The government’s spending watchdog has appointed an economist critical of Brexit to its advisory board.
University tax expert Rita de la Feria, also opposed to VAT cuts, joins the supervisory board of the Office for Budget Responsibility.
She has particular expertise in VAT and how changes in taxation affect consumers and businesses – a specialty which fits with the OBR’s role of estimating how changes in taxation and expenditure affect the economy, tax revenues and the budget deficit.
Ms de la Feria previously tweeted that Brexit was “a very sad day. To me personally, and to my family. But especially to young Britons who won’t enjoy the same rights as me (a product of free movement).”
She also described herself as “very persuasive – against reductions” in VAT for specific products in stores. His tweets were first reported by Guido Fawkes’ blog.
His studies suggested that lower rates for individual products could lead to higher profits for retailers, rather than the entire tax reduction passed on to consumers.
Ms de la Feria also called for a broadening of the tax base, tweeting that Labor proposals to apply VAT to private tuition fees “could even be sold as a Brexit perk. And for once, that would (probably) be true.”
The OBR came under increased political attention last year, when then-Chancellor Kwasi Kwarteng decided not to commission the watchdog’s analysis to be published with his mini-budget.
At a time of deep tax cuts and spending pressures, financial markets saw this as a sign that the government was not interested in balancing the books.
Liz Truss later said that the OBR was too critical of tax cuts and that giving the organization too much leverage over the expected impact of tax and spending decisions “effectively made of the OBR as a driver of fiscal policy”.
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