Firms· Productivity & industrial strategy· Economic growth Robots will enrich not replace us 21 November 2015 by David Willetts The robots are coming to take our jobs. So says Martin Ford in The Rise of the Robots, the FT/McKinsey business book of the year. Andy Haldane, chief economist of the Bank of England, last week warned that 15m jobs in Britain were at risk from automation. Is artificial intelligence about to take over? I am not so sure. Innovation is always … 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
Labour market· Pay Five things we’ve learned from today’s earnings figures (and one thing we haven’t) 18 November 2015 by Laura Gardiner After a longer and deeper pay squeeze than even the most pessimistic of economists would have predicted, 2015 marks the year when pay growth finally returned. Today’s publication of the Annual Survey of Hours and Earnings (ASHE) – our least timely but most comprehensive source on employee pay – gives us the opportunity to lift … Continued READ MORE
Labour Market Outlook· Labour market· Pay How is the UK’s pay recovery being shared? 16 November 2015 by Matthew Whittaker After 12 straight months of real-terms growth, the question on pay has shifted from ‘when will it return?’ to ‘how strong and sustainable is it’? Until now, we’ve been unable to dig any deeper to consider the additional question of ‘who’s gaining?’ but we’ll get some early clues from official data out this Wednesday. Could … Continued READ MORE
Economy and public finances Seven charts that show the changing shape of the state in Britain 13 November 2015 by Matthew Whittaker Seven charts that show the changing shape of the state in Britain What should the state do? That’s the question we asked at our Shrinking Pains event on Tuesday morning. Six years into a planned ten-year period of fiscal consolidation, we took a step back – with the help of Ken Clarke, Jill Rutter and … Continued READ MORE
Welfare Now is not the time to fudge on tax credits 5 November 2015 by Torsten Bell Public policy questions are often difficult, with significant trade-offs between equally important objectives. As a result most people who have spent time taking decision in government know that, despite its bad reputation, the fudge can sometimes be the right answer. It can buy time on issues where the policy substance is unclear or reconcile competing … Continued READ MORE
Budgets & fiscal events· Welfare Tone down, phase in or transition to: the options facing the Treasury on tax credits 27 October 2015 by Torsten Bell Following developments in the House of Lords, we’ve entered a new phase in the tax credits debate. Whatever the constitutional rights and wrongs, everyone can agree that the ball is firmly back in George Osborne’s court. Indeed last night he promised to look again at the changes. The real question now is to what extent … Continued READ MORE
Tax· Welfare National Insurance cuts: far from being the silver bullet for tax credit changes they miss the target 26 October 2015 by Torsten Bell It was another busy weekend in the debate on the changes to tax credits that are set to be introduced next April. More suggestions about how the Government might ameliorate the impact on low income working families have been set out. In particular there’s been a bit of focus on the role National Insurance changes (specifically on … Continued READ MORE
Living standards· Intergenerational Centre The social contract between generations in Britain is being broken 25 October 2015 by David Willetts It marks a dramatic turnaround in the fortunes of different generations that this week the IFS estimate that the incomes of pensioners – £394 per week – are higher than the incomes of the rest of the population – £385 per week. In many ways, this is a triumph. Nobody wants to see pensioners struggling … Continued READ MORE
Labour market The ‘gig economy’ – revolutionising the world of work, or the latest storm in a teacup? 23 October 2015 by Laura Gardiner Listen to some parts of the online media and tech press and you hear that the traditional employee job is on its way out. That’s especially true across the pond, but the issue is generating an increasing amount of heat here in the UK too. Whether it’s selling your crafts on Etsy or Ebay, offering … Continued READ MORE
Tax· Welfare We can’t (tax) cut our way out of the tax credit problem 21 October 2015 by Torsten Bell When it comes to this April’s tax credit cuts we’re now swiftly approaching the point where everyone accepts there is a problem, and starts to ask the real question – what is the solution? Forthcoming work from the Resolution Foundation will look at the issue in detail, but it’s worth sketching out the parameters … Continued READ MORE
Labour market· Pay Is today’s minimum wage rise the calm before the storm? 1 October 2015 by Conor D’Arcy It’s a cliché but if a week is a long time in politics, the seven months since the announcement of today’s increase in the National Minimum Wage (NMW) feels like an eternity. Back in March, the announcement that the minimum wage would rise by 20p to £6.70 an hour felt a little cautious given it … Continued READ MORE
Pay Who gains from the new National Living Wage? 3 September 2015 by Conor D’Arcy The ‘National Living Wage’ – a top-up to the minimum wage for workers aged 25 and over – was the rabbit pulled from the Chancellor’s Red Box at the Summer Budget back in July. But beyond the healine figures published alongside it, it was hard to be sure who the main beneficiaries would be. A … Continued READ MORE
Labour market The rise and rise (?) of zero hours contracts 2 September 2015 by Laura Gardiner For many, zero hours contracts (ZHCs) are emblematic of the UK’s labour market experience during the financial crash, contributing to stronger-than-expected employment figures but also symbolising rising job insecurity. But with the economic recovery now gaining ground, the key question has been whether they’d fade away or remain as a permanent feature of the labour … 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
Tax It’s time to talk about tax relief – how more accountability on tax expenditure could help ease the welfare squeeze 7 July 2015 by Gavin Kelly As the Budget approaches we await the details of deep cuts in welfare spending, but the fact that they are coming is beyond doubt. With the main tax rises having been blocked off, and public services already facing a faster pace of cuts than in the last parliament, every sinew is being strained in the … Continued READ MORE
Budgets & fiscal events· Welfare Will wages fill the tax credit gap? Don’t Budget for it 6 July 2015 by Gavin Kelly Recent high-profile converts are bringing headlines and new vim to the debate on working poverty. Good. But with this comes a cacophony of confusion about the National Minimum Wage (NMW), Living Wage, the role of tax credits and the likelihood that a recovery in earnings will compensate for cuts to in-work support. And this risks … 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
Inequality & poverty· Welfare Could Universal Credit hold the key to reducing child poverty? 25 June 2015 by David Finch We discovered this morning that the proportion of children living in relative poverty is at its lowest level since the 1980s. Great news of course, but this headline masks a much more complicated – and worrying – picture. Falls in this headline poverty measure – which captures those children living in households with incomes less … 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
Budgets & fiscal events· Public spending· Economy and public finances How much wriggle room will the Chancellor have in the July Budget? 22 May 2015 by Gavin Kelly After the flow of easy pre-election promises, here come the hard choices of government. As George Osborne approaches his ‘emergency Budget’ attention will turn to what room for manoeuvre he really has given all the commitments that have been made. How will it all add up and is there a version of austerity that might … Continued READ MORE
Budgets & fiscal events· Public spending· Economy and public finances How tightly has the Chancellor tied his own hands on fiscal policy? 22 May 2015 by Adam Corlett Having secured a majority on 7 May, the Conservatives must now set about the difficult job of delivering on their various pre-election pledges. In relation to fiscal consolidation in particular, they can no longer point to the demands of a junior coalition partner as cause for rowing back on any of the harder to execute … Continued READ MORE
Living standards· Inequality & poverty How do we tackle Britain’s huge, shifting poverty challenge? 20 May 2015 by Conor D’Arcy UK poverty rates have been falling relatively steadily since the start of the 1990s. Policy changes have led to particularly significant reductions among pensioners and children. But much less progress has been made among adults without children; and current projections suggest that many of the improvements of recent decades will go into reverse over the … Continued READ MORE
Pay Is a pay boom coming and if not, why not? 14 May 2015 by Laura Gardiner Rarely has the trope that a week is a long time in politics rung truer. But yesterday we learned that an hour is a long time in economics. The latest employment statistics are unambiguously encouraging. Employment rose and unemployment fell, strengthening trends in place over the past couple of years. Perhaps more significantly, rising nominal … Continued READ MORE
Pay What’s holding back nominal wage growth? 17 April 2015 by Laura Gardiner Today’s statistics mark another welcome step along the road in our long-overdue earnings recovery. A gentle improvement in regular pay in the three months to February 2015 (now 1.8 per cent, with the total pay measure that includes bonuses close by at 1.7 per cent), against a backdrop of inflation having fallen to 0 per … Continued READ MORE
