Ed Miliband dismisses Keynes, but the Laffer Curve takes centre stage

Ed Miliband has told his party's national policy forum that the party must change policy from their traditional approach of raising spending and taxes, saying ''Higher spending is not actually the answer to the long-term economic crisis''. Some members of the forum wanted to force a vote for an immediate increase in public spending should Labour win the next election, but proposals committing Labour to new spending on housing and school meals were withdrawn at the forum in Milton Keynes.So that's one economic theory cast aside.

However, the Laffer curve was much in the news last week, as Arthur Laffer was in London and interviewed by Andrew Neill. He said the government should cut VAT and claimed the UK's 20% level was a "disincentive for people to work, produce and create output". There is a second interview with him, conducted by with Ryan Bourne, Institute of Economic Affairs Head of Public Policy, to discuss tax rates, their effect on growth, and a better taxation system.

It is quite rare to find a piece of textbook theory being discussed on film by the economist who gives their name to the theory, and either of these would make an excellent introduction to fiscal policy work for A2 students, or extension work for AS students who want to go a bit further than the AS syllabus.

And his proposal that politicians should be paid on commission, with them receiving more more money if the unemployment rate fell, would make a great discussion piece as a lesson starter!