Positive thinking

Kate Pickett, University of York and Richard Wilkinson, University of York   To end austerity and make the economy work better for the whole country requires transforming the tax system. It is time for the UK to have a grown-up, national conversation about tax, to gain support for a radical tax regime that will allow it to end austerity, adequately fund public services and reduce inequality. And we need tax records to be publicly available. It’s time to end the British coyness about money. We have written extensively, in our books The Spirit Level and The Inner Level , about the damage caused by income inequality to population health and social cohesion, and the need to reduce inequality as part of a transition to a sustainable economy that maximises well-being rather than GDP. But the UK already has a policy framework and (theoretical) commitment to reducing income inequality, as this is in the United Nations Sustainable Development Goals. The UK signed up to those g...

Hulya Dagdeviren, University of Hertfordshire and Sheilla Luz, University of Hertfordshire   Debt is a growing problem for people on low incomes and it has been made worse by the austerity policies that followed the 2007-08 financial crisis. The UK’s poorest households have the highest debt-to-income ratio in comparison to other income groups. This often means they struggle to repay their debt because it is so high in relation to their earnings. Many are forced to cut back their spending on basic necessities just to keep up with repayments – or they may borrow more, increasing their debt burden further. Our calculations, based on the latest Office for National Statistics data , show that the financial liabilities of the UK’s poorest households (excluding mortgages and student loans) were more than two and a half times their monthly income after tax and other deductions. What is more remarkable is that a significant proportion of this is accounted for by unarranged de...

Sergei Bachlakov / Shutterstock.com Edward Yates, University of Sheffield   Conditions for young people in the UK are bleak. Young people are more likely to be unemployed than all-age workers, and are more likely to be in low-paid jobs when employed . National minimum wage laws allow lawful discrimination against young people as they mean a young worker can be paid less than those over the age of 24 for doing the same job. Young people have worse pension opportunities than previous generations and suffer from a housing market characterised by high rents and purchase costs. They are also paying record levels of tuition fees for university, as well as spending more on accessing training and skills in a system of provision that is increasingly driven by profit. Media portrayals of young people compound the problem and are rife with discriminatory language. Young people are labelled lazy, idle “ snowflakes ” and are blamed fo...

Andrew Smith, University of Bradford and Jo McBride, Durham University   The UK is experiencing record levels of employment , with over 32m people in work. But many workers and their families continue to struggle to survive financially – it’s estimated 5.5m workers are paid below the Real Living Wage , which is set at a level at which people can afford to “live”, based on the minimum income standard . But what’s missing from these statistics are those people who have to work in more than one low paid job to make ends meet. This is the focus of our research – which has never been conducted in the UK before. The Forgotten Workers We interviewed 50 low paid workers in multiple forms of employment in the regions of Yorkshire and North-East England. We expected to speak to workers with two or three jobs, but were surprised and alarmed to find a number with four, five, six and even seven different jobs. All of the workers we spoke to had multiple jobs as they were st...

Jonathan Seaton, Loughborough University The cost Prince Harry and Meghan Markle’s nuptials on May 19 2018 has been estimated at £32m by one wedding planning company. The cost to the public, however, will be far less than his brother William’s marriage to Catherine in 2011, largely because this brought with it a bank holiday . Still, £32m is a lot to spend on a party. It can be justified, however, if the benefits outweigh the costs. For this to happen with the latest royal wedding – or any mega event that’s being staged – the most important thing is that the money involved has a long-term positive impact. Then there’s the social dimension to any party. Building better relationships with your family, friends, colleagues or neighbours is an important part of any event. So this shouldn’t be discounted. One of the big arguments for events is “what goes around comes around”. This sums up what economists call the “multiplier effect”. Take a simple example. The same company...

   Christopher Boyce, University of Stirling After nine years of interest rates below 1%, it seems imminent that the Bank of England will announce a rise before long. As pay growth picks up and inflation hits its 2% target, a rate rise would – it is argued – ward off potential risks of inflation in the medium term. But another factor to bear in mind is that a rate rise could also have serious repercussions for people’s mental health. A large portion of the UK population have high, possibly unsustainable, levels of debt and a higher interest rate is likely to increase the burden of repaying some of that debt. It will therefore likely increase their levels of mental distress. In recent research that colleagues and I published in the Journal of Affective Disorders , we explored how Bank of England interest rate changes from 1995 to 2008 influenced people’s mental health. What we found is that for each 1% increase in interest rates, there was a 2.6% increas...

Nauro Campos, Brunel University London Brexit is like a box of chocolates: you never know what you’re gonna get. The latest surprise is that Downing Street has ruled out staying in the customs union , which allows uninhibited trade in goods within the EU. It follows the leak of the government’s pessimistic assessment of the economic impact of Brexit. The leaked document reinforces the academic consensus on the costs of Brexit and shows that staying in the customs union would be better for the UK economy. The full report is not yet available to the public. Instead, it was leaked in two instalments. The first shows that Brexit will be economically damaging in every scenario – including the scenario the government says it prefers, which seems to be somewhere between membership of the single market like Norway or a trade deal like Canada . The bottom line is that after Brexit, the UK will be inexorably poorer. The second instalment showed not only that migration has b...

Jonathan Perraton, University of Sheffield Britain has £490 billion less in its coffers than previously thought, according to revised estimates of Britain’s balance of payments from the UK’s official statistics body, the ONS. Whereas previous estimates indicated that in 2016 Britain’s assets overseas exceeded its liabilities to the tune of £469 billion, this has now been revised downwards to a net deficit of £22 billion. In the context of the potential disruption to trade and foreign investment from Brexit, this is a worrying development. It is important to note that this does not mean that the country has suddenly become nearly half a trillion pounds poorer. The ONS has now collected more detailed data on Britain’s financial transactions with the rest of the world to build up a more accurate picture of its net stock of external wealth. Nevertheless, the figures do indicate that the UK’s external wealth position is much weaker than previously thought. ...