FT data

The rapid growth in greener, more fuel efficient vehicles will leave the Treasury with a £13bn shortfall in motoring taxes by the end of next decade, despite an anticipated 44 per cent jump in traffic.

The predictions from the Institute for Fiscal Studies, an independent think tank, are based on an analysis of the government’s own long-term forecasts, which show that by 2029 fuel duty will contribute 1.1 per cent of GDP, down from 1.7 per cent today. Vehicle excise duty will drop to 0.1 per cent from 0.3 per cent.

Receipts from the taxes total £38bn a year, equivalent to 7 per cent of all Treasury income.

The lost revenue is equivalent to increasing the basic rate of income tax from 20p to 23.4p, VAT from 20 per cent to 22.7 per cent or raising fuel duty by more than 50 per cent, according to the IFS report, published today.

Immigration has helped to raise average wages of most UK-born workers but held back wage growth for those at the most poorly paid end of the labour market, new study has shown.

Research published in the Review of Economic Studies examined the period between 1997 and 2005, when there was an increase in the foreign-born population equal to 3 per cent of the native population.

The authors – economists Christian Dustmann, Tommaso Frattini and Ian Preston – estimate that immigration depressed wages by 0.7p per hour at the 10th percentile, or the bottom layer, of UK-born workers.

But immigration contributed about 1.5p per hour to wage growth at the median and slightly more than 2p per hour at the 90th percentile.

Schools taking part in the government’s flagship academies programme are being overpaid by more than £120m this academic year owing to errors by the Department for Education, an investigation by the Financial Times has revealed.

The majority of the overspend will be clawed back from local authorities, stoking concerns that schools participating in the converter academies scheme are being favoured over other state schools.

Currently seen as the government’s most visible public policy success, if local authority schools opt to become an academy, they are funded directly by the DfE rather than via local authorities. They gain autonomy over pay and curriculum, but are supposed to receive equivalent funding.

However, analysis of DfE data reveals that 90 per cent of England’s 1,421 converter academy schools are being overpaid, with the bulk of the errors coming from schools which converted in the previous academic year.