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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

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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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

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

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 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

I spent a few days in South Thanet last week trying to find out whether Nigel Farage might after all lose his campaign to become MP for the Kent constituency. Polls have the United Kingdom Independence party leader in a three-way tie with his Labour and Conservative opponents, though bookmakers still have him as the favourite.

A common complaint among local opponents of Mr Farage is that he is rarely in the constituency. When he does appear, he is cocooned in celebrity: the Ukip leader is surrounded by members of the media and security guards. When I visited the local Ukip office in Ramsgate on Thursday afternoon, it was shut. Not famed for his reticence, Mr Farage’s low profile might strike many people as surprising. Read more

At the seven-way leaders debate last week, Nicola Sturgeon took full advantage of a simple fact: she knows much more about UK politics and policies than her opponents know about Scotland’s. A skilled and experienced politician, the Scottish National party leader took advantage of these information asymmetries. She made the most of her perceived underdog status; many commentators said that she “won”.

On Tuesday night, as the overdog rather than the underdog, and debating other Scottish party leaders in a mere four-way TV showdown, Ms Sturgeon was always going to be challenged more — on her government’s record and her policies for 2015. She was criticised for Scotland’s rising NHS waiting lists, its unequal access to higher education, her dubious pledge to increase spending while reducing public debts and for her government’s centralising reforms to policing and cuts to further education. And when she refused to rule out another independence referendum in the near future – a wholly sensible and legitimate choice – the audience had a wee heckle.  Read more

Some supporters of Scottish independence believe in the conspiracy theory that MI5 was working against a Yes vote. Others have so much optimism bias about the economics of independence that I worry there is dopamine* in their Irn-Bru.

And let’s not mention the secret oil fields.

In the aftermath of the referendum Scotland feels beset by an asymmetric tribalism. Crudely, No voters, almost by definition, do not want the general election to be about independence. Yes voters, almost by definition, believe it’s still the defining issue.

The coverage of the SNP’s high poll ratings and what the party might do if it held the balance of power in Westminster often gives the impression that a madness has taken over Scotland and kilted Jacobites are set to invade from north of the border.

But in a very important sense, Scottish voters are behaving entirely rationally.  Read more

Given the Scottish National Party’s imperious poll ratings it easy to conclude that, despite the Yes side’s defeat in last year’s referendum, independence is inevitable.

But the release on Wednesday of annual fiscal figures from the Scottish Government suggest that, at least when it comes to the economic case for independence, 2014 was an unusually good year for nationalists, one that may not repeat itself anytime soon.


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The idea that a staunchly left-wing Scotland is ideologically different – and diverging – from England is among the arguments used by advocates of independence.

One of the ways this is supposedly expressed is via Scots’ more liberal attitudes to immigration. During the referendum campaign, the leaders of the Yes side called for a more open policy than the current UK government’s. And for the most part, they expressed a nationalism based on citizenship rather than on ethnic or family ties. Alex Salmond, then leader of the Scottish National party, contrasted a Scotland that welcomed immigrants with an England increasingly uneasy with its border policies.

So what to make of a poll published on Tuesday by the BBC, suggesting that Scottish attitudes to immigration are in fact similar to those of people in the rest of Britain?


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The independence referendum is still being fought in Scotland, but this time the nationalists are winning. This is one implication from 16 constituency polls commissioned by Tory peer Lord Ashcroft and released on Wednesday.

They support what has been increasingly obvious ever since Scots voted No on September 18: there is a new landscape in Scottish politics. The Scottish Nationalist party is projected to replace Labour as the dominant force north of the border.

Here are the headline results of Lord Ashcroft’s polls (click to expand):

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This month, in a plebiscite on Catalan independence, four out of five voters opted to secede from Spain. The vote was symbolic: Madrid does not recognise Catalans’ sovereignty or their legal right to leave the Spanish state. Artur Mas, the Catalan president, is under criminal investigation for holding the poll. The Spanish government says his plan for independence in 2016 is “a road to nowhere”.

We do things differently in Britain. We have real referendums on independence, where even the defeated parties end up as winners. On September 18, 55 per cent of Scots voted against seceding from the UK in a referendum whose question, timing and franchise were shaped by the Scottish government. By then, dizzied by the yeasty nationalists, the leaders of the main UK parties had vowed that a No vote would still lead to devolution of “extensive new powers” to Edinburgh. This week, a cross-party group tasked with turning that vague promise into reality issued its recommendations. The conclusion of the commission led by Lord Smith of Kelvin means that Scotland should soon become one of the most powerful devolved nations in the world. Read more

Welfare, migration and Britain’s membership of the EU – three areas of policy that are unlikely to prompt cool thinking. Throw them together, as in the question of which benefits EU migrants should be entitled to, and you have a recipe for opacity.

On Tuesday, a European Court of Justice ruling cleared a few things up. It could – could – make for more comprehensible policy in an area that has been full of confusion, empty rhetoric, and public anger. It will also encourage the prime minister to think he can go further in restricting access to some benefits for some EU nationals, a move he is reportedly considering. This is not because the ruling changed EU law but because it clarified the law, implying that, broadly, the approach successive UK governments have taken is legal.

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Digital technology is changing the labour market, from the supermarket check-out to the trading floor. A lot has been written how automation will mean robots doing jobs otherwise done by humans, and how artificial intelligence means that professions are no longer immune from the change brought by machines. Many of these predictions cite research by Carl Frey and Michael Osborne of Oxford university suggesting that 47 per cent of jobs in the US are at “high risk” of replacement in the next 20 years.

In a report published on Monday, Frey and Osborne apply their model – discussed in more detail in this post – to London. The chart below summarises their results, depicting the distribution of jobs in the city that are at low, medium and high risk of replacement in the next 20 years. Thirty per cent of jobs are classed as “high risk” – many of them in sales jobs or in office and administrative support work.

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On Thursday, Scots will vote on whether Scotland should be an independent state. Such a referendum seemed unlikely 10 years ago. A Yes vote would have seemed even more surprising. This is an attempt to explain why the vote is happening – and why it is happening now – for interested and befuddled people from all over the world. In other words, it is a history of 1,000 years of Scottish nationalism. Read more

“It is not about nationalism, it is about socialism.” That is the argument for Scottish independence made not only by many Scots but also by some on the English left. In Scotland, the Jimmy Reid foundation, Common Weal, the Scottish Socialist party, the Scottish Greens and some of the SNP have called for “radical independence”. This idea has attracted left-wing supporters from south of the border: Billy Bragg, John Harris, George Monbiot, Tariq Ali and other writers often found in the Guardian. They hope that Scottish independence will serve as a catalyst for England’s left. A No vote, Monbiot argues, would be an act of “self-harm” and “system justification”.

Although the formal Yes campaign has not gone as far as some of the fringe groups, its underlying argument in the final months of the campaign has been that Scotland is politically and morally different from the rest of the UK – it is crying out to be a social democracy, while the Conservative-led government in London drifts to the right. Read more

“Scotland will vote to remain in the United Kingdom, and by a decisive enough margin to settle the matter for many years to come”, wrote Peter Kellner, the president of YouGov, at the beginning of July. But after reading the results of his new poll, released on Tuesday, the pollster is less confident. The pro-independence side in the Scottish referendum is “in touching distance of victory”, he writes in the Sun.

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Well, this is awkward for someone who has written a magazine article entitled the New Baby Boom. On Wednesday the Office for National Statistics published new data showing that the birth rate in England and Wales dropped from 2012 to 2013. I was more interested in the qualitative aspects of the boom – its diversity, how legal and scientific changes have allowed more people to become parents, and advances in knowledge about child development – than whether its size would be maintained. All of those trends look set to continue – the baby boom will still change Britain. I also used the latest data available, which showed that the increase in the number of births that began at the start of the 21st century was still apparent in 2012.

And yet, and yet, and yet ….

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