Building on Britain’s living standards recovery next year will require decisive action by policy makers

by

British policy makers might well have had a contented Christmas break. At least by recent standards. In 2015 employment reached record highs while real earnings growth returned after a six-year absence. Crucially those on the lowest earnings saw the biggest rises at over three per cent. But policy makers from the Treasury to the Bank … Continued

Tax

Tax expenditures deserve far more scrutiny

by

Last month, the UK government presented its Spending Review, setting out departmental budgets for the next four years. There were protections for some departments and large cuts (though smaller than expected) for others. Coming after years of previous cuts, many departmental budgets by 2019 will be only half what they were in 2009. Opinions will … Continued

Matthew Whittaker

Dealing with the housing aspiration gap

by

Britain’s reputation as a nation of home-owners is under threat. While it’s true that just under two-thirds (65 per cent) of us own our own place, the home-ownership rate has fallen from 73 per cent since 2007. This downward trend has occurred despite the proportion owning their home outright continuing to rise gently in recent … Continued

“An opportunity that must not be missed” – council tax reform in Scotland and beyond

by

Scotland’s Commission on Local Tax Reform has today released its report – recommending the abolition and replacement of the current council tax system. Few would argue that council tax in its current form is particularly sensible or fair, so what happens next ahead of Scotland’s May elections should be of interest far beyond Holyrood. The … Continued

Universal Credit’s future depends on whether it’s the economics or the politics that comes first for the Treasury

by

Incentives matter. That was one of the central assumptions behind the creation of Universal Credit. As well as creating a simpler benefits system (a good thing in and of itself), the purpose of the new benefit is to drive up employment by providing a clearer financial incentive to enter and progress in work. But incentives … Continued

Our country favours the old over the young – and the problem has been getting worse

by

Our country favours the old over the young and the problem has been getting worse. George Osborne took some welcome steps yesterday to reverse that trend. The apprenticeship levy, the extension of student loans, and enabling sixth form colleges to escape their unfair VAT burden by converting to academies are important moves in the right … Continued

Matthew Whittaker

Skewed Britain is no country for young men

by

Against all expectations, George Osborne managed to deliver something of a giveaway with his combined Autumn Statement and Spending Review. That might seem hard to believe given that day-to-day UK government spending is set to be reduced by more than £10bn over the next four years. For many departments that means cumulative budget cuts since … Continued

Robots will enrich not replace us

by

The robots are coming to take our jobs. So says Martin Ford in The Rise of the Robots, the FT/McKinsey business book of the year. Andy Haldane, chief economist of the Bank of England, last week warned that 15m jobs in Britain were at risk from automation. Is artificial intelligence about to take over? I am not so sure. Innovation is always … Continued

The Spending Review’s big choice: will there be five ‘big losers’ or a toning down of the cuts?

by

The core of next week’s Spending Review is now becoming clear. If the Treasury delivers the pre-announced scale of cuts we will see five ‘big losers’ in Whitehall including, surprisingly for some, Education. The Chancellor is now five days away from announcing his second multi-year spending review. Since 1998 these departmental budget setting exercises have … Continued

Five things we’ve learned from today’s earnings figures (and one thing we haven’t)

by

After a longer and deeper pay squeeze than even the most pessimistic of economists would have predicted, 2015 marks the year when pay growth finally returned. Today’s publication of the Annual Survey of Hours and Earnings (ASHE)  – our least timely but most comprehensive source on employee pay – gives us the opportunity to lift … Continued

Matthew Whittaker

Lifting the wage floor increases the urgency for securing productivity gains

by

The welcome introduction of a significantly higher wage floor from April 2016 is set to boost the pay of around 6 million workers. But it will pose adaptation challenges for employers, particularly in lower paying sectors such as retail and hospitality. A simple thought exercise implies that maintaining a broad adherence to the international relationship … Continued

Now is not the time to fudge on tax credits

by

Public policy questions are often difficult, with significant trade-offs between equally important objectives. As a result most people who have spent time taking decision in government know that, despite its bad reputation, the fudge can sometimes be the right answer. It can buy time on issues where the policy substance is unclear or reconcile competing … Continued

Tone down, phase in or transition to: the options facing the Treasury on tax credits

by

Following developments in the House of Lords, we’ve entered a new phase in the tax credits debate. Whatever the constitutional rights and wrongs, everyone can agree that the ball is firmly back in George Osborne’s court. Indeed last night he promised to look again at the changes. The real question now is to what extent … Continued

National Insurance cuts: far from being the silver bullet for tax credit changes they miss the target

by

It was another busy weekend in the debate on the changes to tax credits that are set to be introduced next April. More suggestions about how the Government might ameliorate the impact on low income working families have been set out. In particular there’s been a bit of focus on the role National Insurance changes (specifically on … Continued

Loading
No more posts found