Nicola Smith

The Better Regulation Executive have published a new report, which lists the multiple benefits that regulation has for the UK economy. In a refreshing change from the usual anti-regulation rhetoric of the UK business lobby, this report concludes that:

Regulation has an important role to play in Britain’s economic growth and prosperity. It protects our environment and the health and opportunities of our citizens. Well designed and implemented regulation helps support innovation and has other beneficial outcomes….For example, competitive markets create benefits like extra trade and reduced prices. Regulation means cleaner air and water, safer workplaces and food as well as the safety net created by the minimum wage.

What a shame the Government hasn’t been able to apply these principles to recent policy on employment rights.

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Nicola Smith

Evan Price believes that I should be spending my time tackling the impacts of the recession rather than picking holes in Conservative analysis. But it’s my view that the interests of working people are best served when policy debate draws upon accurate understandings of data trends. In this case, unemployment rate data show that, so far, rates increased faster during the 1980s than the current recession (despite GDP falling more sharply this time around).

There are important lessons here – the 1980s provides a classic example of how unemployment can spiral if Governments fail to invest in tackling unemployment. For those who are interested I have published all of my data on this – both my analysis of the change in actual rates and my failed attempts to copy the Conservative index of what I believe to be ‘change in annual change in unemployment rates’ here.

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Alice Hood

A quick hat-tip to Left Foot Forward for this piece on the massive fare rises for London public transport announced by Boris Johnson last week. The bus fare rises in particular mean that it will be the poorest who will feel the most severe impact of the change.  LFF will be investigating further this week, as I’m sure will Dave Hill on his London blog.

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• Conservatives will repeat economic mistakes of 1930s
  In the first of two interesting articles in today’s Observer, William Keegan is concerned at the prospect the Conservatives might freeze public sector wages:
  “the very idea of a wage freeze at a time like this seems to have gone almost unquestioned. Yet the fact is that the raison d’être for incomes policies and wage freezes is as a weapon in the battle to control inflation. The Conservatives under Edward Heath resorted to incomes policies in the early 1970s, and much of the subsequent Labour government’s time in the mid to late 1970s was taken up with the arduous business of administering an incomes policy.”
  “A wage freeze in a recession is calculated to reduce real incomes and act as a brake on any economic recovery, possibly throwing the economy into reverse gear again at just the time when people are talking about “stabilisation” and possible recovery. Where is the inflation that a wage freeze is designed to combat?”
• Britain’s real jobless total ‘more than 3m’ says new report
  Also in the Observer, Larry Elliot reports on an Industrial Communities Alliance report into the real levels of unemployment around the country:
  “Rapidly rising unemployment in Britain’s industrial heartlands has sent the real level of joblessness surging to well over 3m during the recession, according to a report to be published this week.”
  “Urging a package of help for dole queue blackspots, the study shows that widespread lay-offs in the manufacturing sector have widened the north-south divide in the labour market.”

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Nigel Stanley

There is a very poor article attacking the new pensions settlement due to start in 2012 by Jeff Prestridge in today’s Mail on Sunday. It’s a tired litany of every old criticism, and based on a fundamental misunderstanding of what is actually happening in 2012.

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Nigel Stanley

The government’s new 50% higher rate tax for those on more than £150,000 is one of its most popular policies. There is much more popular support for raising taxes – particularly on the rich – when the time is right to reduce the deficit than most commentators suggest.

The main argument that has been mounted against it is that it won’t raise much cash because people will avoid it. This normally seems to be made by people who do not want to pay it, rather than from some altruistic desire to improve public policy making.

The right response is to close the loopholes that allow this. And if you want to find out how some of these work today’s Sunday Times provides a concise and helpful guide in today’s Greed, oops I mean Money, section.

The trick is to set up as a company, and use this to change income into capital gains, and use the allowances of other family members who don’t pay income tax.

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Nigel Stanley

David Cameron was criticised for saying very little about the environment in his speech to the Conservative Party conference. “Vote blue, get green” seemed to have been forgotten.

He certainly remedied his sin of omission yesterday with a major speech on the environment which is worth reading and has some interesting ideas.

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Nigel Stanley

The Daily Telegraph today reveals that London Mayor Boris Johnson is considering the establishment of a “London Competitiveness Unit” to step up “his lobbying powers and protect London’s interests”.

What is meant by competitiveness is revealed in the report. It includes opposition to the 50p top rate tax and the non-dom levy.

It looks rather like the super-rich are going to get lobbyists on the rates. Do the TPA know?

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• An interesting collection of papers from a Soundings seminar on the credit crunch
• Daily Mail and innumeracy
  John Rentoul finds that the Daily Mail's claim of a huge increase in public sector jobs is based on the emergency bank nationalisations

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Nicola Smith

Earlier today Left Foot Forward published a short analysis I undertook of the Conservatives’ claim that “the rise in unemployment since the beginning of this recession has outstripped that in the last three recessions”. My paper points out that we entered this recession with lower unemployment rates than the 1980s and 1990s, so actual rates are lower now than they were then. I also considered the speed at which actual rates have increased, and found that it’s pretty much the same as previous recent recessions, but that unemployment rates accelerated a little faster in the 80s. Finally I looked at annual change in unemployment rates, and again found faster monthly increases in the 80s than currently. The Office of the Shadow Chancellor has now been in touch with me to respond to my queries, which I sent last week, and I have posted details of their response below.

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