Public spending· Economy and public finances· Political parties and elections How far apart are Labour and the Lib Dems on fiscal policy? 2 April 2015 by Gavin Kelly If they did a deal what might it look like: an end to austerity? Five weeks to go to polling day and it’s clear that the media, and perhaps the public, aren’t getting the answers they’d like to some of the fiscal questions the next government will have to address. What we’ve termed the candour … Continued READ MORE
Public spending· Economy and public finances· Welfare· Political parties and elections Could Labour and the Liberal Democrats agree on deficit reduction and spending cuts? 2 April 2015 by Adam Corlett At first glance How much of a difference is there between Labour and the Liberal Democrats on fiscal policy (we’ll consider the gap between other parties in future briefings)? Labour’s policy is to get “the current budget into surplus and national debt falling as soon as possible within the next Parliament” – ‘current’ meaning excluding … Continued READ MORE
Living standards How far have living standards recovered? 18 March 2015 by Matthew Whittaker What’s the truth behind the Chancellor’s Budget claim that “the latest projections show that living standards will be higher than when we came to office”? With so many alternative ways of capturing ‘living standards’ the answer is that they might be higher, lower, or just about the same. Given that this issue is going to … Continued READ MORE
Tax Five things you need to know about the personal allowance increase 17 March 2015 by Adam Corlett The Budget is expected to confirm rumours that the personal allowance – the amount you can earn free of any income tax – will increase to £11,000 next month, rather than the £10,600 laid out at the Autumn Statement in December. In this brief note we run through five things worth noting about this possible … Continued READ MORE
Incomes· Public spending· Productivity & industrial strategy· Economy and public finances Productivity as much as politics will determine the scale of cuts and tax rises in the next parliament 16 March 2015 by Adam Corlett The scale of fiscal consolidation in the next parliament will depend largely on future productivity growth. Assuming the parties maintained their fiscal targets regardless of the underlying economic circumstances, a future Conservative government would be in the position of tightening less under a strong productivity scenario than is implied by existing Labour plans. Equally, a … Continued READ MORE
Labour market Are zero-hours contracts here to stay? 25 February 2015 by Conor D’Arcy In many ways, the growth of zero-hours contracts (ZHCs) has symbolised the UK’s labour market since the downturn began: contributing to both stronger than expected employment figures but also rising job insecurity. One of the big question marks though has been whether they are solely a symptom of the recession and would start to disappear … Continued READ MORE
Pay Boom time for wages? How realistic is a doubling of wage growth by the end of the year 17 February 2015 by Matthew Whittaker Last week’s Bank of England Inflation Report raised the prospect of a boom time for wages in the coming year. By the end of 2015, the Monetary Policy Committee (MPC) projects that average weekly earnings will be growing at an annual rate of 3½ per cent, up from a forecast of 3¼ per cent back … Continued READ MORE
Living standards· Public spending· Scotland The SNP and austerity: how different are they to the other parties? 13 February 2015 by Gavin Kelly and Adam Corlett Nicola Sturgeon gave a widely trailed speech in London earlier this week majoring on the SNP’s opposition to what she said was a ‘cosy consensus’ in Westminster on austerity. In providing a few new bits of information on the SNP’s view on public spending it helped fit another piece in the jigsaw that is the … Continued READ MORE
Economy and public finances· Political parties and elections 2015 election – the next big ballot box surprise? 13 January 2015 by Gavin Kelly Welcome back to 1974. A tight spring election fails to produce a majority for either of the main parties, so the prime minster of the new minority government calls a second poll in the autumn in pursuit of a clear mandate. Predictions for 2015 are, of course, foolhardy. A small majority for either of the main … Continued READ MORE
Budgets & fiscal events· Public spending· Economy and public finances The high road or the low road? What a balanced current budget by 2017-18 does and does not mean 12 January 2015 by Adam Corlett and Matthew Whittaker Taken at face value a new Charter for Budget Responsibility, with a goal of eliminating the structural current deficit by 2017-18, has potentially significant implications for the parties’ fiscal plans. This applies most to Labour – given their separate pledge to do this by 2019-20 – and to a significant extent for the Liberal Democrats. … Continued READ MORE
Living standards 2015: The outlook for living standards – sunshine and clouds ahead 28 December 2014 by Gavin Kelly The economic recovery gained momentum in 2014, though it failed to feed through into raised living standards as much as many hoped. There are reasons for being fairly optimistic that this could start to change next year. Underpinned by the buoyant jobs market we expect household disposable incomes – the best measure of living standards … Continued READ MORE
Living standards· Incomes· Labour market What’s in store for household incomes in 2015? 27 December 2014 by Matthew Whittaker The 2015 election has been billed by many as the ‘living standards election’, meaning that we can expect much debate in the coming months on just how households are faring and whether economic growth is translating into income growth. To date though, most attention has focused on wages instead of incomes. The six-year real-terms pay … Continued READ MORE
Pay Could we be set for two decades of lost pay growth? 12 December 2014 by Matthew Whittaker Rarely have questions of household living standards and the shape of the public finances been so interwoven. The Autumn Statement – or, more specifically, the OBR’s Economic and Fiscal Outlook – identified a £25bn shortfall in tax revenues by 2018-19 relative to the projections in place at the time of Budget 2014. This is a … Continued READ MORE
Budgets & fiscal events· Public spending· Economy and public finances The drama of the Commons took a back-seat to the economic musings of the OBR today 3 December 2014 by Matthew Whittaker Unusually for a fiscal event so close to an election, today’s Autumn Statement was never expected to be about giveaways and grand schemes. Indeed, the politics in the Commons took a back-seat to the economic musings of the OBR. The two key questions we wanted answered? First, how would the outlook for public finances – … Continued READ MORE
Budgets & fiscal events· Public spending· Economy and public finances Will the Chancellor still be aiming for an overall budget surplus in 2018/19 after the Autumn Statement? 2 December 2014 by Adam Corlett In tomorrow’s Autumn Statement, the Chancellor is expected to announce an updated Charter for Budget Responsibility, which would formally commit the government to a balanced cyclically-adjusted current budget by 2017-18. By forcing a vote in parliament, the Chancellor is thought to be drawing Labour out on their potentially looser fiscal policy. Yet this move also … Continued READ MORE
Welfare The challenges facing Universal Credit go far wider than its IT system 27 November 2014 by David Finch The program to deliver Universal Credit (UC) has already been reset by the Major Projects Authority, and now the National Audit Office has raised further doubts about whether UC will be successfully implemented at all. Their report tells us that the new digital service been delayed by six months due to a lack of staff … Continued READ MORE
Pay A reality check on hopes that Britain’s pay squeeze has ended 19 November 2014 by Matthew Whittaker Last week’s data on average weekly earnings (AWE) showed that annual pay growth in September had overtaken CPI inflation for the first time since 2009, sparking cautious (and not-so-cautious) proclamations that the six-year squeeze on earnings might finally have come to an end. Today comes a sobering reality check. According to the ONS’ Annual Survey … Continued READ MORE
Pay Are earnings going to rise by more than 3 per cent next year? 12 November 2014 by Laura Gardiner Another BoE inflation report, another set of rosy forecasts for earnings next year. Just as 2014 was supposed to be the year of the pay rise, now it seems 2015 will be the year when things turn positive. And, according to the Bank, wages won’t just creep into positive territory next year, they are going … Continued READ MORE
Pay Why hasn’t 2014 been the year of the pay rise? 7 November 2014 by Gavin Kelly Next month we will be treated to the familiar spate of end of year reviews. Amid all that copy we can expect a regular theme to be that this was (another) year in which all the forecasts of a rise in earnings for workers were proved wrong. Inaccurate economic forecasts, especially when it comes to … Continued READ MORE
Pay Where next for the minimum wage? 30 September 2014 by Gavin Kelly Today marks the first real terms rise in the minimum wage in six years. It speaks volumes about the convulsions in our labour market that something that was once taken completely for granted is now viewed as a significant and welcome departure. And the rise occurs at a time when there is something of a competitive … Continued READ MORE
