Archive for July 2011

Low growth implications for living standards particularly bleak

James Plunkett

This blog originally appeared on Left Foot Forward

This morning’s weak Q2 stats (pdf) would be worrying in any recovery. But in the aftermath of such a deep fall in output their implications for real trends in living standards are particularly bleak. The UK economy still has a long way to climb back to pre-recession levels of output. Chart 1 below (now updated from a recent post to include Q2 stats) puts the scale of the task in perspective.

Who ate all the pie?

Gavin Kelly

This post originally appeared on Gavin’s New Statesman blog

You probably won't be too surprised to hear that for a long time many workers have been receiving an ever smaller portion of the fruits of economic growth. But if we are to properly understand the 'trickle-up' tendencies of British capitalism we need to not only register the depressing headline but get under the surface of what brought it about.

Share of GDP paid to low earners down 25% in 30 years

Matthew Whittaker

This blog originally appeared on Left Foot Forward

The Resolution Foundation today publishes the latest report to the Commission on Living Standards. The report, Missing Out, (pdf) reveals that the share of GDP paid as wages to the bottom half of earners has fallen by a quarter over the last 30 years.

A gloomy prognosis for Q2 growth stats

James Plunkett

This blog originally appeared on The Spectator

Next Tuesday the ONS releases its first estimate of second quarter UK GDP growth. It may be a slight exaggeration to call it a ‘make or break’ moment for the Chancellor but ‘make or brake’ might not be a bad description. After six months of no growth another three months of flat GDP would strengthen calls to slow his current economic strategy. A variety of posts are already pointing to gloom among forecasters. Figure 1, which readers may have seen in similar form before, sets out the severity of the situation in contrast to previous recessions. This was the sharpest, deepest downturn in living memory; we badly needed a similarly strong recovery.

When rates finally rise, things are set to get nasty

Gavin Kelly

This blog first appeared in the New Statesman.

A good recession followed by a bad recovery. Trite lines like this are often wide of the mark, but this one bears some truth. The fallout of the economic downturn over the last few years – though harsh - was less gruesome than first feared in terms of overall unemployment, bankruptcies and repossessions.

Haven't I seen this revolution before?

Gavin Kelly

This blog first appeared on the New Statesman.

David Cameron's public service reforms suffer from a serious zeitgeist problem.

Buried under the detritus of the escalating News International scandal is the government's long awaited public services white paper. Assuming you missed it, it's all about the need for "narrative" and to demonstrate a coherent governing project.

Senior politicians, and the commentators they talk to, obsess about this. Strange though it may seem to much of the public, the need to produce these wide ranging plans on public services can feel all-consuming to those working in No.10. On this front, the current administration is no different to its predecessors.

The perils of welfare dependency – but not the kind you’re thinking of

Donald Hirsch

Centre for Research in Social Policy, Loughborough University

For the entire 30 years of my working life, reforms to our welfare system have marched to the drumbeat of calls to reduce “dependency”, by getting more people out to work. So hard have governments tried to achieve this aim that they have created a new kind of dependency, this time among working families receiving huge sums in tax credits. Even though this can sometimes mean giving someone as much state support in work as they would have got out of work (especially if working requires expensive, state-supported childcare costs), it has brought huge benefits to families. Not only can working feel good in itself (though not in all jobs), but the combination of state handouts with wages has brought many families out of poverty.

Dilnot survives the Russian front... for now

Gavin Kelly

This post originally appeared on Gavin’s New Statesman blog

Social care is a minefield for politicians - and the Dilnot report offers no easy option for the government or the opposition.

"One of the three Russian fronts of Whitehall". That's how a very senior Whitehall mandarin described social care to me over a decade ago. Alongside housing benefit and local government finance, social care has long been seen as one of Westminster's most difficult policy challenges.

For another interesting blog on Dilnot read Matthew Taylor