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Nicola Smith

Nicola Smith

I’m Head of the Economic and Social Affairs Department at the TUC. I also represent the TUC on the Social Security Advisory Committee. My posts may therefore range from the environment to the welfare state via macro-economic policy but will inevitably provide more detail in some areas than others. In my previous roles I specialised in labour market policy and coordinated the work of the Commission on Vulnerable Employment (CoVE). Before joining the TUC I worked in research and policy roles for Barnardo’s, the Children and Young People’s Unit at the old DfES and the Centre for Economic and Social Inclusion.

  • Society & Welfare

    UK Statistics Authority upholds TUC’s complaint about DWP’s misuse of statistics

    9th May 2013 — Filed under: Society & Welfare

    Nicola Smith Nicola Smith

    In a formal response to a letter the TUC recently sent to the UK Statistics Authority, Andrew Dilnot CBE (the Authority’s Chair) today replied confirming that:

    We have concluded that the statement attributed to the Secretary of State for Work and Pensions that ‘Already we’ve seen 8,000 people who would have been affected by the cap move into jobs. This clearly demonstrates that the cap is having the desired impact’ is unsupported by the official statistics published by the Department on 15 April.

    The incident also prompted a response from the UK Statistics Authority directly to the Secretary of State for Work and Pensions, in which Andrew Dilnot remarks that:

    In the manner and form published, the statistics do not comply fully with the principles of the Code of Practice, particularly in respect of accessibility to the sources of the data, information about the methodology and quality of the statistics, and the suggestion that the statistics were shared with the media in advance of their publication.

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  • Society & Welfare

    Is the benefit cap encouraging people into work?

    12th April 2013 — Filed under: Society & Welfare

    Nicola Smith Nicola Smith

    Is the benefit cap encouraging people into work? ‘Officials’ at the DWP think so, having told the Press Association on Friday afternoon that as a result of the impending cap 8,000 people have found jobs while others have moved to cheaper properties. The Secretary of State agrees and is glad that ‘…even before the cap comes in we are seeing thousands of people seeking help and moving off benefits’.

    These latest claims appear to derive from this ad hoc analysis (identified by Declan Gaffney) which sets out why official estimates of the number of households who will be affected by the cap have been revised down. Its findings directly contradict the assertions the Department has made to PA. It turns out that changes in eligibility for the cap, normal claimant flows and reductions in the generosity of benefits as a result of uprating are responsible for the lower numbers, and that ‘behavioural change’ is definitely not driving the trend. While it might be politically convenient to claim that the benefit cap is incentivising work, the facts don’t back this up.

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  • Economics

    A budget that takes the country further in the wrong direction

    22nd March 2013 — Filed under: Economics

    Nicola Smith Nicola Smith

    The TUC’s Budget reactions are covered extensively across the press and our General Secretary Frances O’Grady gives her verdict on the Chancellor’s proposals as part of the Guardian growth panel here. I have posts at Progress Online and Left Foot Forward with further details on our assessment and there is analysis from TUC specialists across Touchstone.

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  • Economics

    What does the Budget tell us about the Chancellor’s economic approach?

    21st March 2013 — Filed under: Economics

    Nicola Smith Nicola Smith

    Yesterday’s Budget made clear that the Chancellor will not be changing course. Growth continues to disappoint, borrowing goes up, real wages fall and the Government continues to propose more of the same – apparently of the view that it has no scope at all to prevent ongoing economic stagnation.

    So, what else have we learnt?

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  • Labour market

    Shares for employment rights: what employers think about it (answer: not a lot)

    25th January 2013 — Filed under: Labour market

    Nicola Smith Nicola Smith

    Today, to little fanfare, BIS has published in full all responses to their recent consultation on shares for employment rights. A very brief read through the results reveals very little business support for the plans. A few choice excerpts below:

    From the British Chambers of Commerce

    We do not expect take-up of the new status to be high and we believe it will only be attractive to a small minority of workers….there are significant disadvantages which put most off using it

    Employers have regularly expressed their concern that employees may decide not to apply for a role if forced to accept EO status…employers were universally concerned that only offering EO status would mean limiting the pool of talent from which they were recruiting.

    Most small businesses believed that the bureaucracy and cost of offering shares to employees would put them off using the EO status. There was also concern that it might make it more difficult to attract future investment or to sell the business, and that existing shareholders might object.

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  • Economics

    Why progressives need to defend tax credits, as well as calling for stronger wage growth

    25th January 2013 — Filed under: Economics

    Nicola Smith Nicola Smith

    The Living Wage is rapidly gaining support, among commentators if not employers. But, on left and right, this new recognition of the need to boost Britain’s shrinking wage share has been accompanied by a growing sense that if more businesses were to pay more, the tax credit bill could be substantially cut.

    For example, in Monday’s Guardian John Harris wrote that:

    …The cost of tax credits, which includes a vast de facto subsidy to poverty pay, runs to just under £30bn. These things denote the deep, structural issues that need to be addressed before any debate about universalism starts.

    While in the Telegraph Jeremy Warner, perhaps a surprising advocate of the Living Wage, recently concluded that:

    A living wage would obviate the need for in-work benefits – one of the biggest growth areas in welfare spending.

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  • Economics

    OBR suggest HMRC cuts will lead to less tax revenue being collected

    5th December 2012 — Filed under: Economics

    Nicola Smith Nicola Smith

    Very interesting that the OBR have chosen to note that (highlighting my own):

    There have been, and will continue to be, wider operational changes within HMRC and across Government that are likely to affect the public finances. For example, reductions in administrative spending in other areas of HMRC could lead to less tax revenue being collected. We have not been presented with costings for such changes. Therefore, taken in isolation the costings for the specific operational changes in the Treasury’s policy decision table are potentially unrepresentative of the impact on wider operational changes across Government.

    What does this mean? My reading: that the Government are keen to claim they are investing more resources in HMRC, but have declined to give the OBR numbers as to significant operational cuts which HMRC is currently experiencing, which the OBR reckon will reduce the amount of tax collected.

     

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  • Economics

    OBR demonstrate huge new tax avoidance loophole opened up by employment rights for shares scheme

    5th December 2012 — Filed under: Economics

    Nicola Smith Nicola Smith

    Today’s budget provides costings for the new employment rights for shares scheme – the costs of which are estimated by the Exchequer to be £80 million by 2017-18. But the OBR also note that:

    There are a number of uncertainties about the costing….the cost is expected to rise towards £1 billion beyond the end of the forecast period….it is hard to predict how quickly the scope for tax planning will be exploited; again this could be quantitatively significant as a quarter of the cost already arises from tax planning.

    If a quarter of the budgeted costs arise from tax planning that means this new measure has already introduced a loophole that will cost the Exchequer £20 million a year by 2017/18. But given the OBR suggest that the costs of the policy will rise to £1 billion shortly after this period (presumably in 2018/19) their analysis suggests that by this point avoidance will be costing the taxpayer £250 million a year – a quarter of a billion. This puts the £10 million that Starbucks have apparently today agreed to pay into sharp relief.

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  • Society & Welfare

    Benefits uprating bill: the breaking of the inflation link could be the biggest announcement for living standards

    5th December 2012 — Filed under: Society & Welfare

    Nicola Smith Nicola Smith

    Following the announcement of his decision to reduce tax credit and benefit uprating in years ahead the Chancellor announced today that the Government will be introducing a Welfare Uprating Bill, stating that

    To bring all these decisions for many benefits over many years together, we will introduce into Parliament primary legislation – the Welfare Uprating Bill.

    My understanding is that this is because current legislation requires benefits to be uprated in line with prices. When they broke the RPI link, the government was still able to use existing legislative means to change the inflation measure – CPI still fell within the terms of the existing law.

    But breaking the link with any inflation measure will require a new bill.

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  • Economics

    Changes in uprating bring huge costs for families – while business gets a tax cut

    5th December 2012 — Filed under: Economics

    Nicola Smith Nicola Smith

    The changes the Chancellor has announced in the basis for tax credit and benefit uprating will have significant implications for families – our analysis shows that the cumulative impacts of policies announced over the parliament will mean that some households are over £2,800 a year worse off as a result of tax credit changes alone.

    Interesting then to consider what’s happening to the main corporation tax rate – set to fall again in April 2014. By 2017/18 this measure is set to cost us just over £1 billion a year – 40% of the £2.5 billion generated by holding down support for working age households.

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