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Construction industry figures pick holes in the government's infrastructure plans: actual government capital investment will fall £14bn over the next 3 years, because of the much bigger cuts in the 2010 CSR.
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Cllr David Rogers, Chairman of the Local Government Association's Community Wellbeing Board, accused the Government of underfunding local authorities, leaving the social care system "not fit for purpose". The Labour Party claims there is a "postcode lottery" in the amount people pay for social care, with huge disparities across the country.
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Owen Tudor
European Union countries face a return to recession in 2012, but instead of pro-growth policies from Europe’s political leaders, the European Commission, the European Central Bank and the European Council (ie Europe’s governments) have been pressing on with their plans to lock austerity into the economy by enforcing rules on balanced budgets. As the ETUC’s call ahead of the December European Council, and its response to the outcome make clear, we need a new social compact between governments, employers and unions to combat unemployment and avoid the social unrest and poverty that is spreading through the EU’s ‘periphery’ and could become contagious.
The December statement by Euro area leaders was reported – at least in Britain – through the prism of Cameron’s unlilateral (as it turned out, although clearly he expected to have allies) attempt to veto the agreement over financial transaction taxes affecting the City of London. But it was actually fully in tune with the UK government’s ideological approach to government spending. And the Cameron government has been suspiciously quiet about the attempt by Europe’s leaders to centralise control over member states’ economic policies, suggesting he would be happy with the outcome, even though the process would mean giving up precisely the sovereignty he is pledged to strengthen.
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Owen Tudor
One of the few achievements of the G20 in 2011 was the creation of an employment task force to give some reality to the fine words about jobs being the top priority for world leaders in November’s Cannes Summit Statement. The creation of the task force, initially proposed by the 2nd G20 employment ministers’ meeting in Paris this Spring (the first was in New York in April 2010), was a key demand of the trade union movement. But even for us union types, getting a committee set up was not the ultimate goal: we want the 2012 Mexican G20 to agree and then implement a strategy addressing youth unemployment.
On 15 December, the first meeting of the task force took place in Mexico City, and whilst it’s good news that such urgency was displayed, there is still a long way to go before the G20 leaders’ summit in Los Cabos in June. Global unions have set out a range of demands for the 2012 Mexican G20, but youth unemployment will be the key test, and global unions issued a discussion paper ahead of the first task force meeting.
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Brian Basham – "as regulation in the UK and the US has loosened its restraints, the monsters have proliferated."
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Excellent article by Jayati Ghosh about how increased/maintained spending on quality public services financed by progressive taxation/development aid is needed to prevent yet another surge in global unemployment.
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Owen Tudor
Apologies for not having commented on this until now, but earlier this month, the OECD issued “Divided we stand”, a seminal report on growing inequality that put the final nail in the coffin of the theory propounded in the 1980s by Thatcher and Reagan that the wealthier the rich got, the more money would trickle down to the lower paid. What the report showed was that over the last four decades, the rich have grown staggeringly richer in countries like the UK and the US (and the super rich have got even richer than that), but the poor have, well, sort of stayed where they were (which in terms of keeping up with the Joneses means they got poorer). In the UK, the gap between the richest 10% and the poorest has widened since the 1980s from 8:1 to 12:1 – and what’s driven this change has predominantly been the super-remuneration of the top 1% who have increased their share of national wealth from 7.1% in 1970 to 14.3% in 2008. There’s a lot more detailed information like that in the report.
Does this rise in inequality matter? Yes, for three reasons, two of them economic and one of them moral (the co-existence of conspicuous consumption and lavish lifestyles with poverty and squalor is, I think most people would agree, obscene).
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Kevin Watkins, senior research fellow at the Brookings Institution, writes in Guardian Development about how we can pay for the Millennium Development Goal on children's education. "How about using proceeds from a global financial transaction tax to pay for an initiative that could bring hope to millions of the world's most disadvantaged children? Now that would be innovative financing."
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Paul Krugman has a note for British readers: "every time Cameron takes credit for low British rates, he’s hoping you don’t know that the same thing has been happening in every non-euro advanced country."
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Research by the Resoliution Foundation shows theTax Credit cuts will far outweigh the impact of the income tax cuts. On average, basic rate tax payers will be £41 a year better off but low-to-middle income families with children will be much worse off.
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Owen Tudor
In case you’re already feeling slightly dyspeptic after Christmas, here’s some news from the US that will leave a really sour taste in your mouth. Just before Christmas, the union- and Democrat-backed Americans for Financial Reform (AFFR) held a conference on unequal pay which focused on the extent to which top corporates are paid obscene amounts, and on the damage that has done to the US economy. Pay disparity has risen enormously in the US over the last thirty years (similar trends are developing in the UK too), and as well as depressing demand through lower wages for ordinary families and forcing them to take on debvts they cannot afford, the spiralling remuneration of the super-rich has led to them investing their surplus cash in ever riskier investments. Both trends stoked the sub-prime mortgage crisis that caused the Global Financial Crisis of 2008.
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Laura Rodrigues
Free school meals are a crucial form of financial support for many low income families with around a million children receiving them. They also promote healthy eating by providing a nutritious lunch for children from disadvantaged backgrounds. The benefits of having had a healthy, hot meal at lunchtime on children’s behaviour and educational attainment cannot be denied. For some children this is the only good meal they will have in the day.
However, there are several issues with both the current eligibility criteria and delivery of Free School Meals. There has long been a stigma attached to Free School Meals with some children being singled out and bullied for receiving them. Moreover, current eligibility criteria means that parents who work more than 16 hours per week lose eligibility for Free School Meals for their children.
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Nicola Smith
Recent economic debate in the UK can sometimes seem to be dominated by deficit reduction. But while there is plenty of polling showing that the public recognise that the public finances need to be put into better shape, there has been little recent coverage of wider public concerns about the direction of travel our economy is taking. Although falling living standards and rising unemployment dominate the domestic news agenda the political debate on still centres on the public finances rather than, whatever the fiscal constraints, how to secure the best outcomes for UK households.
So recently published You Gov polling (commissioned by the Fabian Society and the TUC, and covered in today’s Independent) has sought to look in some more detail at public views on the direction that recent economic policy approaches are taking us in.
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Clemens Noelke reviews research on youth unemployment and employment protection legislation and carries out regression and difference-in-difference analyses for 15 Western European countries and the U.S.. "Neither …yield any robust evidence whatsoever linking either dimension of EPL to inferior youth labour market performance, for any of the education groups or institutional conditions tested."
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