This guest post is by Sir Robin Wales, Mayor of Newham

The introduction of the National Minimum Wage (NMW) is widely regarded as one of the most impactful policies of recent decades. Its success as a policy is illustrated by the fact that the need for a minimum wage is rarely questioned any more, even as the government looks to repeal other areas of business legislation. This is great achievement, and the debate has now moved on to discussion over what level the minimum wage should be set at to cover living costs.

These debates are important. But, as the Resolution Foundation has highlighted, with them we have lost sight of a vital issue: enforcement. What many people do not realise is that there is a hidden economy operating where workers are still not receiving the NMW. Without improved enforcement of the law these abuses will continue.

The London Borough of Newham is today publishing research showing that in Newham a shortage of job opportunities combined with a lack of skills, confidence and knowledge of the NMW means workers end up in informal jobs paying measly wages.

This post originally appeared on the OECD blog

How did inequality and household debt interact in the run up to the 2008/09 financial crisis?  Today, a new report by NIESR for the Resolution Foundation provides new evidence on that question for the UK. The new analysis confirms the severity of the borrowing situation of low income households in Britain before the crash and raises difficult questions about patterns of consumption in an era of high inequality.

The report’s key contribution is to dig beneath headline figures for household debt to describe the borrowing picture for households at different points in the income distribution. It’s well established that UK household debt, in common with many other countries, ballooned in the late 1990s and 2000s, with the aggregate savings ratio—the percentage of household disposable income that is saved—turning negative in 2008 for the first time since records began. Yet so far these headline figures have been something of a black box. 

This post originally appeared on Gavin's New Statesman blog

The last time a letter left on a desk caused such a stir it involved an exchange between two senior politicians about the future of the country’s finances. This time the note was from a group of Whitehall cleaners to Iain Duncan Smith asking him to make good on his commitment to make work pay and make his department, DWP, a living wage employer. The fact that it so caught the public mood says something about how the question of low pay has risen in salience. 

This is in no small part due to the success of the living wage campaign, a grass-roots movement formed just over a decade ago, to push for a decent wage – above the minimum wage - for workers. It has helped shine a light on the rising problem of in-work poverty. In an era when there are many structural forces bearing down on low pay – from shifts in technology and trade to the continued demise of collective bargaining and the real terms falls in the minimum wage - the momentum behind the campaign for a living wage is a rare example of at least some countervailing pressure.

This post originally appeared on Gavin's New Statesman blog

Two years into the life of the coalition and all the sudden the passing of time seems like Ed Miliband’s best friend and David Cameron’s worst foe. For a government that has lost its footing, facing an opposition learning how to benefit from the stumbling and fumbling, the long expanse of time left in this parliament will be starting to feel less like an opportunity to develop and deliver an agenda and more like an ordeal to be survived.

It’s not just the slow motion horror of the six weeks since the budget or the likelihood that the next few weeks, dominated as they will be by the Leveson inquiry, will feel like a very long stretch indeed for Jeremy Hunt and David Cameron. It’s the six budgets and autumn statements the coalition parties have to negotiate before the next election; the thirty seven months of enervating governing grind to get through; and the fact that come the next election it will have been a full 23 years since the Conservatives won outright, an observation that is weighing increasingly heavily on the Tory ranks who sense their prospects of doing so next time aren’t brightening. A lot of politics is still to happen even before the parliament reaches half-time – and the second half is littered with all manner of political, economic and legal icebergs.

This post originally appeared on Gavin's New Statesman blog

Governments, like individuals, often like to believe their varying instincts and aspirations all fit comfortably together even when they don't. They prefer to try to keep these tensions under wraps and sometimes don't even like to admit them in private to themselves. And the coalition is a case in point.

One of its favourite claims is that, despite the fact that all sorts of welfare support is being removed from families on middle incomes, when it comes to the very poorest they are doing more than their predecessors. The pupil premium usually gets a mention here, followed by the expansion in student support for the most disadvantaged.

Another cherished claim is that punitive marginal tax rates for those struggling on modest incomes seeking to earn their way up will be reduced - a point  made with great passion by David Cameron in his 2009 Conservative party conference speech when he railed against an example of a 96 per cent tax rate hitting a single mother.

This post first appeared on Gavin Kelly's New Statesman blog.

Once in a while a policy moves from being partisan and divisive to representing the mainstream consensus in a very short period of time. That is, or at least was, the case with the national minimum wage (NMW). It wasn’t so long ago it was denigrated by much of the business community and the then Conservative opposition - but only a few years later it acquired a very different status as a statement of the bleeding obvious. The result, according to a timely new report by Professor Alan Manning, is that it has ‘settled down into a premature staid middle age’ following a noisy infancy without ever having passed through a teenage rebellion.

Times are undoubtedly tough for the 350,000-plus graduates who now leave university every year. Collapsing demand in some parts of our jobs market has seen competition for jobs intensify and many graduates now seek jobs for which they are over-qualified, accepting lower wages than their qualifications would usually be expected to command.

And yet for all the hyperbole of a ‘lost generation,’ graduates remain the overall ‘winners’ in our increasingly polarised labour market. The coveted graduate wage premium is still a reality with the average economic return to a degree remaining fairly constant (and rising steeply for top graduates). Possession of a degree is still associated with significantly increased prospects of moving up the earnings ladder.

This post originally appeared on Gavin's New Statesman blog

“In this country we have to look upon budget promises as made of the same stuff as lover’s oaths.”  So said Lord Salisbury, three times Conservative PM, and his words are perhaps more apt than ever given that all the love drained out of the Coalition’s marriage some time ago. We need to sift carefully before being sure about what today really means.  

As with all Budgets we should start this process by asking what impact it will have on the overall economy, who wins and loses, and what it will mean for the political strategies of different parties. 

In terms of macroeconomics this budget was always going to be a non-event. It is broadly fiscally neutral, with only very minor upward ticks to growth forecasts. None of this is a surprise: this chancellor was always going to ignore those calling for more stimulus. This Budget, like all the others this Parliament, lives in the shadow of the choices made in the emergency Budget in June 2010 and subsequent spending review.

This blog originally appeared on The Huffington Post

Chancellor George Osborne says tomorrow's budget will be a budget for working families. "The bulk of the measures in the budget are going to be targeted at working people on low and middle incomes" he told the BBC's Andrew Marr on Sunday.

So, with budget day upon us, it's worth asking what a budget that genuinely put working families first would look like. At its heart would be a reversal of planned cuts to the Working Tax Credit (WTC) - which, as they stand, are set to hit precisely the people Osborne claims to be trying to help.

Why prioritise WTC rather than further increases in the personal tax allowance (PTA)? After all, if rumours are to be believed, working families can count on a substantial further increase in the level at which individuals start paying income tax towards the Lib Dem's flagship target of £10,000. This move will indeed benefit most working people on low to middle incomes - though not those earning less than the current threshold, due to rise to £8,105 in April. But raising the PTA is not a good way of targeting support at low and middle income households with relatively small benefits spread far up the income distribution, only petering out when individual earnings reach well over £100,000.