Blog

Category: Living Standards

Changing the conversation in 2012

Gavin Kelly

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

Low growth, high unemployment, deeper cuts, falling wages, and a further reduction in the living standards of working families. Just in case you were under any doubt, 2012 is going to feel like one long Groundhog Day, a darker version of its grim predecessor.

There will, of course, be many new twists and turns. But the raw material of the economy-driven news cycle is likely to have a certain haunting familiarity, even if it is far harder to predict the political ramifications and Westminster winners and losers.

So who pays?

Gavin Kelly

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.

The onslaught against working families continues

Gavin Kelly

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.

Learning the right lessons from Labour's economic record

Gavin Kelly

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.

Taxing times for the coalition (contd...)

Gavin Kelly

This post originally appeared on the New Statesman blog

Just in case there was any risk of the coalition row on tax policy cooling down for a day or two, along comes a new report today, Tax and the Coalition, to fan the flames.

We do, of course, need to bear in mind that in this choppy pre-party conference period, there is bound to be a rash of publications appealing to the party faithful and burnishing the author's credentials in their eyes. Nonetheless, Lord Newby -- author of the report -- is a well connected Liberal Democrat peer and tax-expert, known to be close to Vince Cable. His report pulls no punches. The 50p rate must be preserved until fiscal consolidation is achieved; the Laffer-curve economics of those on the right calling for its abolition is dismissed; and a raft of tax raising measures are proposed that would hit the seriously affluent including a mansion tax on properties over £2m (served up with a swipe against Eric Pickles), an increase in capital gains tax, a land value tax, and further anti-avoidance initiatives.

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.

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