The Family and Parenting Institute – a charity – today published a report which claims that families will be the hardest hit by the Coalitions tax and welfare reforms, based on analysis undertaken by the Institute for Fiscal Studies. According to its report, families will disproportionately “shoulder the burden of austerity” compared to those without …
Economics
Thoughts on the public sector strike
I’ll declare my interest up-front: a few weeks ago I became a civil servant and have already started contributing towards my public sector pension. However, I’m not a member of a union so can’t take part in the strikes today. The defined benefit pension available to me is a career average scheme (long gone are …
An alternative housing plan: stop caring so much about home-ownership
Like a boil that can’t be lanced, the housing market is once again the focus of political activity. Personally, I find the focus on housing as frustrating it is bizarre. The financial crisis began by encouraging a lot of people who couldn’t afford to buy housing assets to over-leverage themselves, by financial institutions who then …
Should technocrats run Italy and Greece?
The answer to any newspaper headline crafted as a question is invariably “no”, according to Andrew Marr. So it is with this post. Both Greece and Italy have, in recent days, appointed technocrats to run their countries. Apparently, received wisdom, in the midst of an economic crisis, is that economists are best placed to stave …
Politicians and sex
What can behavioural economics tell us about political sex scandals? More than you might think. I’m currently reading Dan Ariely’s excellent book Predictably Irrational: The Hidden Forces that Shape Our Decisions. In one chapter, Ariely describes a study he undertook in 2006 which tested whether periods of sexual arousal altered responses to some questions about sex. In …
Household debt and inflation
There’s a spat going on between Duncan Weldon and the Taxpayer’s Alliance over Osborne’s Budget last month and in particular, the causes of substantial forecast increases in household debt by the Office for Budget Responsibility. I think they’re both right and both wrong. Let me explain. I agree with the Taxpayer’s Alliance that Duncan is …
Out of credit
Are lending institutions solely responsible for individuals getting into debt they struggle to, or cannot, repay? I ask because the campaign to ‘End Legal Loan Sharking‘ – organised by Compass and supported in Parliament by, amongst others, Stella Creasy MP – seems to lay the blame primarily, if not wholly, at their door; borrowers themselves …
Fuel’s gold
Of all western nations, Britain has amongst the highest tax rate on petrol – around 4/5 of the price consumers face for a litre of petrol is tax. Fuel is probably one of the few products that households buy in regular quantities at regular intervals, so price fluctuations are likely to be immediately obvious on …
Osborne’s apparent lack of understanding of the National Accounts
Perversely, today’s surprise GDP figures have provided meat to all sides. Labour claims it was their action while in government that helped grow the economy 1.1% in the second quarter compared to the first. The Coalition claim the figures validate their approach of expedited deficit reduction, pointing to the fact that the majority of the …
The government is right to address the pensions issue
Firstly, let’s separate out two different issues relating to pensions – the pension entitlement (essentially a benefit), and public sector pensions (part of a contract between the government and its employees). The Coalition government has made proposals relating to both this week, which is likely to confuse the issue of how specific measures might decrease …