Thursday 30 November 2017

Report reveals lack of social mobility between Scottish boroughs

A study released by the UK Social Mobility Commission has revealed discrepancies between the services of local authorities. There is a gulf between what different councils are able to provide to tackle the attainment gap that impacts upon what sort of life young people could lead.

The level of literacy and numeracy differs by as much as a third between the wealthiest and most deprived countries. 

Using controversial new Scottish Government data, the SMC report ranks local authorities by the average gap in reading and writing attainment in P1, P7 and S3. At P1, the deprivation gap in the proportion of pupils reaching the expected level was almost 34% in Highland, the worst-performing area. At P7, Aberdeenshire came bottom of the table, with an attainment gap of over 40%. And Aberdeenshire saw the biggest difference between the best and worst-off pupils at S3, of 40%.

UK wide it was found that the worst performing areas for social mobility are no longer inner city areas, but remote rural and coastal areas, and former industrial areas, especially in the Midlands. Young people from disadvantaged backgrounds living in these areas face far higher barriers than young people growing up in cities and their surrounding areas - and in their working lives, face lower rates of pay; fewer top jobs; and travelling to work times of nearly four times more than that of urban residents.

The Rt Hon Alan Milburn, chair of the Social Mobility Commission, said:

'The country seems to be in the grip of a self-reinforcing spiral of ever-growing division. That takes a spatial form, not just a social one. There is a stark social mobility lottery in Britain today.

London and its hinterland are increasingly looking like a different country from the rest of Britain. It is moving ahead as are many of our country’s great cities. But too many rural and coastal areas and the towns of Britain’s old industrial heartlands are being left behind economically and hollowed out socially.

Tinkering around the edges will not do the trick. The analysis in this report substantiates the sense of political alienation and social resentment that so many parts of Britain feel. A new level of effort is needed to tackle the phenomenon of left behind Britain. Overcoming the divisions that exist in Britain requires far more ambition and far bigger scale. A less divided Britain will require a more redistributive approach to spreading education, employment and housing prospects across our country.'

Source: gov.uk

Tuesday 28 November 2017

OECD downgrades UK's Growth Forecast making it the weakest of the G7 countries

The Parisian based think thank the Organisation for Economic Co-operation and Development, today released it's predictions for the UK's growth. It forecast Britain's economic growth to drop from 1.5% in 2017 to 1.2% in 2018 and 1.1% in 2019.

The OECD’s forecast for 2018 and 2019 is well below the downgraded estimate issued by the Office for Budget Responsibility alongside chancellor Philip Hammond’s Budget last week, and highlights how the organisation believes Brexit will weigh heavily on Britain’s economic performance.

The OECD's report published in September put Britain at just 1% in 2019, the rise is attributed to the interim deal that is currently being negotiated. In today's report, Britain leaving the EU is described as a significant risk for economic prospects in Germany, Ireland, Latvia, the Netherlands, South Africa and Spain. 


Figures for the global growth in the OECD report are 3.6% this year and 3.7% in 2018, putting the UK well behind the global level led by China and India. 


José Angel Gurría, the OECD general secretary, said: “Growth has picked up momentum and the short-term outlook is positive, but there are still clear weaknesses and vulnerabilities.


“There is a need to focus structural and fiscal action on boosting long-term potential as monetary policy support is reduced. Countries should implement reform packages that catalyse the private sector to promote productivity, higher wages and more inclusive growth.”

Thursday 23 November 2017

Fraser of Allander Institute and Scottish Centre for Employment Report on Scottish Labour Market Trends

The Fraser of Allander Institute and Scottish Centre for Employment has released their report on Scottish labour market trends. 

The Fraser of Allander Institute is a leading economic research institute with over 40 years of experience researching, analysing and commentating on the Scottish economy. The FAI undertakes a unique blend of cutting-edge academic research alongside applied commissioned economic consultancy in partnership with business, local and national government and the third sector. 


The report shows that Scotland’s labour market remains strong, in absolute terms and relative to the rest of the U.K., with a slightly lower unemployment and a higher employment rate. Scotland continues to have the best employment rate outside of the East and South of England with a record high of 75.2% employment and unemployment remaining low at 4.0%.


Much of the increase in employment comes from self employment. The nature of this work is predominantly unknown, whether a move to increase work flexibility and potential earnings or a result of not being able to find employment and so becoming precariously self employed. The kind of work being undertaken will have an impact on the amount of tax revenue generated by this upturn in self employment. 


Self employment has risen particularly in women since 2008, perhaps indicating that child care is a motivation in the increase. In terms of age, the largest increase in employment since 2008 has been in the 65+ demographic, 25-34 and 35-49 are also back at pre-2008 levels of employment. 


Trends in youth labour market of 16-24 show employment at a record low, however this could in part be due to employment inactivity indicating an uptake in full time education between these years.Productivity remains sluggish, as a result of which real earnings once adjusted for inflation are also subdued. 


You can read the full report here as well as John Sutherland looking in more detail at firm’s workplace adjustment strategies during the Great Recession with insights from the Workplace Employment Relations. John is an Honorary Research Fellow at the Scottish Centre for Employment Research (SCER) in the Department of Human Resource Management at the University of Strathclyde.

Friday 17 November 2017

Health and Social care now the biggest employer in Scotland

A new Scottish Parliament Information Centre (SPICe) report shows that most people in Scotland are now employed by the NHS or local councils. Health and social care now accounts for 16% of jobs in Scotland, and is likely to continue to rise as the population ages. 

This marks a shift from traditional occupations. Ewan Gibbs, a historical political economy researcher at the University of the West of Scotland, said the 21st century workforce was largely unrecognisible compared with that of 50 or 60 years ago “There were over 250,000 Scots employed in coal mining, steelmaking, shipbuilding and related heavy engineering in 1958 and comparative figures now will be highly negligible,” he said. “Shipbuilding is largely a defence operation now. Steel is restricted to speciality and refinement with no basic production. Coal has essentially disappeared.” 

He continued: “A key point to make would be that process of erosion didn’t all happen in the 1980s. For instance, more coal jobs were actually lost in the 1960s – but at that point they were managed through industrial diversification policies that brought alternative forms of employment in assembly engineering activities.”

The changes in industry and agriculture are in line with other similar economies. The retail sector has also decreased, as more people shop online. 

Of those in employment, 4% were self employed, 32% part time employed and 64% in full time jobs. This shows a 1% increase in part time employment with 70,000 more people now working part time. 

Source: https://digitalpublications.parliament.scot/ResearchBriefings/Report/2017/10/13/Scotland-s-Employment-by-Industry-and-Geography#Full-time-and-part-time-trends

Wednesday 15 November 2017

UK Employment Figures Fall

Employment in the UK has fallen for the first time in two years. The number of unemployed people went up by 14,000 in the summer quarter according to the Office for National Statistics. The inactivity rate: measuring those who are not employed and are not seeking work, rose to an eight year high. The highest rates of inactivity were amongst 18-24 year olds suggesting that young people are leaving work for further education. 

There is speculation that the impact of Brexit is being felt, with figures being released yesterday that show the UK economy growing at half the rate of Germany's. 


Howard Archer, an economist with EY Item Club, a forecasting body said; “A fall in employment over the quarter suggests that persistent lacklustre economic growth and appreciable economic and Brexit uncertainties may be starting to rein in the labour market’s strength,”  

The ONS said the unemployment rate held at a four-decade low of 4.3 percent but that pay growth -- which would usually be expected to rise with so many people in work -- remained much slower than inflation.



Further evidence of a weaker labour market came from a fall in job vacancies, a 29,000 decline in the number of full-time jobs and an increase in the number of part-time workers saying that they would like to have full-time employment.

The report comes one week before Phillip Hammond set the budget for the UK. 

Tuesday 14 November 2017

Inequality is rising as report finds that richest 1% own half the world's wealth

A report published this morning by Credit Suisse has found that 1% of the world's population own 50.1% of the world's wealth. 

The report looks at where we are ten years on from the financial crisis, it shows that total global wealth is 27% higher today than it was in 2007 before the financial crisis. It also shows that the number of millionaires has increased by 8,740,000 since 2007 leading to one of the largestest outcomes of the financial crisis to be an increase in inequality. 

It says:

'The remaining negative heritage of the financial crisis is wealth inequality. It has been rising in all parts of the world since 2007. As calculated by the report authors, the top 1 percent of global wealth holders started the millennium with 45.5 percent of all household wealth, but their share has since increased to a level of 50.1 percent today.'

'The outlook for the millionaire segment is more optimistic than for the bottom of the wealth pyramid (less than 10,000 dollars per adult). The former is expected to rise by 22 percent, from 36 million people today to 44 million in 2022, while the group occupying the lowest tier of the pyramid is expected to shrink by only 4 percent.'

Oxfam said Credit Suisse’s research showed that politicians need to do more to tackle the “huge gulf between the haves and the have-nots”. 
“In the UK, the wealthiest 1% have seen their share increase to nearly a quarter of all the country’s wealth, while the poorest half have less than 5%,” Oxfam’s head of advocacy, Katy Chakrabortty, said. “This divide matters hugely at a time when millions of people across the UK face a daily struggle to make ends meet and the numbers living in poverty are the highest for almost 20 years. 
“The recent Paradise Papers revelations laid bare one of the main drivers of inequality – tax-dodging by rich individuals and multinationals. Governments should act to tackle extreme inequality that is undermining economies around the world, dividing societies and making it harder than ever for the poorest to improve their lives. 
“In the UK, the chancellor should use next week’s budget to prioritise tough action to tackle tax avoidance to help provide funds to fight poverty in both the UK and developing countries.”
Source: https://www.credit-suisse.com/corporate/en/articles/news-and-expertise/global-wealth-report-2017-201711.html?aa_cmp=socm_hrcb_glob_17.11.14_ca1613_pr005_ag01_bt01_cf35_eng_me00296

Monday 13 November 2017

The Pound Falls against Dollar and Euro over governmental instability.

The pound has fallen this morning as pressure mounts on prime minister Theresa May over Britain's exit from the EU. Talks from both Micheal Barnier and Brexitiers in the cabinet have lead to a shock for the British market. 
Sterling has lost almost a cent this morning, to below $1.31. This follows yesterday's report in the Sunday Times that 40 Conservative members of Parliament have agreed to sign a letter of no confidence in Theresa May.
Forty eight is the number needed to launch a leadership challenge, creating new worries in the City and beyond about the stability of the UK government.
In another significant move, foreign secretary Boris Johnson and environment secretary Michael Gove have written a letter to May complaining that “some parts of Government” aren’t doing enough to prepare for a hard Brexit.



This letter, which leaked over the weekend, appears to be an attempt to undermine chancellor Philip Hammond (as he puts the finishing touches to next week’s budget).
One minister has described the move as “Orwellian”, suggesting that the cabinet is badly split as MPs return to parliament to debate the Brexit bill.
Rajeev Syal and Jon Henley reported in the Guardian that :
'Another minister said' “I doubt they thought this would ever come out. It stinks to high heaven. May will have to dress them down or look weak.”
“I can’t believe this has come out. This is exactly the kind of arm-twisting by Brexiters one expects to go on behind the scenes, but the fact that it is in the public and is being inflicted upon the prime minister is remarkable.”
Kathleen Brooks of City index writes: 
'Firstly, today’s move tells us that the markets are on alert for political risks emanating out of the UK, and if there is a party coup to replace Theresa May then political turbulence is likely to weigh on the pound further.
Secondly, even though the pound has had a jolty start to the week, volatility and technical signals do not suggest to us that the pound is about to fall off a cliff just yet, we may need this story to develop further to get another big move lower in sterling. 
Thirdly, don’t get too complacent about the pound, the political and Brexit situations remain fluid and can throw up surprises. In future, when volatility is low in the pound investors should be on their guard that a pullback is likely. '

Source: Guardian/ City Index

Friday 10 November 2017

EU calls for Ireland to remain in Single Market and Customs Union to avoid hard border.

A working paper has been published by the EU requesting that the Island of Ireland remains within the single market and customs union.

The paper says that in order to avoid a hard border it is essential that there is no difference in rules for either side of the border. 

It also explicitly spells out the fact that to avoid a hard border will take more than technical arrangements as favoured by the British Government: NI must be within the single market. 

The question of protecting the Good Friday agreement is also addressed; Both the UK and the EU named this as a priority. 

The Irish Foreign Affairs Minister, Simon Coveney, said that talk of individual countries vetoing a move to the next stage of negotiations is "unhelpful" but progress still had to be made on the border issue.
"I think that there is a way to go between the two negotiating teams to be able to provide credible answers and sufficient progress in the context of the Irish border before we can move on to Phase Two," he told Irish state broadcaster, RTE. 
A spokesman for the UK's department for leaving the EU said that the government is committed to avoiding a hard border. 
"We recognise that the solutions to the unique circumstances in Northern Ireland must respect the integrity of the EU single market and customs union.
"But they must also respect the integrity of the United Kingdom."
"The government is determined to find specific solutions to Northern Ireland's unique circumstances, not least as the only part of the UK to share a land border with an EU member state."

The Commission document will place more pressure on the Conservative government given its reliance on the DUP for survival.

Northern Ireland remaining inside the customs union and single market, while the rest of the UK was outside, would impose an entirely new structure on the United Kingdom.

source: https://static.rasset.ie/documents/news/2017/11/eu-paper.pdf
BBC

Tuesday 7 November 2017

Paradise Papers

Leaked documents of 13.4m files from two offshore service providers and 19 tax havens' company registries know as the paradise papers have been released, revealing how much wealth is stored off shore to avoid tax. 

Amongst the offshore wealth is 10 Million pounds worth of investment made on behalf of the Queen by the Duchy of Lancaster. Some of this investment was in Bright House, a company that charges high rates of interest on household goods for those who cannot afford to buy them outright. Last week Bright House was ordered to pay back £14.8m to its customers last week after the Financial Conduct Authority said it had not acted as a “responsible leader”.

Apple was also found to have moved parts of it's operation to Jersey, to avoid tax on $252bn. This move was after Apple came under scrutiny for their previous Irish tax avoidance system.

Conservative donor Lord Ashcroft is also under investigation for using an offshore trust to shelter wealth. With 13.4 million files, many more tax avoidance schemes are sure to continue to come to light. 

After the revelations, the Labour leader, Jeremy Corbyn, appeared to suggest the Queen should apologise. “Anyone that is putting money into tax havens in order to avoid taxation in Britain, and obviously investigations have to take place, should do two things – not just apologise for it but also recognise what it does to our society,” said Corbyn.

Theresa May said that ‘HMRC is already able to see more information about the ownership of shell companies for example so they can ensure that people are paying their tax.’