Andy Haldane, the Bank of England’s Chief Economist, has said that the UK’s shareholder model of corporate governance is holding back business investment and hurting economic growth. In a fascinating interview on Newsnight with Duncan Weldon (formerly TUC Senior Economist), he said that firms…Read more…
Young people’s debts have doubled in five years and are now highest of all age groups
In many ways today’s ONS figures on household indebtedness are unremarkable, given we are increasingly accustomed to figures showing high levels of household debt. By and large the debt burden is continuing to increase. One in five households report financial (i.e. non-mortgage) debts are a ‘heavy’…Read more…
How the Government turns a severe and ongoing reduction in public investment spending into a ‘priority’ spend
In its newly issued document outlining the approach for the spending review 2015, the government makes some bold statements about public investment. In June the OECD criticised countries for focusing spending cuts on public investment, and in its previ…Read more…
‘March of the Makers’ goes into reverse
By David Bailey Whatever happened to the ‘March of the Makers’ and the much heralded rebalancing the British economy? This year has so far been pretty dire for UK manufacturing. The…Read more…
Want to reduce inequality? New IMF research says unionisation is key
Through gritted teeth, the International Monetary Fund (IMF) has this week issued a ‘staff discussion note’ which contains a bit of a bombshell. The ballooning inequality that results from rampaging top people’s pay is not, as previously thought, an unfortunate by-product of…Read more…
Government borrowed as much in 2015-16 Q1 as it originally planned to borrow in year as a whole
We should not get too carried away by the Treasury’s claimed improvement in the public finances. Borrowing in the current financial year to date (April to June) is £25.1bn, down from £31.3bn in the same period of 2014-15. This indeed amounts to a gain of £6bn, but: 1. this gain over one quarter is…Read more…
Half the CPI shopping basket is now showing price falls
June 2015 CPI inflation was back at zero, from 0.1% in May. Likewise core inflation (excluding energy, food, alcohol & tobacco ) was back at 0.8% from 0.9% in May. Falling prices are now seen throughout the index. ONS publish CPI figures broken down into some 85 non-overlapping categories (e.g….Read more…
Construction failure reflects neglect and recklessness under the coalition
Latest ONS figures show construction falling by -1.3 per cent into May; this follows a Q1 growth figure that was the slowest for two years. The chart below shows the longer view. Construction output caved-in in the early years of the coalition; from ar…Read more…
George Osborne: British Conservative or German-style Christian Democrat?
My former TUC colleague Duncan Weldon, who is now the Newsnight economics correspondent, has written an interesting post for his BBC web page today under the headline ‘Osborne’s “Christian Democrat Budget”? Duncan knows that I’ve long taken an interest in the German economic model and, accordingly,…Read more…
The poison politics of failed deficit reduction #summerbudget2015
Five years ago, the Chancellor set out policies to bring the public finances back under control. On the basis of any definition, these policies failed. Deficit reduction proceeded greatly slower than planned; public sector debt rose even higher than ex…Read more…
Not a workers’ budget
Massive and unfair cuts in tax credits and benefits are going to hit low-paid workers. Can the Chancellor hope to justify his claim that this is a “one nation Budget”? The key to any Budget is how it answers the question who gains and who loses? The big picture is explained well in the…Read more…
Born in the 90s? Then this Budget is not for you
“This is a one nation Budget,” announced the Chancellor in his introduction to today’s Budget, before announcing reforms that exclude under 25s from higher pay and 18-21 year olds from housing benefit, scrapping maintenance grants for students, and permitting elite (“high-quality teaching”)…Read more…
Northern Puzzlehouse: how exactly will it drive up productivity?
Although the Chancellor said today, “We will be bold in delivering the Northern Powerhouse,” he had little to add on his big, unifying idea of “connectivity.” The theory (that I’ve not been able to track down to its evidence base) is that “a transformation in connections between the great cities of…Read more…
National Living Wage – good news, but some important questions
George Osborne announced today that the government would introduce a new National Living Wage of £7.20 per hour for workers aged 25 and above, to apply from April 2016 onwards (Budget Report, p32, Para 1.121). This will take the form of an initial 50p supplement to the existing adult rate National…Read more…
A plan for working people that leaves them worse off (on the basis of the OBR figures)
There is a lot to absorb in this astonishing budget where those who have suffered most in the recession appear to be paying most for a partial ending of austerity. But in spite of the claimed ‘plan for working people’, it appears that the OBR think households will end up worse not better…Read more…
Summer Budget 2015 has little to say on industrial policy
The headlines from today’s Budget are pretty clear to see: the National Living Wage, an apprenticeship levy for large employers, a further squeeze on benefits. There is little to say on industrial policy and whilst today’s Budget can be viewed as a statement about big themes, concerns that the…Read more…
#Budget2015 gives with one hand but takes with the other
George Osborne is giving with one hand and taking away with the other in today’s Budget. The Chancellor has finally woken up to the fact that Britain needs a pay rise. The TUC has long campaigned for the minimum wage to rise faster and it’s good to see that the Chancellor has listened…Read more…
One London: under the coalition, the capital’s economy moved even further from the rest of the UK
As the government’s flagship regional initiative seemingly flounders under the failings of investment in the railways and ahead of potential Budget announcements, it is worth reviewing just how far the regional reality is from the rhetoric. For over the period of the coalition, London moved even…Read more…
Regional CCS clusters needed – UK is approaching a carbon policy black hole
I went to the launch of the Teesside Collective report today in London, on the case for an industrial CCS pipeline in the North East. So did a new DECC Minister (see below). The four ‘anchor’ companies leading the project are steel producer SSI, fertiliser producer GrowHow, plastics firm Lotte…Read more…
Congratulations to Heathrow – now become a Living Wage employer
This morning, the TUC has welcomed the recommendation from the Airports Commission calling for additional runway capacity at Heathrow. We have long been on record as supporting airport expansion. As the voice of Britain at work, the TUC seeks the creat…Read more…