This post originally appeared on Gavin's New Statesman blog

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 laid down.

Nick Clegg's recent speech to the Resolution Foundation making the case for going further and faster in reaching a personal tax allowance of £10,000 has been widely reported as a significant moment in the genesis of the forthcoming budget which due to the precarious position of the economy, and the increasingly creaky nature of the Coalition, is destined to be a highly charged affair both fiscally and politically.

This post appeared on the OECD Insights blog

Do workers reap the benefits of productivity growth?  Few questions are more central to the conundrum of faltering living standards. If the 20^th 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 earned income.

Of all the findings from our recent work at the Resolution Foundation, then, few are more worrying than those that suggest a weakening

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 decrease in economic inactivity.

Yet these headline measures mask significant changes in working patterns. The number of people working part-time or on a temporary basis has risen, while the number of full-timers has dropped. Self-employment, though it has fallen very slightly, has been creeping year-on-year much beyond expected trends. It is now near its highest levels since records began.

This post originally appeared on the New Statesman

It may still be early February but the March Budget has already kicked off. This morning's Telegraph splashes with Danny Alexander's first attacking move, with the Chief Secretary saying he strongly supports a reduction in higher rate pension tax relief to fund further increases in the personal allowance. For all the Lib Dem's previous talk of mansion taxes and crackdowns on tax evasion, this is serious stuff. Alexander claims the government could save £7 billion by reducing the 40p tax relief currently given to higher rate tax payers to 20p, the first cash on the table that would come close to funding his party's ambition on the £10k allowance.

This post originally appeared on Gavin's New Statesman blog

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 young family at the same time as driving through her commitment to equality in the corporate boardroom.

This blog first appeared on Coffee House, The Spectator Blog.

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 leaders such as Germany.

This article originally appeared in Public Finance Magazine

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 benefits, it is no wonder that the Oxford English Dictionary declared ‘squeezed middle’ to be its Word of the Year in 2011.

This post originally appeared on Gavin's New Statesman blog

Another week, another terrible set of GDP figures, an IMF downgrade of the UK's growth prospects, and a new report showing 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 their incomes recover. All attempts at peering into our economic future do, of course, need to be taken with a handful of salt. And if long range economic forecasting is a mug's game, then seeking false precision about the resulting political consequences is truly the pursuit of fools.

Yet for all the uncertainty we can discern the broad contours of different possible paths for living standards over the rest of the decade. None are attractive -- though some are uglier than others. All are likely to challenge the standard assumptions upon which recent politics have been based.

This post originally appeared on Mortgage Solutions

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 would take a first-time buyer on a low to middle income 22 years to save for a deposit compared to three to five years in the 1980s and 1990s.