Labour market· Pay Unwrapping the agency worker pay penalty 21 December 2017 by Lindsay Judge Christmas is coming – and many of the presents we’re all busy buying are being picked and packed in warehouses, delivered by drivers, or sold to us in shops by staff who are not directly employed, but who work through an agency instead. So how has this part of the workforce fared over the course … Continued READ MORE
Pensions & savings· Intergenerational Centre Auto-enrolment has had a great beginning. But will it have a happy ending? 18 December 2017 by David Finch We hear a lot about good policy plans gone wrong (Universal Credit springs to mind) for obvious reasons. But we ought to listen (and learn) from successes too. Auto-enrolment into workplace pension savings is the obvious candidate for this cheery policy tale, though the story has only just begun. Over nine million have signed up … Continued READ MORE
Labour market· Productivity & industrial strategy ‘The rise of the robots’ and ‘productivity pessimism’ can’t both be right 14 December 2017 by Adam Corlett Talk of looming automation, AI and robots is pervasive in public policy chat – including in the government’s new industrial strategy. Almost as common are projections that the weak growth of the past decade is here to stay – including in the latest official economic outlook. Sometimes these assumptions are even mentioned in the same … Continued READ MORE
Labour market Icebreakers, overtime and the squeezed middle 12 December 2017 by Torsten Bell One of the wonders of life is that there are a lot of things to talk about. But one of its big let downs is that when people regularly spend time together they often spend it talking about the same old things; the weather, what mutual acquaintances have been up to, the rest. But every … Continued READ MORE
Demographics· Living standards· Pensions & savings What could the latest life expectancy projections mean for the State Pension Age? 5 December 2017 by David Finch At the end of last week, the ONS published the latest future projections showing its best estimate of how long we can expect to live. We don’t automatically associate our living standards with factors like health or how many years of life we may have. But just like income, life expectancy is an important indicator … Continued READ MORE
Labour market· Productivity & industrial strategy· Skills Britain’s skills record has hindered, not helped, our productivity drive. That needs to change 30 November 2017 by Kathleen Henehan Over the last week, we’ve heard a lot about the need to boost Britain’s productivity and how education and training can support that drive. First we had welcome new funding commitments in the Budget, then a strong skills focus in the Industrial Strategy White Paper and today we have a Skills Summit. Throughout, the Government … Continued READ MORE
Budgets & fiscal events· Economy and public finances The Chancellor has coped with a huge economic downgrade, but the outlook is grim for families across Britain 23 November 2017 by Torsten Bell For his first Autumn Budget, the Office for Budget Responsibility has given Philip Hammond a truly catastrophic set of economic forecasts. After a decade of unrealised productivity forecasts, the OBR has now delivered the mother of all downgrades; all but halving its view of the UK’s capacity to grow. As a result it now expects … Continued READ MORE
Budgets & fiscal events· Labour market· Low pay· Economy and public finances The Autumn Budget 2017 brings worse than hoped for news for the low paid 23 November 2017 by Conor D’Arcy or many people, the big news out of November’s Budget – a massive downgrade in the outlook for productivity growth – will sound a bit abstract. The productivity downgrade has made the Chancellor’s task of balancing the books harder. But its impact on pay – with average annual earnings lowered by £1,000 – mean it’s even … Continued READ MORE
Housing· Intergenerational Centre Will building more homes help to reduce housing costs? 21 November 2017 by Kate Barker and Neal Hudson As part of the Foundation’s ongoing housing work, leading economist and Intergenerational Commission member Kate Barker and Housing market analyst Neal Hudson write about the impact that boosting housing supply could have on prices and wider housing costs. Since the mid-2000s the dominant narrative about housing in the UK has been around a shortage … Continued READ MORE
Budgets & fiscal events· Scotland· Tax Will the (Scottish) Budget raise income tax rates? 20 November 2017 by Adam Corlett With the UK Budget imminent, it’s important not to forget proposals released in Scotland earlier this month. These could lead to increases in income tax rates as soon as April, intended to protect public services and benefits in Scotland. This would be a departure from the usual direction of travel in the UK: there has … Continued READ MORE
Budgets & fiscal events· Economy and public finances It’s time to stop feeling sorry for the Chancellor – there’s no excuse for a do nothing Budget 20 November 2017 by Torsten Bell It’s all the rage to feel sorry for Britain’s Chancellor of the Exchequer. Philip Hammond is an unlucky man we’re told, having to prepare a Budget against a backdrop of a weaker economy, worse public finances and pressure to relaunch a government that’s had a tough Autumn. Those pressures are real, and no-one’s doubting that … Continued READ MORE
Labour market We need to put the changing world of work back in the spotlight 20 November 2017 by Conor D’Arcy Angst over diminishing attention spans is widespread these days, with the reaction to Twitter’s expansion to 280 characters a case in point. That’s long been true in politics: even the most important of issues need a regular drumbeat to maintain public interest. And it certainly applies to the problems highlighted by the Taylor Review of … Continued READ MORE
Budgets & fiscal events· Productivity & industrial strategy· Economy and public finances Hammond’s goal in this Budget should be to restart the productivity engine 20 November 2017 by Matthew Whittaker As a nation, we’re working smarter than we used to. A decade ago, for every hour we worked, we produced about £31.30 of stuff; today each hour of graft generates £31.85 of output. That sounds like good news. If we’re becoming more productive we should be able to treat ourselves to a pay rise, or … Continued READ MORE
Budgets & fiscal events· Housing Stamping it out? Housing in the Budget 17 November 2017 by Lindsay Judge It’s that time of year when we all read the runes from the Treasury in an effort to anticipate what will be announced in the Budget next week. We know the government is acutely aware that nothing ranks more highly with the disaffected young voter than the question of housing. Small surprise, then, that many … Continued READ MORE
Budgets & fiscal events· Economy and public finances· Tax All gain, no pain? – the Chancellor’s cunning tax plan 16 November 2017 by Torsten Bell British politics is odd these days. But even by current standards something very unusual looks set to happen in next week’s Budget. A basic rule of British politics is that tax rises tend to happen soon after a general election, with the Chancellor betting that we’ll all have forgotten about them when the next election … Continued READ MORE
Budgets & fiscal events· Economy and public finances· Intergenerational Centre How Philip Hammond can strike a blow for intergenerational fairness in his Budget 13 November 2017 by Laura Gardiner With the dust beginning to settle on a scandal-focused fortnight in Westminster politics, attention is turning back to the big event looming on the horizon – Philip Hammond’s first Autumn Budget in 12 days’ time. The backdrop looks challenging, with the Chancellor having to deal with the headache of a likely downgrade to the economic … Continued READ MORE
Budgets & fiscal events· Housing Strictly Come Building: How housing can make a star turn in the upcoming Budget 9 November 2017 by Torsten Bell Lowering expectations ahead of a Budget always helps a Chancellor. And when it comes to expectations of Cabinet members, Boris Johnson and Priti Patel have definitely been in the lowering business. But others have made the Chancellor’s task harder rather than easier. Robert Chote, the chair of the Office for Budget Responsibility, is set to … Continued READ MORE
Household debt The Bank has increased borrowing costs, but is personal debt bubbling over? 5 November 2017 by Matthew Whittaker Following a period of double digit growth in consumer credit over the last year or so, there have been some concerns about the reappearance of a debt bubble in the UK economy. In truth though, household borrowing currently resembles less of a bubble and more of two day-old helium balloon: partially deflated and looking worse … Continued READ MORE
Pay It’s all about the wages, stupid 4 November 2017 by Torsten Bell Yesterday’s good news: the reason the Bank of England increased interest rates is because it thinks the growth in your pay packet is about to start picking up. The bad news: it doesn’t think they’re going to pick up very far because we’re just not very good as a country at improving how we produce … Continued READ MORE
Housing Helping or hindering? The latest on Help to Buy 3 November 2017 by Lindsay Judge When Sajid Javid announced last month that the government would allocate a new tranche of money to the Help to Buy (HTB) programme he claimed that this would enable “people to make their dream of owning a home a reality”. But is this expensive policy really doing ‘people’ any favours? When HTB was introduced in … Continued READ MORE
Macroeconomic policy Crunching the numbers on today’s rate rise 2 November 2017 by Matthew Whittaker Interest rates are up. It may be a very modest increase but, for any number of reasons, the news is big. Ten years on from the last rise, today’s 0.25 percentage point increase in the Bank’s base rate (taking it back to the 0.5 per cent it sat at between March 2009 and August 2016) … Continued READ MORE
Living standards· Macroeconomic policy The rate rise debate should prompt wider questions about the living standards impact of monetary policy 1 November 2017 by Torsten Bell Tomorrow the Bank of England is expected to raise interest rates for the first time in a decade, kicking off the first tightening cycle for monetary policy in 14 years. Whether or not the Bank’s Monetary Policy Committee behaves as markets anticipate, the expectation has triggered two big questions. First there is the macro question … Continued READ MORE
Welfare Time to make Universal Credit fit for purpose in 21st century Britain 31 October 2017 by David Finch The pace of the roll-out of Universal Credit (UC) has quickened in recent months – and so too have the complaints and reputational hit that the reform is taking. Much of the focus has been on the six week wait before new claimants moving out of work receive their first payment, which is the result … Continued READ MORE
Labour market· Low pay· Pay The national living wage has caused the biggest fall in low pay in 40 years – but how is this improving people’s living standards? 27 October 2017 by George Bangham Employment is at a 40-year high, while pay is stagnating. That, in brief, sums up the last few years of changes in Britain’s labour market. As Figure 1 shows, politicians rightly highlight that employment and unemployment are undeniably trending in the right direction. But the good news on employment has failed drastically to translate into … Continued READ MORE
Labour market· Low pay· Pay The latest on low pay 26 October 2017 by Conor D’Arcy To paraphrase the great Yogi Berra, making predictions is hard. That’s especially true of the future of the UK’s labour market. After all, the current combination of record high employment and falling real wages is not a forecast many economists would’ve made even a couple of years ago. But new Annual Survey of Hours and … Continued READ MORE
