Budgets & fiscal events· Living standards· Inequality & poverty· Economy and public finances Should the Office for Budget Responsibility also forecast inequality? 2 March 2018 by Adam Corlett The strengths and weaknesses of economic forecasting are under scrutiny, perhaps like never before. How might GDP perform under different Brexit policies compared to a world with no Brexit? Is unemployment now likely to rise or fall? What will public borrowing in 2022 be? Whatever your politics, such modelling and forecasting is indispensable – so … Continued READ MORE
Productivity & industrial strategy· Labour market ‘The rise of the robots’ and ‘productivity pessimism’ can’t both be right 14 December 2017 by Adam Corlett Talk of looming automation, AI and robots is pervasive in public policy chat – including in the government’s new industrial strategy. Almost as common are projections that the weak growth of the past decade is here to stay – including in the latest official economic outlook. Sometimes these assumptions are even mentioned in the same … Continued READ MORE
Budgets & fiscal events· Scotland· Tax Will the (Scottish) Budget raise income tax rates? 20 November 2017 by Adam Corlett With the UK Budget imminent, it’s important not to forget proposals released in Scotland earlier this month. These could lead to increases in income tax rates as soon as April, intended to protect public services and benefits in Scotland. This would be a departure from the usual direction of travel in the UK: there has … Continued READ MORE
Incomes· Living standards Did raising tuition fees flatter measurements of young people’s incomes? 13 October 2017 by Adam Corlett The government has announced that the maximum annual tuition fee will be frozen at £9,250; and that the earnings threshold for repayment will jump from £21,000 to £25,000. What’s more, there will be a wide review of student finances to “look again” at this turbulent political issue. While they’re doing that, government statisticians should look … Continued READ MORE
Living standards· Incomes· Inequality & poverty Vast gaps in living standards between ethnic groups persist — and recent progress could yet be undone 10 August 2017 by Adam Corlett We talk a lot about certain types of income inequality—the recent outcry over unequal pay at the BBC springs to mind—but the specifics of ethnic economic inequalities rarely get enough air time. Though only scratching the surface of such a complex topic, my recent Resolution Foundation briefing on the gaps in household incomes for different ethnicities sought … Continued READ MORE
Public spending· Economy and public finances· Political parties and elections How do the main parties’ fiscal policies compare? 25 May 2017 by Adam Corlett The parties’ manifestos cover a lot of ground. But what would their fiscal policies mean for the country? As we set out in an earlier report, boring-sounding rules about the deficit matter hugely for the country’s public debt trajectory, the parties’ delivery of services and tax and benefit policies, and for accommodating coming demographic challenges. … Continued READ MORE
Living standards· Incomes For low income families, the next four years could be worse than the recession 16 May 2017 by Adam Corlett Will households be better off in 2020 than in 2016? And who will fare best? Economic predictions are always uncertain, particularly as we embark on the long process of negotiating just what Brexit really means. But the official Office for Budget Responsibility forecasts for pay, prices and employment are as comprehensive as it gets, and … Continued READ MORE
Living standards· Inequality & poverty Is the Prime Minister right to say that inequality has gone down? 16 March 2017 by Adam Corlett In the brave new world of ‘alternative facts’, it’s natural to take politicians’ claims with more than the usual dose of salt. That’s particularly true when rivals appear to take very different positions on verifiable points of fact. With the Prime Minister claiming yesterday that “inequality has gone down under this government” and Jeremy Corbyn … Continued READ MORE
Labour market· Pay Public sector pay in decline as spending restraints and inflation bite 15 March 2017 by Adam Corlett Average pay grew reasonably fast in 2015 and 2016 – driven more by an inflation slowdown than high productivity or nominal wage growth. However, this growth is now slowing rapidly. Adjusting for CPI inflation, ONS figures show growth in the year to January 2017 of 0.8 per cent, down from 2.0 per cent a year … Continued READ MORE
Labour market Enough of the pessimism about the rise of the robots 3 February 2017 by Adam Corlett Will all our jobs soon be replaced by robots? Recent headlines suggest so. But historical experience casts doubt on such sensationalism. Indeed there are reasons for us to encourage more automation, rather than worry about the harm it will do. It is common now to hear theories about how new technologies are leading us towards … Continued READ MORE
Living standards· Inequality & poverty Back to the ‘80s: Projections for living standards and inequality in the UK 1 February 2017 by Adam Corlett and Stephen Clarke The UK economy has, in many respects, performed well recently. Last week it was revealed that GDP grew by 2 per cent in 2016, above the OECD average, and higher than forecasters expected when the country voted to leave the European Union. Employment is at a record high and average wages, although still 4 per … Continued READ MORE
Housing Only half of families own their own home – how do the other half live? 27 December 2016 by Lindsay Judge and Adam Corlett While the received wisdom is that home ownership has fallen to 64 per cent over the last decade, is that a fair reflection of the real world? Do around two in three of us really own our home? Conventional rates of home ownership may offer a misleading picture as they only tell us the proportion … Continued READ MORE
Budgets & fiscal events· Labour market· Tax Will the Chancellor replace employer National Insurance with a payroll levy? 5 October 2016 by Adam Corlett The Autumn Statement – the first fiscal statement not delivered by George Osborne since March 2010 – will be no small event. Given the replacement of the Prime Minister and Chancellor, the economic implications of the Brexit vote and the resetting of fiscal policy for the rest of the parliament, there will be plenty to … Continued READ MORE
Incomes· Economic growth Blind men and the elephant: what does the elephant curve really tell us about rich countries? 13 September 2016 by Adam Corlett There is an Asian parable about a group of blind men and an elephant. The men try to determine by touch what the elephant is like, but each touches a different part of the great creature – a leg, the trunk, an ear… – and so each comes to a different conclusion. In contrast, commentary on … Continued READ MORE
Pensions & savings· Wealth & assets Own a LISA? First impressions of the Lifetime ISA 18 March 2016 by Adam Corlett In the build-up to the Budget, the Chancellor backed away from significant changes to the pension tax system for now, despite the strong case for some reform. This was a relief for some and a disappointment for others. But given that he had aimed to save money, it’s a surprise that he’s nonetheless introduced a … Continued READ MORE
Budgets & fiscal events· Public spending· Economy and public finances The billions that the spending review forgot 10 January 2016 by Adam Corlett New Year’s Eve is an exciting day. For, each year, it is the day that the government – without any fanfare – publishes new stats on the cost of tax expenditures. Presumably it is only coincidentally a time of year when scrutiny and column inches are likely to be limited. This is a shame, because … Continued READ MORE
Tax Tax expenditures deserve far more scrutiny 30 December 2015 by Adam Corlett Last month, the UK government presented its Spending Review, setting out departmental budgets for the next four years. There were protections for some departments and large cuts (though smaller than expected) for others. Coming after years of previous cuts, many departmental budgets by 2019 will be only half what they were in 2009. Opinions will … Continued READ MORE
Scotland· Tax “An opportunity that must not be missed” – council tax reform in Scotland and beyond 14 December 2015 by Adam Corlett Scotland’s Commission on Local Tax Reform has today released its report – recommending the abolition and replacement of the current council tax system. Few would argue that council tax in its current form is particularly sensible or fair, so what happens next ahead of Scotland’s May elections should be of interest far beyond Holyrood. The … Continued READ MORE
Low pay· Pay Clearing up the confusion around the National Living Wage 7 December 2015 by Adam Corlett The National Living Wage, the blockbuster announcement of the Summer Budget, is a hugely welcome move on low pay. But we’re now four months away from its introduction and, as a new government poll reveals, many businesses are not prepared for it. The awareness raising campaign launched today is a good start towards addressing that … Continued READ MORE
Budgets & fiscal events· Economy and public finances The Spending Review’s big choice: will there be five ‘big losers’ or a toning down of the cuts? 20 November 2015 by Torsten Bell and Adam Corlett The core of next week’s Spending Review is now becoming clear. If the Treasury delivers the pre-announced scale of cuts we will see five ‘big losers’ in Whitehall including, surprisingly for some, Education. The Chancellor is now five days away from announcing his second multi-year spending review. Since 1998 these departmental budget setting exercises have … Continued READ MORE
Low pay· Pay· Living Wage The national living wage alone is not enough 15 September 2015 by Adam Corlett A pay rise for six million people sounds great but the new national living wage is a policy that that cannot stand in isolation. The National Living Wage is set to bring much-needed pay rises – but it can’t solve our living standards challenge alone. After an unprecedented six-year pay squeeze, wage levels have finally started … Continued READ MORE
Labour market The importance of digging beneath the headline measure on employment 11 August 2015 by Adam Corlett It may have reversed very slightly in recent months, but the strong employment growth recorded over the last year or two in the UK remains little short of remarkable. The number of people in work topped 31 million in March, establishing a headline employment rate of 73.5 per cent – both historic highs. If not … Continued READ MORE
Budgets & fiscal events· Tax The Tax-Free Minimum Wage – a gimmick or a real giveaway? 3 July 2015 by Conor D’Arcy and Adam Corlett Amid the flurry of pre-election pledges made by each party, the Conservatives’ ‘Tax-Free Minimum Wage’ attracted a curious mix of attention. The policy – which will ensure that those working 30 hours a week or fewer on the minimum wage do not pay income tax – received widespread media coverage, but much of it described … Continued READ MORE
Pay Much like the British summer, make the most of the earnings boom while it lasts 15 June 2015 by Laura Gardiner and Adam Corlett Ahead of the summer budget early next month, the Chancellor may be hoping for some positive headlines in the employment statistics due on Wednesday. When it comes to earnings, he’s sure to be rewarded. Our analysis suggests that real regular pay will top 2.5 per cent year-on-year growth in this week’s numbers (covering the three … Continued READ MORE
Labour market Why Britain is no longer in America’s shadow on employment 5 June 2015 by Adam Corlett The US approach to working-age welfare may come in for criticism in some quarters for failing to offer much support to those who fall out of work, but at least it delivers strong employment outcomes. Not like in the UK of course. While not quite as generous as some of our European neighbours, out-of-work welfare … Continued READ MORE
