Social care· Low pay· Pay Budgeting for the National Living Wage in the social care sector 13 July 2015 by Laura Gardiner The centrepiece of the 2015 Summer Budget – the National Living Wage (NLW) ‘premium’ on the minimum wage for those aged 25 and over – has been rightly welcomed by many as delivering a pay rise to millions of Britain’s low paid workers. However, as with the debate around each annual increase in the National … Continued READ MORE
Living standards· Low pay· Welfare Raising low pay is welcome. But we should still fear the forces hurting family incomes 12 July 2015 by Gavin Kelly George Osborne’s audacious unveiling of what he termed the “national living wage” dominated the budget coverage and succeeded in delighting, outraging and confusing in almost equal measure. Low-pay campaigners were certainly buoyed, just as some business leaders were appalled at what they viewed as a Milibandesque intrusion into pay-setting. Many others were left puzzling over … Continued READ MORE
Tax It’s time to talk about tax relief – how more accountability on tax expenditure could help ease the welfare squeeze 7 July 2015 by Gavin Kelly As the Budget approaches we await the details of deep cuts in welfare spending, but the fact that they are coming is beyond doubt. With the main tax rises having been blocked off, and public services already facing a faster pace of cuts than in the last parliament, every sinew is being strained in the … Continued READ MORE
Budgets & fiscal events· Welfare Will wages fill the tax credit gap? Don’t Budget for it 6 July 2015 by Gavin Kelly Recent high-profile converts are bringing headlines and new vim to the debate on working poverty. Good. But with this comes a cacophony of confusion about the National Minimum Wage (NMW), Living Wage, the role of tax credits and the likelihood that a recovery in earnings will compensate for cuts to in-work support. And this risks … Continued READ MORE
Budgets & fiscal events· Tax The Tax-Free Minimum Wage – a gimmick or a real giveaway? 3 July 2015 by Conor D’Arcy and Adam Corlett Amid the flurry of pre-election pledges made by each party, the Conservatives’ ‘Tax-Free Minimum Wage’ attracted a curious mix of attention. The policy – which will ensure that those working 30 hours a week or fewer on the minimum wage do not pay income tax – received widespread media coverage, but much of it described … Continued READ MORE
Inequality & poverty· Welfare Could Universal Credit hold the key to reducing child poverty? 25 June 2015 by David Finch We discovered this morning that the proportion of children living in relative poverty is at its lowest level since the 1980s. Great news of course, but this headline masks a much more complicated – and worrying – picture. Falls in this headline poverty measure – which captures those children living in households with incomes less … Continued READ MORE
Pay Much like the British summer, make the most of the earnings boom while it lasts 15 June 2015 by Laura Gardiner and Adam Corlett Ahead of the summer budget early next month, the Chancellor may be hoping for some positive headlines in the employment statistics due on Wednesday. When it comes to earnings, he’s sure to be rewarded. Our analysis suggests that real regular pay will top 2.5 per cent year-on-year growth in this week’s numbers (covering the three … Continued READ MORE
Budgets & fiscal events· Welfare Assessing the proposal to cut £5 billion from Child Tax Credit 14 June 2015 by David Finch Last week, the BBC reported that the government was contemplating a major reduction in Child Tax Credit, in order to go part way towards meeting the £12 billion in working age welfare benefit cuts that it has committed to finding by 2017/18. The report suggested that the government was considering reducing the value of the … Continued READ MORE
Welfare Credit where it’s due? How to reform and make the most out of Universal Credit 8 June 2015 by Gavin Kelly There are some issues where a little bit of knowledge, and a lot of bluster, are all that’s needed for a politician – whether government or opposition – to get through a standard media grilling. Universal Credit (UC), the government’s flagship and troubled welfare reform that integrates six separate welfare benefits, is a case in … Continued READ MORE
Labour market Why Britain is no longer in America’s shadow on employment 5 June 2015 by Adam Corlett The US approach to working-age welfare may come in for criticism in some quarters for failing to offer much support to those who fall out of work, but at least it delivers strong employment outcomes. Not like in the UK of course. While not quite as generous as some of our European neighbours, out-of-work welfare … Continued READ MORE
Living standards· Labour market The View That Britain Should Be Learning Lessons From the US Labour Market Is Long Past Its Sell-By Date 5 June 2015 by Gavin Kelly Political debates about key policy challenges often tend to idealise – and bastardise – the experience of other countries. Whether it is Finnish schools, Swedish childcare, German vocational training, Danish ‘flexicurity’, Israeli entrepreneurship or Dutch pensions, there are places that we are supposed to look to for inspiration. Usually these views are rooted in some … Continued READ MORE
Budgets & fiscal events· Public spending· Economy and public finances How much wriggle room will the Chancellor have in the July Budget? 22 May 2015 by Gavin Kelly After the flow of easy pre-election promises, here come the hard choices of government. As George Osborne approaches his ‘emergency Budget’ attention will turn to what room for manoeuvre he really has given all the commitments that have been made. How will it all add up and is there a version of austerity that might … Continued READ MORE
Budgets & fiscal events· Public spending· Economy and public finances How tightly has the Chancellor tied his own hands on fiscal policy? 22 May 2015 by Adam Corlett Having secured a majority on 7 May, the Conservatives must now set about the difficult job of delivering on their various pre-election pledges. In relation to fiscal consolidation in particular, they can no longer point to the demands of a junior coalition partner as cause for rowing back on any of the harder to execute … Continued READ MORE
Living standards· Inequality & poverty How do we tackle Britain’s huge, shifting poverty challenge? 20 May 2015 by Conor D’Arcy UK poverty rates have been falling relatively steadily since the start of the 1990s. Policy changes have led to particularly significant reductions among pensioners and children. But much less progress has been made among adults without children; and current projections suggest that many of the improvements of recent decades will go into reverse over the … Continued READ MORE
Pay Is a pay boom coming and if not, why not? 14 May 2015 by Laura Gardiner Rarely has the trope that a week is a long time in politics rung truer. But yesterday we learned that an hour is a long time in economics. The latest employment statistics are unambiguously encouraging. Employment rose and unemployment fell, strengthening trends in place over the past couple of years. Perhaps more significantly, rising nominal … Continued READ MORE
Budgets & fiscal events· Economy and public finances· Political parties and elections How far apart are the Conservatives and the Lib Dems on fiscal policy? 28 April 2015 by Matthew Whittaker Amid recent discussion of the key role that parties such as UKIP and the SNP might play in ‘propping up’ a minority government after 7 May, less attention appears to have been given to the continued potential leverage of the Liberal Democrats. Of course, any future negotiations will revolve around a multitude of issues and … Continued READ MORE
Public spending· Economy and public finances· Political parties and elections How far apart are the Conservatives and Liberal Democrats on fiscal policy: could the coalition renew its vows? 28 April 2015 by Adam Corlett Recently we looked at the degree of potential overlap between Labour and Liberal Democrat fiscal plans, and found that the parties are not as far apart as might first be assumed. In this second note, we consider the relative positions of the Conservatives and Liberal Democrats. The Conservative goal appears relatively straightforward: they want to … Continued READ MORE
Pay What’s holding back nominal wage growth? 17 April 2015 by Laura Gardiner Today’s statistics mark another welcome step along the road in our long-overdue earnings recovery. A gentle improvement in regular pay in the three months to February 2015 (now 1.8 per cent, with the total pay measure that includes bonuses close by at 1.7 per cent), against a backdrop of inflation having fallen to 0 per … Continued READ MORE
Public spending· Economy and public finances· Political parties and elections How far apart are Labour and the Lib Dems on fiscal policy? 2 April 2015 by Gavin Kelly If they did a deal what might it look like: an end to austerity? Five weeks to go to polling day and it’s clear that the media, and perhaps the public, aren’t getting the answers they’d like to some of the fiscal questions the next government will have to address. What we’ve termed the candour … Continued READ MORE
Public spending· Economy and public finances· Welfare· Political parties and elections Could Labour and the Liberal Democrats agree on deficit reduction and spending cuts? 2 April 2015 by Adam Corlett At first glance How much of a difference is there between Labour and the Liberal Democrats on fiscal policy (we’ll consider the gap between other parties in future briefings)? Labour’s policy is to get “the current budget into surplus and national debt falling as soon as possible within the next Parliament” – ‘current’ meaning excluding … Continued READ MORE
Labour market· Skills Hollowing out – deeper than it sounds 23 March 2015 by Laura Gardiner It’s rare that technical economic concepts make their way out of the halls of academia and into the mainstream. Yet the idea that labour markets in advanced economies are increasingly ‘polarising’ between ‘lovely’ and ‘lousy’ jobs – with middle-of-the-road jobs being ‘hollowed out’ and wage inequality rising as a result – is one that has … Continued READ MORE
Public spending· Economy and public finances All aboard the fiscal rollercoaster? 19 March 2015 by Adam Corlett We now have the final fiscal backdrop for the election, with the OBR setting out their forecast for tax receipts and the government’s tentative proposals for spending. Here we take a post-Budget look at what the parties’ deficit reduction targets might mean for the next parliament. The graph below shows the fiscal stance of the … Continued READ MORE
Living standards How far have living standards recovered? 18 March 2015 by Matthew Whittaker What’s the truth behind the Chancellor’s Budget claim that “the latest projections show that living standards will be higher than when we came to office”? With so many alternative ways of capturing ‘living standards’ the answer is that they might be higher, lower, or just about the same. Given that this issue is going to … Continued READ MORE
Tax Five things you need to know about the personal allowance increase 17 March 2015 by Adam Corlett The Budget is expected to confirm rumours that the personal allowance – the amount you can earn free of any income tax – will increase to £11,000 next month, rather than the £10,600 laid out at the Autumn Statement in December. In this brief note we run through five things worth noting about this possible … Continued READ MORE
Incomes· Public spending· Productivity & industrial strategy· Economy and public finances Productivity as much as politics will determine the scale of cuts and tax rises in the next parliament 16 March 2015 by Adam Corlett The scale of fiscal consolidation in the next parliament will depend largely on future productivity growth. Assuming the parties maintained their fiscal targets regardless of the underlying economic circumstances, a future Conservative government would be in the position of tightening less under a strong productivity scenario than is implied by existing Labour plans. Equally, a … Continued READ MORE
