Blog & Articles

Why the Lib Dems' £12,500 tax allowance promise is a smaller pledge than it sounds

Date: 11. March 2014
Gavin Kelly

Inflation alone will ensure that the allowance rises to over £11.3k and minimum wage workers will still be paying tax. Since the weekend, when the Lib Dem faithful gathered in York for their spring conference, quite a few column inches have been filled with frothy speculation about Nick Clegg’s likely longevity as Liberal Democrat leader. Nothing, however, has been written about the new twist he gave their proposed tax policy 

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Another Tory-Lib Dem coalition in 2015? It's no done deal

Date: 17. October 2013
Gavin Kelly

The polls suggest the next election will be tight, so we can expect 18 months of speculation about the likelihood of a hung parliament and the coalition deals that might result. Expect every policy announcement to be scrutinised as much for what it says about future coalition talks as it will be for its actual content.

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Why living standards and public finances matter

Date: 30. September 2013
Gavin Kelly

The party that persuades voters it can deal with both issues will win the election.

They are the towering issues of British politics that are not about to go away soon: the steep decline in living standards and the grim state of the public finances. Each compounds the other. Taken together they will dictate the terms of politics between now and 2015.

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The generation that’s going backwards

Date: 19. May 2013
Gavin Kelly

Falling incomes, rising prices, impossible debts ... even before the crash some workers faced a suffocating squeeze

When John F. Kennedy declared that “a rising tide lifts all boats” he was encapsulating the postwar belief that growth would generate steady rises in living standards for all.

Even if richer households were sometimes the biggest gainers, there was at least the guarantee that every household would enjoy some advance. Sadly, even if it once was true, a rising economic tide no longer necessarily helps all individuals or households. Even in better times a large slice of working families were struggling to keep their heads above water.

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Ed Miliband has many challenges – but the spending review isn't one of them

Date: 7. May 2013
Gavin Kelly

George Osborne's immediate priorities shouldn't distract Labour, which instead must focus on how it plans to cut the deficit

Whether Labour matches the spending totals set out by George Osborne in the spending review is deemed to be one of the most significant questions in British politics and the sternest test yet of Ed Miliband's leadership. But like many self-evident truths that emerge from Westminster, it's a bit wide of the mark.

To be sure, Miliband faces some major judgment calls before the election – above all on the public finances. But whether to match the coalition's spending review proposals isn't one of them. What's more, the main reason for this is that the coalition has inadvertently let him off the hook.

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Labour's recovery position

Date: 29. April 2013
Gavin Kelly

To assert that the next general election will be about living standards is now a commonplace in Westminster, even a cliche. Say it and people nod along. But precisely what this means – the progress the public thinks is possible, the purchase they believe political parties have on the main policy issues – remains rather hazy.

Some in Labour will confidently tell you that the Ronald Reagan challenge – are you better off than at the last election? – will be the killer question to swing the 2015 outcome. If it were that simple, Labour would be home and dry: real wages are likely to have fallen by up to 10% by the end of the parliament; "better off with Labour" would be the inevitable campaign slogan.

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There's no single, simple solution to low pay

Date: 14. April 2013
Gavin Kelly

Another year, another drop. The odds are that the impending announcement on the new rate for the national minimum wage will see a further decline in its real value, meaning a lost decade for those on the lowest pay.

Wages right across the earnings spectrum have fallen, so many experts will greet this news with a shrug. But that's unlikely to be the reaction of those toiling at the sharp end of the jobs market, where working poverty is escalating and people are living on ever tighter margins (even before the arrival of the majority of cuts).

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The great tax swindle

Date: 2. April 2013
Gavin Kelly

In the week when the meaning of austerity hits home for many, the one big coalition giveaway comes in the form of the rapidly rising personal tax allowance. Any criticism about cuts to tax credits or benefits is met with the same ministerial retort: just look at the size of our tax reductions for those on low and middle incomes.

And this month's hike in the income tax threshold is far from the summit of current aspirations.  The Lib Dems have already made clear that, at enormous expense, they want to go beyond next April's £10k allowance to reach £12.5k in the next parliament – all done in the name of helping the low paid. Not to be outdone, Grant Shapps let it be known that the Conservatives will be joining the bidding race. And Labour has entered the tax-cutting fray with its pledge to reintroduce the iconic 10p tax band that Gordon Brown abolished.

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What does the childcare announcement really tell us?

Date: 19. March 2013
Gavin Kelly

This post originally appeared on Gavin's New Statesman blog

Before we rush to dissect the government’s new childcare policy it is worth pausing to reflect on the very fact that in an unprecedented time of austerity a Conservative-led administration is proposing to spend near on £1bn on childcare. There are all sorts of caveats and problems with the policy, when it will be introduced and how it will be paid for. But before we rush into all that we should note that today’s announcement confirms that the issue of childcare will remain at the centre of the political arena.

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