Richard Exell

Yesterday’s DWP press release on the results of the test for new Employment and Support Allowance claimants has excited the usual frenzy – the Sun, the Telegraph, the Mail and the ever-egregious Express all covered it much as you might expect.   I suppose we’re going to have to get used to this being a monthly event and the forces of goodness and light could respond by rehashing our own stories.

But this month we don’t have to do that because there’s a first rate piece on the BBC website by Mark Easton.

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Owen Tudor

The main progressive think-tank in Canada has issued an excellent paper on financial-sector taxation calling for various taxes (including a financial transactions tax) to redress the tax breaks which the sector has received in Canada. And this could be hugely influential, because the left-leaning NDP – the most pro-FTT party - is now scoring just a few percent below the ruling Conservatives ahead of Monday’s general election. The Canadian Centre for Policy Alternatives (CCPA) study, by economist Toby Sanger, says Canada should introduce fairer taxes on the financial sector that could generate over $10 billion a year. Sanger says:

It’s a cruel irony that, after an economic crisis that cost the public purse hundreds of billions of dollars, our governments are rewarding those who caused the crisis with an expanded financial safety net and lower taxes, but making individual Canadians pay for it with higher taxes in other areas and reduced social services

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• Sustained early years investment is needed to meet the UK’s child poverty targets
  Between 2003 and 2007 the UK substantially "strengthened its position as one of the biggest investors in families in the OECD." And between 1995 and 2005, child poverty "fell more than in any other OECD country." Now, "social protection spending on families – particularly via family service provisions, as a longer-term solution to poverty risks – needs to be protected." In particular, cuts to childcare would make it more difficult to make work pay for low income families. This is already a problem: before childcare costs, the cost of entering paid work for a family's second earner is below the OECD average; after childcare costs, it is +above+ the average.

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Richard Exell

Today’s preliminary results for GDP  in the first quarter of 2011 weren’t as bad as they could have been. A second quarter of negative growth, producing a double-dip recession now was possible, and we have avoided that. (Probably – remember these are preliminary results, often revised.) And its good news that growth in every industry except construction was positive: in the last quarter of 2010, “distribution, hotels and restaurants”, “transport, storage and communications”, “business services and finance” and “government and other” all showed negative growth. The growth in these industries may be low, but it’s still an improvement.

On the other hand, 0.5 per cent has got to be disappointing,

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Richard Exell

Crime reduction charity NACRO has announced that it is due to make over 100 staff redundant because of  “local and central government cuts and contracts coming to their natural end.”  This follows a survey earlier this month by Clinks, the umbrella body for third sector rehabilitation organisations, showing that 68 per cent have staff on “or imminently facing” redundancy notices and that more than three quarters have already seen their grant incomes reduced.

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Owen Tudor

This week’s news that the Prime Minister has downgraded the policy of reducing net immigration to under 100,000 a year from a target to an ambition is a significant defeat for the populist wing of the Conservative Party, although the Prime Minister attempted to balance that with a ‘dog whistle’ attack approach to integration. It may also require a new category for “the TUC told you so” blogs. As I argued here as recently as February, the problem with the proposed cap on immigration is not only that it is flawed in principle and misses the point, but that it isn’t achievable (or rather, that it can’t be delivered directly by public policy: as I also pointed out, a nose-diving economy could certainly deliver the higher emigration and lower immigration required, as an unintended consequence). However, there’s still a long way to go before the Government achieves a migration policy that is actually good for Great Britain. That would require recognising that migration is not, in itself, the problem: the issue is how we manage its consequences.

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Owen Tudor

Ahead of the IMF and World Bank meetings in Washington DC a week ago, a flurry of workshops, seminars and conferences took place, bringing together governments, unions, employers, economists, campaigners and NGOs. IMF chief Dominique Strauss-Kahn, possible contender for the French Presidency, argued that inequality and joblessness led to social unrest of the sort seen in the Middle East and North Africa, and that “growth beset by social tensions is not conducive to economic and financial stability”. He acknowledged that ”unemployment is at record levels” and ”in too many countries, inequality is at record highs.” And without naming names, he said that ”fiscal tightening can lower growth in the short term, and this can even increase long-term unemployment, turning a cyclical into a structural problem.”

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• Right-wing hate campaign clouds debate on benefits
  A brilliant post from Sue Marsh on why the right-wing press's headlines on disability benefits – based on disingenuous statements from government ministers – are misleading to the point of fraud.

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Owen Tudor

It has been a bumper fortnight for the Robin Hood Tax campaign, with endorsements beginning to mount up, and an innovative road trip round the UK bringing the message to a wider audience still. Key developments have to be the endorsement by tweet (how 21st century!) from European Commissioner and former Director of the European Bank for Reconstruction and Development Laszlo Andor; and the impressive worldwide thousand-strong economists’ letter (every one a PhD: Chancellor George Osborne wouldn’t even have been eligible to sign it!) Last time the campaign brought economists together to sign such a letter, ‘only’ 350 did. Further grown up support came from Cambridge economist Ha Joon Chang and Oxfam’s excellent Duncan Green, and the endorsement of yet another national UK newspaper, the Observer (the Mirror and the Mail are already on record).

Meanwhile, in Washington DC, the Spring meetings of the International Financial Institutions (IMF, World Bank) saw several developments. Most importantly, the first strong support for an FTT by a group of developing countries. Finance Ministers of low-income Francophone (mostly African) countries expressed a strong endorsement of a broad-based financial transactions tax. They urge all G20 countries and others to adopt the FTT as put forward by France and Germany. The statement is on the web in French only so far, but an FAQ on why southern countries should support FTTs was launched this month too. There was also a stunt launching the economists’ letter, and ITUC official Dr Peter Bakvis handed in the economists’ letter to French Finance Minister Christine Lagarde.

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Richard Exell

A new survey by Homeless Link, the coalition of homelessness charities, has found that “cuts in public funding are already having an impact – with services closing, fewer beds available and more projects having to turn homeless people away.” The annual Survey of Needs and Provision (funded by the Department for Communities and Local Government) reports that 50 per cent of homeless services in England have already had cuts and that 63 per cent of these believe it has had an effect on their clients. The most common impacts are staff redundancies, and services being reduced or closed.

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