Nigel Stanley

Given how often we are told that public sector pensions are more generous than those in the private sector, there is some irony in the growing employer campaign to level down private sector pensions to public sector levels.

This flows from the Government’s decision – announced in the budget and covered here and  here on Touchstone – to index public sector pensions and most benefits in future to the generally lower CPI measure of price inflation rather than the previous RPI indicator.

Already ministers have announced that the minimum indexation standards that private sector DB pensions have to follow will in future be based on CPI.

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Nicola Smith

Durham Police has issued redundancy warnings to all civilian workers in the force, including police community support officers. 1,160 staff have been warned that their jobs are at risk, and around 200 posts are expected to be lost.

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Richard Exell

The latest monthly NHS employment figures show that the number of staff fell by 0.3% between March and April. There were similar falls for the workforce measured in terms of numbers of roles and full time equivalents. Even more significant than the fall in itself is the likelihood that it marks the start of a new trend.

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Richard Exell

Today’s GDP figures show growth of 1.1% in the second quarter of this year, nearly double the previous two quarters combined. This is great news if it can be sustained, but there’s some reasons for being cautious.

The first is that private consumption is only going to be sustained on the basis of renewed confidence about future prospects for the economy and that hasn’t happened. The Nationwide building society’s Consumer Confidence Index fell further in June, reaching its lowest point for a year. Only 29% of people thought that this was a good time for a major purchase (like a car or house), the lowest figure since December 2008.

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Nicola Smith

The Guardian are reporting that S4C, the government-supported Welsh-language channel, will shortly be facing a 24 per cent cut in its Budget as a result of the Comprehensive Spending Review. 

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Nicola Smith

Last week the ONS published their excellent Economic and Labour Market Review, highlighting analysis that shows that since Jan – March 2009 underemployment levels have been greater than those for overemployment. In the first quarter of 2010 there were 2.81 million people classed as being in time-related underemployment, compared with 2.75 million people who were classed as being in time-related overemployment.

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Nicola Smith

In response to today’s GDP figures the Chancellor has stated that:

Today’s figures show the private sector contributing all but 0.1% of the growth in the second quarter, and put beyond doubt that it was right to begin acting on the deficit now.

Is this correct? During Q2 the ONS estimate shows that the economy grew by 1.1 per cent. So, 0.1 per cent of this growth would be 0.0011 per cent. Has the private sector contributed all but 0.0011 per cent of growth? No – as page 5 of the ONS release shows, the contribution to growth made by different sectors of the economy is as follows: Production 0.1 (9 per cent of total growth); Construction 0.4 (36 per cent – much of which will be state supported); Distribution, hotels and restaurants 0.1 (9 per cent); Business service and finance 0.4 (36 per cent); Government and other 0.2 (18 per cent). In Transport, storage and communications growth was negative, leading to a loss of 0.1 (9 per cent).

So, ‘Government and other’ spending has contributed 18 per cent of total Q2 growth – and a significant proportion of construction spending will also be accounted for by public sector investment (these figures reflect the situtation in April). At best the Chancellor’s statement appears to deliberately underplay the impact that public investment is still having on the recovery.

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Richard Exell

Government funding for most English universities and further education colleges is being cut. Compared with last year, funding for 51 universities is being cut in cash terms, while a further 58 are seeing their grant increased by less than 3.5 per cent (the current rate of CPI inflation); only 21 are receiving above inflation increases. 51 English FE colleges are also having their budgets cut in cash terms and another 31 in real terms; 41 see real-terms increases.

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Owen Tudor

At the International AIDS Conference in Vienna this week, Michel Sidibe, Executive Director of UNAIDS, the joint UN programme on HIV/AIDS, has called for a Robin Hood Tax to raise money for causes like the eradication of HIV/AIDS. He said:

“The financial crisis should not be an excuse to flat-line or scale back. In fact, it is an opportunity for new sources of funding, like a levy on global financial transactions – a Robin Hood tax.”

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Nicola Smith

The Financial Times has reported that military planners are examining cutting Britain’s land forces from eight to five brigades, which would cut army numbers by up to 30,000.

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