Tag Archives: resolution foundation

The graph which shows why the Lib Dem policy of raising the personal allowance is the wrong priority

Here’s a graph which should make Lib Dems who continue to advocate increasing the personal allowance as an effective way to help low- and middle-income earners sit up and pay attention.

It’s from the Resolution Foundation’s report, Missing the target: tax cuts and low to middle income Britain, published yesterday.

What it shows is which households gain from the party’s policy to increase the threshold at which income tax is payable to £12,500 over the course of the next parliament. As you can see, those households which benefit most are at the wealthier end of the spectrum; the poorest 20% benefit least.

res fdn tax cuts lib dem graph 1

Posted in Op-eds | Also tagged , , and | 46 Comments

The Independent View: Will 2015 be the turning point on wage growth?

image001Another Bank of England inflation report, another set of rosy forecasts for earnings next year. Just as 2014 was supposed to be the year of the pay rise, now it seems 2015 will be the year when things turn positive.

And, according to the Bank, wages won’t just creep into positive territory next year, they are going to take something of a jump upwards. In the last quarter of 2015 the Bank expects nominal wage growth of 3.25% at a time of inflation of 1.4% – so a gear shift from the current position of at best flat-lining real pay to healthy growth of roughly 1.8% in a year’s time.

How sceptical should we be?  The Bank’s Chief Economist has been admirably forthright in highlighting his organisation’s own habit of promising sunshine tomorrow, with spring always just around the corner but never coming to pass, as the chart below from his recent speech illustrates. At some point, though, things have to brighten. And every passing month in which unemployment continues its fall and GDP continue to rise makes a degree of optimism about the following year that bit more plausible.

Posted in The Independent View | Also tagged | 17 Comments

How should we share the gain and the pain in the next Parliament?

resolutionfoundationThat was the question the Resolution Foundation posed at a Lib Dem conference fringe meeting in Glasgow last week. Some of what follows was inspired by (ie, copied from) IFS Director Paul Johnson’s excellent LibDemVoice article, Balancing the books: some unpalatable choices, published last week. Some of it I’ve previously rehearsed in my ConservativeHome column, Make no mistake, these are deep and meaningful cuts – and there’s more to come. Anyway, here’s what I said…

“The gain and the pain.” I want to congratulate the Resolution Foundation on taking a glass half-full approach to the next five years. But I also want to challenge the premise of the question. Because – and I don’t want to be too depressing in what follows – I can see quite a lot of pain and I’m at a bit of a loss to see where the gain is likely to come from. Here’s why.

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Making work pay – how taxes should work better for the ‘squeezed middle’

The Resolution Foundation helped give birth to the phrase ‘squeezed middle’: that group of low-income individuals and families just above the threshold to qualify for most welfare help, but only just able to make ends meet, and always in danger of slipping back into poverty.

Today they’ve published a report written by Paul Johnson, Director of the Institute for Fiscal Studies, identifying key reforms that could allow the tax and welfare system to redistribute more efficiently. Here’s the summary-of-the-summary:

Simply making the current system more generous to those on low incomes will not be sustainable in the long run. Reforms to

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Nick Clegg returns to income tax

Later this morning, Nick Clegg will be giving a speech to the Resolution Foundation (word cloud here) in which, after recent talk about wealth taxes, he is returning to the topic of income tax cuts. More specifically, speeding up the progress towards a basic income tax allowance of £10,000 whilst keeping the 50p rate.

This is of course closely linked to wealth taxes as they are a way to raise the funds to pay for the income tax cuts.

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The low earner Liberal Democrats

Yesterday The Voice ran an op-ed from the Resolution Foundation’s Sophia Parker about the, “9.4 million working-age ‘low earners’ – those people living on an average household income of £15,800 while remaining broadly independent of state support.”

It’s a group of people that is not that often explicitly addressed in Liberal Democrat policy debates or campaigning and messaging discussions, expect in as much as they are part of the millions who would benefit from the party’s policy of raising the income tax threshold to £10,000.

Yet these low earner households have been the bedrock of many of the party’s biggest electoral …

Posted in Op-eds | Also tagged and | 28 Comments

The Independent View: five key priorities for the UK’s low earners

Today, the Resolution Foundation launches our open memo to the next government.  In it, we propose five key priorities which we believe will improve outcomes for the UK’s 9.4 million working-age ‘low earners’ – those people living on an average household income of £15,800 while remaining broadly independent of state support.

These are families who may not be the poorest in society, and they are not in crisis. Nevertheless their economic independence is fragile and they are living at the very edge of their means. 56 per cent have experienced a drop in income since the start of the recession – and …

Posted in Op-eds and The Independent View | Also tagged | 11 Comments
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