Paul Sellers

New figures published today by the Council of Mortgage Lenders (CML) show that there were 36,000 repossessions in 2010, whilst 175,000 households were in arrears. These figures are an improvement on 2009, with repossessions declining by 24% and arrears by 13%. there is no room for complacency  though, as the CML forecasts a slight rise in mortgage problems this year ,with 40,000 repossessions and 180,000 households expected. Taking into account the average family size, this equates to more than half a million people’s  homes at risk.

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Sam Gurney

Despite the tide of change sweeping across the Arab world, the Iraqi government seems intent on undermining its trade union movement. The TUC will seek to block the Iraqi delegation at the International Labour Organisation (ILO) in a few weeks if it doesn’t stop its attacks on Iraqi unions.

The developing situation in the Middle East and North Africa formed the backdrop to the most ILO governing body meeting. The new Egyptian labour minister and the leader of the Tunisian trade union federation addressed the meeting, setting out the central role trade unionists had played in the ‘Arab Spring’ in those countries and calling for progress on the recognition of worker’s rights across the region. Whilst great progress has been made, attempts at outright repression are still ongoing in many countries including; Bahrain, Libya and Syria and, despite its almost total absence from the news, Iraq.

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Brendan Barber

I’ve been at the O2 in Greenwich today, to speak to the Insitute of Directors (IoD) annual convention.

I always admire the way the IoD doesn’t pussy-foot around. They’re very clear that they don’t just back the spending cuts, but want more of them – and want them more quickly. But in their desire to see the deficit tackled in this way, they should be very careful what they’re wishing for.

The deep and rapid spending cuts are not just slicing away at the public sector, but doing big damage to the private sector too. The medicine doesn’t just taste nasty, its side-effects are making the disease worse too.

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Tim Page

I won’t spend long dwelling on this morning’s downgrading of the Bank of England growth forecast, as outlined in its latest Inflation Report. The Bank presents its GDP projection as a fan chart, showing various levels of possible growth with various levels of probability, so it’s hard to draw clear statistics, although the Press Association has had a go. According to the Guardian, PA are saying that the Bank has downgraded its projections for GDP in 2011 to around 1.7% from around 2.0% in its February Inflation Report. GDP in 2012 is expected to come in at around 2.2%, from just under 3% previously forecast.

This will surprise no-one. Embark on a massive package of spending cuts, put hundreds of thousands of public sector workers out of a job, increase VAT and fail to develop a meaningful growth strategy and its hard to expect anything else. Only George Osborne and Nick Clegg don’t seem to get it. It’s worth noting, however, that the Bank’s forecasts, on growth and inflation, factor in an interest rate rise in the third quarter of this year. If growth really is sluggish, it might need to think again about that. The Bank Governor, Mervyn King, warns that CPI inflation may go as high as 5% during this year, but he has been clear that high inflation is due to imported commodity prices and increased VAT. A rise in base rates would make no difference to those factors, whilst undermining growth still further.

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• Iraq’s union crackdown puts progress at risk
  Brendan has an article today in Comment is Free on the Iraqi government’s crackdown on trade unions, with the TUC’s sister organisation the GFIW derecognised and a heavily politicised committee appointed to take control of unions’ elections and assets. Union colleagues in Iraq are reporting officials coming to take over their offices, backed up by the police and military. This is a dangerous recipe for breaking apart one of the few institutions left that unites people across tribal, ethnic and religious boundaries, and which is committed to women’s rights and the creation of a peaceful and prosperous Iraq. LabourStart are also running an online campaign to the Iraqi government at http://ow.ly/4RjEc
• The Hardest Hit: May 11th
  Tomorrow sees the Hardest Hit march and lobby of Parliament, campaigning against disability benefit cuts. If you can’t make it along to central London, there’s lots you can do to help online!

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Richard Exell

Ed Balls was very effective today, ridiculing George Osborne’s National Insurance “holiday.” This is one of the government’s new employment programmes, letting new businesses off paying National Insurance Contributions for the first 10 employees hired in their first year. Back in 2009, the Conservative Party claimed that it would create 60,000 jobs in two years, but by the time of last year’s Budget this had risen to 400,000 businesses (and presumably more jobs) benefiting. The government was so worried that this offer was going to be over-subscribed that they excluded businesses in London, East Anglia and the South East, and even so, budgeted to spend £50 million in 2010-11, rising to £370 million in 2012-13.

Well, how’s it going? As Mr Balls pointed out, figures the Treasury tried to slip out on the quiet showed that the actual figures so far are 3,000 businesses and an estimated 6,000 workers. Total cost so far?  £5 million.

Ahem …

We’ve argued for some time that the government has talked up the National Insurance holiday to a ludicrous extent. It isn’t actually harmful – some jobs will be created, but it doesn’t come anywhere near matching the scale of the problem. And it certainly doesn’t compensate for the vandalism of closing down the Future Jobs Fund. Of course, it’s possible that this is just a slow start, eventually it’ll be a great success and I’ll have egg on my face.

But somehow I don’t think so.

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Nicola Smith

Today’s Telegraph led with the claim that ‘workers are 40% better off in public sector’. The claim that public sector wages are ‘out of control’ is based on this research from Policy Exchange. But in February the IFS concluded (in research which Policy Exchange have referenced, and therefore presumably read) that the gap was 6%, that there were still methodological reasons which limited the validity of this estimate (such as the impossibility of controlling for gender discrimination in the private sector and the difficulty of taking into account actual ability rather than proxy measures for productivity) and that:

Before the financial crisis, public sector employees were, on average, paid at levels roughly in line with their private sector counterparts once observed differences in skill composition were taken into account.

So, have Policy Exchange managed to improve on the IFS’s methodology?

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Owen Tudor

The French bank Crédit Coopératif has broken ranks and agreed to pay a levy on its currency transactions even before the tax is introduced in France. In a boost to the campaign to get countries to sign up to financial transaction taxes through the Eurozone or the G20, the bank will pay 0.01% on currency transactions after 1 March 2011 – the details are set out in English here.

Crédit Coopératif has pledged not to pass the cost on to consumers, even though it is at twice the 0.005% rate that the TUC has called for on currency transactions (margins on such transactions are lower than for shares and other financial transactions). The bank is, as its name suggests, owned by its members, and has a history of support for progressive causes. It has equity of €1.28 billion (which is, obviously, quite small, for a bank).

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• Economic costs of health inequalities in the European Union
  Abstract of research showing that the costs of health inequalities in Europe each year include more than 700,000 deaths and €980 billion (9.4% of national income).
• Sweatshops are still supplying high street brands
  Madeleine Bunting summarises the findings of an ITGLWF report on sweatshop conditions in the globile textile industry.

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Paul Swinney

Yesterday the independent think tank Centre for Cities launched a short report looking at five facts about universities and local economic development. It finds that by far the biggest impact that universities have on the local economy is through the students they attract and the people they employ.

The report shows that although universities do have some interaction with the local business base, these impacts are much smaller than the effect of employment by universities and the spending of their students on everything from housing to retail. For example, the two universities in Coventry account for over 10% of total jobs in the city. And undergraduate students spend £267 million per year in Stoke, £350 million in Plymouth and £410 million in Cambridge.

As the debate about university fees continues, this analysis poses questions about the impact that the new fee structure will have on city economies.

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