Stealth cuts to universal credit will hit the working poor

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Few things in politics are certain, but certain policy announcements elicit a predictable media response. Tinker with the tax treatment of the elderly and prepare to be accused of imposing a “granny tax”. Or, more hopefully for the coalition, increase the generosity of the personal tax allowance and read about “tax cuts for low earners”. So here’s … Continued

The Treasury has a point on living standards — but it ignores the role of inequality

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One of the big surprises in today’s Autumn Statement lies in the new OBR projections. Growth has been revised up as expected—at least in the short-term. But wage forecasts are down. Amazingly, after today’s largely positive economic news, the squeeze on wages is now going to be even longer than the OBR thought in March. The updates reflect … Continued

A sixth of UK debt is held by those who have less than £200 a month left after essentials

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Thursday’s Autumn Statement is likely to generate headlines about energy bills, improving public finances and the promise of a return to real wage growth in the new year. At least that is what George Osborne, the chancellor, will be hoping for. He should also prepare himself for another rash of stories about debt-soaked Britain. When people sift the detail, they … Continued

Starting out or getting stuck?: An analysis of who gets trapped in low paid work – and who escapes

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It is generally acknowledged that the UK has a serious low pay problem. One in five employees were low paid in 2012, which compares poorly to other similar economies. But little is known about the persistence of low pay and consequently this is an under-developed aspect of the social mobility debate. This matters because many argue that, … Continued

Matthew Whittaker

Crisis averted, or delayed reaction?

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As the weather gets colder, so Britain’s economic recovery appears to be warming up. The sense of optimism engendered by positive GDP and employment figures and by a range of business surveys is likely to be reinforced at next week’s Autumn Statement with significant upgrades to the OBR’s growth projections for the coming years. Clearly … Continued

Shared ownership could help plug the housing gap

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Home ownership is in decline. Rising house prices, falling wages and restrictions on mortgage lending have left this common aspiration far out of the reach of the vast majority of low- and middle-income households. Though today 64% of Britons still own their home, that figure is fast dropping, in no small part due to coalition … Continued

Pay: the lost decade

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Recent good news on the jobs front should not obscure the fact that real wages have been falling for at least four years. Overall, the wage squeeze has created a lost decade for pay New Office for National Statistics data out this morning confirms what many workers will already know: the wage squeeze continues. In … Continued

Kickstart institutional investment to build new homes for generation rent

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Investors have long enjoyed a love/hate relationship with property. An asset class dominated by commercial real estate, it delivers diversification and a reasonable yield in the good times. But in difficult times, upward-only rent reviews vanish, and fund managers are left wrestling with high voids and bad debts. Residential real estate, meanwhile, has largely been … Continued

Who will benefit from the tax break for married couples?

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Universal Credit means that married couples with children will only receive a small proportion of the gains David Cameron’s announcement of a marriage tax allowance has attracted significant interest. The policy will make £1,000 of personal income tax allowance transferable between adults who are married or in a civil partnership, provided the higher earner is … Continued

How to revive build to rent

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The private rented sector is fast becoming the only housing option for low to middle income families. Even with Help to Buy, home ownership is too great a stretch for many, especially in expensive areas and they are very unlikely to get access to affordable housing. The UK’s private rented sector though remains characterised by … Continued

Building homes for ‘generation rent’

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The private rented sector is fast becoming the only housing option for low-to-middle-income families. Even with Help to Buy, home-ownership is too great a stretch for many, especially in expensive areas, and they are very unlikely to get access to affordable housing. We need to increase the supply of market rented homes as well as … Continued

It’s time to be honest about who gains from tax cuts

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The news that George Osborne is likely to match the flagship Liberal Democrat commitment to raise the personal tax allowance to £12.5k in the next parliament is further proof of what became apparent during the conference season: the government’s economic message is jerking awkwardly between painting a bleak account of the years of austerity still to come and sunny … Continued

Matthew Whittaker

Plugging the gap

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Have lower rates helped to plug the income/expenditure gap? The latest Economic Review from the ONS provides the usual useful compilation of recent economic outputs, reinforcing the sense of momentum underpinning recovery, but questioning just how balanced this new growth is. One of the most important imbalances it picks up is between consumption and investment. Although still … Continued

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