Public finances The week when the numbers become reality 4 April 2011 by Gavin Kelly With the Budget behind us and the new financial year starting on Wednesday, it is a timely moment to take stock of the prospects of those living on low-to-middle incomes. To do that we need to consider the combined impact of stagnant wages, rising prices, reduced tax-credits and benefits from the June 2010 Budget – … Continued READ MORE
Incomes Digging beneath the figures on household disposable income 1 April 2011 by Lee Savage Figures released earlier this week by the Office for National Statistics showed that total real disposable incomes have fallen in the UK for the first time in thirty years. But behind those headline figures, if we instead look at disposable income per head, there’s an interesting story about the performance of different regions across the country. In … Continued READ MORE
Public finances Trouble ahead at the Treasury, New Statesman 28 March 2011 by Gavin Kelly For many politicians, tax cuts are the elixir of politics. In times of plenty they are deployed triumphantly as evidence of a thriving economy; in times of hardship they are handed down by chancellors as a salve to a hard-pressed public. So it should come as no surprise that, even in this parliament – dominated … Continued READ MORE
Public finances Tough news for living standards from the OBR 24 March 2011 by James Plunkett Yesterday’s budget had been pre-billed as a boost to living standards, and in particular as targeting the ‘squeezed middle’. Of course, for most in the group this was always going to be small beer in comparison to the impacts from last year’s Spending Review and emergency budget. But overall, did yesterday bring good or bad … Continued READ MORE
Public finances Osborne the reformer is an unfinished work 24 March 2011 by James Plunkett One interesting aspect of today’s Budget is the government’s change of tack on personal allowances. Back in June 2010, when the Chancellor committed to raise allowances from £6,475 to £7,475, he chose to cancel out the gains for higher rate taxpayers by lowering the level at which the 40p tax rate kicks in. The idea … Continued READ MORE
Incomes Politicians have not solved the living standards crisis 24 March 2011 Stand back from the detail of today’s Budget and what we observe is Britain’s political class trying – and failing – to respond to the crisis in living standards facing Britain. They are doing this at the same time as they, of course, seek to outmanoeuvre their political opponents and build support among their friends. … Continued READ MORE
Public finances There is no single inflation rate 23 March 2011 by Matthew Whittaker In December we had the wrong type of snow. Now it’s the wrong type of inflation, with the chancellor blaming bad borrowing figures on the type of price rises now hitting the UK economy. For consumers that all raises a basic question: what does it mean to say there’s more than one type of inflation, and is … Continued READ MORE
Public finances Spiralling inflation continues to squeeze some more than others 22 March 2011 by Matthew Whittaker The February inflation figures spell more bad news for living standards in the UK. With average weekly earnings growth standing at just 2.2 per cent, millions of workers continue to get poorer in real terms. However, differences in the make-up of typical “shopping baskets” mean that the spending implications of inflation vary by income group. Since 2007, … Continued READ MORE
Social security Wake-up call on childcare 17 March 2011 by Vidhya Alakeson Speaking at the Liberal Democrat’s Spring Conference, Nick Clegg once again took up the cause of hard working families in Britain – his ‘alarm clock Britain’, the people who want to get up and get on. But changes to the childcare tax credit announced in the Comprehensive Spending Review and due to come in this … Continued READ MORE
Incomes It’s not all bad news on social mobility 1 March 2011 by Gavin Kelly We all know the usual story on social mobility. It’s been falling steadily for ages and continued to fall during the Labour years. Plenty of politicians, journalists and pundits will line up to tell anyone willing to listen that things have got worse. It sounds like a compelling story – the problem is, it’s not … Continued READ MORE
Public finances Three charts that complicate a simple focus on growth 28 February 2011 by James Plunkett [Extract] GDP growth figures have become the barometer of choice for commentators trying to tell the political weather – a good measure of how the public will eventually fall in the faceoff between Osborne and Balls. The story goes that a return to sustained growth will mean a return to rising living standards. That means … Continued READ MORE
Incomes Sitting in the middle 28 February 2011 by James Plunkett Yesterday at the Resolution Foundation we launched a wide-ranging investigation into the pressures now facing low-to-middle earners. The Commission on Living Standards will focus on the long-term economic trends that are changing the reality of life for those on low-to-middle incomes in Britain, writes James Plunkett It will bring together leading thinkers, from major employers … Continued READ MORE
Incomes Wanted: a new purpose for British capitalism 18 February 2011 by Gavin Kelly If this year’s question is “When will growth resume?”, next year’s will surely be “How do we make sure that growth benefits the great majority of working people?”. For much of the 20th century, that second question would not have been necessary. The link between growth and living standards held strong — it was the … Continued READ MORE
Public finances Time to think again about the way we measure inflation? 16 February 2011 by Matthew Whittaker As was widely expected, annual inflation increased again last month. A combination of the VAT rise and higher oil prices helped push CPI from 3.7% in December to 4% in January – twice the government’s official target of 2 per cent. The wider RPI measure also increased, from 4.8% to 5.1%. There is, however, a big question over … Continued READ MORE
Public finances Low-to-middle earners to bear brunt of latest prescription price increase 10 February 2011 by Matthew Whittaker Despite the passing of legislation in the Scottish Parliament to remove prescription charges north of the border and pressure from the British Medical Association to follow suit in England (prescriptions are already free in Wales and Northern Ireland), the government announced last week that the cost of prescriptions will rise by 20p to £7.40 per item from April 1st. … Continued READ MORE
Incomes The type of social mobility no-one talks about 4 February 2011 by James Plunkett Ed Miliband today addressed the issue of social mobility in a speech in Gateshead. His argument was built around the concept of the ‘British Promise’ – the idea that each generation of children will do better than their parents. It’s our own rather less lofty version of the American Dream, and it’s a promise, he … Continued READ MORE
Incomes Considering income alone is never enough when looking at living standards 3 February 2011 by James Plunkett The Independent reported yesterday that ‘middle England’ will be ‘hit hardest’ by upcoming changes to taxes and benefits. Research commissioned by the paper finds that families in the £40k-£50k bracket are set to suffer a four-way hit from: The reduction of the 40p tax threshold; A rise in NICs rates; A sharper taper on tax credits; and … Continued READ MORE
Public finances Inflation and the poverty squeeze: where will it strike? 2 February 2011 by Donald Hirsch Of all the ways in which trends in living standards are changing, possibly the most important and least expected has been the insidious impact of inflation on the living standards of people on low incomes. For the first time in my lifetime, the worst-off people in Britain are getting systematically and steadily worse off in … Continued READ MORE
Incomes The King’s Speech: Governor’s “bigger picture” isn’t big enough 27 January 2011 by James Plunkett Bank of England Governor Mervyn King yesterday acknowledged that Britain’s households are now facing the toughest squeeze on living standards since the 1920s. His comments echo the findings of our report Squeezed Britain, which revealed in December that, on the basis of Office for Budget Responsibility (OBR) projections, the average low-to-middle income family will be £720 poorer in 2012 than they were … Continued READ MORE
Incomes Australia’s squeezed middle on a sticky wicket 26 January 2011 by Sue Regan Australians continue to lick their wounds over their Ashes’ loss. But looking beyond this recent sporting catastrophe, Australia is fairing well. The economy is strong, unemployment is around 5 % and the post GFC (Global Financial Crisis) is relatively tiny. Whilst economic prospects are currently far better than in the UK, Australia still provides a … Continued READ MORE
Incomes The Spirit Level: is income equality the sole solution? 14 January 2011 by Vidhya Alakeson Earlier this week, the ippr hosted a seminar with Richard Wilkinson, author of The Spirit Level. Wilkinson presented data set after data set to make one basic point: more equal societies have better social outcomes such as rates of mental illness and teenage pregnancy, not just for those at the bottom but for everyone. A wealthy, … Continued READ MORE
Public finances After the recession, the real pain begins 13 January 2011 by Gavin Kelly Fuel price protests rattled Blair. The 10p tax row dogged Brown. Is David Cameron ready for the storm that his huge raid on our personal finances is about to unleash? Economic narratives take shape like stalactites: the drip, drip of daily headlines deposits its wisdom and, before you know it, there’s a solid consensus. For … Continued READ MORE
Incomes Happy New Year? 4 January 2011 by Katherine Green Well, after lots of talk of fiscal consolidation, the first real day of reckoning has arrived: today VAT rose to 20% – the first increase in the main rate of VAT since 1991, moving the UK from below average to nearer the top of international comparisons. Fiscal consolidation may be necessary – to some degree … Continued READ MORE
Incomes Social mobility and earnings change over the life-cycle 16 December 2010 by Lee Savage Since the emergency budget in June of this year, government policymaking has been unswervingly focused on reducing the deficit. However, the coalition has asked to be judged not just on its impact on the public finances, but also on the progress it makes in increasing social mobility. Social mobility is undoubtedly an important issue. It … Continued READ MORE
Incomes We’re all squeezed now 15 December 2010 by Gavin Kelly [Extract] Research suggests that most British people will call themselves middle class by 2020. But many will find it increasingly hard to achieve the lifestyle that is supposed to go with it. It is one of the most famous sketches in comedy: John Cleese, Ronnie Barker and Ronnie Corbett, lined up in descending height, dressed … Continued READ MORE
