Connected Research

Union policy research in the 21st century

Posts Tagged ‘Economic forecasts

Budget 2010 – some reaction

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A series of articles giving a trade union reaction to yesterday’s Budget over at ToUChstone and some politics from Hopi Sen. Prospect members can also download a summary of the highlights here.

And some cider reaction over at Liberal Conspiracy – and a petition, too, of course. Not, methinks, a move guaranteed to win much support from the more hirsute members of the labour movement – but then, I can’t recall Alistair Darling ever had a time as a beard wearer within the Labour Party, as the reference in this story seems to prove…

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Written by Calvin

25/03/2010 at 5:25 pm

Budget Day 2010

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ToUChstone, the TUC’s policy blog, has linked up with Left Foot Forward, Labour List and Liberal Conspiracy in the Progressives Liveblog of this afternoon’s Budget speech.

Click on the link on the right and join ToUChstone for commentary and debate on the Budget from 12 noon today, for coverage of Prime Minister’s questions, and then straight through into the Budget.

Meanwhile, the TUC’s pre-Budget statement calls for:

a Budget for growth, jobs and a better balanced economy that moves away from sucking up to the finance sector and instead invests in productive industries and green jobs,

The statement also calls for honesty in the continuing debate about public services and for politicians to spell out what they mean rather than hiding behind smokescreens and euphemisms.

As far as pensions are concerned, a debate which focuses on the facts rather than the myths would also be helpful.

Written by Calvin

24/03/2010 at 10:15 am

Not just a picture from my hols…

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… but also a reference not only to this week’s welcome economic news but also to the TUC’s forthcoming Going Green at Work conference, taking place on 15 March and being chaired by Prospect’s own Paul Noon.

Written by Calvin

28/01/2010 at 8:39 pm

Post-‘Beyond Crisis’

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A warm welcome to the selection of videos and blog posts from yesterday’s TUC-organised ‘Beyond Crisis’ conference which have been posted up on ToUChstone, accessible via the link on the right of this page or else directly here.

Good to see the TUC take the initiative here in terms of the debate about what the UK economy should look like in the future – greener, more fair and more equal – if not to prevent crisis happening again, then at least to ensure that we have learned from the mistakes which have come together both to inspire this one and to see it have such deep effects on the economy.

Written by Calvin

17/11/2009 at 3:29 pm

The recession and middle Britain’s shrinking wages

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The TUC has published a ToUChstone pamphlet – the first in a new series – exploring the role of the declining share of wages in national wealth and the much less well-known role this has played in the recession (see TUC press release).

The author on behalf of ToUChstone – Stewart Lansley – also wrote the earlier work on middle income Britain (blogged here) which documented the rise of an onion-shaped distribution of wealth in the UK and the rising divide between an affluent 40% and the bottom 60%. In this new report, he focuses in more detail on why middle- and lower-income Britain has been left ‘in the slow-lane of rising prosperity’ (a theme also picked up in The Guardian‘s Comment is Free pages today, although seemingly rather obliviously to Lansley’s work).

In his blog post for ToUChstone introducing the pamphlet, Lansley highlights that wages held steady at around 60% of national output for much of the twenty five years after 1945, before rising to 65% in 1975. Now, however, they account for 53% – a fall mirrored elsewhere: more steeply in the US, more shallowly in continental Europe – as a result of the erosion of employment rights [here Lansley is kind to his hosts: trade union weakness in general terms is also a factor], as well as reduced demand for unskilled labour and the transfer of jobs triggered by globalisation. All of this has contributed to boosting the bargaining power of employers which has had the effect of wages falling behind productivity growth – the wage squeeze.

The effect is that families borrow more to maintain living standards – staggeringly, households borrowed an average of 45% of their income in 1980 but 157% in 2007.  Of course, individual choice is an aspect here, but the wage squeeze implies that, formerly, such a level of living standards were financeable from wages whereas this is currently not the case. At the same time, rising company profitability – the counterpart to wages falling behind productivity – flowed into justifying record dividend payments and an explosion in executive remuneration, while higher rates of return in financial engineering led to the replacement of funding for long-term success with money being moved around specifically to chase the quickest return. This, in turn, lays behind the other, more well-known, factors in the current crisis.

The policy conclusions are not only that cuts would end a recovery before it has properly begun – since wages fuel spending – but that, in the long-term, the share of wages in national output needs to rise again.

Clearly, this latter is much easier said than done. Essentially, we need to confront and overturn a thirty-year orthodoxy which, albeit incorrect, has led to a major weakening of, and support for, the institutions capable of delivering that level of confrontation. It means essentially that people need to adopt a much greater degree of solidarity with and for each other, and reducing the importance of self (and self-interest) in doing so. Twelve years of Labour government, despite some important initiatives and an awful lot of warm words, has done little to change the increasing individualisation which lays behind the policy initiatives of the previous twenty. Challenging that orthodoxy clearly needs to take its place in a proper consideration of economic alternatives and Lansley’s pamphlet certainly helps to inform the debate here. Nevertheless, we should recognise not only that this sets out a specific challenge for trade unions (and, indeed, their members) but also that the scale of that challenge is significant.

Written by Calvin

12/11/2009 at 7:16 pm

From greed to green

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Speaking at the ILO, TUC General Secretary Brendan Barber has warned (original press release here; full speech here) that the green shoots of economic revival, as welcome as they are, don’t make for a recovery and that an economy bumping along on the bottom without creating jobs hasn’t really recovered at all.

Several commentators, led last week by the respected National Institute for Economic and Social Research, have argued that the UK has started to emerge from recession, with economic growth in both April and May. National Statistics data published on the same date also suggested that industrial production was on the rise. Nevertheless, with unemployment set to continue to rise, any technical end to recession has still some way to go before its impact on ordinary people is over.

In warning of the dangers of jumping too quickly to conclusions that the recession is over, which perspective he interestingly shares today with the CBI, Barber is, however, more concerned that the re-thinking of the economic fundamentals, entailing a move to a greener economy, for which the TUC has called throughout, is being jeopardised. Barber is concerned most of all – and, here he would no doubt depart from the CBI – that too hasty a talk that the recession is over obviates the need for a re-examination of how we do business and the basis on which we organise our economic affairs.  In the process, we may lose the opportunity to green the UK economy should we believe that a quick return to economic growth means that the model was not, after all, broken.

Building a green economy from the rubble of the greed economy is not only a wonderfully neat slogan, it’s also something that we need to implement in practice if the lessons of the past are to be learned and the future to be preserved. Barber is right to be concerned if that opportunity passes us by before such alternatives have been properly debated and examined – another reason to regret the drawn-out exposés of the past few weeks and the time wasted by the political elites on them.

Written by Calvin

15/06/2009 at 2:25 pm

Posted in Economic trends

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Interest rates remain unchanged

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The Bank of England has today kept interest rates unchanged, at 0.5%. This is the third month in a row that rates have stood at this level following a succession of sharp falls over the autumn and winter which saw rates reduced six times from a high of 5% in October 2008.

At the same time, the Bank did not announce any new measures in its programme of quantitative easing, for which it has authority to spend up to £150bn, one-third of which should be used to purchase private sector assets. By the end of May, it had spent some just under £73bn of this money, and it intends to spend a total of $125bn by July. The Bank is to keep the scale of the programme under review.

Amidst evidence of some signs of economic recovery or, at least, some welcome degree of stabilisation (increasing signs of consumer optimism; a Halifax survey showing rising house prices), this is a key time for economic policy-makers since money and credit growth, which should have been the product of quantitative easing, is not yet apparent. This is likely to lead to interest rates remaining low, into 2010, according to some commentators.

At the same time, the lack of evidence of the programme easing credit availability and cost is worrying since it is these that will keep inflation in check.

Written by Calvin

04/06/2009 at 6:07 pm