Full transcript
0:02Wasted money on cures.
0:06Forgot how to fix myself.
0:09[Music]
0:11They say that time is free.
0:15Then why is it so precious?
0:18Oh, I'll save
0:21meories
0:23in my head
0:26like polo
0:28on wall. They remind
0:32you to look ahead.
0:36Time is running out.
0:40[Music]
0:44Time is running out.
0:49[Music]
0:54Lately I've lost my track
0:58my track.
0:59>> I've sailed the deepest seas
1:02deep hoping to find something
1:07to bring back better times.
1:11Oh, I'll save
1:13meories
1:15in my head.
1:18Like polar o
1:22they remind
1:24you to look ahead.
1:28But time is running out.
1:30[Music]
1:32Time is running out. Time is running
1:36out. Time is running out. Time is
1:40running out. Time is running out.
1:44Time is running. Time is running out.
1:48[Music]
1:54Time is running out.
1:57[Music]
2:03Oh,
2:05what if my best days are over? They
2:10can't be over.
2:14[Music]
2:16They can't be over now.
2:20Time is running out.
2:23What if my best
2:25over
2:28[Music]
2:34time is running?
2:44Time is running out.
2:49[Music]
2:58>> Hi there. Good evening. Welcome to the
3:00third in our series of autumn vision
3:03sessions. uh 10 sessions scheduled
3:05Monday night on the dial six o'clock
3:07each week taking either a key topic or a
3:10key exam skill and I mentioned the
3:12autumn term there looking out out of the
3:14window from my studio here it's very
3:16autuminal some heavy rain in Yorkshire
3:18get rain in Yorkshire normally it's a
3:20sign that term has already started I
3:21hope your course is going well and if
3:23you're in year 13 you are cracking on
3:25with the new content if you're in year
3:2712 I hope you're enjoying the subject so
3:30welcome to everybody if you're a
3:31subscriber to the channel you can
3:32contribute to the chat window So, please
3:34click subscribe. That allows you access
3:36to our our chat window and we will
3:39showcase some great answers as we go
3:40through this session. Now, this is quite
3:42a short session tonight. We're just
3:43going to focus on evaluation, what it
3:45is, how how best to evaluate in an
3:48answer. Let's make a start with one big
3:51reveal. We're going to take a business.
3:53Here are five clues. Now, the great
3:55Graeme Pre is in the building this
3:57evening and uh this is he doesn't know
3:58the answer to this question. So, here we
4:01go. Uh, this business employs around
4:0476,000
4:06people directly. If you think you know
4:08the answer by the post it in the chat
4:09window and we're looking to see who gets
4:12the right answer first. Now, if you know
4:13a business that employs about 75,950
4:17people, of course, that's the wrong
4:18answer.
4:20So, 76,000 people. Next clue.
4:24The business caters for an average of
4:27200,000 customers per day. Graeme says,
4:30"Is it cheater to you?" It's not Graeme.
4:32You are so close. You wouldn't believe
4:34how close you are. Um, so a cases for an
4:38average of 200,000 customers. Now,
4:39Graeme would talk about industry
4:41specific language.
4:43Uh, so we'll call them customers. Okay,
4:46we'll call them customers. What do we
4:48think? Which business could this be?
4:52It's, by the way, it's based in the UK
4:54and it cers for an average of 200,000
4:57customers. So, Kudsai comes in with
4:59Waitros and John Lewis.
5:01Great answer. It's not that right
5:03answer. Uh number three, annual revenue
5:061.7 billion. So it's not a multi-billion
5:09pound business, but it's a standalone
5:11business. It's worth billions of
5:13revenue. Uh but a good start. Good
5:16start. Any other businesses? What do we
5:18think? Don't worry about having a go. We
5:20don't bite in these sessions. So what do
5:24we think? One 1.7 billion revenue,
5:26200,000 customers. Should we use the
5:28word customer? 76,000 people employed
5:31directly. Olberg says Gregs based on the
5:33assumption uh Olberg that it's always
5:36Gregs. It's always Gregs, but it's not
5:39Gregs. Fourth clue. It's part owned by
5:41the Qatari Investment Authority and also
5:44Saudi Arabia's PIF.
5:47So, what do we think? What do we think
5:49here? Part owned by the Qatar Investment
5:51Authority and Saudi Arabia's PIF. So,
5:53again, Graeme's question is you. You're
5:56so close, Graeme. You wouldn't believe
5:58how close. Kai comes in with a great
6:00answer. WH Smiths. Interesting. Right.
6:03Five more seconds.
6:05Here's a fifth clue.
6:0725,000 items each year. PA, including
6:11surfboards, wedding dresses are left
6:13behind. Uh, sometimes a combination of
6:17surfboard and a wedding dress left
6:19behind.
6:22What do we think? What do we think?
6:24Elliot says, "Aqa." I'm just wondering
6:25whether he's thinking what what example
6:27are we doing. H Elliot says the Reading
6:29Festival. Elliot, you on the right
6:31tracks. You are on the right tracks.
6:34Graeme says, "Fat Graeme says Fat Face,
6:36that well-known retailer." Elliot,
6:39that's a really subtle answer. The
6:40Reading Festival. Freddy Hudson. Welcome
6:43to Freddy. He says, "Glastenbury,
6:45uh, the world of Sammy P." Agrees with
6:47him. Uh, what do we think? Any other
6:50answers coming through? Harvey D17 says,
6:52"Board Masters Festival." He says the
6:54answer lovingly presumably went there.
6:57Bberg says Heathro Heathro airport.
7:00Let's check the answer. It is indeed
7:03Heathro airport. Fantastic. So if we can
7:06find answer, I think that was the first
7:08correct answer that came up. There it
7:09is. Recognition an online hat tip to it.
7:13It is indeed Heathrow. Bang. Great start
7:16everybody. Let's crack on. So what we'll
7:18do today, we're going to take two
7:20examples. We're not going to spend a
7:21long time on this. Let's keep it nicely
7:23focused on evaluation skills. The best
7:27way to evaluate an economics essay, you
7:29know, those longer style questions is to
7:32consistently question, challenge and
7:34question the assumptions, the
7:35constraints and the significance of your
7:38analysis. So last week we did analysis
7:40the week before application and of
7:41course they go together.
7:44Crucially, I mean I mark thousands of
7:45answers every year. Okay? So, I know
7:47what I'm looking for. And it's true that
7:49evaluation should be a kind of sustained
7:51process. Doesn't happen at the end of an
7:53essay. It should occur throughout an
7:55essay. And in particular, you should be
7:57looking to produce a wellsupported final
7:59judgment in your conclusion. And your
8:01teachers will have very specific advice
8:03on the exam board requirements. It's a
8:06good idea to keep analysis and
8:07evaluation paragraphs separate so that
8:09the examiner can credit you
8:11appropriately. Okay? So it's it's okay
8:14if you put analysis and evaluation in
8:15the same paragraphs, but it's better to
8:18keep them separate.
8:20And don't forget to add, and this is
8:22really important, don't forget to add
8:24application into both analysis and
8:26evaluation. So as we said in our first
8:28session two weeks ago, it's available on
8:31uh replay. If you put application in
8:34each of your main paragraphs, that is
8:36the glue that holds together a good
8:38answer. Now, most of answers require
8:40reason judgment at the end. always refer
8:42back to the question. Okay, so if you're
8:46year 12, you probably haven't written a
8:47long essay yet, but if you're year 13,
8:49this is really important. So, what can
8:51you do to evaluate? There's many, many
8:53things you can do. I'm just going to
8:54pick out five, if that makes sense.
8:56Okay, first of all, think short run,
8:58long run. So, think time. So, it could
9:00be a policy question. It could be an
9:02effect question. So, think about the
9:04immediate effects, the immediate effects
9:05or the short run effects and think about
9:08longerterm consequences. That's a nice
9:09way of evaluating to think in terms of
9:11time. A really good approach is to
9:14challenge assumptions. So sometimes when
9:16you explain a bit of theory, you make an
9:18assumption. For example, keteris parabus
9:21all other things remaining equal. Now a
9:24lot of students I know this from last
9:25year's exams got very good grades,
9:28exceptional grades because they
9:30challenged the keterus powerbus
9:32assumption. That means all other things
9:34held equal. Of course rarely holds true
9:36in the real world. There's lots of
9:37moving parts. Okay. Uh it depends on is
9:41an approach that many students use and
9:42that's fine. So you use conditional
9:44statements to show that the outcome of a
9:46policy depends on specific variables and
9:49it depends on is a nice easy pathway to
9:52adding nuance to your argument. By the
9:56way, we're doing this early in the year
9:57so that you have lots of time to
10:00practice using the assignments your
10:01teachers give you. Question the mag the
10:03magnitude and significance. So consider
10:05how large or significant the potential
10:07impact of a change or policy might be.
10:09Is it is it a major impactful policy or
10:13consequence or shock or is it something
10:16which at the margins can be can be uh
10:18seen as less significant? Okay,
10:21Graeme comes in here. Great techniques.
10:23Important to remember it depends on how
10:24you use depends explain how and why it
10:27depends on the fact you state.
10:29Absolutely right and really important
10:31and this is why we start with evaluation
10:33early in the year. The best answers do
10:36have that little bit of awareness of
10:37real world examples and context such as
10:40seasoning strengthens your arguments by
10:42integrating real world examples. So
10:45that's a bit of speaking from me. Let's
10:48move on. We're going to look at two
10:50examples of policies uh which we can
10:53evaluate. Okay. So, I'm I'm really
10:56looking to see some great uh answers
10:58coming through from from the team. Let's
11:01look at the first one. Corporation tax.
11:03Uh from 2023, uh the main rate of
11:06corporation tax on company profits went
11:09up quite sharply from 19% to 25%.
11:13That's a big change for companies with
11:15profits over a quarter of a million
11:17pounds per year. There is a 19% rate for
11:20smaller companies that make profits of
11:22less than £50,000.
11:26Keep that in mind. And also there's an
11:27investment allowance which is now
11:29permanently built into the system. So
11:31from September 2022, a business that
11:33buys new computers or whatever it is,
11:35new planting equipment can offset that
11:39up to a million pounds spend from their
11:41tax liability. So there's an investment
11:43allowance of a million pounds for
11:46businesses. So, for example, if you
11:47spend a million pounds on new equipment
11:49and you're a small business, let's say,
11:51or a large business, let's say, you can
11:53get a 25% rebate because you can claim
11:57that against your tax. So, corporation
11:59tax has gone up. Let's move on. Here's a
12:02challenge for you. Can we'll have a one
12:04minute clock on this and Jim and the
12:06production team will pick out some good
12:07answers. Can you first of all for me
12:10please build the case build the case for
12:14raising corporation tax from 19% to 25%.
12:17Have a go.
12:24So if you're a subscriber to the
12:25channel, type your answers in the chat
12:26window. And if you're watching on replay
12:29or catch up, just press that pause
12:30button, give yourself a moment or two,
12:33and jot down some thoughts. We'll go
12:35through the answers together in 30
12:37seconds.
12:44So, what's the arguments for that
12:46increase in corporation tax? Okay,
12:50Jasmine comes in with a lovely answer.
12:52Well done, Jasmine.
12:54One of our great contributors from last
12:55week as well.
13:09and Harvey uh D7 Harvey gets some
13:13application in there with a bit of bit
13:15of bit of bit of such as seasoning.
13:21Excellent stuff. Yeah, interesting point
13:23there from S. I mean the idea of course
13:25a lot of businesses now would use up
13:27that investment allowance, wouldn't
13:28they? you know, if they want to reduce
13:29their corporation tax liability,
13:32they if they have the money, the
13:33wherewithal, the profits to reinvest in
13:35planting equipment, uh they can offset
13:37that against tax. And I like Freddy
13:39Hudson's answer. Really like this. So we
13:41raise more tax revenue which can be
13:42spent on other merit goods such as
13:44healthcare and education. Now Freddy,
13:46we'll come on to that in a second, but
13:48you could even be even more specific
13:50than that. Which state education or
13:52reducing NHS waiting lists? That makes
13:54the answer even more impressive. Allberg
13:57talks about subsidizing merit goods
13:59which is excellent and produce more
14:01positive externalities. So linking
14:02neatly there to market failure. Uh
14:06really good stuff. Yeah lovely. Akai
14:08comes in with infrastructure and
14:10transport the TTC which have costed over
14:1350 billion.
14:14So there's a need here most of you
14:16focusing on the increase in revenue and
14:18how that revenue might be spent. Really
14:20really good. So what you're doing is
14:21you're building the argument. First of
14:23all here are my two points coming up on
14:24the screen.
14:26So higher tax rate on profits raises
14:27more direct taxes. This could help fund
14:30key public services. By the way, putting
14:32the word keys key in. You think, well,
14:35why would we do that? Well, it's just
14:36suggesting that these are really key
14:37important public services such as state
14:39education, NHS, social care pressures,
14:41and housing shortages, which whilst
14:44addressing the problem of rising
14:45government debt. Again, a bit of
14:46application there. Corporation tax going
14:48up. one way of trying to address that
14:50increasing level of government debt and
14:52perhaps help to overcome multinational
14:54tax avoidance.
14:57And the other uh my second point was
14:59that uh we've got this tiered system. So
15:01not only about one in 10 businesses
15:04actually pay 25%. Most businesses in the
15:07UK pay 19%. Depends on how they're doing
15:10profit-wise. Um but the 19% is for
15:13smaller businesses earning £50,000 or
15:16less in profit. Okay. Okay, so that's
15:18our first point. Now let's evaluate. So
15:21part of the evaluation of course is
15:22having confidence in challenging and
15:24questioning. A minute on the clock. Some
15:26great answers so far. Over to you.
15:28Criticisms of the decision to raise
15:30corporation tax from 19 to 25%. Have a
15:34go.
15:38So maybe you've covered fiscal policy in
15:40your year 12 economics.
15:44Now, can we be as specific as possible
15:46in your criticism? So, take a moment.
15:48We've got 45 seconds.
15:51And again, we'll showcase some of the
15:52best answers
15:55on the screen.
16:11Yeah, Isabella. The negatives would be
16:13part of evaluation. This is this is this
16:15little section here that counts as
16:17evaluation. It's a challenging question.
16:26So scanners comes in with a point about
16:27disposable income for businesses
16:30possible fall in investment and then
16:31links it to the formula for GDP which is
16:34great.
16:36Oliver talks about reduced profits for
16:38firms. Uh come back to that in a second
16:40Ollie. would reduce assume firms are
16:41profit maximizers firms increase prices
16:43for consumers. Now that's an interesting
16:45question. There's a big debate in the
16:46exam board about whether firms do
16:49raise prices if corporation tax goes up.
16:51I'll come back to that Oliver in a
16:52second. Let's look at one or two others.
16:55Um Jasmine a brain drain this businesses
16:58may locate to countries with lower taxes
17:00on firms such as the UAE. So certainly a
17:02fear there could be a shift in foreign
17:06direct investment or business location.
17:09Uh Jonathan Bills brings in the idea of
17:11the laugh curve idea. Then Freddy Hudson
17:12comes in with over the long term and
17:15what Freddy's doing here if you're
17:16watching live in our group. Freddy's
17:18bringing in the time perspective. Large
17:21businesses such as Freddy may move
17:24overseas to nations with lower
17:25corporation taxes such as Dubai. This
17:27will reduce longrun government revenue.
17:28Excellent point.
17:30That is good evaluation. Thanks Freddy
17:32Dyson. They've already moved to
17:34Malaysia, haven't they? Uh that's good
17:36evaluation because you're bringing in
17:37the long-term consequences.
17:42Now Ol's point about will firms raise
17:44price. They don't have to because
17:46corporation taxes paid expost after the
17:48event. Okay. So in other words, if I if
17:51I make profit this year, I pay my tax on
17:55uh I pay my tax next year. So my
17:58corporation tax in 2026 is based on
18:00profits I made in 2025. So firms may
18:04raise price but it's not really a cost
18:06of production because corporation taxes
18:08after the event costers talks about
18:10difficulties in enforcing it. Well
18:13shouldn't be a major problem there
18:14because we have uh the income tax
18:16system. Corporation taxes um there are
18:18ways of avoiding tax which is you're
18:21hinting at a really good point. S says I
18:23know it's for income tax but could we
18:25bring in the laugh curve as the same
18:27applies to firms? Yes you can. Yes, you
18:30can avoid too much uh using lava curve
18:33in every single essay, but this would
18:34certainly certainly rise be good.
18:37Some great questions coming in, some
18:39great points coming in from Mandip and
18:40Kai and John. Here are my two answers.
18:43Conscious of time, everybody. I want to
18:44keep the session nice and short. Now,
18:46what see what I'm doing here? The word
18:48might.
18:50That's in bold and green. Worth noting
18:52please if you're if you're with us
18:54tonight. That's called a hedging word
18:56and it's really good for evaluation. So
18:59let's just work through the answer. Um
19:01higher corporation tax might discourage
19:04investment might better than will. Okay.
19:07A higher tax on profits reduces the
19:08after tax return on capital which could
19:10make the UK a less attractive place for
19:12both domestic and foreign businesses to
19:15invest. And quite a few of you talked
19:16about that which is excellent.
19:19As a result, this tax increase could
19:23might lower potential output long aggate
19:25supply in the long term. So, I'm
19:26building there on kind of um uh Freddy's
19:30point about long run dynamics. Okay,
19:35Jasmine comes in with a lovely question.
19:36I think Jasmine's doing is in year 12.
19:38So, welcome to economics, Jasmine. Just
19:40a question to people in year 13. Does
19:42economics get really hard? Was it based
19:43off how well you understand rather than
19:45difficulty? Well, you've hit the nail on
19:46the head there, Jasmine. It's all based
19:48on understanding. It doesn't get a lot
19:49more difficult. Some of the curves and
19:52theories might get a bit more
19:53challenging. It's all about building
19:54awareness and understanding and
19:56confidence and you'll be absolutely
19:58fine. I hope you're enjoying the
19:59subject. My second point is that the
20:02£50,000 threshold might discourage the
20:04growth for smaller businesses. You see
20:06thinking well if we grow our business we
20:08might have to pay 25% instead of 19%. So
20:11let's keep our family business at a
20:13certain level and that in turn can
20:15affect how many people they employ and
20:17how much they spend on machinery and
20:18things. Freddy comes in with a lovely
20:20contribution to Jasmine's question.
20:23Freddy says if you understand the
20:24basics, you can build on it quite easily
20:26and I think that's that is absolutely
20:29right. It really is. And just keep
20:32tapping into the news and what's
20:33happening in the in the UK and overseas.
20:37Uh okay, great stuff. Let's try one
20:39more. Uh again, it's moving from macro
20:42to micro. The Labor government have set
20:44an ambitious target to build 1.5 million
20:47new homes in England and Wales, I think,
20:50over the next five years to address the
20:51housing crisis, a chronic shortage of
20:53housing. This is an average of 300,000
20:56new homes each year. I've done the
20:57maths, by the way. I did the math for
20:59you, which is a level of construction
21:01not achieved since the 1960s, which is
21:04my the decade when I was born. Here we
21:06go. Let's have a go.
21:09Evaluate policies that might be most
21:11effective in achieving the target of 1.5
21:14million. So what we're looking for here
21:15is maybe one short run policy and one
21:18long run policy. Could we have a go at
21:20that? Here's a minute on the clock.
21:26So this one this approach is saying okay
21:28right we need to build a million and a
21:29half new homes which policy might be
21:32most effective or policies.
21:35So evaluation is about ranking,
21:38assessing,
21:39calibrating what those policies might
21:41be. So here's a one challenge. Can you
21:43think of a shortrun approach to getting
21:45new homes built? And using Freddy's, the
21:49spirit of Freddy Hudson, a long run
21:52policy.
21:59Glenn comes in with a fantastic comment
22:01about hedging words. Thank you, Graeme.
22:03Yeah, it's likely to lead to this may
22:05result in our great ways to build both
22:07analysis and evaluation. Use hedging
22:10words.
22:13So, we're looking to build new homes.
22:16John Bills comes in with reducing
22:17housing regulations. So, reform of
22:20planning. Great point there from
22:21Jonathan.
22:24Let's have a quick look and our
22:26production team will pick out some
22:27answers as by the way. Thanks for the
22:28contributions. They're a bit like my
22:30debt. Outstanding.
22:33Uh yeah, you got to keep the keep it to
22:35economic space. People talking about
22:36tightening borders, restriction of
22:38migrations. Yes, I think focus on the
22:40economics, subsidizing production of
22:42homes in the construction industry. So
22:44for example, Jasmine, you might um take
22:46away VAT on uh redevelopment, re
22:49reconditioned homes, increasing
22:52construction investment to boost
22:54productivity. Yes, Hayden, we need that.
22:56I would I'll come back to you with a
22:58question. Which policy might achieve
23:00that? If that makes sense.
23:02George Shortland who comes in with a
23:04fantastic point mandatory housing
23:06targets for local councils. Uh there's
23:08been a big fall in in new council house
23:10building in recent times which has
23:12really had had an effect. Uh excellent.
23:15A lot of you talk about inelastic
23:16housing supply.
23:18Um okay. Yeah. Here's Miloy.
23:23Uh implementing subsidy construction
23:25industry will enable supply to shift
23:26rightwards. Indeed. Good diagram there.
23:29that inelastic supply of building houses
23:30can cause timeline costs. Yes, that's
23:32good evaluation built into your point.
23:36Excellent point. Really, really good.
23:37Really good. Let me go through my two
23:39points. Uh and then just again refer
23:42back to evaluation. So my short point
23:44will be things like faster planning
23:45systems, uh planning passports are being
23:48introduced for brownfield sites. That's
23:49things like old warehouses and
23:50supermarkets and whatever it is, you
23:53know. Uh prioritizing release of
23:54stateowned land for development,
23:56including things like airfields and
23:57former council buildings. There's one
23:59opposite me at the moment. Also making
24:02easy to build on lower quality green
24:03belt or so-called gray belts. The
24:05geographers, by the way, would have an
24:06absolute field
24:08day on this, especially if they built
24:10houses on those fields. Supply side
24:13subsidies such as grants or lowinterest
24:16loans for housing developers. So that
24:18would be kind of short run policies long
24:20run
24:22pardon me we probably need measures to
24:24address big skilled labor shortages in
24:26construction to the industry which
24:28really can't get the people it needs and
24:31that drives up costs as well as delays
24:34in production. So for example, you might
24:35expand a work visa program for people
24:38coming from the EU or investment long
24:40run in vocational courses linked to the
24:43construction sector. But that takes time
24:46and it takes money or innovation in
24:49house building. In other words, what we
24:51you come to the conclusion that we need
24:53a range of policies, some short-term,
24:56some long-term. Okay. Uh so final slide
25:00just thinking about how we link this to
25:02the different types of evaluation I
25:03mentioned. So short run versus long is a
25:05really good
25:07approach in the short run. There's not
25:09much the government can do to increase
25:10house building, but they they're working
25:12within the time frame between now and
25:14the next election. Challenge
25:16assumptions. Are the assumptions about
25:17population growth and things like female
25:19fertility, family size accurate? Social
25:21change, uh reduce birth rates, etc. Um
25:25more people living independently, aging
25:27population, challenge the assumptions
25:29about how many houses we need. Evaluate
25:31it depends on. So for example, the
25:33outcome of a subsidy which some of you
25:35mentioned uh depends on the amount of
25:37spare capacity in the housing sector.
25:38You subsidize new house building. Do we
25:41have the capacity to build those homes?
25:44Question magnitude and significance.
25:46Will planning performance make much
25:47difference or is a more radical approach
25:49needed? In other words, do we need to go
25:50back to the council house building in
25:52the 1960s or what have you? And also
25:54crucially just have that realworld
25:56context. Jasmine was talking about um uh
26:00building her year 12 economics
26:02confidence. So just be aware for example
26:04of the latest policies regarding Brexit
26:06and work visas. What's happening to
26:08wages? What's happening to interest
26:10rates? Mortgage rates any other factor
26:12affecting housing demand could be
26:14brought in to the discussion. Now
26:16evaluation is a is an art is a technique
26:19and all we've done in this session is
26:21just look at two examples of how how we
26:23can challenge and question as part of
26:26our evaluation.
26:28Thank you everybody. Thank you to all of
26:30our contributors. Uh too many to
26:32mention, but um you Jonathan was in
26:35there and Freddy and Jasmine. Absolutely
26:37fantastic. As always, we're building up
26:39a student community here at the
26:41intersection of economics and exam
26:43success. Spread the word, please. Uh our
26:46our group is growing each week, which is
26:48fantastic. As we head into term, next
26:50Monday, we start our specific content
26:54revision and we'll be showing you how
26:56you can link topics together from year
26:5812 into the stuff you're doing in year
27:0013. So, as always, thank you for joining
27:02us on this wet and windy Monday evening.
27:06Stay happy, stay safe, stay curious,
27:09stay healthy, and see you sometime soon.