Busting dance moves and wishing back bad weather

Morning all,

Let’s face it, there’s been some pretty disappointing performances during the election campaign. But the weather at least has finally stepped up to the plate to provide an appropriate backdrop to the SUMMER election. Still, it always pays to have a brolly at hand.

While the sun is still out the summer vibes roll on in TOTC as we dive into the impacts of dance music and hot weather. Back on familiar terrain, our Chart of the Week examines the UK’s inequality conundrum through the Gini coefficient and public attitudes. But after reading this great thread, I’m beginning to think I’m missing the bigger picture – which is to judge a country instead by the suits that are worn…

Have a good weekend,

Mike Brewer

Interim Chief Executive

Resolution Foundation

Nimby nominations. Look away devolution devotees… Do devolution and planning reform make for happy bed-fellows? One interesting paper suggests they may not be. Using electoral reform in US towns to examine the link with electoral geography, the report finds that housing permits fall 20 per cent when towns switch from electing representatives at the town level to the ward level. There’s a clear suggestion here of tension between decentralisation (at least at this granular level) and housing supply. This is one of the reasons why English devolution has been to empower city regions or metropolitan areas, rather than (say) local authorities: larger areas in principle should find it easier to capture the benefits of new housing (anyone for some growth?) without being enthralled by NIMBY objections.

Savings success. Would you like a piece of good news about sensible public policy being well implemented and having a positive impact? Here you go (and un-paywalled version of the earlier working paper here). Auto-enrolment has been used to strengthen long-term retirement saving in the UK to much acclaim, but this paper finds that it is also an effective strategy for boosting short-term saving. A UK employer began automatically opting new employees into a payroll savings plan where they put aside £40 every month (an average of 1.9 per cent of affected workers’ pay). As you’d expect, there’s a steep increase in participation in the first months of employment. This does then gradually tail off over time, but participation remains nearly 50 per cent higher than it would have been without auto-enrolment. Certainly, a policy worth considering – indeed we’ve called for it ourselves – given that one-in-four UK adults could not pay an unexpected £300 bill with their own money.

Dance data. Here’s another question that our politicians REFUSE to answer – what is it about music that makes us want to dance? Never fear, this charmingly techy paper endeavours to figure it out. The authors conduct a listening experiment by playing different types of music to participants and asking them to rate the experience. The upshot? Genre has very little to do with it. There are two characteristics of sound that make people want to boogie, and the authors identify the “fullness” of a sound as being the strongest predictor as to whether a listener feels the urge to dance. If you understand what “fullness” means in this context, please explain it to me, so I can adjust my summer playlists accordingly.

Weather wars. You may have heard this week warnings that the Olympics need to be better prepared for future extreme weather events, in order to protect athletes and fans. We certainly need to prepare for a heating world in years to come – and this notable paper digs into the worrying question of how weather shocks might intensify conflict in warzones. The authors used monthly data covering 168 countries between 2013 and 2022 to demonstrate that high temperatures exacerbate existing conflicts (although they don’t appear to trigger new ones). According to their modelling, a warmer  world could lead to a 12.3 per cent increase in deaths from conflicts in warring countries.  Go green, save lives.

Peering at PIP. A recent substack from Ben Geiger peers beneath the hood of Personal Independence Payments (PIP) – the specific category of benefit that the Conservative party said they would cut by 40 per cent to deliver tax cuts. But there’s a lot of confusion about who gets PIP – and specifically about whether you have to have been in work – which matters when it comes to cutting it. There’s a lot of fascinating detail to dig into in Ben’s substack (charts!). He shows that, although PIP is technically a benefit that can be claimed by people both in and out of work, in reality the majority are not in paid work. Only 41 per cent of people newly awarded PIP in March 2023 were in work, and an even lower proportion – just 16 per cent – of the total PIP caseload were in employment in 2023. So, it’s not actually *that* incorrect when politicians get muddled and call it an ‘out of work benefit’. As our new report on disability benefits underlines, the fact that many people receiving PIP are out of work and potentially also receiving other benefits underlines that it’s foolish to try to save money on spending on PIP without thinking about the social security system as a whole.

Chart of the week

Living standards should feature in the election campaign next week. That’s because a) we’ll get new ONS data on real household disposable incomes b) you’ll get new RF research on what’s happened since 2010 and c) most importantly, it’s a topic that the public are concerned about, as this week’s Chart of the Week shows. The share of people who list poverty and inequality as a big issue facing Britain has more than doubled since the 2000s, from 6 to 14 per cent in 2022. In some ways, this is odd, because Britain’s inequality story hasn’t really changed over this time. As you know, income inequality in the UK soared in the 1980s and has remained at a high, stable level – higher than any other large European country – ever since. What has changed is Britain’s wider economic performance. Our long-term growth story (measured as decadal growth in GDP per capita) has sunk like a stone – from 30 per cent in the mid-2000s to just 9 per cent by 2022. So why has inequality been rising up the political agenda? Both RF (here) and I (here) have literally written books on this topic, but essentially it comes down to the fact that it’s harder to ignore Britain’s longstanding inequality problems when no-one is getting richer. Both parties tell us they want to economic growth up. Great. But we need growth that is not just shared, but that actually gets inequality down. And we’ve heard far less about that.