Why are some employees paid a low wage? In the run up to the UK Budget on Wednesday, some commentators are arguing that the answer is, in effect, “because employers can get away with it”. Why not, then, the logic goes, simply raise the national minimum wage (£6.50 until October for over-21s; £6.70 thereafter) to the level of the so-called Living Wage (£7.85 outside of London; £9.15 in the capital)?

Why not, while we’re at it, cut tax credits, since they are “subsidies” to employers? After all, the argument continues, since employers can pay higher wages, tax credits allow them to pay lower wages than they otherwise would and to pocket the extra. Read more

EVEL is less a threat to the Union than a reflection of the threat it is under. Today’s proposals shows that the UK is moving, almost blindly, towards an ad hoc, muddled and unofficial federalism. This is why, despite its dryness, EVEL is incredibly important, and together with the forthcoming Scotland Bill, part of the most significant constitutional changes since devolution.  Read more

Poverty has many causes. The subject is studied by economists, sociologists, historians and epidemiologists, as well as increasingly, psychologists, cognitive scientists and even geneticists. And the idea that the government has to do more than redistribute income to improve children’s “life chances” has been apparent for a long time, too. Under Tony Blair, the UK set up task forces and policy units charged with addressing the “multidimensional” nature of poverty in 21st century Britain.

I think one reason why Iain Duncan Smith irks many policy wonks is that it can often seem that he believes he was the first politician to figure out that poverty is about more than money. That, and because having a deep belief in the rightness of one’s cause is not the same as being right about one’s policies. (A very lefty error, that.)  Read more

Iain Duncan Smith has said he wants employers to pay higher wages to employees who receive tax credits. Like other critics of the current system of topping up pay, the work and pensions secretary suggests that tax credits are “subsidies” for employers who would otherwise pay employees higher wages. At the Budget next week, George Osborne, chancellor, is widely expected to announce cuts to spending on tax credits.

In his analysis, Mr Duncan Smith implicitly makes a couple of assumptions. The first is that tax credits suppress wages. This might be the case when employers are so powerful that they can keep wages down. It might also be the case if tax credits were to lead companies to spend less on capital that could help increase productivity. These are not mad ideas; the story of the minimum wage in the UK suggests that simple economic models cannot fully explain the relationship between employers and employees. Fewer jobs were lost than many economists predicted at the time.  Read more

According to new demographic statistics released on Thursday, Britain is becoming more populous, diverse, urban — and older. More Britons are being born than dying off, more are living in cities (especially London), and net migration remains high. The UK population is 64.6m, up by about half a million over the past year.

These trends are well-established but it is fascinating to look at the data and speculate on how demographics influence public policy and politics.

Consider, for example, the UK’s “population pyramid” in 2014 versus 2004. It breaks down the British population by age. The bars refer to 2014 data and the black outline traces what those numbers would have been in 2004.

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One of the more eye-catching statistics I have come across in recent months is that the rate of “stop and search” in Scotland in 2013 was nine-times higher than that in New York City. The use of the police tactic has become increasingly controversial north of the border, in part due to the empirical research of Dr Kath Murray, a research fellow in the school of law at the University of Edinburgh. Her findings are important, not only because they should improve accountability in policing, but also because they reveal some of the broader flaws in Scottish public policy-making.

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During both the independence referendum and the general election, the state of the National Health Service in Scotland was a big issue north of the border. This was slightly odd: health is one of the many areas of public policy devolved to Edinburgh and therefore it should be a more a natural subject for debate during elections to the Scottish parliament. What is more, while politicians in the Scottish National party and opposition outfits were speculating about what could or would happen to the NHS under independence/staying in the UK/the Tories/a Labour-SNP coalition (remember that one?), few people stopped to look at what was actually happening.

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Earlier this month I wrote about how the Scottish National party’s policy on student financing has let down Scotland’s poorest students. In that post, which drew on the work of Lucy Hunter Blackburn, I tried to explain how the Scottish government has cut means-tested grants while raising the amount available to students in loans. In other words, the SNP’s totemic “no tuition fees” policy is in effect paid for by having students take on more debt to pay for living costs. Because poor students are the ones who receive grants, cuts to bursaries hurt them more than middle-class Scots.

Student financing in Scotland is an estoeric area of public policy. But I think it is important because only by looking at the details of the Scottish government’s policies can one start to have an informed view of the SNP’s record and, by extension, the political culture of Scotland. Remember that the SNP came to power in 2007 promising to wipe out Scottish students’ debt. Quite clearly, this has not happened.

And yet members of the Scottish Government too often say things that are not true. On May 13, the cabinet secretary for education, Angela Constance, was asked in parliament by Michael McMahon, a Labour MSP, about the points made in my post. Read more

In trying to explain the rise of the Scottish National party, one possible explanation is that it was a growing sense of Scottish national identity that led 45 per cent of Scottish voters to vote Yes in the independence referendum and more than half of them to opt for Nicola Sturgeon’s party in the general election earlier this month.

But in an excellent post at the London School of Economics policy blog, Jan Eichhorn, Chancellor’s Fellow (Social Policy) at the University of Edinburgh, argues that data from social attitudes surveys do not support this argument. He uses the chart below to suggest that Scots’ sense of personal identity has not shifted in a more Scottish direction since devolution — if anything, the opposite is true.

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In The Unfinished Revolution, his account of New Labour’s rise to power, Philip Gould wrote that the paradox of 20th century politics in Britain was “that the party of conservatism held power because of ceaseless modernisation” whereas “the party of radical change lost power because of its conservatism”. Far more so than the US Democrats or centre-left parties in north-western Europe, Labour has strong nostalgic tendencies, the pollster argued, stemming from its roots in Fabianism, religion, trade unions, and the cultural conservatism of the English working class.

Such attitudes were fostered by the break with Liberalism, which made more difficult the sort of left-wing coalitions found elsewhere in the rich world. In the century that gave rise to the mass franchise and the welfare state, the Conservative party was in government for two-thirds of the time; the Labour party was in government for less than a quarter of it (23 years). For Gould, this was due to Labour’s resistance to what he called “modernisation” and the embrace of ideological purity over pragmatism. Read more

On Saturday, Jim Murphy announced he will resign as leader of the Scottish Labour party, calling Len McCluskey, general secretary of Unite union, the “kiss of death”.

On Sunday, Mr McCluskey said his union would rethink its support (it helps fund the party and many of its members are Labour affiliates) for Labour if it doesn’t show it is the “voice of ordinary working people, that they are the voice of organised labour”. Read more

In the ongoing discussions about the extra powers to be devolved to Scotland there is a complex and technical issue that it is important to understand. It is the principle, or rather principles, of “no detriment”. And inevitably, they are all about money.

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Where now for this weary union? After the general election triumphs of the Scottish National party and the Conservatives, voices in both parties are calling for the UK government to find a new constitutional settlement. But what might this mean?

I think there are four possible – but not equally possible – options for what might happen in the short-term, roughly taken to mean the next year, before the 2016 elections to the Scottish parliament in Holyrood. They are not necessarily exclusive. Read more

Okay, the US vice-president hasn’t directly commented on the Scottish National party. But in any analysis of public policy it is important to keep his words in mind:

“Don’t tell me what you value, show me your budget, and I’ll tell you what you value.”

In a piece for FT Weekend, I try to kick the tires (as Joe might put) of the Scottish government. So naturally, I started by asking: how does it spend its money?  Read more

At the 2007 Holyrood elections, the Scottish National party campaigned to “dump the debt” accrued by students at Scottish universities. It promised to service the existing loan debt for Scottish graduates “by meeting their annual loan repayments, re-introduce grants instead of loans and scrap the graduate endowment fee”.

A look at its record shows that most of this didn’t happen. In England, the Liberal Democrats were punished for their broken pledges on tuition fees, but in Scotland, the SNP has been able to use its policies as “evidence” of its progressive credentials.

The reality is, however, very different.  Read more

Beyond the immediate political battles being fought by the Labour party against the Scottish National party, and the Conservatives against both of them, there is a more fundamental tension north of the border. It is between politics and economics.

The pro-independence SNP has the political momentum. Not only is it set to win the vast majority of Scottish Westminster seats, its rise has provoked the sort of reaction among senior Conservatives such as Sir John Major that serves its cause. The more the SNP playing a role in Westminster is seen as somehow illegitimate (a ridiculous notion), the more it fosters the belief that Scotland and England are drifting apart.  Read more

One of the smartest moves Alex Salmond ever made was to swiftly pass on the leadership of the Scottish National party to Nicola Sturgeon after the independence referendum. She personifies the generational shift in the party’s support base from an eclectic group of often conservative nationalists to Scots who would historically be expected to vote Labour. According to opinion polls, she has successfully overseen the transfer of Yes votes in the referendum to likely SNP votes on May 7. At the launch of the SNP manifesto on Monday, Ms Sturgeon’s speech was peppered with cheers from the party’s besotted activists. She appears alone on the manifesto cover.

Inside, the word “independence” appears only once. Instead, the manifesto is full of miscellaneous pledges to spend more money than Labour. If the SNP were to play a role in the next Westminster government, what its manifesto suggests is not that the party would mount a sudden push towards independence, or even “full financial responsibility”, but that it is geared for opportunism and grinding negotiations. This is because for the SNP, independence is a process, not an event. Read more

I highly recommend this post by Carl Gardner, a barrister and former government lawyer, about the legal basis for what happens when there is a hung parliament.

In it, Gardner makes a critical distinction:

“Under our Parliamentary system, the test for whether a Prime Minister can govern or not is whether he (or she) commands a majority in the House of Commons. Once it’s clear to the Prime Minister that he no longer does so, by convention he should resign.” Read more

I want to argue that when it comes to thinking about the SNP and the future of the union, we could all really do with calming down a little bit. It’s hard but here’s why.

It starts with all the talk about what is called “Full Fiscal Autonomy” or FFA. Read more

There is something quite bizarre about Conservative enthusiasm for the Right to Buy policy (to be clear: not the sell-off). Many of the people who may benefit from it aren’t the hard-working families of four of the Tory imagination. Many will be retired. Whisper it: some may be on benefits. Meanwhile, private renters are going to be miffed that they don’t get free money.

On top of this, there is the stance towards housing associations, which seem to me to be following a very Conservative approach to public policy. They are charities – and they are increasingly using the capital markets to provide their essential services.

And now this could be undermined by the new policy. I’m starting to think that (fellow) critics of Right to Buy II, while correct in their analysis have confused something. This is not a policy that represents Thatcherism redux. It’s in fact the opposite. What was once the emblematic Tory policy is now not very Tory at all.  Read more