Public finances A budget for the ‘makers, doers and savers’ 20 March 2014 by Matthew Whittaker The theme of economic optimism that built during 2013 spilled over into today’s Budget—but only just. GDP is projected to rise more quickly over the next four years than was the case back in the autumn, and employment continues to out-perform expectations. But there are question marks over the extent to which people are feeling … Continued READ MORE
Public finances Mind the Budget income gap 19 March 2014 by Vidhya Alakeson If the Chancellor is to be believed, this was yet another Budget for ‘hard working families’. But the reality seems more mixed. Let’s start with the positive: yesterday’s childcare announcement. Leave aside that the majority of new spending on childcare is still going to better off families, including those earning up to £300,000, a little … Continued READ MORE
Work The Budget contains little to excite those on middle incomes 19 March 2014 by Matthew Whittaker Despite the talk of letting people keep more of what they earn and what they save, today’s budget contained little to excite those on low to middle incomes. The government’s policy of increasing the income tax personal allowance above inflation has consistently been sold as a low-earner tax cut. But in reality, today’s announcement of … Continued READ MORE
Work More than a minimum: reforming the minimum wage 13 March 2014 by Conor D’Arcy The national minimum wage celebrates its 15th birthday next month. Given the dire effects some predicted it would have – two million job losses and spiralling inflation – even its short-term survival was far from guaranteed in 1999. George Bain, chair of the Low Pay Commission when the initial rate was set, has admitted he … Continued READ MORE
Social security Why the Lib Dems’ £12,500 tax allowance promise is a smaller pledge than it sounds 11 March 2014 by Gavin Kelly Since the weekend, when the Lib Dem faithful gathered in York for their spring conference, quite a few column inches have been filled with frothy speculation about Nick Clegg’s likely longevity as Liberal Democrat leader. Nothing, however, has been written about the new twist he gave their proposed tax policy (Lib Dem blogger Mark Pack being the … Continued READ MORE
Housing Shared ownership: a role for funders? 7 March 2014 by Vidhya Alakeson Almost a year on from the launch of Help to Buy, millions of Britons are still unable to get on the housing ladder. The ongoing costs of a high loan to value mortgage are too great a stretch on a modest income, however small the deposit. Among the under thirty fives on low to middle … Continued READ MORE
Work SeaTac: the small US town that sparked a new movement against low wages 23 February 2014 by Gavin Kelly Until the turn of the year, few Americans had much reason to have heard of SeaTac, a small community just outside Seattle. Those aware of the town’s existence knew it as a place that exists to serve the city’s bustling Seattle–Tacoma international airport. But SeaTac is now firmly on the map. Recent events there have … Continued READ MORE
Work Without sustained improvement in wages, the recovery may yet run out of road 19 February 2014 by Matthew Whittaker While the latest set of labour market statistics which came out this morning suggested a slowdown in the rate of improvement, they don’t disguise what continues to be a very strong period for UK employment. The number of people in work passed its pre-recession peak of 29.6 million in the summer of 2012; since then … Continued READ MORE
Incomes It’s too early to be pessimistic about boosting living standards 11 February 2014 by Gavin Kelly Things are likely to stop getting worse sometime soon, progress will then be painfully slow, and it’s going to be an awful long time before they get back to where they were before the crash. That’s the gist of a major new report on living standards by the Resolution Foundation, which will show that typical household incomes … Continued READ MORE
Social security The case for looser childcare ratios rests on confusion 29 January 2014 by James Plunkett This blog originally appeared on the New Statesman The government claims to want to reduce costs and increase quality. It can’t have it both ways. This morning’s announcement on childcare ratios should be just the hors d’oeuvre before the government sets out its plans to increase childcare support for parents. According to the latest rumours, it now … Continued READ MORE
Social security Careers and carers: would some stay-at-home mums prefer to work? 24 January 2014 by Vidhya Alakeson Camilla is 31. She has two children under five. She currently works five hours a week but she would prefer to work 16 hours. Like her, Rachel also has two children under five. She’s a stay at home mum but she would prefer to work full time. But for both Camilla and Rachel, childcare is … Continued READ MORE
Work These wage stats don’t tell us much about living standards 24 January 2014 by James Plunkett This morning the government released some interesting new stats on wages. It claims that 90 per cent of people saw their earnings rise in the year to April 2013. As I tweeted earlier this week, the data source that the government are using tells a more positive story about wages than the more regular earnings data that drives most … Continued READ MORE
Work The robots are coming. Will they bring wealth or a divided society? 6 January 2014 by Gavin Kelly Whether it’s our humdrum reliance on supermarket self-service tills, Siri on our iPhones, the emergence of the drone as a weapon of choice or the impending arrival of the driverless car, intelligent machines are woven into our lives as never before. It’s increasingly common, a cliche even, for us to read about the inexorable rise … Continued READ MORE
Social security Stealth cuts to universal credit will hit the working poor 13 December 2013 by Gavin Kelly Few things in politics are certain, but certain policy announcements elicit a predictable media response. Tinker with the tax treatment of the elderly and prepare to be accused of imposing a “granny tax”. Or, more hopefully for the coalition, increase the generosity of the personal tax allowance and read about “tax cuts for low earners”. So here’s … Continued READ MORE
Incomes The Treasury has a point on living standards — but it ignores the role of inequality 5 December 2013 by James Plunkett One of the big surprises in today’s Autumn Statement lies in the new OBR projections. Growth has been revised up as expected—at least in the short-term. But wage forecasts are down. Amazingly, after today’s largely positive economic news, the squeeze on wages is now going to be even longer than the OBR thought in March. The updates reflect … Continued READ MORE
Housing A sixth of UK debt is held by those who have less than £200 a month left after essentials 3 December 2013 by Gavin Kelly Thursday’s Autumn Statement is likely to generate headlines about energy bills, improving public finances and the promise of a return to real wage growth in the new year. At least that is what George Osborne, the chancellor, will be hoping for. He should also prepare himself for another rash of stories about debt-soaked Britain. When people sift the detail, they … Continued READ MORE
Work Starting out or getting stuck?: An analysis of who gets trapped in low paid work – and who escapes 2 December 2013 by Alex Hurrell It is generally acknowledged that the UK has a serious low pay problem. One in five employees were low paid in 2012, which compares poorly to other similar economies. But little is known about the persistence of low pay and consequently this is an under-developed aspect of the social mobility debate. This matters because many argue that, … Continued READ MORE
Work The price we pay for poverty wages is too high 27 November 2013 by Gavin Kelly Low pay is not simply a rite of passage that young people go through, the odds of escaping are truly grim. Living on low pay in 2013 is a rough and all too common experience, but being stuck on poverty-pay for a decade or more is tougher still. Yet for all the talk in Westminster … Continued READ MORE
Housing Crisis averted, or delayed reaction? 27 November 2013 by Matthew Whittaker As the weather gets colder, so Britain’s economic recovery appears to be warming up. The sense of optimism engendered by positive GDP and employment figures and by a range of business surveys is likely to be reinforced at next week’s Autumn Statement with significant upgrades to the OBR’s growth projections for the coming years. Clearly … Continued READ MORE
Housing Shared ownership can put a roof over the head of Generation Rent 22 November 2013 by Vidhya Alakeson With house prices out of reach for many, shared ownership could be the next big thing – but only if it makes some serious change The gap between renting and owning with a conventional mortgage, even a high loan-to-value mortgage, has become unbridgeable for low and modest income families in some parts of the country, … Continued READ MORE
Incomes The long downturn has hit labour markets hard — but it has also reshaped them 20 November 2013 by James Plunkett First there was the crisis, then the long downturn, and now—let us hope—a labour market recovery. And as Britain and America enter the third phase of a painful economic story, a new question is coming to define political debate: how will the proceeds of the recovery be shared? The answer to this question will depend … Continued READ MORE
Housing Shared ownership could help plug the housing gap 20 November 2013 by Hannah Fearn Home ownership is in decline. Rising house prices, falling wages and restrictions on mortgage lending have left this common aspiration far out of the reach of the vast majority of low- and middle-income households. Though today 64% of Britons still own their home, that figure is fast dropping, in no small part due to coalition … Continued READ MORE
Incomes Whose recovery is this? And who will reap the benefits? 17 November 2013 by Gavin Kelly Mark Carney, governor of the Bank of England, gave his blessing to the recovery last week, proclaiming that it had “taken hold” in the wider economy. He didn’t, and couldn’t, take a similar stance on what’s likely to happen to the living standards of low- and middle-income Britain, where there are still few signs of an … Continued READ MORE
Work Pay: the lost decade 13 November 2013 by James Plunkett Recent good news on the jobs front should not obscure the fact that real wages have been falling for at least four years. Overall, the wage squeeze has created a lost decade for pay New Office for National Statistics data out this morning confirms what many workers will already know: the wage squeeze continues. In … Continued READ MORE
Work Why the Bank of England should target wages as well as unemployment 6 November 2013 by Matthew Whittaker After months of relative inaction, MPC meetings are about to get very interesting again. While rate increases should be some way off yet, improvements in a range of economic indicators mean that ever more attention is set to shift towards the question of how and when monetary policy tightens. While calls for action are likely … Continued READ MORE
