Public finances· Social security· 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
Work Hollowing out – deeper than it sounds 23 March 2015 by Laura Gardiner It’s rare that technical economic concepts make their way out of the halls of academia and into the mainstream. Yet the idea that labour markets in advanced economies are increasingly ‘polarising’ between ‘lovely’ and ‘lousy’ jobs – with middle-of-the-road jobs being ‘hollowed out’ and wage inequality rising as a result – is one that has … Continued READ MORE
Public finances All aboard the fiscal rollercoaster? 19 March 2015 by Adam Corlett We now have the final fiscal backdrop for the election, with the OBR setting out their forecast for tax receipts and the government’s tentative proposals for spending. Here we take a post-Budget look at what the parties’ deficit reduction targets might mean for the next parliament. The graph below shows the fiscal stance of the … Continued READ MORE
Incomes 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 finances· Growth 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
Incomes· Political parties and elections Living standards in the downturn and recovery: the backdrop to the election 12 March 2015 by Matthew Whittaker After six long years, average pay is rising. The gains are currently modest, but momentum is expected to build in the coming months (thanks in no small part to falling inflation). And there’s evidence that household incomes have started to recover too. The best data on this is significantly out of date but, buoyed by … Continued READ MORE
Work 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
Work A £6.70 minimum wage – how ambitious a rise is it? 24 February 2015 by Conor D’Arcy The Low Pay Commission, the body tasked with advising the government on the national minimum wage’s (NMW) annual increase, has recommended it rise by just over 3 per cent, from £6.50 to £6.70, from October 2015. The second in its “new phase” of above-inflation rises after years of falling in real terms, any real increase … Continued READ MORE
Work 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
Incomes· Scotland· Public finances 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
Work How the exclusion of the self-employed might obscure the 2015 earnings recovery 21 January 2015 by Laura Gardiner Over the past few years growth in self-employment has been a big story – the self-employed account for two thirds of the net change in employment since the pre-recession peak. But this may now be turning a corner; self-employment peaked back in June and has fallen steadily by 79,000 over the last two quarters, while … Continued READ MORE
Work· Living Wage Better pay for care workers: up-front costs but long-term gains 20 January 2015 by Laura Gardiner There is growing realisation that the race to the bottom in working conditions is becoming a barrier to quality in social care. Low pay, at times below the minimum wage, and unenviable terms are unlikely to deliver the sustainable long-term care system that our ageing society requires. While many accept this, so far we have … Continued READ MORE
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 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
Incomes 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
Incomes· Work 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
Work 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
Housing Households have been coping remarkably well with high housing costs, but interest rate rises lurk just around the corner 10 December 2014 by Laura Gardiner The lack of affordable housing, particularly in London and the South East, is one of Britain’s most-told misery stories. But less is known about how these challenges differ for various household types and, perhaps more importantly, how people cope with them. New research by the Resolution Foundation seeks to deal with both of these questions. … Continued READ MORE
Public finances· Political parties and elections Assessing the post-election implications of the parties’ different fiscal stances 5 December 2014 by Matthew Whittaker Our recent briefing note In The Balance set out some indicative figures for public finances in the next parliament based on our interpretation of each of the three main parties’ highly sketchy (to date) outlines of their preferred trajectories. This note updates this work based on the new OBR figures released alongside the Autumn Statement. … Continued READ MORE
Budgets & fiscal events· 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 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
Social security 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
Work 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
Work We need strategies to boost pay progression for the low paid 19 November 2014 by Conor D’Arcy “There’s only one person there who’s gone from the bottom to the top, out of hundreds. If I’m starting at the bottom, and I only know one person that’s gone all the way, I don’t think I’m going to be able to do that.” That was the view of an employee of a large supermarket. … Continued READ MORE
