The need for growth, graduate jobs and vultures Top of the Charts 13 January 2023 Torsten Bell Afternoon all, Ageing can be hard, so it’s important to celebrate the benefits – such as greater self-knowledge, the children leaving home and the Government/housing market giving you free stuff. For those of you over 50 the latest good news is the Government is considering considering “exempting over-50s returning to work from income tax entirely for six months to a year”. This is an interesting bonkers idea – unless of course the policy objective is to encourage the generation with the worst drug habit in the country (Gen X) to find themselves in rural Thailand, finally taking that gap year and funding it from a massive tax break upon their return. We’ve already got quite enough expensive/stupid tax breaks, confirmed by HMRC’s latest tax relief costings yesterday. As Adam Corlett shows, we’re spending over £4 billion a year on just five of the worst reliefs – that’s £50,000 each to 70,000 people without any public policy justification. Well done us them. For more in this vein, come along on Monday to an event on how well (or not) targeted the significant amount we spend encouraging people to save is. Enjoy this week’s reads – which excitingly come in a new, larger font because a few of you asked and this is a market economy after all. If you don’t want text at all you’ll be glad to know the Comms team got overexcited and launched an Instagram account this week – they’re like that. Check it out. Torsten Chief Executive Resolution Foundation Valuing vultures. Talk of vultures normally gets me thinking of funds looking to profit from countries struggling with debts. But this week it got me thinking about… actual vultures. That’s thanks to an article examining the impact on humans of near disappearance of vultures in India in the mid-1990s. The population fell by over 95 per cent over a few years, driven by humans albeit accidently (giving livestock a drug that killed vultures if they scoffed said livestock’s carcass). Even those not fussed about the vultures should sit up at the finding that human death rates rose by over four per cent in vulture heavy areas. Why? Because farmers relied on vultures to eat dead livestock, and without them 1) dead animals were disposed of in water = disease 2) or left out in the open for longer = more (rabies-infected) dogs/rats. The lesson? Just because something’s not pretty, doesn’t mean it’s not valuable. Stimulating spending. Government’s spent big to support the economy mid-pandemic. That’s part of a wider trend in recessions for fiscal authorities to do so (rather than leaving it to central banks) which means we should focus on what levers available to them deliver the biggest bang for your buck economic support-wise. A new paper asks whether US-style stimulus checks, unemployment insurance, or cutting income tax are the way forward. Unemployment insurance comes top – not surprisingly because those having a tough time spend the cash quickly. Universal stimulus checks take longer to get spent but have things going for them. Tax cuts are rubbish – directly targeting those less in need and with much of any stimulated spending happening after the recession. The Treasury should be 1) reading this paper 2) putting in place a system for efficiently targeting support when the next big downturn comes. Which it will. Covid careers. Good news alert. A short IFS note confirms that the generation that graduated into the pandemic have largely bucked the trend of previous recessions, where those entering the labour market during them suffer lasting damage to their prospects. Yes, those graduating in 2020 initially had worse outcomes (i.e. entering lower paid jobs), but those unwound with no lasting employment effect a year later. Less good news comes for those who had to do their education during the pandemic and graduate into a cost of living crisis. This should remind us of one of the benefits of the tens of billions spent on supporting the economy: far less long Covid labour market-wise. Getting growth. Tory think-tank leader Robert Colvile has an interesting essay on “the morality of growth” out. Lots of food for thought. I’m with the big argument that growth is desirable given the real benefits that can flow to people. Obviously that’s true globally (look at China’s plummeting poverty rates) but also for the UK where low growth is the single biggest driver of our stagnant wages. The piece is also quite telling though in that it highlights the challenge of having a real growth agenda for modern conservatism. As Robert rightly notes, while he wants to see more building (of houses and infrastructure), many Tory voters and politicians do not. It was Tory MPs, not the woke warriors also in Robert’s sights, who made the Government gut their own planning bill just weeks ago. Surveying sexuality. The census juggernaut rolls on. This week we got the sexual orientation data – the first from a census so the biggest survey we’ve ever had on this topic. It reminded me of a puzzle I’ve been pondering for a while – hopefully one of you has the answer. The census has 89 per cent of us identifying as straight and around 3 per cent as Gay/Lesbian/Bisexual/Other (7.5 per cent didn’t answer). We’ve seen similar results in government surveys before. The puzzle is that I’m regularly told that one in ten of us are LGB+ (something basically only true in Brighton with the census), and other surveys are closer to that (this Ipsos MORI survey shows 8 per cent). Now maybe people feel able to be more open with surveys not from the Government, but I find it hard to believe that explains the scale of the gap. Anyone got other/better theories? Chart of the Week British politics is very focused on one problem right now: how to reduce labour market inactivity, with rising ill health and disability post-pandemic centre stage. But the debate ignores the reality that this rise began pre-pandemic – the number of working-age disabled people is up by more two million since 2013. This risks focusing on the symptom (rising labour market inactivity) not the cause (our health as a nation – and specifically surging mental ill-health). But it also risks missing one of the positive trends of the past decade that COTW spells out: rising employment rates for those with almost any kind of disability, which prevented rising ill-health pushing up inactivity as it has done more recently. What we have here is a) welcome progress to learn from, b) motivation for further progress (the employment rate for people with disabilities is 54 per cent vs 82 per cent for others) and c) a reminder we badly need a wider policy agenda to make our population healthier (hello public health/social care/a functioning NHS).
