subsidy or become swamped in bureaucratic red tape."

For further comments or to arrange an interview, contact Kate Andrews, Communications Manager, at kate@adamsmith.org / 07584 778 207.

The Adam Smith Institute is an independent libertarian think tank based in London. It advocates classically liberal public policies to create a richer, freer world.

Dr Eamonn Butler writes for the Financial Times

Director of the Adam Smith Institute, Dr Eamonn Butler, wrote a comment piece for the Financial Times: "The politics of pay pervades the boardroom".

Read the article here.