26 June 2013
We are delighted to have been crowned Prospect Magazine's UK Economic and Financial Think Tank of the Year 2013.
The Prospect judges were impressed by our joint report with Policy Exchange on Heathrow expansion and the impact it continues to have on the public debate. It was previously endorsed by the Economist, Financial Times and House of Commons Transport Committee amongst others.
You can view the full list of categories and winners here.
5 June 2013
The lack of funding for UK postgraduates has reached crisis point, a new report by CentreForum warns.
Backed by Julian Huppert, Liberal Democrat MP for Cambridge, the report brings together leading figures from business and higher education who unite behind the case for a postgraduate funding settlement. It includes chapters by the British Academy, Confederation of British Industry (CBI), GuildHE, Higher Education Commission, National Union of Students (NUS), Russell Group, Sutton Trust and respected economists Joanne Lindley and Stephen Machin.
The report likens education's highest tier to "an exclusive golf club" – the preserve of affluent individuals from the UK and abroad – which is becoming increasingly exclusive amid rising tuition fees and real terms reductions in research and funding council support. These factors have contributed to a fall in the number of home students undertaking postgraduate courses, despite the rising value of these courses in the global economy.
31 May 2013
Quantitative easing (QE) should be superseded by innovative monetary alternatives and a more activist fiscal policy, a new report suggests.
Writing for the think tank CentreForum, entrepreneur Jo Owen argues that the Bank of England's policy – through which it has so far bought £375 billion of assets – is "past its sell by date" and should only be used in future as a "weapon of last resort".
QE is considered to have had harmful side effects since its introduction in 2009, including propping up an asset bubble, making the rich wealthier, and building an economy dependent on low interest rates. But the report says that the reversal of existing QE should not happen in the foreseeable future, as the costs would be too great for the UK's recovering economy to bear.
It instead urges the Bank to start exploring alternatives to QE, such as remunerating marginal excess reserves by the banks at below the base rate to encourage more lending, and recapitalising RBS and Lloyds.
The report calls for monetary, regulatory and fiscal policy to be better aligned, suggesting that monetary policy cannot do all the "heavy lifting" and that radical alternatives such as "helicopter money" should be avoided.
It also calls for additional capital expenditure while the government continues to follow its fiscal mandate of reducing current spending. It recommends the establishment of an independent Office of Capital Expenditure to ensure current spending is not reclassified as capital expenditure through "creative accounting" at the Treasury.
Report author Jo Owen said:
"QE is past its sell by date. It was a short term solution to a crisis, but with unpleasant side effects. The Bank of England needs to move on from the monthly ritual of discussing QE. Monetary policy cannot do all the heavy lifting. The Bank and government need to make sure monetary and fiscal policy work together to ease the UK out of austerity."
NOTES TO EDITOR
The CentreForum report 'The wrong sort of money: options for quantitative easing' by Jo Owen can be downloaded.
ABOUT THE AUTHOR
Jo Owen is one of the founders of Teach First and is also a founder of six other charities in education and reoffending including Teaching Leaders, Future Leaders and Start Up which has helped 250 offenders start their own businesses on release from prison. Previously he was partner at Accenture; built a business in Japan; worked in brand management at Procter and Gamble. He has worked with over 100 of the best, and a couple of the worst, businesses on our planet in most industries and continents.
He is the author of 14 books on management and business, including 'How to Lead' and 'Tribal Business School'. He led a study into Anglo-French leadership with Oxford University. He has appeared on the BBC, in the Financial Times and most leading media. He holds an MA from Cambridge University and an MSc from London Business School.
24 May 2013
Getting the self employed to pay their fair share of national insurance would raise £2.3 billion a year and close down a common tax avoidance loophole, a new report by CentreForum suggests.
The report says that money raised from levying higher national insurance rates on self employment income could be used to give ordinary workers a £110 tax break. As things stand, the self employment equivalent of employee national insurance has a main rate of 9%, rather than 12%, and there is no equivalent of the 13.8% employer charge on staff wages.
The report also urges government to scrap the self employment 'poll tax', a fixed sum of £141 a year for most self employed people. It points out that this brings in just £350 million, while placing an unnecessary administrative burden on the self employed and HMRC.
The report addresses a complaint previously raised by Paul Johnson of the Institute for Fiscal Studies that the treatment of the self employed for national insurance is "a huge open invitation to tax avoidance because [self employment national insurance] is so much lower than you pay as an employee".*
The introduction of the single tier pension, which will especially benefit the self employed, strengthens the case for reforming national insurance, the report argues.
Delivered in full, the report's recommendations would raise more tax from the self employed as a group, but the bottom 50% of self employed people would pay less tax.
Report author Adam Corlett said:
"There is no good justification for the self employment tax break. The tax system should treat employees and the self employed equally. National insurance should also be made simpler and fairer by scrapping the regressive self employment poll tax."
NOTES TO EDITOR
The report 'Ending the self employment tax break' can be downloaded.
HMRC acknowledges a tax break of £1.6 billion, after accounting for benefit differences. This will grow by more than £700 million with the introduction of the single tier pension and end of contracting out.
At the lowest incomes, the self employed actually more tax thanks to 'Class 2 NICs'. A self employed worker on £100,000 meanwhile gains £7,500 a year from this tax break.