Archive for November 2011

Guardian Logo

Worried about losing a decade after the autumn statement? We might lose two

Date: 30. November 2011
Gavin Kelly and

Gavin Kelly, The Guardian

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 ...

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Autumn statement blog

So who pays?

Date: 29. November 2011
Gavin Kelly and

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

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 of these from families with children.

The decision to scrap the planned increases in Child Tax Credit (hitherto the coalition's one emblem of its commitment to tackle child poverty), together with other cuts to Working Tax Credit, will mean more than £1.2bn of cuts in 2012.

 

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Ed Miliband 1

How seven years of cuts will transform the political landscape

Date: 29. November 2011
Gavin Kelly and

This post originally appeared on Gavin's New Statesman blog

When it comes to big political set pieces, like yesterday's Autumn Statement, the predictable somehow still manages to surprise. Everyone knew it would be bad; and we all knew it would raise big challenges for all three parties. Yet today, everyone is caught off-guard.

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Family debt

Working families feel more pain

Date: 24. November 2011
Gavin Kelly and

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

If today’s report proves correct then tomorrow Nick Clegg will announce a further blow for low-to-middle income families in order to pay for a new programme for the young unemployed.

Let’s start with the better, latter, half of that sentence. The new programme will, according to insiders, walk and talk like Labour's 'Future Jobs Fund' which offered incentives to employers to take on 18-24 year olds who had been out of work for more than 6 months.

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White house slider

Are we catching the US disease?

Date: 21. November 2011
Gavin Kelly and

This post originally appeared on Gavin's New Statesman blog

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 mass of US households on low to middle incomes, the middle-class in American parlance, to benefit from the recent era of economic growth and rising productivity. Typical US family incomes today are at the same level as they were in the late 1980s, and median wages have flat-lined for an even longer period.

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Macroeconomic Analysis

Are we facing an American nightmare?

Date: 21. November 2011
James Plunkett and

This post originally appeared on the Spectator blog

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 in parliament next week.

But before all the fighting about Plan As and Bs reaches fever pitch, it’s worth asking what the next decade looked like under the previous, more optimistic growth projections. The answer isn’t pretty and it helps highlight one major question that’s rarely asked in our debate about GDP: what kind of growth are we after?

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Observer logo

What Britain must learn from the misfortunes of middle America

Date: 20. November 2011
Gavin Kelly and Jared Bernstein

Jared Bernstein and Gavin Kelly, The Observer

The great American middle class is hurting – and has been for a generation. While middle-income households in most advanced economies have been hit ...

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childcare slider

Universal Credit: winners and losers

Date: 17. November 2011
Vidhya Alakeson and

This post originally appeared on the Public Finance blog

Iain Duncan Smith has found an extra £300m for childcare in his Universal Credit, but women who want to work longer hours will lose out. The result is only going to make households worse off

Earlier this month, the government announced the level of support that would be available for childcare under Universal Credit when it is introduced in 2013. This is equivalent to the support currently available to low-to-middle income families through the childcare element of the Working Tax Credit.

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Family debt

Goodbye to the good life

Date: 16. November 2011
Gavin Kelly and James Plunkett

This article originally appeared in Prospect

In the three months from July to September, Britain’s economy actually grew—by 0.5 per cent. That performance was less bad than many had feared, and some have seized on it as a source of hope. For Chancellor George Osborne it was a “positive step… laying the foundations for the future success of the country.” Even Bank of England Governor Mervyn King, hitherto the nation’s self-appointed prophet of economic doom, recently said that the squeeze “is now beginning to come to an end.” Whether or not such sparks of hope prove justified, they obscure a much bigger question: even if the economy recovers, will living standards improve?

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Blair and Brown

Learning the right lessons from Labour's economic record

Date: 15. November 2011
Gavin Kelly and

This blog originally appeared on Gavin's New Statesman blog.

You might think the one thing the world doesn't need right now is yet another instant history about the Labour years. But here one comes -- this time, though, with a difference. The authors certainly won't be dining out on the royalties and there's no insider gossip or "he said, she said" revelations about rows in Downing St. Which is perhaps one reason why it's worth reading; it says something serious about what did and didn't happen to economic performance during the Labour years.

 

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IM_money exchange

Getting from economic bingo to a growth plan

Date: 3. November 2011
Gavin Kelly and

This post originally appeared on Gavin's New Statesman blog

The last week has produced a bumper crop of economic reports and statistics - resulting in a form of daily economic bingo - which will define the political and economic debate for the rest of the autumn and set the scene for the run into 2012. It's a week that has sharpened the economic and political challenge on growth - not just for the Coalition, but for Labour too.

It kicked off with Incomes Data Services grabbing the headlines with their finding that this year there has been a near 50 per cent increase in total remuneration for FTSE 100 directors - a hike that dwarfs the 2.3 per cent increase in average earnings, or the 4.5 per cent annual rise in the FTSE 100.

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