A version of this article was first published by the Financial Times.
The significance of choices made in the midst of a crisis often get overlooked. During the first lockdown the UK government scrambled to invent a generous system of wage insurance for employees and income-protection for the self-employed. It could have sent all households an emergency flat rate benefit payment or targeted those in most need. Instead, the bulk of the new support offered was linked to past earnings. During this century’s darkest hour Britain turned to Bismarck, not Beveridge, for inspiration.
This represents a major rupture with the UK’s post-war policy settlement. Protecting existing jobs and wages — and the economic continuity and social cohesion this secured — trumped all other considerations like cost and selectivity that, in less extreme circumstances, would have prevailed. …
As the new real Living Wage rates get announced — £9.50 in the UK and £10.85 in London — it is a good moment to reflect on the impact of the Living Wage campaign over recent years.
For all the publicity it attracts, what do we really know about how much difference it has made? Sure, we know that almost 7,000 employers have signed up — but how many workers has it helped lift up?
That’s a tricky question to answer. Before now there hasn’t been reliable independent data on this.
Thanks to a new analysis by Nye Cominetti at the Resolution Foundation (RF) we can shed some light. His work shows us that between 400k-500k get paid the Living Wage rates but he also reminds us that many of these people would have received that pay rate anyway, even if the Living Wage didn’t exist, so it would be silly to lay all this at the door of the Living Wage campaign. To try and gauge its additional impact the analysis compares how many people get paid at the Living Wage rates in a given year to the numbers getting paid that exact amount in the previous year (i.e. before it represented the Living Wage figure). The answer is almost 200k more workers were paid the Living Wage in 2019 compared to the number that we’d otherwise have expected. …
With little fanfare the UK is about to witness a mass experiment in the extension of access to capital. Other nations may have sovereign wealth funds, and some have experimented with universal basic incomes, but the UK is the first to create a citizen’s endowment for all young adults.
From 1st September, those turning eighteen will start gaining access to their Child Trust Funds with an estimated average worth of around £1200. From now until 2029 around 55,000 young people every month will gain access to their accounts: the 2020s will, among many other things, be the decade of the Child Trust Fund. …
As more workers are laid-off this autumn, the grim reality of meagre support will become clear
This article was first published by the Financial Times.
Resisting pressure to spend more on disadvantaged groups is seen as part of the job by battle-hardened officials in the UK Treasury. But stripping away benefit increases that have only just been introduced is rather different and doing so in the midst of an economic collapse would, to put it mildly, be something extraordinary.
Yet that is the course the government is currently on. At a time when many are talking about the need for a new social contract in the wake of the pandemic, the prosaic reality is that Whitehall’s focus is on whether to cut, or keep, this year’s benefits increase. It will be a telling choice. Either the safety net is going to be weakened just as millions are teetering on the edge, or the government will reverse the trend of a decade and make its benefit boost permanent. …
“France in 1789. Russia in 1917. The Europe of the 1930s. The pandemic of 2020. They are all junctures where the river of history changes direction.” Margaret MacMillan, celebrated historian of the 20th Century, doesn’t hold back with the totemic comparisons. The implication is that the pandemic represents not just a historical punctuation mark between the ‘pre’ and ‘post’ era, but a political turning point too. One in which established economic and social settlements get scrambled and remade, as societies try to make good the failings that have been exposed.
Others see big ideological shifts in the wake of the crisis. Francis Fukuyama believes the pandemic is likely to rekindle liberal democracy in some nations even while it nurtures the forces of nationalism in others. Meanwhile, popular left-wing historian Rutger Bregman says “it’s a wonderful time to be a social democrat”. …
Making sense of the debate on the pandemic and its long-term impact on politics and policy
“France in 1789. Russia in 1917. The Europe of the 1930s. The pandemic of 2020. They are all junctures where the river of history changes direction.” Margaret MacMillan, celebrated historian of the 20th Century, doesn’t hold back with the totemic comparisons. The implication is that the pandemic represents not just a historical punctuation mark between the ‘pre’ and ‘post’ era, but a political turning point too. …
If we are to have a Churchillian response to the crisis, let’s have the right one
A shorter version of this piece first appeared in the FT.
It was inevitable, perhaps, that the current crisis would result in daily nods to our foremost leader during a time of national crisis. Mr Johnson, a biographer of Churchill, was always going to succumb. And during the PM’s illness a range of lesser known politicians reached for Churchill as they strained to rise to the demands of the moment.
Some may mock but a better reaction would be to accept that if it is our national fate to turn to Churchill during wretched times we should, at least, seek to draw the right inspiration. He has, after all, more to offer us than blood, toil, tears and sweat. …
If we are to have a Churchillian response to the crisis, let’s have the right one
A shorter version of this piece first appeared in the FT.
It was inevitable, perhaps, that the current crisis would result in daily nods to our foremost leader during a time of national crisis. Mr Johnson, a biographer of Churchill, was always going to succumb. And during the PM’s illness a range of lesser known politicians reached for Churchill as they strained to rise to the demands of the moment.
Some may mock but a better reaction would be to accept that if it is our national fate to turn to Churchill during wretched times we should, at least, seek to draw the right inspiration. He has, after all, more to offer us than blood, toil, tears and sweat. …
The link between national prosperity and personal wellbeing is not straightforward
This piece was first published in the Financial Times.
Consider the good fortune of a country far richer than the UK. Its economy is more than £300bn bigger and its workers are almost a quarter more productive than Britain’s, enjoying wages that are typically £7,000 higher. Households are flush enough to spend thousands more on consumption, just as public services are far better resourced. This economy still faces deep challenges — including entrenched inequality, regional imbalances and climate change — but prosperity generally makes life just that bit easier.
If this imaginary nation sounds both foreign and familiar, well, it should. …
The new Living Wage rates for 2019–20 have been announced. The rates are overseen by the Living Wage Commission (which I Chair) and below is the foreword to a report on this year’s calculation. It is written by me in that capacity . The full report is available here: https://www.resolutionfoundation.org/app/uploads/2019/11/Living-wage-calculation.pdf
Each year the Living Wage Commission (LWC) is tasked with setting the new wage rates for the UK and London. In doing so it follows an established methodology to calculate the hourly wage rate required to enable households to reach a minimum acceptable living standard.
If the basic idea of earning enough to live on is a simple one, it’s fair to say the underlying calculation is a bit more complicated. Yet the fundamental premise of a real Living Wage — reflecting changes in the cost of living, and rooted in the public’s beliefs about the good and services that a household needs to get by — is both intuitive and powerful. …
About