Incomes· Work The View That Britain Should Be Learning Lessons From the US Labour Market Is Long Past Its Sell-By Date 5 June 2015 by Gavin Kelly Political debates about key policy challenges often tend to idealise – and bastardise – the experience of other countries. Whether it is Finnish schools, Swedish childcare, German vocational training, Danish ‘flexicurity’, Israeli entrepreneurship or Dutch pensions, there are places that we are supposed to look to for inspiration. Usually these views are rooted in some … Continued READ MORE
Budgets & fiscal events· 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 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
Incomes· 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
Work 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
Budgets & fiscal events· Public finances· Political parties and elections How far apart are the Conservatives and the Lib Dems on fiscal policy? 28 April 2015 by Matthew Whittaker Amid recent discussion of the key role that parties such as UKIP and the SNP might play in ‘propping up’ a minority government after 7 May, less attention appears to have been given to the continued potential leverage of the Liberal Democrats. Of course, any future negotiations will revolve around a multitude of issues and … Continued READ MORE
Public finances· Political parties and elections How far apart are the Conservatives and Liberal Democrats on fiscal policy: could the coalition renew its vows? 28 April 2015 by Adam Corlett Recently we looked at the degree of potential overlap between Labour and Liberal Democrat fiscal plans, and found that the parties are not as far apart as might first be assumed. In this second note, we consider the relative positions of the Conservatives and Liberal Democrats. The Conservative goal appears relatively straightforward: they want to … Continued READ MORE
Work 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
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 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
