Welfare What works in encouraging saving? 23 February 2012 by Giselle Cory This post originally appeared on Left Foot Forward There are many tricks that can be used to encourage more saving – but we don’t know if any of them work. That is the finding from a new report from the Institute of Fiscal Studies. In looking outside classical economics to understand what drives savings, the authors pinpoint four … Continued READ MORE
Welfare Why Nick Clegg’s still taxing Cameron and Miliband 19 February 2012 by Gavin Kelly It remains a curiosity of today’s political scene that a small and unpopular party bumping along on 7 to 10 per cent in opinion polls is making the waves on the central issue of tax policy. On this one issue at least, the two main parties find themselves reacting to the gauntlet the Liberal Democrats have … Continued READ MORE
Welfare Tax credits: a flawed friend 17 February 2012 by Gavin Kelly Following on from this week’s bleak news on jobs – with unemployment up and confirmation that those new jobs on offer are all part time and insecure – another wave of stealth cuts is about to crash over Britain’s working poor. After their tax credits were singled out for harsh treatment last spring then frozen in the autumn, … Continued READ MORE
Labour market The fraying thread between pay and productivity 17 February 2012 by James Plunkett Do workers reap the benefits of productivity growth? Few questions are more central to the conundrum of faltering living standards. If the 20th century was a golden era for material wellbeing in Britain, that’s explained by one factor above all others: from 1900 to 2000 UK labour productivity grew roughly fourfold, translating into unprecedented growth in real … Continued READ MORE
Labour market Beneath the unemployment stats, our jobs market is changing 15 February 2012 by Giselle Cory Unemployment is up. That’s the latest from the Office of National Statistics. Their stats released this morning show 48,000 people fell out of work in the last quarter, with the unemployment rate rising to 8.4 percent. For ministers looking for a positive spin, the good news is that employment’s also up, and there has been a slight … Continued READ MORE
Living standards The lesson Cameron needs to learn from Birgitte Nyborg 9 February 2012 by Gavin Kelly David Cameron has been in Stockholm this week, expressing his love for all things Nordic from economic openness, to free schools, and the Danish TV series The Killing. Based on his pronouncements today he’s doubtless also been attracted to Borgen, the political drama in which a female prime minister juggles coalition politics and the demands of a … Continued READ MORE
Labour market Cameron is right to focus on quality apprenticeships 7 February 2012 by James Plunkett If there are ‘no votes in skills’, as the old dictum goes, there seem to be some in apprenticeships. Hence David Cameron’s call this morning for apprenticeships to become a ‘gold standard’ qualification ranking alongside degrees from the best universities. His goal is to rectify Britain’s shockingly poor performance on mid-level skills compared to world … Continued READ MORE
Living standards Squeezed middle: all pain, no gain 30 January 2012 by Matthew Whittaker Average incomes in the ‘squeezed middle’ group will take until at least 2020 to return to their 2007 level – a trend made even worse by public sector cuts With two out of three British workers facing pay freezes, inflation running at an annual average of 5.2% and widespread cuts to government spending on services and … Continued READ MORE
Housing Homeownership: the preserve of the rich? 25 January 2012 by Joe Coward One of the most striking findings of our Squeezed Britain report, which sets out the economic position of the squeezed middle in forensic detail, is that home ownership is now out of reach for many people on low to middle incomes (LMI). On the basis of current incomes, house prices and the loan-to-value ratios now available, it … Continued READ MORE
Living standards Waving goodbye to two decades 25 January 2012 by Gavin Kelly Another week, another terrible set of GDP figures, an IMF downgrade of the UK’s growth prospects, and a new reportshowing the squeeze on living standards is set to run and run. The public, along with our politicians, is probably starting to grow immune to some of the shocking headlines about how long it will be before … Continued READ MORE
Living standards The real squeezed middle could stagnate for 20 years 24 January 2012 by Joe Coward This morning Liam Byrne and David Laws launched a new Resolution Foundation report, Squeezed Britain, which sets out the economic position of the squeezed middle in forensic detail, offering some pointers towards what will be the key political issues over the next few years. The report focuses on people on low to middle incomes, who the … Continued READ MORE
Living standards Acting like an opposition while in government can only take you so far 18 January 2012 by Gavin Kelly Tomorrow David Cameron will complete the beauty parade of party leaders offering their take on crony capitalism, following on from Ed Miliband’s conference speech, which he amplified last week, and Nick Clegg’s call for a “John Lewis economy”. Expect Cameron to balance a fierce rhetorical attack on boardroom excess (“fill your boots capitalism”) with plenty … Continued READ MORE
Economy and public finances Food and fuel prices will be key to inflation in the year ahead 17 January 2012 by James Plunkett Backed by strong discounting from retailers, RPI fell from 5.2 per cent in November to 4.8 per cent in December, while CPI fell from 4.8 per cent to 4.2 per cent, its largest one month drop since December 2008. Stressed-out-by-inflationThat of course means inflation remains at more than twice the level of its Bank of … Continued READ MORE
Labour market The scandal of low-paid care workers 22 December 2011 by Gavin Kelly and Joe Coward A friend who is a care worker employed by an agency has a moan to me about her work. Repeated 15 minute slots with a client followed by a frantic dash to another part of the city she lives in to do the same again. Care in a hurry, on the cheap. Welcome to home … Continued READ MORE
Living standards Lessons from America 20 December 2011 by Sophia Parker In the three months I’ve been working on low income households in the US, a wry smile and an emphatic “no” is the almost universal response I get to my question “does the US have any lessons for the UK?” It is certainly true that American safety nets, where they exist at all, are more … Continued READ MORE
Housing Plugging the gap in the rental market 17 December 2011 by Louisa Darian We may be out of recession but the housing market story continues to be one of doom and gloom. House prices continue to fall, the mortgage market continues to contract. While even deposit ready first-time buyers are struggling, the situation is exponentially worse for low-to-middle earners. With just 2 per cent of mortgages available at … Continued READ MORE
Living standards Changing the conversation in 2012 16 December 2011 by Gavin Kelly Low growth, high unemployment, deeper cuts, falling wages, and a further reduction in the living standards of working families. Just in case you were under any doubt, 2012 is going to feel like one long Groundhog Day, a darker version of its grim predecessor. There will, of course, be many new twists and turns. But … Continued READ MORE
Economy and public finances Uneven inflation costing low-to-middle earners £150 a year 15 December 2011 by Matthew Whittaker Today’s figures from the Office for National Statistics shows that inflation rose in the UK in November, with the CPI increasing from 3.2% to 3.3% – above the government’s official target of 2% for the eleventh month in a row – and the wider RPI measure rising from 4.5% to 4.7%. With average annual earnings growth sitting … Continued READ MORE
Labour market Women’s work – an opportunity for growth we can’t afford to pass up 12 December 2011 by James Plunkett As economic forecasts continue to head south, it’s worth pausing to ask a simple question: Where exactly do we expect future growth in living standards to come from – even once a recovery takes hold? The list of possible answers to that question isn’t long. In fact, when it comes to household income growth, there are effectively … Continued READ MORE
Living standards Will Britons cope with the fallout from a lost decade? 5 December 2011 by Gavin Kelly [Extract] It’s still amazing how little many people understand about how poor so many families are in our country, relative to what other people think. That’s particularly a metropolitan misunderstanding. That’s still the case today, but it is also noticeable that there is starting to be a detail and rigour in the conversation about … Continued READ MORE
Economy and public finances Worried about losing a decade after the autumn statement? We might lose two 30 November 2011 by Gavin Kelly Those fretting about whether we might face a “lost decade” need to steel themselves. It could be worse than that. Based on the downgraded Office for Budget Responsibility (OBR) assumptions we can now project that the wages of an ordinary worker in 2016 will be at the same level as they were in 2001; and that only … Continued READ MORE
Labour market So who pays? 29 November 2011 by Gavin Kelly Just in case you were under any doubt about where the burden of today’s widely expected cuts to tax credits will fall, the chart below should make it clear. Over 75 per cent of the pain of today’s changes to tax credits is felt by the bottom half of the income distribution. The vast majority … Continued READ MORE
Living standards Are we facing an American nightmare? 21 November 2011 by James Plunkett With the Chancellor’s autumn statement due next Tuesday, we’re all talking about growth. The ECB and Bank of England now say the UK economy is set to grow at less than half the rate the OBR forecast back in March. That makes it all but certain that George Osborne will announce dramatic downward revisions to UK forecasts when he stands up … Continued READ MORE
Living standards Are we catching the US disease? 21 November 2011 by Gavin Kelly In the 1970s, the policy and political elite obsessed about the ‘British disease’ — the failure of our system of industrial relations, and its impact on UK prosperity relative to our competitors, above all the US. Forty years on, their concern should be whether we have caught the ‘US disease’: the failure of the broad … Continued READ MORE
Living standards What Britain must learn from the misfortunes of middle America 20 November 2011 by Gavin Kelly The great American middle class is hurting – and has been for a generation. While middle-income households in most advanced economies have been hit by the great recession, the US middle class, the great majority of working families, has not seen the good times for longer than most. Stagnating middle incomes in the US date … Continued READ MORE
