13.12.21
Devolution

New economic policy in Scotland and Wales

Scottish budget. The Scottish government published its 2022-23 budget last week: the first SNP-Green budget since the coalition was formed in August. Deputy First Minister John Swinney MSP called the budget a ‘bold package to tackle child poverty, address climate change and support economic recovery’. However, despite having the biggest pot of money available for a Scottish budget in 20 years, Nicola Sturgeon admitted that some announcements were ‘tough choices’, given the likely pressures on Scottish finances over the next few years.


Community wealth building. Scotland is the first national government to adopt an explicit community wealth building approach in the UK. Its states this  central to its plans for a ‘wellbeing economy’. CLES has more detail here. The ‘Higgins report’, which analysed Scotland’s economic prospects in the context of the Covid-19 pandemic, also highlighted the need for community wealth building. 

Just transition. The Scottish budget mentioned a ‘just transition’ 20 times, including a reminder of Scotland’s £500 million Just Transition Fund primarily aimed at supporting oil and gas workers in the north east and Moray region. In 2018, the Scottish Government set up a Just Transition Commission. However, environmentalists and trade unionists have said that the commission’s recommendations are too often ignored. 


Universal Basic Income. A proposed trial for Universal Basic Income (UBI) in Wales has been described as ‘one of the most eye-catching Welsh government proposals of recent times’.  Welsh Future Generations Commissioner, Sophie Howe, said that UBI would cut poverty in half. Autonomy finds that UBI could cut child poverty by 64% and pensioner poverty by 61%.

Weekly Updates

Inequalities and migration

Levelling down? A new report from NEF has found that inequality in the UK has increased since the start of the pandemic. It finds that the poorest half of households are on average £110 worse off per year, while the top 5% have gained £3,300 on average.

  • Causes.  While this is partly due to the macro impact of Covid, active policy errors such as failure to lock down fast enough and early withdrawal of support have also contributed, argues NEF’s Alfie Stirling.
  • Levelling up mission? Meanwhile, Michael Gove’s rumoured approach to levelling up may borrow from the ‘mission-oriented’ approach developed by Mariana Mazzucato, argues IPPR’s George Dibb.

Global inequality. The bottom 50% of people globally have captured just 2% of the gains from global economic growth since 1995, while the richest 1% have captured 38%, according to the new Global Inequality Report.

  • Growth and inequality. This busts the myth that growth of itself helps tackle inequality, argues economic historian Matthias Schmelzer.

Nationality and Borders Bill. The government’s Nationality and Borders Bill passed through the Commons last week and will now move on to be debated in the House of Lords. The Runnymede Trust set out what the Bill could mean for ethnic minority Britons while the Huffington Post has a good overview of the Bill.

Work and welfare

New furlough. As the government issues new guidance to work from home, the TUC renews its call for a successor to the furlough scheme. Without action, jobs will be at risk warns TUC General Secretary Frances Grady in the i.

Sick pay. Another potential hole in the safety net as new restrictions are imposed is the failure to fix the sick pay system, argues Sarah Jane Clarke from the Nuffield Trust.

Homeworking report. A new report from Demos on the impact of homeworking on low paid workers finds that low paid workers are just as likely as others to want to continue working from home in the future, and argues that this option must be open to them.


Impact of the minimum wage. A new report from the IFS finds that raising the National Living Wage has had significant spillover impacts on workers earning above the minimum, raising their wages without. significant reductions in employment.

  • Named and shamed. Over 200 firms guilty of paying some workers below the minimum wage have been named and shamed, with the list including House of Fraser and Waterstones.


Flexible working. New polling from the TUC has found that 7 in 10 Human Resources managers support expanding flexible working.


Gig economy. The European Commission has published new proposals on improving conditions for platform workers. Oxford labour lawyer Jeremias Adams-Prassl unpacks what it means.


4 day week. The Congressional Progressive Caucus in the US (the leftish wing of the Democrats) has endorsed a Bill that would introduce a 32 hour work week.

Housing and taxation

House price rises. A housing boom during an economic crisis is a sign that something needs to change in our housing market, argues Ross Clark in the Spectator.

Rented housing conditions. A large proportion of people living in the private rented sector experience substandard or unsafe conditions, according to a new report from the National Audit Office. The report has been analysed by the Resolution Foundation.


Council tax reform. A new report from IPPR argues that the proposal for a proportional property tax to replace council tax made by the Fairer Share campaign could help ease London’s housing crisis and benefit the rest of the country.

  • Capital gains on housing. A new report from the Resolution Foundation argues that unearned and untaxed capital gains on main residences creates negative economic side effects and explores options for taxing those gains.

Social housing at risk. A new report from NEF finds that social and affordable housing is at risk of being squeezed out of new developments by developers worried about profit margins.


Care home tax avoidance. The UK’s largest care home operator avoided millions of pounds in tax by shifting profits offshore, finds a new investigation from the Centre for International Corporate Tax Accountability and Research with BBC Panorama.

Climate change and environment

Cambo paused. The Cambo oilfield project off Shetland is set to be paused following Shell’s withdrawal from the project, report the BBC.


Driving less. Reducing the number of car journeys is essential to hitting climate targets, and would also contribute to wellbeing and save billions, argues a new report from Green Alliance.


Currency power. A new international monetary system is needed to ensure that currency imbalances do not continue to fuel resource extraction and climate change, argues Positive Money.


Forests still at risk, Despite commitments at COP26, there will be no end to deforestation without reductions in meat and dairy consumption, concludes a new report from Greenpeace.


Sewage inquiry. We need a fully independent inquiry into cleaning up our rivers and seas after recent revelations about sewage dumping, argue We Own It.

Macroeconomic policy

New GDP figures UK GDP growth was 0.1% in October 2021 and the overall level of output is still 0.5% below the pre-pandemic peak, according to new figures from the ONS. 

Business uncertainty. The UK economy is not out of the Covid woods yet and businesses are still facing significant uncertainty, warns a new economic forecast from the British Chambers of Commerce, downgrading growth expectations for 2021.