Low pay· Pay· Scotland New year, new wage: implementing the National Living Wage in Scotland 4 January 2016 by Conor D’Arcy The first week back at work after the new year is no one’s favourite, with the brighter, better spring weather still a long way off. But this year, thousands of low-paid workers across Scotland have even more cause to be impatient for the end of winter. From April, thanks to the National Living Wage (NLW) … Continued READ MORE
Living standards Building on Britain’s living standards recovery next year will require decisive action by policy makers 31 December 2015 by Torsten Bell British policy makers might well have had a contented Christmas break. At least by recent standards. In 2015 employment reached record highs while real earnings growth returned after a six-year absence. Crucially those on the lowest earnings saw the biggest rises at over three per cent. But policy makers from the Treasury to the Bank … Continued READ MORE
Tax Tax expenditures deserve far more scrutiny 30 December 2015 by Adam Corlett Last month, the UK government presented its Spending Review, setting out departmental budgets for the next four years. There were protections for some departments and large cuts (though smaller than expected) for others. Coming after years of previous cuts, many departmental budgets by 2019 will be only half what they were in 2009. Opinions will … Continued READ MORE
Household debt· Wealth & assets Why defusing the debt bomb means dealing with distributions 26 December 2015 by Matthew Whittaker Following the near-collapse of the global financial system back in 2008, it appeared only a matter of time before the UK’s household debt time bomb went boom. In aggregate, households owed just shy of 1.6 times their total income, up from a ratio of just over 1 at the start of the century. That there … Continued READ MORE
Housing Dealing with the housing aspiration gap 19 December 2015 by Matthew Whittaker Britain’s reputation as a nation of home-owners is under threat. While it’s true that just under two-thirds (65 per cent) of us own our own place, the home-ownership rate has fallen from 73 per cent since 2007. This downward trend has occurred despite the proportion owning their home outright continuing to rise gently in recent … Continued READ MORE
Scotland· Tax “An opportunity that must not be missed” – council tax reform in Scotland and beyond 14 December 2015 by Adam Corlett Scotland’s Commission on Local Tax Reform has today released its report – recommending the abolition and replacement of the current council tax system. Few would argue that council tax in its current form is particularly sensible or fair, so what happens next ahead of Scotland’s May elections should be of interest far beyond Holyrood. The … Continued READ MORE
Living standards· Incomes· Prices & consumption Five charts that show who spends what in the UK 8 December 2015 by Matthew Whittaker The issue of living standards has – rightly – risen up the agenda in recent years, following the unprecedented six year-pay squeeze and severe hit to household incomes in the years after the financial crisis of 2008. Yet too little attention is given to the other side of the living standards equation: the cost of … Continued READ MORE
Low pay· Pay Clearing up the confusion around the National Living Wage 7 December 2015 by Adam Corlett The National Living Wage, the blockbuster announcement of the Summer Budget, is a hugely welcome move on low pay. But we’re now four months away from its introduction and, as a new government poll reveals, many businesses are not prepared for it. The awareness raising campaign launched today is a good start towards addressing that … Continued READ MORE
Welfare Universal Credit’s future depends on whether it’s the economics or the politics that comes first for the Treasury 4 December 2015 by Torsten Bell Incentives matter. That was one of the central assumptions behind the creation of Universal Credit. As well as creating a simpler benefits system (a good thing in and of itself), the purpose of the new benefit is to drive up employment by providing a clearer financial incentive to enter and progress in work. But incentives … Continued READ MORE
Living standards· Intergenerational Centre Our country favours the old over the young – and the problem has been getting worse 26 November 2015 by David Willetts Our country favours the old over the young and the problem has been getting worse. George Osborne took some welcome steps yesterday to reverse that trend. The apprenticeship levy, the extension of student loans, and enabling sixth form colleges to escape their unfair VAT burden by converting to academies are important moves in the right … Continued READ MORE
Budgets & fiscal events· Intergenerational Centre Skewed Britain is no country for young men 25 November 2015 by Matthew Whittaker Against all expectations, George Osborne managed to deliver something of a giveaway with his combined Autumn Statement and Spending Review. That might seem hard to believe given that day-to-day UK government spending is set to be reduced by more than £10bn over the next four years. For many departments that means cumulative budget cuts since … Continued READ MORE
Firms· Productivity & industrial strategy· Economic growth Robots will enrich not replace us 21 November 2015 by David Willetts The robots are coming to take our jobs. So says Martin Ford in The Rise of the Robots, the FT/McKinsey business book of the year. Andy Haldane, chief economist of the Bank of England, last week warned that 15m jobs in Britain were at risk from automation. Is artificial intelligence about to take over? I am not so sure. Innovation is always … Continued READ MORE
Budgets & fiscal events· Economy and public finances The Spending Review’s big choice: will there be five ‘big losers’ or a toning down of the cuts? 20 November 2015 by Torsten Bell and Adam Corlett The core of next week’s Spending Review is now becoming clear. If the Treasury delivers the pre-announced scale of cuts we will see five ‘big losers’ in Whitehall including, surprisingly for some, Education. The Chancellor is now five days away from announcing his second multi-year spending review. Since 1998 these departmental budget setting exercises have … Continued READ MORE
Labour market· Pay Five things we’ve learned from today’s earnings figures (and one thing we haven’t) 18 November 2015 by Laura Gardiner After a longer and deeper pay squeeze than even the most pessimistic of economists would have predicted, 2015 marks the year when pay growth finally returned. Today’s publication of the Annual Survey of Hours and Earnings (ASHE) – our least timely but most comprehensive source on employee pay – gives us the opportunity to lift … Continued READ MORE
Low pay· Labour market· Pay Lifting the wage floor increases the urgency for securing productivity gains 18 November 2015 by Matthew Whittaker The welcome introduction of a significantly higher wage floor from April 2016 is set to boost the pay of around 6 million workers. But it will pose adaptation challenges for employers, particularly in lower paying sectors such as retail and hospitality. A simple thought exercise implies that maintaining a broad adherence to the international relationship … Continued READ MORE
Labour Market Outlook· Labour market· Pay How is the UK’s pay recovery being shared? 16 November 2015 by Matthew Whittaker After 12 straight months of real-terms growth, the question on pay has shifted from ‘when will it return?’ to ‘how strong and sustainable is it’? Until now, we’ve been unable to dig any deeper to consider the additional question of ‘who’s gaining?’ but we’ll get some early clues from official data out this Wednesday. Could … Continued READ MORE
Economy and public finances Seven charts that show the changing shape of the state in Britain 13 November 2015 by Matthew Whittaker Seven charts that show the changing shape of the state in Britain What should the state do? That’s the question we asked at our Shrinking Pains event on Tuesday morning. Six years into a planned ten-year period of fiscal consolidation, we took a step back – with the help of Ken Clarke, Jill Rutter and … Continued READ MORE
Welfare Now is not the time to fudge on tax credits 5 November 2015 by Torsten Bell Public policy questions are often difficult, with significant trade-offs between equally important objectives. As a result most people who have spent time taking decision in government know that, despite its bad reputation, the fudge can sometimes be the right answer. It can buy time on issues where the policy substance is unclear or reconcile competing … Continued READ MORE
Budgets & fiscal events· Welfare Tone down, phase in or transition to: the options facing the Treasury on tax credits 27 October 2015 by Torsten Bell Following developments in the House of Lords, we’ve entered a new phase in the tax credits debate. Whatever the constitutional rights and wrongs, everyone can agree that the ball is firmly back in George Osborne’s court. Indeed last night he promised to look again at the changes. The real question now is to what extent … Continued READ MORE
Tax· Welfare National Insurance cuts: far from being the silver bullet for tax credit changes they miss the target 26 October 2015 by Torsten Bell It was another busy weekend in the debate on the changes to tax credits that are set to be introduced next April. More suggestions about how the Government might ameliorate the impact on low income working families have been set out. In particular there’s been a bit of focus on the role National Insurance changes (specifically on … Continued READ MORE
Living standards· Intergenerational Centre The social contract between generations in Britain is being broken 25 October 2015 by David Willetts It marks a dramatic turnaround in the fortunes of different generations that this week the IFS estimate that the incomes of pensioners – £394 per week – are higher than the incomes of the rest of the population – £385 per week. In many ways, this is a triumph. Nobody wants to see pensioners struggling … Continued READ MORE
Labour market The ‘gig economy’ – revolutionising the world of work, or the latest storm in a teacup? 23 October 2015 by Laura Gardiner Listen to some parts of the online media and tech press and you hear that the traditional employee job is on its way out. That’s especially true across the pond, but the issue is generating an increasing amount of heat here in the UK too. Whether it’s selling your crafts on Etsy or Ebay, offering … Continued READ MORE
Tax· Welfare We can’t (tax) cut our way out of the tax credit problem 21 October 2015 by Torsten Bell When it comes to this April’s tax credit cuts we’re now swiftly approaching the point where everyone accepts there is a problem, and starts to ask the real question – what is the solution? Forthcoming work from the Resolution Foundation will look at the issue in detail, but it’s worth sketching out the parameters … Continued READ MORE
Labour market· Pay The national living wage brings public sector complications 14 October 2015 by Conor D’Arcy Since its announcement at the summer Budget, the National Living Wage (NLW) has rarely been out of the headlines. We’ve heard employer warnings on its impacts as well as some firms going one better and bumping their staff up to the ‘real’ Living Wage. But what’s received less media attention is how the public sector … Continued READ MORE
Pay· Living Wage We don’t want an economy where everything that is good is compulsory 10 October 2015 by David Willetts It is Living Wage week and Boris Johnson has said he wants employers across London to pay at a rate of £9.40 an hour, while businesses outside the capital are being asked to pay £8.25. That is not to be confused with the National Living Wage announced by George Osborne in the Summer, which will … Continued READ MORE