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Is giving money to homeless people a better solution to the homeless epidemic?

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Is giving money to homeless people a better solution to the homeless epidemic?

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Homeless people to be given cash in first major UK trial to reduce poverty

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Led by King’s College London, study will recruit 360 people in England and Wales to explore benefits of scheme

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CMA decision in UK housebuilding sector 

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CMA decision in UK housebuilding sector 

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The firms expect to fully merge operations within 18 months, with efficiencies and cost savings due after three years.

These could net £90m a year, but with a one-off restructuring cost of about £73m.

Overlapping roles are expected to be cut, which could lead to the loss of about 10% of jobs across the combined business.

Barratt chief executive David Thomas, said: "With this combination, we have created an exceptional housebuilder in terms of quality, service and sustainability, able to accelerate the delivery of the homes this country needs.

"Our focus now is on integrating our businesses as efficiently and effectively as we can to deliver the expected benefits."

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Barratt and Redrow £2.5bn merger agreed as monopoly fear allayed

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The housebuilding giants' plan gets the go-ahead after a competition probe into two homes projects.

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If Labour fails to begin to sort out the housing crisis, it is unlikely to get the 10 years in office it needs to repair the Tories economic mess

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If Labour fails to begin to sort out the housing crisis, it is unlikely to get the 10 years in office it needs to repair the Tories economic mess

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Labour, beware: Britain’s housing crisis is driving voters towards populism | John Harris

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Whenever I talk to people who are bitterly disconnected from politics, they raise the lack of decent homes, says Guardian columnist John Harris

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Greece reahas been screwedby the EU. Now the Greeks are being screwed by their own government. This makes no economic sense to me.

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Greece reahas been screwedby the EU. Now the Greeks are being screwed by their own government. This makes no economic sense to me.

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Companies in countries worldwide may be toying with the idea of implementing shorter working weeks, but in Greece employees have been told that, henceforth, they can put in a sixth day of labour in an unorthodox step aimed at turbocharging productivity.

After outpacing other Europeans in terms of economic growth, the nation once at the heart of the continent's worst financial crisis has bucked the trend again, introducing a 48-hour working week. The measure, decried as "barbaric" by unions, takes effect from Monday.

"It makes no sense whatsoever," said Akis Sotiropoulos an executive committee member of the civil servants' union Adedy. "When almost every other civilised country is enacting a four-day week, Greece decides to go the other way."

The pro-business government of the prime minister, Kyriakos Mitsotakis, says the initiative was made necessary by the twin perils of a shrinking population and shortage of skilled workers. Prior to announcing the legislation - part of a broader set of labour laws passed last year - Mitsotakis described the projected demographic shift as a "ticking timebomb". In an unprecedented exodus, about 500,000 mostly young educated Greeks are estimated to have emigrated since the near decade-long debt crisis erupted in late 2009.

The six-day scheme, officials say, will only apply to private businesses providing round-the-clock services. Under the extended working week, staff in select industries and manufacturing facilities will have the option of working an additional two hours a day or an extra eight-hour shift, rewarded with a top-up fee of 40% added to the daily wage.

Either choice, the centre right government claims, will redress the issue of employees not being paid for overtime while also tackling the pervasive problem of undeclared work.

"The nucleus of this legislation is worker-friendly, it is deeply growth-oriented," Mitsotakis said before the Greek parliament endorsed the law. "And it brings Greece in line with the rest of Europe."

But the backlash has been fierce. In a country with almost no tradition of inspections in the workplace, critics contend the reform ultimately sounds the death knell of the five-day working week, not least because it enables employers to dictate whether a sixth day of labour is required.

For opponents, who have already taken to the streets in protest, the reform erodes legal protections and rolls back long-established workers' rights in the name of flexibility.

"In reality this has been passed by a government ideologically committed to generating ever bigger profits for capital," said Sotiropoulos. "Better productivity comes with better work conditions, a better quality of life [for employees] and that, we now know, is about less hours not more."

The measure, he said, had been made possible partly because trade unions had also seen their power wane as a result of debt-stricken Athens enacting austerity measures in return for rescue funds during the country's financial crisis. Unions have long argued that overtime enables employers to hold back on hiring more staff.

Trialled four-day week programmes have repeatedly shown increased levels of productivity with researchers attributing the outcome to improved levels of focus. Belgium in 2022 legislated to give employees the legal right to spread their working week over four days instead of five, and pilot schemes have been carried out in countries including the UK, Germany, Japan, South Africa and Canada.

Greeks already work the longest hours in Europe, putting in an average 41 hours a week according to the EU's statistics agency, Eurostat, although surveys have also proved they get paid much less. The left-wing opposition has frequently decried "Bulgarian salaries in a country of British prices", claiming the phenomenon has only exacerbated the brain drain.

People on pensions, who have also been encouraged to work under the legislation, have weighed into the debate.

"What the government is essentially saying is 'go and work longer, we'll turn a blind eye even if you're a pensioner,'" said Grigoris Kalomoiris who heads the union of retired teachers (Pesek).

"It knows that the majority of Greeks, on an average monthly salary of €900, can only survive until the 20th of the month. This latest barbaric measure is not going to solve the fundamental problem of labour shortages and a lot of us feel it is very unfair to unemployed young Greeks who may never have a job."

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Greece introduces 'growth-oriented' six-day working week

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Pro-business government says measure is needed due to shrinking population and shortage of skilled workers

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Genuinely shocked by these figures. The majority of younger people seem to be taking out morgages of 30 years or longer

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Genuinely shocked by these figures. The majority of younger people seem to be taking out morgages of 30 years or longer

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Are 25-year UK mortgages a thing of the past?

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Younger homebuyers are turning to ultra-long loans, prompting fears over the risk to their finances and the wider economy

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After 14 years of austerity it little wonder firmss are reluctant to invest. Keynes called it low animal spirits.

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After 14 years of austerity it little wonder firmss are reluctant to invest. Keynes called it low animal spirits.

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Governments also invest when they spend money on things such as new schools, the health service, and on new roads and railways.

However, the IPPR said that data from the Organisation for Economic Co-ordination and Development (OECD) shows that when measuring total investment - which covers both businesses and government - the UK has had the lowest level of investment in the G7 for 24 of the past 30 years.

It added that the UK currently was not just bottom of the G7 investment table with investment at 18.3% of national income, but "significantly" behind the next worst performer - the US at 21.2%.

"The UK's dire productivity performance since the great financial crisis of 2008 is, to a large extent, the single biggest driver of our dire living standards," the IPPR said.

"Without resources flowing into new investment, it's hard to see how UK economic performance can improve," Dr Dibb added.

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Low investment blocking UK growth, says think tank

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Both Conservative and Labour plan to reduce government investment over the next parliamentary term

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The ugly truth behind ChatGPT: AI is guzzling resources at planet-eating rates | Mariana Mazzucato

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Tech has massive externalities that are often overlooked.

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Tech has massive externalities that are often overlooked.

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When you picture the tech industry, you probably think of things that don't exist in physical space, such as the apps and internet browser on your phone. But the infrastructure required to store all this information - the physical datacentres housed in business parks and city outskirts - consume massive amounts of energy. Despite its name, the infrastructure used by the "cloud" accounts for more global greenhouse emissions than commercial flights. In 2018, for instance, the 5bn YouTube hits for the viral song Despacito used the same amount of energy it would take to heat 40,000 US homes annually.

This is a hugely environmentally destructive side to the tech industry. While it has played a big role in reaching net zero, giving us smart meters and efficient solar,it's critical that we turn the spotlight on its environmental footprint. Large language models such as ChatGPT are some of the most energy-guzzling technologies of all. Research suggests, for instance, that about 700,000 litres of water could have been used to cool the machines that trained ChatGPT-3 at Microsoft's data facilities. It is hardly news that the tech bubble's self-glorification has obscured the uglier sides of this industry, from its proclivity for tax avoidance to its invasion of privacy and exploitation of our attention span. The industry's environmental impact is a key issue, yet the companies that produce such models have stayed remarkably quiet about the amount of energy they consume - probably because they don't want to spark our concern.

Google's global datacentre and Meta's ambitious plans for a new AI Research SuperCluster (RSC) further underscore the industry's energy-intensive nature, raising concerns that these facilities could significantly increase energy consumption. Additionally, as these companies aim to reduce their reliance on fossil fuels, they may opt to base their datacentres inregions with cheaper electricity, such as the southern US, potentially exacerbating water consumption issues in drier parts of the world. Before making big announcements, tech companies should be transparent about the resource use required for their expansion plans.

Furthermore, while minerals such as lithium and cobalt are most commonly associated with batteries in the motor sector, they are also crucial for the batteries used in datacentres. The extraction process often involves significant water usage and can lead to pollution, undermining water security. The extraction of these minerals are also often linked to human rights violations and poor labour standards. Trying to achieve one climate goal of limiting our dependence on fossil fuelscan compromise another goal, of ensuring everyone has a safe and accessible water supply.

Moreover, when significant energy resources areallocated to tech-related endeavours, it can lead to energy shortages for essential needs such as residential power supply. Recent data from the UK shows that the country's outdated electricity network is holding back affordable housing projects. This will only get worse as households move away from using fossil fuels and rely more on electricity, putting even more pressure on the National Grid. In Bicester, for instance, plans to build 7,000 new homes were paused because the electricity network didn't have enough capacity.

In an era where we expect businesses to do more than just make profits for their shareholders, governments need to evaluate the organisations they fund and partner with, based on whether their actions will result in concrete successes for people and the planet. In other words, policy needs to be designed not to pick sectors or technologies as "winners", but to pick the willing by providing support that is conditional on companies moving in the right direction. Making disclosure of environmental practices and impacts a condition for government support could ensure greater transparency and accountability. Similar measures could promote corporate accountability in global mineral supply chains, enforcing greater human rights compliance.

In navigating the intersection of technological advancement and environmental sustainability, policymakers are facing the challenge of cultivating less extractive business models. This is not just about adopting a piecemeal approach; it's about taking a comprehensive systematic view, empowering governments to build the needed planning and implementation capacity. Such an approach should eschew outdated top-down methods in favour of flexible strategies that integrate knowledge at all levels, from local to global. Only by adopting a holistic perspective can we effectively mitigate the significant environmental impacts of the tech industry.

Ultimately, despite the unprecedented wave of innovation since the 1990s, we have consistently overlooked the repercussions of these advances on the climate crisis. As climate scientists anticipate that global heating will exceed the 1.5C target, it's time we approach today's grand challenges systemically, so that the solution to one problem does not exacerbate another.

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The ugly truth behind ChatGPT: AI is guzzling resources at planet-eating rates | Mariana Mazzucato

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Big tech is playing its part in reaching net zero targets, but its vast new datacentres are run at huge cost to the environment, says economics professor Mariana Mazzucato

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Claims that British unions harm economic growth have one tiny flaw. They're 100% wrong | Larry Elliott

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Profiteering is nothing new. Stanley Baldwin had a pithy description for the new intake of Conservative MPs at the 1918 general election, noting that they were "a lot of hard-faced men who look as if they had done very well out of the war". The future Tory prime minister was right. Many companies had found a war economy greatly to their liking, securing lucrative government contracts and making a mint in the process. Profiteering was rampant.

Sharon Graham, the general secretary of the Unite union, says something similar has been happening since the war on Covid began in 2020. A study of the reports and accounts of almost 17,000 firms - big and small - showed that pre-tax profit margins were, on average, 30% higher in 2022 than they were in the years immediately before the pandemic began.

The UK's inflation rate peaked at just over 11% in 2022 and, judging by the Unite research, many companies took the opportunity to increase their prices by more than was necessary to cover rising costs, on the basis that consumers wouldn't notice that they were being gouged.

Workers have fared less well. For the past few months, as the annual inflation rate has come down, real incomes have been going up because wages have been rising faster than prices. But this welcome improvement in living standards cannot make up for the deep real wage cuts earlier in the cost of living crisis and, in any event, is likely to be a brief interlude unless there are changes to the way the economy operates. As Graham notes, companies can get away with fattening their profit margins because they have the power to do so. "What's happened in the last three years is, underneath it all, a major redistribution of wealth away from workers' wages to corporate profits."

Unions think companies have too much power while they have too little, and that's one reason they took such a hard line this week with Keir Starmer over Labour's new deal for workers. The planned expansion of workers' rights promises to shift the balance of power between labour and capital modestly in favour of the former, but no more than that. After unions made clear this was a totemic issue for them, Starmer said Labour was sticking with the planned reforms.

There are three counter-arguments to the points made by Unite in its profiteering report, and by the unions more generally. The first is that different profit numbers can be arrived at using different methodology, so there is nothing really to see here. The second is that corporate profits are vital, because they are the source of investment that creates the jobs of the future. The third is that handing more power to unions threatens to wreck Britain's flexible labour market and will cost jobs.

The first argument would be more convincing if Unite's report was a one-off, but the same picture emerges from elsewhere in the world. In 2021, US profit margins for non-financial companies reached their highest level since the second world war. The European Central Bank's president, Christine Lagarde, said last year that companies in the eurozone were taking advantage of high inflation to plump up their profit margins. At the very least, there is a case for UK plc to answer.

Nor is there any real evidence of a link between profits and investment. Rather, as a paper by the left-of-centre thinktank Common Wealth points out, the bulk of the profits are finding their way to shareholders through dividends, rather than into new capital spending.

Back in the 1970s, when unions had considerably more power than they enjoy today, private non-financial corporations paid out 20p in dividend payments for every £1 of gross fixed-capital formation. In the second half of the 2010s, this figure was 95p. Payouts to shareholders rose two and a half times faster than total employee compensation between 1988 and 2019. Meanwhile, business investment over that period has been consistently lower than the average for leading industrial nations.

The original justification for putting restrictions on unions and boosting corporate power was that it would boost growth by stimulating entrepreneurship and create more, better-paid jobs.

In practice, a lack of union protection left workers wide open for exploitation. Companies were always able to find people to work for low wages, particularly once they found they could tap into global pools of migrant workers. Real wages - even after the recent small increase - have flatlined since the time of the global financial crisis in 2008.

So the idea that Britain's flexible labour market represents some sort of gold standard for international best practice is a nonsense. The fact that labour is so cheap discourages firms from investing in new kit and in developing the skills of their workers so that they are truly flexible rather than - as they all too often are - easily dispensable.

Graham's assessment is that life is sweet for those at the top but tough for workers, and it is hard to disagree with her. The UK has a poor record for investment, a poor record for productivity, a poor record for real wage growth and, since the pandemic, a poor record for employment. Britain's workforce is 900,000 smaller than it was before the pandemic, in part due to inactivity caused by long-term sickness and ill health.

The "flexibility" model is based on fear, insecurity and poverty pay, and it has failed. After 40 years, it is time to try something different.

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Claims that British unions harm economic growth have one tiny flaw. They're 100% wrong | Larry Elliott

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Restrictions on collective power led to decades of exploitation and stagnant pay for workers, says the Guardian economics editor, Larry Elliott

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The doomsters were wrong about the minimum wage. They're wrong about Labour's new deal for workers, too | Larry Elliott

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Unit 11 Labour Markets: "Flexibility isn't working" is the reason Larry Elliott thinks we need to boost the rights/power of UK workers. 

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Unit 11 Labour Markets: "Flexibility isn't working" is the reason Larry Elliott thinks we need to boost the rights/power of UK workers. 

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It will cost jobs. It will harm the UK's competitiveness. It will make the labour market less flexible. For those with long enough memories, the push back against Labour's plans for a new deal for workers has a familiar ring to it. The same arguments were wheeled out before the national minimum wage was introduced a quarter of a century ago. All proved groundless.

Confounding the doomsters and gloomsters of the late 1990s, the minimum wage has raised the pay of millions of Britain's lowest-paid workers by an average of £6,000 a year without lengthening dole queues. It has been described by one thinktank as the most successful economic policy in a generation.

Labour's plans would outlaw zero-hour contracts, and give workers certain rights - such as the right to statutory sick pay and protection from unfair dismissal - from day one of employment. It is comfortably the most radical policy the party has on offer.

Voters seem to like the idea of the changes. A poll conducted on behalf of the TUC last year found 67% of those surveyed - including 61% of Conservative voters at the 2019 general election - supported day-one protection from unfair dismissal. Similar majorities supported enhanced rights for gig economy workers, and bans on hire and rehire and zero-hour contracts. There was also strong support for union collective bargaining rights.

Predictably, businesses are less keen on the proposed reforms. The employers' lobby group the Confederation of British Industry (CBI) was one of the business groups that was wrong about the minimum wage in the 1990s, but that hasn't prevented its president, Rupert Soames, sounding off to the Financial Times about the need to avoid a "European model" of employment rights and resist excessive regulation that harmed productivity.

Given that it nearly went under as a result of a scandal involving sexual misconduct and bullying, a period of silence from the CBI on employment issues might be welcome. It does, though, have allies in the Labour party - most notably Lord Peter Mandelson - who are warning against rushing through changes.

So far, Labour has resisted the pressure to water down its plans, and it is right to do so. It should listen politely to what businesses have to say and then go ahead anyway. This is not about turning the clock back to the 1970s.

Rather, the rationale for change is simple. Giving more rights to workers and to unions would help redress the imbalance of power between employers and employees. Change would be good for workers but also good for the economy.

What's more, it is a politically risk-free option. As things stand, Labour is going to win the general election by a landslide anyway, but even if that were not the case, the new deal for workers would win more votes than it would lose. Paul Nowak, the general secretary of the TUC, says voters recognise that Labour will inherit an economic mess and that it will take time to turn round public services. "But a new deal for workers is something Labour could do on day one and which would generate a massive amount of public goodwill."

The TUC - and individual unions - have make it clear to Sir Keir Starmer, Rachel Reeves and Angela Rayner that they expect Labour to deliver on workers' rights. Watering down the green prosperity plan was tough to accept, but a U-turn on the new deal for workers would be of a different order of magnitude. For the unions, it is a red-line issue.

What should stiffen Labour's resolve is that the "flexible" labour market has failed even on its own terms. Since 2008 - the height of the global financial crisis - the number of people on zero-hours contracts has increased from about 0.5% of the workforce to more than 3%. Over that same period, productivity growth has averaged less than 0.5% a year, while wages adjusted for inflation are lower than they were in 2008. A truly flexible labour market would not have almost a million job vacancies, many of them in the sectors - such as hospitality and social care - where trade union membership is lowest and job protection scantiest.

At times, even the Conservatives have recognised that there is a problem. Theresa May talked of the need to deliver for those who were just about managing. Boris Johnson pledged to create a "high-wage, high-skill, high-productivity economy".

There is a long, long way to go before that happens. To be sure, unemployment is low but economic inactivity is at near-record levels. Hundreds of thousands of people left the workforce during the pandemic and have never returned. This is an economy marked by low wages, a disregard for skills and weak productivity. Workers are plentiful, cheap and easy to dispose of, so there is little incentive for firms to invest in training or in expensive new kit that would help make them more efficient. The UK is disfigured by epic levels of insecurity and in-work poverty.

Ultimately, the strongest case for Labour sticking to the new deal for workers is not that it would force employers to treat people more decently, although that would be the case. Nor is it that the unions would be livid if it fails to pass, although that too is true. No, the argument that Labour should make is that the status quo is not delivering, and so it is time to try something else. That might make the labour market less "flexible" but, to coin a phrase, flexibility isn't working.

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The doomsters were wrong about the minimum wage. They're wrong about Labour's new deal for workers, too | Larry Elliott

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This is a policy that could make a radical difference - as long as it's not watered down like the green prosperity plan, says the Guardian's economics editor Larry Elliott

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Where in Europe has the most wealth inequality?

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Experts suggest that tax systems and home ownership rates play a significant role in the disparities of wealth between the rich and poor. Euronews takes a look.

Wealth inequality is very much evident across the world, and Europe is no exception: the wealthiest 10% on the continent own a staggering 67% of the wealth, while the bottom half of adults possess only 1.2% of it.

The extent to which wealth is unevenly distributed varies considerably from country to country too, as shown by Credit Suisse and UBS's Global Wealth Report 2023.

Net worth or "wealth" is defined as the value of financial assets plus real assets (principally housing) that households own, minus their debts.

Its unequal distribution is measured by the Gini coefficient and the share of the top percentiles: the higher the Gini coefficient, the more wealth inequality there is, with 0 representing complete equality.

Among the 36 European countries studied, wealth inequality in 2022 ranged from 50.8 in Slovakia to 87.4 in Sweden.

Excluding Iceland, wealth inequality was fairly high across the Nordic countries. Finland, Denmark, Norway and Sweden all came in the top half of the table, with Sweden topping the list altogether.

Germany had the highest wealth inequality score (77.2) among the EU's 'big four' economic powers, followed by France (70.3), Spain (68.3) and Italy (67.8). The UK, a former EU member still considered one of the 'big four' within the continent of Europe, had a score of 70.2.

Belgium (59.6), Malta (60.9) and Slovenia (64.4) followed Slovakia in having the least wealth inequality.

Huge disparities among the richest

Across 21 European countries with available data, significant wealth disparities exist among the top percentiles, including the richest decile, top 5%, and top 1%.

Looking at the richest decile in 2022, Sweden had the highest wealth inequality, where the top 10% owned 74.4% of the wealth. Belgium had the lowest inequality value at 43.5%.

In fact, the richest decile owned over half of the wealth in every country except for Belgium.

Among the EU's 'big four', Germany had the highest wealth inequality, where the richest 10% owned 63% of the wealth, followed by France (54.9%), Spain (53.8%) and Italy (53.5%). The UK had a lower figure than all these four countries at 53.3%.

Excluding Germany, the richest decile in Europe's four economic powerhouses had comparatively lower inequality figures among the 21 countries.

Sweden soars, Belgium bucks the trend

The ranking remains largely unchanged when comparing the top 5% wealth share to the top 10%. Sweden maintained its top position, with the richest 5% owning 60.3% of the wealth, while Belgium had the lowest wealth inequality, with the top 5% holding 30.8% of the wealth.

Looking at the share of the top 1%, Turkey had the highest figure at 39.5%, followed by Czechia (37.8%), Sweden (35.8%) and Germany (30.%).

The share of the top 1% in Belgium was far lower than the average, with the richest top 1% owning only 13.5% of the wealth there. The next lowest figure was 19% in Portugal.

Why is Sweden at the top of wealth inequality?

It might be a surprise to see the Nordic countries in general scoring so highly for wealth inequality, especially as they seem to perform very well in other indices, such as welfare, disposable income and democratic values.

The tax system is the most significant reason why Sweden in particular goes against the grain here, according to Dr Lisa Pelling, the head of Stockholm-based think tank Arena Idé.

"We have during the past decades abolished a number of taxes on wealth," she told Euronews Business. "In Sweden, at the moment there is no wealth tax. There is also no tax on inheritance, gifts and property."

She said that successful international Swedish companies, which have benefitted from investments that have been made with taxpayers' money, are not paying back those funds.

"We also have very low taxes on companies. This means that there are a lot of possibilities for rich people to get even more rich," Pelling added.

Welfare system: People feel safe

Pelling underlined that Sweden is still one of the most equal countries in the world in other aspects, particularly when it comes to income.

"This is mainly due to the fact that we have a well-developed welfare system where people feel safe about the public healthcare system and people feel relatively comfortable with their pensions, with their insurance when it comes to sick leave and unemployment," she said. As such, people have fewer incentives to put money to one side for these things.

Compared to other Nordic countries with effective welfare systems, Pelling noted that the key difference lies in the tax system.

In Finland, schools are state-owned and operated, while in Sweden, a third of upper secondary school students attend private schools. These schools, largely for-profit, receive full state funding without restrictions on their profit margins, she said.

The same is true of the healthcare system. "Primary care is largely privatised, and it is very profitable. The privatised tax-funded welfare companies make their owners very wealthy," Pelling said.

Factors behind wealth inequality within Europe

Looking at Europe more broadly, one of the most important factors in wealth inequality is asset composition, according to Eszter Sándor and Dr Carlos Vacas‑Soriano, research managers at the European Foundation for the Improvement of Living and Working Conditions (Eurofound).

Homeownership rates between countries in particular are one of the main factors contributing to differences in wealth distribution.

"Countries with higher levels of home ownership tend to have lower levels of wealth inequality, while countries where access to other financial assets is more prevalent, tend to have higher wealth inequality," the researchers told Euronews Business.

Sándor and Vacas‑Soriano also said that voluntary pensions and life insurance play an important role in wealth inequalities.

"In Western European countries, people are more likely to be able to save for their retirement, both because they have higher income, and because they have better access to voluntary instruments for income after retirement than eastern and southern European citizens," they said.

Germany: Few homeowners, no wealth tax

Turning to the fact that Germany, a country with a strong economic track record, scored highly in wealth inequality, Sándor and Vacas‑Soriano highlighted that there is no wealth tax there.

"Germany has a high proportion of renters, but they have very low effort rates (housing expenses divided by income) compared with other Western European countries due to heavily regulated rental markets and a comparatively larger housing supply," they said.

In 2022, Germany had the lowest shares of homeownership, where only 46.5% of the population lived in a household owning their home, according to Eurostat. The EU average was 69.1%. This share was also lower than the EU average in Sweden (64.2%) and Turkey (57.5%)

Has wealth inequality improved anywhere?

Among the major European countries, namely the EU's 'big four' and the UK, wealth inequality, as reflected by the Gini coefficient, actually fell in Germany (-4.3) between 2000 and 2022.

However, it still had the highest score of wealth inequality out of the five of them in 2022.

The UK also saw a fall in inequality over the same period, although less significant (-0.4).

Italy meanwhile recorded the highest rise at 7.4 points, while it increased by 2.8 in Spain and 0.6 in France.

Between 2000 and 2022, France experienced the most notable improvement in the wealth share of the top 1% among these five countries, with a decrease of 4.3 points. Spain and the UK also saw decreases, with declines of 1.7 and 1.4 points respectively.

In Germany and Italy, the richest top 1% increased their wealth shares by around 1 point.

The figures suggest that there's not been any major improvement in the unequal distribution of wealth in Europe's major countries in the past two decades.

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Where in Europe has the most wealth inequality?

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Experts suggest that tax systems and home ownership rates play a significant role in the disparities of wealth between the rich and poor. Euronews takes a look.

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Poverty is deepening in modern Britain - but will economic growth be the solution?

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Worrying increases in poverty in UK. Is waiting for economic growth the solution, or ignoring the problem?

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Worrying increases in poverty in UK. Is waiting for economic growth the solution, or ignoring the problem?

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Modern Britain: the sixth-richest economy in the world, with 12 million people living in absolute poverty.

The latest official figures showing the biggest increase in poverty in 40 years have been described by charity leaders and politicians as both "shocking" and "horrifying" in their confirmation of the devastating impact of the cost of living crisis.

It is a snapshot that will trouble Rishi Sunak in an election year, as he attempts to paint Britain as a nation on the mend, having been through the worst of the inflation shock triggered by the Covid pandemic and Russia's war in Ukraine.

The consequences for UK households are clear. Absolute poverty, when households have less than 60% of the median income in 2010-11 after adjusting for inflation, grew for a second year in a row.

With an increase of 600,000 in the year to March 2023, the figures suggest a population larger than that of Sheffield have been pushed below the breadline of the government's preferred measure of poverty. Half are children, with the total in absolute poverty now 3.6 million - enough to fill almost 130,000 classrooms.

Given the sharpest increase in inflation for 40 years, significantly outpacing pay growth for the average worker, the Institute for Fiscal Studies thinktank suggests it is hardly a big surprise that this parliament is on course to be among the worst in modern history in terms of growth in living standards.

Government support worth more than £100bn over the past two years helped soften the blow, curbing the rise in poverty through £3,400 worth of help for the average household over that period. Ministers argue the measures prevented 1.3 million people from falling into poverty.

However, charities have repeatedly said the help has been insufficiently targeted at the poorest in society, who bore the brunt of the inflation shock because they spend disproportionately more of their incomes on energy, food and basic essentials, the prices of which have increased most.

Research from the New Economics Foundation shows the sharpest rise in poverty levels has come in the poorest areas of the country. Child poverty has risen six times faster in the most deprived areas compared with the richest, the thinktank found, while 19 out of the 20 local authorities with the highest increases in child poverty were in the north-west of England and Midlands.

Even before the cost of living crisis, poverty levels were already high after deep cuts to benefits in the Conservatives' post-2010 austerity drive. Studies have shown a clear link between Tory welfare changes and rising poverty, orchestrated in the name of cracking down on "shirkers" on the dole to encourage people to work. This is a position Sunak is hardly in a hurry to abandon.

Meanwhile, a decade of flatlining wage growth has left 1.6 million more people in relative poverty in a working household than in 2010, amid a worrying breakdown in the traditional routes out of destitution through employment.

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Labour described the figures as "horrifying", arguing that households were paying the price for the Tories crashing the economy. After Tony Blair promised in 1999 to eradicate child poverty within 20 years, it is clear that Labour - should it form the next government - will have a big job on its hands to make up for lost time.

However, critics say Keir Starmer lacks seriousness when it comes to tackling the problem, having insisted that his party would keep the Tories' controversial two-child benefits cap - a policy academics describe as "poverty producing".

Instead the leader of the opposition, and the prime minister, are focused on improving Britain's growth potential as the most powerful way to help struggling households get back on their feet. However, most forecasters think economic growth will remain tepid at best for some time to come, and expect it will take several years for living standards to return even to pre-pandemic levels.

For whoever wins the next election, tackling the alarming levels of poverty will be a serious challenge.

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Poverty is deepening in modern Britain - but will economic growth be the solution?

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Official figures will trouble Rishi Sunak during an election year as millions found to be struggling

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Longest sustained rise in people too sick to work since 1990s, says thinktank

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Some up to date labour market stats show big rises in economic activity amongst the very young and the very old 

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Some up to date labour market stats show big rises in economic activity amongst the very young and the very old 

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Britain is going through the longest sustained rise in the number of working-age adults who are too sick to work since the 1990s, according to a report warning that a benefits crackdown is unlikely to solve the country's jobless crisis.

The Resolution Foundation said economic inactivity due to long-term sickness - when people aged 16-64 are neither in work nor looking for a job because of a health condition - had increased in each year since July 2019, the longest sustained rise since 1994 to 1998.

The thinktank warned that a near-record 2.7 million working-age adults were too sick to work, with the biggest increase since the Covid pandemic concentrated among the UK's youngest and oldest workers.

Highlighting the legacy of the pandemic as the British economy struggles with chronic workforce shortages, it said the UK was the only G7 country with a lower rate of employment than before the health emergency.

However, the report showed the upward trend in long-term sickness had started before the pandemic struck in the summer of 2019, and had lasted for 54 months. The longest previous period was for 55 months, between 1994 and 1998.

It comes as Rishi Sunak comes under growing pressure from within Conservative ranks to " get a grip on worklessness " after a dramatic increase in economic inactivity over the past four years to more than 9 million people.

People with long-term sickness do not contribute to the official unemployment rate, which has fallen to 3.9% among those aged 16 years and over - equivalent to 1.4 million people - among the lowest levels since the mid-1970s.

However, economic inactivity has increased from 20.5% of all working-age adults to 21.8% - equivalent to 700,000 people - with little sign of slowing as the impact of the Covid pandemic on the jobs market recedes.

Labour and the Conservatives have promised a tough stance on benefit claimants. Earlier this month the shadow work and pensions secretary, Liz Kendall, said there would be " no option of a life on benefits " under a future Labour government as she outlined plans to support young people to find work or training.

The government announced a crackdown on welfare claimants who "refuse" to engage with their jobcentre at the autumn statement, while Mel Stride, the work and pensions secretary, was criticised this week for claiming that the UK's approach to mental health was in danger of having "gone too far".

However, the Resolution Foundation report said policymakers should be "wary about having an increasingly strict unemployment benefits system", since this was possibly acting to encourage more people to claim health-related benefits instead.

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Spending on disability benefits is expected to rise by £16.1bn over the next five years to £52.2bn by 2028-29, a rise of 45%, according to the Office for Budget Responsibility.

Louise Murphy, a senior economist at the Resolution Foundation, said the impact on young and old adults could have "serious effects both on individuals' living standards and career paths, as well as wider strains on the NHS and welfare spending if we fail to improve the nation's health and reduce economic inactivity".

"Britain's labour market is finally returning to normal, but the Covid-19 pandemic has left an alarming legacy of the longest sustained rise in sickness-related inactivity since the 1990s," she added.

A Department for Work and Pensions spokesperson said: "We've reduced the number of workless households by 1 million since 2010. Our £2.5bn back to work plan will help break down barriers to work for over a million more people and our recent budget measures are estimated to boost the labour force by an extra 300,000 workers."

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Longest sustained rise in people too sick to work since 1990s, says thinktank

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Resolution Foundation points to legacy of Covid as it warns that near-record 2.7m people are too ill to work

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Apple sued live: US accuses Apple of monopolising smartphone market - BBC News

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Unit 7: Contextual example - Apple accused by US competition authority of anti-competitive monopoly behaviour

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Unit 7: Contextual example - Apple accused by US competition authority of anti-competitive monopoly behaviour

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Deputy Attorney General Lisa Monaco takes over from Garland, and starts with stating that they have used all necessary sources to hold Apple accountable.

"Competition fuels and drives our nation's economy, these laws keep prices in check and they open doors to innovation. Today the department alleges that Apple crosses the line from rigorous competition to anti-competitive exclusion."

Monaco adds that "Apple has gone from revolutionising the smartphone market to stalling its advancement".

She says that 16 other attorney generals agreed and joined the lawsuit against Apple.

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Apple sued live: US accuses Apple of monopolising smartphone market - BBC News

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The US has accused Apple of monopolising the smartphone market in a landmark lawsuit against the tech giant.

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Housebuilders probed over sharing prices privately

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Contextual example of CMA investigating potential anti-competitive collusion in major UK housebuilding firms 

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Contextual example of CMA investigating potential anti-competitive collusion in major UK housebuilding firms 

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Dearbail JordanBusiness reporter, BBC News

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Housebuilders probed over sharing prices privately

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The regulator finds evidence information may be being swapped, which could affect selling prices.

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Scotland to Increase Alcohol Minimum Price by 30% in Public Health Push

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Minimum price if alcohol to increase by 30% in Scotland. Will it be effective? What is the aim of the policy?

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Minimum price if alcohol to increase by 30% in Scotland. Will it be effective? What is the aim of the policy?

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A renewable energy renaissance swept the globe in 2022, with wind and solar power propelling worldwide electricity generation to its greenest level yet. Ember, an independent climate think tank, reveals that 12% of global power [...]

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Scotland to Increase Alcohol Minimum Price by 30% in Public Health Push

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Scotland's government plans to raise the minimum unit price of alcohol by 30% to 65p, aiming to curb alcohol-related deaths and hospitalizations. This move is part of a broader strategy to address public health concerns.

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UK state pension age will soon need to rise to 71, say experts

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When I told you they would make your generation work into their 70s I'm not sure you believed me. Read this article. And weep. Further evidence that your generation is being screwed.

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When I told you they would make your generation work into their 70s I'm not sure you believed me. Read this article. And weep. Further evidence that your generation is being screwed.

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The retirement age will have to rise to 71 for middle-aged workers across the UK, according to research into the impact of growing life expectancy and falling birthrates on the state pension.

The UK pension age of 66 is set to rise to 67 between May 2026 and March 2028. From 2044, it is expected to rise to 68.

But the research suggests that this is not enough, and that anyone born after April 1970 may have to work until they are 71 before claiming their pension.

This age limit may need to be set even higher, say experts, thanks to the high rate of workers exiting the workforce before they reach state pension age, predominantly due to preventable ill health.

Les Mayhew, associate head of global research at the International Longevity Centre and author of the report State Pension Age and Demographic Change, said: "In the UK, state pension age would need to be 70 or 71 compared with 66 now, to maintain the status quo of the number of workers per state pensioner.

"But if you bring preventable ill health into the equation, that would have to increase even more," added Mayhew, who is also professor of statistics at Bayes Business School and has advised the government on rises to the state pension age multiple times as a senior civil servant and in his current roles.

By age 70, only 50% of adults in England and Wales are now disability-free and able to work. A smaller working population and a large economically inactive population reduces the tax base to pay for pensions - and creates huge labour shortages, which creates its own problems.

According to the Office for Budget Responsibility, pensioner benefits will cost the UK government £136bn in 2023-24, of which £124bn will be spent on state pensions.

Jonathan Cribb, associate director and head of retirement at the Institute for Fiscal Studies, said that while he did not disagree with a higher pension age, increasing it without addressing other cost-saving measures was not "realistic or equitable".

He added: "It would disproportionately impact poorer individuals whose ill-health means they have shorter lives, and so who receive pensions for less time."

While the ILC's solution is "illustrative of the kind of pressure that an ageing population puts on the public finance", a rise in the retirement age to 71 was not a "realistic policy option unless you have a real emergency", he added.

Cribb pointed out that while state pensions and pension benefits are estimated to increase by £45bn by 2050, the pressure on public finance from health and social care is estimated to increase by £105bn in today's terms over the same period. "The real issue is actually around the NHS and social care," he said.

The Intergenerational Foundation, an independent thinktank, agreed that the pension age had to rise, but questioned on whose shoulders that cost should fall.

Younger people, their research has found, do not have the financial assets that their parents and grandparents did. In 2010, those under 40 held £7.53 of every £100 of wealth. By 2020, that had fallen to £3.98. One-third of the UK's 14 million Gen-Xers are at high risk of retiring on insufficient income.

Angus Hanton, co-founder of the thinktank, said pension age should be based on life expectancy and occupation. He also supports a wealth tax to fund and pay more towards people's retirement, and reducing income tax and national insurance.

"The over-60s should finance their own extra retirement years since they have received such generous treatment from the state," he said. "The money raised can be used to invest in improving the health and prospects of younger generations so they are less of an economic burden as they age."

Andrew Scott, co-author of the 100-Year Life, whose new book, The Longevity Imperative, will be published shortly, said there needs to be a greater focus on preventing ill health not just in old age but from early age through adulthood.

"Increasing the state pension age would be a terrible policy - a really bad way of attempting to make people more productive," he said.

David Finch, assistant director at the Health Foundation, said increasing the state pension age without providing support for workers with health issues would worsen the situation by exacerbating existing health inequalities. "The government should provide more support for people already out of work due to health issues," he said. "Employers can help by adapting roles and maintaining contact with employees on sick leave."

The government said it would ensure that the state pension remained "a sustainable and fair foundation of income for future generations".

A spokesperson said: "We have committed £70m in employment and skills support for the over-50s, which has seen an extra 54,000 over-50s added to company payrolls. Our £2.5bn Back to Work plan is supporting people to stay fit and find work, in addition to £14.1bn to improve health services to help people live longer, healthier lives."

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UK state pension age will soon need to rise to 71, say experts

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Research on life expectancy and birth rates shows that ill health makes status quo unsustainable

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Health inequalities 'caused 1m early deaths in England in last decade'

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Over 1,000,000 premature deaths caused by austerity, Poverty and COVID since 2010. Just let that sink in. 

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Over 1,000,000 premature deaths caused by austerity, Poverty and COVID since 2010. Just let that sink in. 

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More than 1 million people in England died prematurely in the decade after 2011 owing to a combination of poverty, austerity and Covid, according to "shocking" new research by one of the UK's leading public health experts.

The figures are revealed in a study by the Institute of Health Equity at University College London led by Sir Michael Marmot. They demonstrate the extent to which stark economic and social inequalities are leading to poorer people dying early from cancer, heart problems and other diseases.

Using Office for National Statistics figures, the report's author Prof Peter Goldblatt looked at the life expectancy of people across England who do not live in the wealthiest 10% of areas.

The report, titled Health Inequalities, Lives Cut Short, found that between 2011 and 2019, 1,062,334 people died earlier than they would have done if they lived in areas where the richest 10% of the population reside. A further 151,615 premature deaths were recorded in 2020, although this number was higher than expected because of the coronavirus pandemic.

Chart showing excess deaths in England in 2011-19

Of these deaths, Goldblatt directly attributed 148,000 to austerity measures implemented by the coalition government from 2010 by comparing them with levels seen earlier.

Marmot, who authored a seminal review into health inequalities in the UK in 2010, said the premature deaths and widening inequalities were a "dismal state of affairs". He urged political leaders to do more to tackle the fact that poorer people are at much higher risk of getting and dying from illnesses, which are closely linked to poverty, poor housing and unemployment.

He said: "One million premature deaths, made dramatically worse by austerity, is a shocking political failure. The worse health of the more deprived 90% of the population, compared to the best-off 10%, means that health inequalities involve the majority of society.

"If you needed a case study example of what not to do to reduce health inequalities, the UK provides it. The only other developed country doing worse is the USA, where life expectancy is falling.

"Our country has become poor and unhealthy, where a few rich, healthy people live. People care about their health, but it is deteriorating, with their lives shortening, through no fault of their own. Political leaders can choose to prioritise everyone's health, or not. Currently they are not."

Analysis by Cancer Research UK has estimated that there are 33,000 extra cases of cancer in the UK each year associated with deprivation, while women from England's poorest areas die on average five years sooner than their wealthier counterparts. During the coronavirus pandemic, people from black and Asian backgrounds were at greater risk of dying from the virus than their white counterparts.

Previous research has shown that policies introduced by the Labour governments between 1997 and 2010, which focused on early years and education, were beginning to reduce glaring health inequalities. Much of the action taken flowed from the English health inequalities strategy, a cross-government plan. Studies have found that this particular strategy was associated with a decline in geographical inequalities regarding disparities in life expectancy, which reversed a previously increasing trend.

However, after it ended in 2010, coinciding with the introduction of austerity, health inequalities began to increase again. The institute's 2020 report Health Equity in England: the Marmot Review 10 Years On found that improvements to life expectancy had stalled, with the greatest slowdown seen in the most deprived areas, and had even declined for women in the poorest 10% of areas.

The study found that during the pandemic, inequality between the least and most disadvantaged 10% of areas contributed to a further 28,000 excess deaths, in comparison with the previous five years.

The report also found that "healthy life years" - which measures the length of time someone lives free of ill health - has worsened in the UK compared with countries in the European Union over recent years. In 2014, men and women in the UK had a higher average number of healthy years than those in the EU. However, by 2017 this had stagnated for men and fallen for women, but had increased by two years for both sexes in the EU.

Wes Streeting, the shadow health secretary, said it would be the next Labour government's mission to "build a fairer Britain where everyone lives well for longer".

"The last Labour government not only delivered the shortest NHS waiting lists and highest patient satisfaction in history, we also tackled the social determinants of health and cut health inequalities," Streeting said. "Fourteen years of Conservative wreckage of Labour's legacy has left our country with an NHS on its knees, an increasingly unhealthy society, with appalling consequences for people.

"Where you are born, and the circumstances you are born into, shouldn't decide how long you will live. It will be the mission of the next Labour government to both get our health service back on its feet and to build a fairer Britain where everyone lives well for longer."

Marmot added that it was time for action and political leadership across the board. "Important as is the NHS - publicly funded and free at the point of use - action is needed on the social determinants of health: the conditions in which people are born, grow, live, work and age. These social conditions are the main causes of health inequalities.

"I'm saying to party leaders: make this the central plank of the next government - stop policies harming health and widening health inequalities. To MPs: if you care about the health of your constituents, you must be appalled by their deteriorating health."

The Department of Health and Social Care has been approached for comment.

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Health inequalities 'caused 1m early deaths in England in last decade'

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Exclusive: Review by Michael Marmot decries 'shocking political failure' behind differing life expectancies across country

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Sir Howard Davies: Not that difficult to buy a home, says NatWest chair

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Pale, male, stale, rich banker says it's not that difficult to buy a home. Could these clowns be any more out of touch?

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Pale, male, stale, rich banker says it's not that difficult to buy a home. Could these clowns be any more out of touch?

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NatWest's chair has said he believes it is not currently "that difficult" for people to get on the housing ladder.

Sir Howard Davies said people have always had to save for a deposit but admitted they had to save more today, warning of "easy access" to credit.

Critics said his comments on the BBC's Today programme were "astounding" and "out of touch with reality".

Sir Howard later sought to clarify his remarks, saying he "did not intend to underplay" the challenges buyers face.

"My comment was meant to reflect that in this context, access to mortgages is less difficult than it has been," a statement said. "I fully realise it did not come across in that way."

The average price of a UK property is currently £287,105, according to latest figures from Halifax, the UK's biggest mortgage lender.

Typically, borrowers need a deposit of at least 10% of a property's value to get a mortgage. With the gap between house prices and average earnings widening over decades, saving enough money to put down initially is the biggest hurdle for many hoping to buy a home.

It is also one factor in why the average age of a first-time buyer has risen to 32.

In the interview, Sir Howard was asked when he thought it would be easier for people to get on to the property ladder in the UK. He replied: "Well, I don't think it's that difficult at the moment. You have to save, and that's the way it always used to be."

Pressed on his reasoning, the NatWest chair admitted people found it "difficult to start the process" in saving, but said it was also due to fundamental changes in the housing market seen in the wake of the 2008 financial crisis.

"What we saw in the financial crisis was the risk of having people being able to borrow 100% and then suffering severe falls in the equity value of their houses and having to leave and having a bad credit record so there were dangers in very, very easy access to mortgage credit," he added.

'Ludicrous'

Ben Twomey, chief executive of campaign group Generation Rent, said Sir Howard's comments were "astounding to hear from a senior banker".

"What planet does he live on?" he added.

Katy Eatenton, a mortgage and protection specialist at Lifetime Wealth Management, called Sir Howard's comments "ludicrous" and "totally out of touch with reality".

"The cost of living is the highest it has been, rents are increasing year on year and house prices, interest rates and the lack of first-time buyer schemes are all adding to the difficulty in getting on the property ladder," she said.

Sir Howard has been chair of NatWest, which is 39%-owned by the taxpayer, since 2015, having previously been the deputy governor of the Bank of England.

He receives a salary of more than £750,000 a year and is due to stand down in April.

Sir Howard said later on Friday that he recognised the difficulty in buying a home, acknowledging it "is very tough for first-time buyers".

He said the role of banks was to "lend responsibly and support customers to build a savings habit and move towards home ownership".

While people have to save more cash for a deposit, the rising cost of living in recent times has hindered many people's ability to set money aside.

Inflation - the rate prices rise at - hit a 40-year high in 2022 and as a result, the Bank of England has increased interest rates to try to slow it down, making the cost of borrowing money more expensive.

Renters hoping to save have also seen their monthly outgoings rise sharply, with a new let costing £1,201 a month on average, according to Zoopla. High demand has driven the increase, while supply has also narrowed with some private landlords selling up as a result of higher mortgage rates.

Mr Twomey, of Generation Rent, said the cost of rent was making it "incredibly hard" for people to buy a home, with tenants handing "a third of our wages every month over to our landlord".

He argued the circumstances to save for a deposit were now "far worse", with the time required for the average earner in England to save enough increasing to almost 10 years.

He said more homes needed to be built, including social housing, to ease pressure on the market.

Torsten Bell, boss of the Resolution Foundation think tank which focuses on improving living standards, said it was "increasingly not true" that people save for a house deposit, due to half of first-time buyers in their 20s getting help of an average of £25,000 from their parents.

Prior to Sir Howard's comments, Mr Bell said the most common living arrangement for an adult aged between 18 and 34 in 1997 was "being in a couple with children" but now it was "living with your parents".

But there are signs pressure on mortgage-holders is easing, with several big lenders announcing cuts. Many homeowners coming off fixed-rate deals will, however, still face big repayment increases.

On Friday, the average two-year fixed rate stood at 5.83%, while a five-year deal was 5.43%, according to financial information service Moneyfacts.

Kim Kinnaird, director at Halifax Mortgages, said with mortgage rates easing, buyers' confidence could increase in the coming months.

Halifax said house prices rose for the third month in a row in December, but it forecast a fall this year with buyers perhaps becoming more cautious due to economic uncertainty.

The lender's figures only take into account buyers with mortgages - about two-thirds of all sales - and do not include those who purchase homes with cash or buy-to-let deals.

Separate figures from the Bank of England published on Thursday showed the number of mortgage approvals rose slightly in November, which could be seen as a sign of more confidence from buyers.

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Sir Howard Davies: Not that difficult to buy a home, says NatWest chair

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Sir Howard Davies faced backlash online and has since rowed back on his comments on home ownership.

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Currys boss: minimum wage hike shows government does not 'care' about retail

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Labour Markets: Boss of Currys (on £2.2M a year) complaining about the increase to costs of the increase in NMW. But he totally ignores how much more money is spent at Currys as a result of millions of low paid workers gaining an £1800 per year wage increase.

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Labour Markets: Boss of Currys (on £2.2M a year) complaining about the increase to costs of the increase in NMW. But he totally ignores how much more money is spent at Currys as a result of millions of low paid workers gaining an £1800 per year wage increase.

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The boss of Currys has accused the government of failing to "understand or care" about UK retailers by pushing through a "big hike" in the UK's minimum wage.

Alex Baldock's comments come weeks after chancellor Jeremy Hunt announced plans to increase the legal minimum wage for the UK's lowest paid workers to £11.44 an hour, representing a hike of almost 10%, from April 2024. The move will force employers to pay full time workers around £1,800 more per year.

However, the boss of the electrical retailer said this would put significant pressure on high street retailers like Currys, which are also preparing for a surge in business rates - the property-based tax levied by local councils from businesses such as retailers, pubs and offices.

"We believe we are paying our colleagues well and we certainly intend to continue to," Baldock told reporters on Thursday morning. "That said, for the retail industry as a whole, having a big hike in the national living wage at the same time as an expected half a billion pound increase in the rates bill just shows how little the government appears to understand or care about this industry.

"There are 3m jobs at stake in UK retail, and loading more costs on to an already overburdened sector is irresponsible, and we call for a change of heart on it."

High street shops are preparing for a collective £1.95bn inflation linked increase in local taxes next year. Hunt froze business rates last year for companies in retail, leisure and hospitality, and granted a 75% discount worth up to £110,000 per business. However, those discount are set to expire in March 2024.

Baldock's criticism came as Currys reported a 4% drop in like-for-like sales over the six months to October, as the cost of living crisis left consumer spending subdued.

The chief executive said there were a mix of factors at play. "On the one hand, the consumer is hard pressed and confidence is pretty bumpy. Interest rates have been rising ... and consumers are cautious about their spending. But on the other hand, real wages have continued to climb, employment has stayed high, people have retained savings and customers are treating themselves."

He said consumers were more likely to buy products on credit offered by the company, which allowed consumers to spread the cost of their purchases over a number of months.

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But Baldock stressed that the company was being responsible with its lending, and wanted to "stay a mile away from any reputational damage that comes with lending money to people who can't afford to pay it back".

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Currys boss: minimum wage hike shows government does not 'care' about retail

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Planned 10% UK increase as business rates rise will put pressure on already overburdened industry, says Alex Baldock

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Iceland boss hits out at parent 'exploitation' in baby milk market

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U7: Great contextual example: baby food market - price maximum, duopoly/oligopoly, CMA intervention.

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U7: Great contextual example: baby food market - price maximum, duopoly/oligopoly, CMA intervention.

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The boss of Iceland has hit out at "exploitation" of new parents and joined calls for a price cap on baby formula after the competition watchdog found evidence of greedflation by leading manufacturers.

The Competition and Markets Authority (CMA) on Wednesday revealed manufacturers had increased prices by more than their costs during the inflation crisis, fattening profit margins and imposing an average 25% increase on shoppers in two years. It warned competition could be hampered because the market is dominated by two companies, Danone and Nestlé, which between them account for 85% of sales.

Richard Walker, the executive chair of Iceland, said: "This is exploitation. We need this to stop immediately.

"There is a cost of living crisis. Some people cannot afford to feed their babies. This is a real issue with real consequences and we need to do something about it. It now costs £14.50 for a week's supply of infant formula. It's crazy and I don't know how some people can afford it. It's a myth to say people should rely on breast milk which many can't do."

Walker said the government should convene a roundtable of brands and retailers and agree price controls. "It seems an obvious thing to do," he said

The First Steps Nutrition Trust also called for a price cap alongside other measures including a public health campaign that would highlight the nutritional equivalence of all first infant formula - the contents of which is strictly regulated no matter the price or brand.

Its own research, which was published in August, found significant price differences between brands. The price per 100ml of cow's milk-based formula varied from 13p per 100ml for the cheapest product, Cow & Gate First Infant Milk (1,200g pack), to 35p per 100ml for the most expensive, Aptamil's 1 First Milk Tab (552g pack).

A graphic showing the price of 100ml of infant formula by selected brand

The speed of price rises also varied, with an 800g pack of Danone's Aptamil formula up 26% to about £14.50 between March 2021 and April 2023. The same size pack of Cow & Gate 1 rose 31% to about £10.50 during the same period, while a 900g pack of Aldi's Mamia brand rose 45% to about £9.40.

Brands currently get around the limits on advertising infant formula by promoting "follow-on milk" - a type of formula targeted at toddlers who do not need a special drink to remain healthy.

Walker argued that the burden on parents could be eased by loosening restrictions on marketing so that retailers could enable shoppers to buy infant formula using loyalty scheme points or food bank vouchers and to allow promotions.

Walker said Iceland was now accepting loyalty scheme points and had slashed its prices by 20%, in effect selling infant formula at the cost price. He said Iceland had done this despite the risk of breaking rules on promoting formula by highlighting the price cut in stores this summer.

"There should be fewer restrictions, I can promote vapes or chocolate but not formula," he said.

Other high-profile figures are also calling for action on the price of formula. The shadow health secretary, Wes Streeting, last month said the marketing regulations were "no longer fit for purpose".

He said: "With Labour, retailers will be able to accept loyalty cards and vouchers as payment for infant formula to help families feed their children."

The CMA is to investigate the baby formula market further after finding it was vulnerable to higher-than-inflation price rises because there was only one UK retailer - Aldi - that sold own-label. It found competition was hampered because shoppers were very reluctant to switch brands, either because they were recommended by friends and family or because their baby would only drink one type.

The watchdog found those who do switch could save as much as £500 a year by doing so. It added that annual costs could also be pushed up by manufacturers' feeding volume guides, which were "systematically higher" than those recommended by the Scientific Advisory Committee on Nutrition.

Walker said Iceland had experimented with an own-label formula some years ago but it didn't sell as shoppers preferred to stick to well-known brands.

A spokesperson for the British brand Kendamil, which accounts for just 9% of the UK market, welcomed the CMA inquiry, which is due to report back early next year. It said the "concentration of supplier power" on Danone and Nestlé promoted "monopolistic market dynamics, a concerning lack of supply diversification and, in our view, unjustifiable pricing strategies".

"Competing against dominant multinational conglomerates [with combined annual profits of over £15bn] is a challenging and often hostile endeavour and we support the CMA's view that a lack of competition is working against parents struggling during a cost of living crisis," the Kendamil spokesperson added.

A spokesperson for Danone UK & Ireland, by far the biggest player in the UK baby formula market, and which makes Cow & Gate and Aptamil, said it believed the UK market to be competitive:"We recognise the challenges faced by parents due to inflation. During this difficult period, we have worked very hard to absorb the significant cost increases we have faced, make savings, and minimising any price increases."

Nestlé said it welcomed the CMA review and that it was open to "all constructive dialogue to help parents in the most effective way possible".

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Iceland boss hits out at parent 'exploitation' in baby milk market

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Richard Walker calls for price cap on infant formula as competition watchdog finds evidence of greedflation

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Councils say they are 'held to ransom' by private providers of children's care

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Unit 5 & 7: Privatisation causing extreme market failure + CMA intervention

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Unit 5 & 7: Privatisation causing extreme market failure + CMA intervention

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Councils claim they are being "held to ransom" by private care providers as it emerged the taxpayer has been paying as much as £63,000 a week for single children's social care placements.

The extraordinary bill - equivalent to £3.3m a year for one placement - came in new figures from local authorities in England released on Wednesday that showed the number of placements for the care of vulnerable children costing over £10,000 a week has risen to over 1,500 - equivalent to at least £780m a year. There were only 120 such placements five years ago.

The councils have provided no further details about the single £63,000-a-week outlay but the Local Government Association highlighted it as an example of how the market for children's social care placements is "broken".

The president of the Association of Directors of Children's Services (ADCS) said it demonstrates "profiteering".

"Local authorities are the sole purchasers of placements, yet are often held to ransom by private providers due to lack of sufficiency meaning costs can be thousands of pounds a week for individual placements for children in their care," said John Pearce, the ADCS's president. "It cannot be right that the largest 20 independent providers of children's social care homes made more than £300 million of profit last year, every penny of which came directly from the public purse."

The exorbitant costs being charged by some private social care providers emerged as another major council effectively declared itself bankrupt. Nottingham city council followed Birmingham city council in issuing a formal notice that it cannot balance its budget this year. Nottingham cited the increased demand for children's social care as a reason behind its financial peril.

The latest warning came after the Guardian reported last year that one council was charged £60,000 a week to look after an autistic teenager with a mild learning disability. She had a history of violence and was looked after by six dedicated carers.

The LGA is now calling for urgent funding for children's social care in the upcoming provisional local government finance settlement. It warned the lack of investment in the chancellor's autumn statement "risked councils' ability to provide the critical care and support that children rely on every day".

"The astronomical costs of care placements mean there is less money available for councils to spend on earlier support for children and families," said Cllr Louise Gittins, chair of the LGA's children and young people board. "These findings are indicative of a broken market for children's social care placements, but it doesn't have to remain this way."

In March 2022, the government's competition regulator concluded that "the UK has sleepwalked into a dysfunctional children's social care market" and warned about the risks of private equity funding in private childrens' social care.

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Councils say they are 'held to ransom' by private providers of children's care

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One child cost a local authority £63,000 a week and the number of placements has shot up to more than 1,500 from 120 five years ago

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Sunak risks fuelling inflation with high taxes and Brexit red tape, retailers warn

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Will the Autumn statement cause inflation to begin rising again next year?

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Will the Autumn statement cause inflation to begin rising again next year?

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The UK's largest retailers have warned Rishi Sunak that his government risks prolonging the cost of living crisis by driving up the cost of doing business on the high street with Brexit red tape and higher taxes.

The British Retail Consortium (BRC) said a number of measures laid out by the chancellor, Jeremy Hunt, in last week's autumn statement risked adding to inflation next year.

After soaring to a 41-year high last autumn, inflation has fallen back before this year's pivotal Christmas shopping season. The BRC said its measure of annual shop price inflation eased for the sixth month in a row to 4.3% in November, down from 5.2% in October. The decline does not mean shop prices are going down, only that they are rising less rapidly.

However, the industry trade body warned that retailers were facing headwinds in 2024 from "government-imposed" measures - including tax increases and Brexit red tape - which risked fuelling inflation.

"Combining these with the biggest rise to the 'national living wage' on record will likely stall or even reverse progress made thus far on bringing down inflation, particularly in food," said the BRC chief executive, Helen Dickinson.

Hunt argued last week the government had taken "difficult decisions" to meet Sunak's primary target to halve inflation this year, while saying his economic plans would help inflation continue to fall next year. Official figures show inflation has fallen back from a peak of 11.1% in October 2022 to stand at 4.6% last month.

However, the BRC said the cost of several government measures confirmed in the autumn statement were likely to be passed on to consumers in the form of higher prices on the shelves.

It singled out an increase in business rates - paid by firms on the premises they occupy - from April, for adding more than £400m to retailers' tax bills, despite Hunt making concessions for smaller firms and cheaper properties.

The cost of managing post-Brexit import checks and labelling rules, due to come into force next year, are also likely to be passed on to shoppers, it said.

The BRC also questioned whether Hunt approving an almost 10% increase in the national living wage to £11.44 an hour from next spring was sustainable, while saying the higher wage costs would be tough for retailers to stomach amid a slump in consumer spending and rising tax levels.

Figures released on Monday from the Confederation of British Industry show retail sales volumes fell year on year in November for a seventh consecutive month, as bosses warned they were anticipating a "disappointing" festive period.

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Martin Sartorius, the principal economist at the CBI, said: "Retailers had hoped the chancellor's autumn statement would offer a reprieve from next year's hike in business rates. While prioritising relief for SMEs and key sectors is understandable, many retailers are being left to contend with another increase in costs at a time when they are least able to afford them."

He said sales had languished in negative territory for much of 2023, reflecting the impact of strained household finances on the sector's fortunes.

"Though sentiment has picked up slightly, firms do not feel that a revival in activity is imminent. Given the weakness in trading conditions, it's little surprise that firms are scaling back on their investment ambitions."

The Treasury said it was helping businesses by cutting taxes on investment and extending business rates relief for more than 1m business properties. "It is thanks to our action that we've achieved our target of halving inflation this year, but we are continuing to stay the course to get inflation all the way back down to 2%," a spokesperson said.

"The OBR have confirmed that our policies will reduce inflation next year while boosting growth and rewarding people for their hard work."

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Sunak risks fuelling inflation with high taxes and Brexit red tape, retailers warn

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Shop price inflation eased to 4.3% in November but ministers' plans could lead to higher prices, BRC says

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UK spends more financing inequality in favour of rich than rest of Europe, report finds

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The UK spends more than anywhere else in Europe subsidising the cost of structural inequality in favour of the rich, according to an analysis of 23 OECD countries.

Inequalities of income, wealth and power cost the UK £106.2bn a year compared with the average developed country in the Organisation for Economic Co-operation and Development (OECD), according to the Equality Trust's cost of inequality report.

When compared with the top five most equal countries, however, inequality costs the UK £128.4bn a year in damage to the economy, communities and individuals.

Fixing the NHS crisis, including funding the maintenance backlog, hiring more staff and increasing wages, would cost about £66.7bn over 15 years.

"Inequality has made the UK more unhealthy, unhappy and unsafe than our more equal peers," said Priya Sahni-Nicholas, the chair of the trust. " It is also causing huge damage to our economy: we have shorter healthy working lives, poorer education systems, more crime and less happy societies."

Britain in the 1970s was one of the most equal of rich countries. Today, it is the second most unequal, after the US.

Sahni-Nicholas said: "There is a direct financial cost to inequality: the consequences of structuring society to allow for massive profiteering for the richest at the expense of the rest of us have been enormous."

Overreliance on financial systems that allow for massive profits and wealth-hoarding has hollowed out our infrastructure, she added, encouraging massive regional disparities and leaving the UK vulnerable to shocks and recessions.

The report found that the richest 1% in the UK are the most expensive top 1% group in Europe, paying the lowest taxes of such a group in any large European country. The benefits of allowing this to continue are "almost impossible to defend", said Danny Dorling, the author of Inequality and the 1%.

"Inequality is more than just economics: it is the culture that divides and makes social mobility impossible," he said. "The mere accident of being born outside the 1% will have a dramatic impact on the rest of your life: it will reduce your life expectancy, as well as educational and work prospects, and affects your mental health. The cost of the super-rich is just too high for the rest of us. We must urgently redress the balance."

Stewart Lansley, the author of The Richer, the Poorer and The Cost of Inequality, said it was "an acute paradox of contemporary capitalism that as societies get more prosperous, rising numbers are unable to afford the most basic of material and social needs".

He said: "In Britain, child poverty has doubled in 40 years. Yet few modern tycoons go without private jets, luxury yachts, even private islands."

Lansley blames the way the gains from growth have been increasingly colonised by a small group of financial and business magnates - a process he says is facilitated by state policy.

"Many of Britain's deep-seated problems - a broken economy, hollowed-out public services, static and falling living standards, the doubling of child poverty since the late 1970s, and the fall in social resilience - can be traced to the way the economy has been turned into a cash cow for the already rich," he said.

Too much of today's economy involves unproductive activity geared to personal reward, a far cry from the culture of entrepreneurialism promised by Margaret Thatcher and Tony Blair, Lansley adds.

Several factors account for the further enrichment of the already wealthy, says Lansley, "none of them serving much social purpose", with nine-tenths of all national assets and infrastructure are now privately owned making Britain one of the most heavily privately and narrowly owned economies among rich countries.

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UK spends more financing inequality in favour of rich than rest of Europe, report finds

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Inequalities of income, wealth and power cost UK £106.2bn a year compared with average developed OECD country

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New Study Finds a High Minimum Wages Creates Jobs

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U11 Labour Markets: Mind-blowing study destroys mainstream economic theory of NMW and labour markets

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U11 Labour Markets: Mind-blowing study destroys mainstream economic theory of NMW and labour markets

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A decade ago, conventional wisdom held that raising the minimum wage would not necessarily benefit low-income workers. The logic of this view went like this: Although some workers would benefit from the government forcing their pay up by fiat, others would find themselves effectively locked out of the labor market. After all, if one lacked the skills necessary to produce $15 worth of economic value in an hour of labor, then a law forbidding employers from paying anyone a lower rate than that would render you unhireable. Indeed, rather than improving the lot of "low-skill" workers, a high minimum wage would inspire businesses to automate their roles out of existence, condemning such proletarians to jobless penury. (Conservative economists who pushed this line always had to paper over the dissonance between their ostensible support for increasing productivity and their opposition to a government policy that would, by their account, yield new labor-saving technologies.)

A 2010 op-ed from Michael Saltsman of the Employment Policy Institute provides a characteristic rendition of the argument. Saltsman warned that if state legislatures raised the minimum wage for fast food workers, "The BurgerTron 3000" would soon take their jobs.

"In addition to pushing businesses toward automation, increasing the minimum wage makes it less likely for businesses to take a chance on employees without previous experience," Saltsman explained. "Already feeling the pinch from the continuing economic downturn, the only way businesses will hire new employees is if they are skilled enough for the new, higher wage. Say goodbye to entry level jobs and hello to permanent double digit unemployment."

Over the next thirteen years, a long list of cities and states enacted minimum wage increases of unprecedented size. Between 2014 and 2022, California increased its minimum wage by 56 percent in inflation-adjusted terms. Over a similar time period, New York raised its wage floor by 72 percent.

Permanent double digit unemployment did not ensue.

In fact, not only did these historically large minimum wage hikes fail to put all fast food workers out of job, but a new study indicates that they actually induced job growth.

In " High Minimum Wages and the Monopsony Puzzle," a team of economists at the University of California, Berkeley examined 47 large U.S. counties where the minimum wage had reached $15 an hour by the first quarter of 2021, and compared their wage levels and employment figures to those of similar counties that hadn't raised the minimum wage since 2009. They focused specifically on fast-food workers, so as to avoid the complexities introduced by the tipped-wages common among servers at more upscale restaurants.

Their results will shock Saltsman and his ideological sympathizers. First, raising the minimum wage successfully increased hourly pay for workers in the bottom 10 percent of the income distribution without reducing wages for those in the middle. Had New York and California failed to pass minimum wage increases, this narrowing of the gap between the bottom and middle rungs of the income ladder would not have occurred. Second, the implications for employment were very slightly positive: Counties that enacted minimum wages saw more job growth, not less.

Now, a conservative economist might counter that one reason why these minimum wage hikes didn't increase unemployment is that New York City, San Francisco, and Los Angeles already had fairly high market wages, and saw considerable "natural" wage growth over this period. If researchers had focused narrowly on the impact of state-level minimum-wage hikes on relatively low-wage counties in upstate New York or inland California, they probably would have discovered substantial employment effects.

Happily, the Berkeley economists thought of this. To correct for the possibilities 1) that high-wage cities are disproportionately likely to enact large minimum wage increases and 2) that high market wages attenuate the employment implications of high minimum wages, they isolated the impact of state-level minimum wages on counties that had neither enacted local minimum wage increases nor enjoyed above-average market wages.

When they narrowed their lens, the researchers did in fact find that the employment impacts of minimum wage hikes became more profound: Rather than producing a slight increase in job growth, high minimum wages were associated with substantial increases in employment.

In truth, this finding is not all that surprising. Economists have long recognized that, under conditions of "monopsony" - which is to say, when there are just a small number of employers in a given labor market - modest increases in the minimum wage will not kill jobs and might even create them. And liberal analysts had been arguing for decades that monopsony was far more common than generally appreciated.

Under conditions of monopsony, businesses do not need to offer competitive wages, since workers have few other employers they can turn to. Therefore, the market wage may substantially underprice the value that a given hour of labor actually provides to a firm. When the government steps in and forces wage rates up, businesses can afford to weather the increase in labor costs without slowing hiring, automating roles, or raising prices. Rather, they're simply forced to divert a bit of their earnings away from ownership and towards staff.

That redistribution of income away from business owners to workers can, in turn, have a stimulative effect. Low-wage workers often live paycheck to paycheck and spend a high percentage of their earnings. Affluent business owners, by contrast, can often afford to stow away excess earnings. Thus, when you move dollars from the latter to the former, that money becomes more likely to circulate in the local economy. Which translates to higher demand for goods and services, such as fast food, which gives fast food restaurants an incentive to add more staff. This dynamic would of course break down if you raised the minimum wage to $1,000 or what have you. But the past decade of economic history indicates that there is far more scope to increase wages by government statute than previously thought.

Economic life is full of genuine tradeoffs. And there are times when progressives refuse to prioritize between competing goods in a counterproductive manner. But there are also many instances in which the only real tradeoff is between maximizing profits for owners and improving conditions for workers. In those cases, owners have an incentive to promote theories that posit a different, specious tradeoff - one that hurts a more sympathetic constituency. It is now apparent that the debate over a $15 minimum wage was one such case.

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New Study Finds a High Minimum Wages Creates Jobs

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A new study finds that when New York and California raised their minimum wages to $15 an hour, they actually increased job growth in their states, rather than reducing it, as conservative economists had predicted.

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UK ‘in violation of international law’ over poverty levels, says UN envoy

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U8 Poverty & inequality: When. Will. We. Wake. Up. To. What. They. Have. Done?

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U8 Poverty & inequality: When. Will. We. Wake. Up. To. What. They. Have. Done?

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UK ‘in violation of international law’ over poverty levels, says UN envoy

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Exclusive: Special rapporteur Olivier De Schutter to urge ministers to increase welfare spending on visit to country this week

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No utopia: experts question Elon Musk's vision of world without work

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U11: Would an AI world without work be possible or beneficial?

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U11: Would an AI world without work be possible or beneficial?

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Oscar Wilde thought hard work "the refuge" of those with nothing better to do while he envisaged a society of "cultivated leisure" as machines performed the necessary and unpleasant tasks.

Karl Marx's dream was of state-regulated general production that allowed liberated workers to "hunt in the morning, fish in the afternoon, rear cattle in the evening, criticise after dinner" without the drudgery of being tied to one job.

The 19th-century socialist activist William Morris advocated for more pleasurable work, believing once the profit motive of the factory had been abolished, less necessary labour would led to a four-hour day.

So Elon Musk's suggestion to Rishi Sunak that society could reach a point where "no job is needed" and "you can do a job if you want a job ... but the AI will do everything", raises debate on the issue of how we work that has long been discussed.

Yet a world without work, experts question, may be more dystopian than utopian.

"This is an old, old story that never actually happens," said Tom Hodgkinson, the co-founder of the Idler magazine, which for three decades has been a platform to examine issues surrounding work and leisure.

"There was a poem in ancient Greece saying isn't it wonderful that we have invented the watermill so that we no longer have to grind our corn. The women can sit around doing nothing all day from now on. It's that kind of recurrent idea.

"People like Bertrand Russell were talking about this in the 30s. What would we do without work. One view is people wouldn't know what to do because people are more or less slavish. That they would just sit around watching daytime TV or porn all day."

In fact, given more free time, such as on furlough during Covid, "they start living better", Hodgkinson said. "They are starting neighbourhood groups, doing more gardening, doing up the house, spending more time with family, doing creative things, playing music, writing poetry, all the things that are part of what I would call a good life."

Despite that, studies had shown that paid work was beneficial for mental health, for status and identity, he said.

"I think we need to do some sort of work. We should be moving towards a shorter working week, and more leisure filled society," Hodgkinson said, adding that it would need a radical overhaul of the economic and education models to eliminate work on the scale Musk predicted.

One significant body of research in 2019, which was led by Brendan Burchell, professor in social sciences and a former president of Magdalene College, Cambridge, established that eight hours of paid employment a week was optimal in terms of benefit in mental health, with no extra benefit subsequently accrued.

Setting aside the "awful jobs that really screw you up", Burchell said, "your average job is good for you" in terms of social interaction, working collectively, giving structure and sense of identity.

A world without work "is a terrible idea of what society would look like for all sorts of reasons, as well as people's mental health", he said.

The labour market, as a way of distributing money around the economy, would have to be transformed, so would the education system "to teach people how to fill their days, by writing poetry or going fishing or whatever, instead of going to the factory or the office", Burchell continued.

Shifting to shorter working hours was shown to have "massive benefits for people", said Burchell, but added: "If we move to a society where lots of people are completely excluded from the labour market then I get very worried that's going to be a very dystopian future."

In his book Making Light Work: An End to Toil in the 21st Century, David Spencer, professor of economics at the University of Leeds, also makes the case for less work but not its elimination.

"It would leave us bereft potentially of things that we value in work," he said, citing communal enterprise, personal relationships and the development of skillsets.

In essence, we would be a poorer, sadder, less skilled society. "Yes, there will be some loss through loss of work," Spencer said. "I realise not all work is good. So we ought to automate drudgery, seek to use AI to reduce the pain of work, and therefore leave work which is good."

He draws from Morris, who talked about bringing joy to work. "Skilful work is good work and it has a role in the creation of a better society," said Spencer. "We ought to use technology to create less and better work. In that sense the future can be really positive.

This was, he added, the future imagined by "Oscar Wilde, William Morris, and a lot of utopian positive thinking, where technology makes work lighter. It's not eliminating work, it's bringing light to work."

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No utopia: experts question Elon Musk's vision of world without work

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Using AI to create less and better work would benefit society. Getting rid of it altogether would be unproductive

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Britain's inequalities are growing and levelling up is difficult - here's why

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U8 Inequality: Is a cross party consensus emerging about the urgent need to level up?

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U8 Inequality: Is a cross party consensus emerging about the urgent need to level up?

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Britain's inequalities are growing and levelling up is difficult - here's why

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Collaboration and funding are key to reversing the regional divide but both are in short supply

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More than 1 million UK children experienced destitution last year, study finds

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U8: A disturbing new report on extreme (absolute) poverty in the UK. Excellent contextual examples for your exams.

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U8: A disturbing new report on extreme (absolute) poverty in the UK. Excellent contextual examples for your exams.

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More than 1 million children experienced destitution last year - meaning their families could not afford to adequately feed, clothe or clean them, or keep them warm - according to a major study which reveals an explosion of extreme poverty in the UK.

Severe material hardship was "no longer a rare occurrence", the study found, with rates of destitution more than doubling in the last five years as a result of benefit cuts and cost of living pressures, leaving struggling households increasingly reliant on regular charity handouts.

Poverty campaigners, teachers and frontline welfare workers have expressed growing alarm about the damaging effects of destitution, particularly on children, including physical ill health, undernourishment, mental illness, social isolation, school absences and poor classroom behaviour.

An estimated 1.8m UK households containing nearly 3.8 million people, including 1 million children, were destitute at some point in 2022, according to the study, published by the Joseph Rowntree Foundation (JRF). Half of destitute households tried to get by on less than £85 a week after housing costs, with a quarter reporting no income at all.

JRF's chief executive, Paul Kissack, criticised the government for in effect ignoring the rise in destitution. "The government is not helpless to act; it is choosing not to," he said. "Turning the tide on destitution is an urgent moral mission, which speaks to our basic humanity as a country, and we need political leadership for that mission."

A co-author of the study, Prof Suzanne Fitzpatrick, of Heriot-Watt University, described soaring destitution as "morally reprehensible" and said the UK state had abdicated its responsibility to society's poorest. "There must be immediate action from all levels of government to tackle this social emergency," she said.

Destitution is defined as the inability to meet basic physical needs to stay warm, dry, clean and fed, either because of a lack of clothing, heating, shelter or food, or because household income falls below a minimum level after housing costs - ranging from £95 a week for a single adult to £205 a week for a couple with two children.

The study, the latest in a series tracking the phenomenon since 2015, also interviewed people about their experiences of destitution. It found:

More than half of destitute adults (51%) regularly went without toiletries such as shampoo and toothpaste, as well as hygiene and cleaning products, often relying on food banks for these items. One respondent had to borrow money to buy incontinence pads for her disabled daughter.

New clothing and footwear "were essential items that people simply did not buy at all", the study concluded, with many adult respondents wearing worn-out clothes, and only buying new clothes - such as school uniforms and trainers - for their children.

Destitution - once largely limited to immigrants ineligible for social security support - was now predominantly experienced by UK nationals in receipt of welfare benefits, and increasingly by families, the study revealed. One in 10 destitute households included working adults.

Disabled people and people with long-term chronic health conditions, and Black British, Caribbean and African households, were disproportionately likely to be destitute. The number of destitute lone parents almost tripled between 2019 and 2022, while the number of children experiencing destitution has tripled since 2017.

Ethnic breakdown of destitution - graphic

The erosion of state support for people in severe hardship, and their growing reliance on informal help from charities and parents, was one of the most striking aspects of the research, the study said. More than 574,000 destitute people were supported by food banks in 2022, up from 214,000 in 2019.

The study noted the critical role of volunteer food banks in the lives of the poorest households despite concern over their ability to meet rising demand. One charity worker told researchers: "We used to worry about food banks opening. Now we're worrying about food banks closing. That's how bad it is in our country right now."

Meagre benefit rates meant a single adult on the basic £85 weekly rate of universal credit was by definition in severe hardship, falling below the £95 a week destitution threshold, the study said. The two-child benefit limit and benefit sanctions also drove destitution. The UK social security system was "full of holes", it concluded.

The JRF called on all political parties to commit to a plan to eradicate destitution, including an overhaul of benefit rates to provide an "essentials guarantee", which would ensure universal credit was sufficient to protect households from severe hardship.

A government spokesperson said: "Our number one priority is driving down inflation because that will help everyone's money go further.

"There are 1.7 million fewer people in absolute poverty than in 2010, including 400,000 fewer children, but we know some families are struggling, which is why we are providing support worth an average of £3,300 a household, including raising benefits by over 10% this year, and are increasing the national living wage again.

"To help people out of poverty through work, we are also investing £3.5bn to help thousands into jobs and are removing barriers for parents with the biggest ever expansion of free childcare - providing 30 free hours of childcare for working parents and support for children from nine months old to when they start school. This will save eligible parents up to an average of £6,500 a year."

Clare Willsher with her husband, sons and pet dog at home in south-east London. Photograph: Graeme Robertson/The Guardian

'I often wake up hungry at 3am'

"What's destitution like? A complete nightmare!" says Clare Willsher, who lives with her husband and two teenage boys in Bexleyheath, south-east London. She is quite matter-of-fact about it: life has often been pretty tough, but never this tough.

Soaring energy and food costs over the last two years coincided with her husband getting cancer and having to give up work. They had personal debts, and their household income shrank just as their outgoings went through the roof.

Universal credit pays the rent on their private rented home, but the basic allowance meant for living costs will not stretch to a whole month. The family gets disability benefit for the boys, without which, she says, they would be totally scuppered.

Putting food on the family table takes time and ingenuity. A weekly grocery budget of £35 has to be supplemented with trips to food banks. Some weeks, when other bills have to be paid, she has had as little as £10 for food.

She and her husband regularly skip meals - "we never have three meals a day" - to ensure the boys always have enough to eat. But going without is hard: "I often wake up hungry at three in the morning," she says.

Last winter was miserable, she recalls, as the cost of energy meant they could rarely afford to put the heating on, even when it was freezing. Sometimes they switched it on because it was the only way to dry the boys' school uniforms.

The inability to afford things they used to take for granted can be demoralising, she says. She and her husband recently went out for a token one drink to celebrate their wedding anniversary. "It left us skint," she reflects, with a hint of regret.

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More than 1 million UK children experienced destitution last year, study finds

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Severe material hardship no longer a rarity, as study reveals impact of benefit cuts and cost of living crisis

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Demand and supply. Is a huge crisis brewing in the rice market?

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Demand and supply. Is a huge crisis brewing in the rice market?

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What is included in my trial?

During your trial you will have complete digital access to FT.com with everything in both of our Standard Digital and Premium Digital packages.

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Export restrictions and extreme weather are threatening the global supply of a staple commodity relied on by millions

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Rolls-Royce announces up to 2,500 job cuts

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U7: Cost cutting at Rolls Royce in a bid to boost profitability. But will it work?

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U7: Cost cutting at Rolls Royce in a bid to boost profitability. But will it work?

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Rolls-Royce to axe up to 2,500 jobs in bid to cut costs

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The engineering giant says redundancies will be made worldwide as part of a move to cut costs.

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Angus Deaton on inequality: 'The war on poverty has become a war on the poor'

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U8: Poverty and inequality in America. Angus Deaton is one of the few Nobel prizewinners worth listening to.

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U8: Poverty and inequality in America. Angus Deaton is one of the few Nobel prizewinners worth listening to.

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hen Angus Deaton arrived in the US four decades ago, he imagined he had something to say about economic inequality and how to tackle it that Americans might want to hear. Instead, the great economic minds of the time told him to shut up.

The Scottish-born winner of the 2015 Nobel prize for economics struggled at first to understand why there was so little interest in a subject most European economists regarded as a central concern of post-war policies to reduce poverty and build more equitable societies.

But, as Deaton describes in his unsparing new book, Economics in America: An Immigrant Economist Explores the Land of Inequality, he soon realized he had run headlong into the libertarian monetarists of the Chicago School of Economics, and they were driving US policy.

"There is this very strong libertarian belief that inequality is not a proper area of study for economists," Deaton said. "Even if you were to worry about inequality, it would be best if you just kept quiet and lived with it."

Deaton persevered, building a reputation as a contrarian for scrutinising the prevailing orthodoxy that an unfettered free market would deliver greater economic equality and individual liberty, and that government intervention and regulation would undermine both.

The result, said Deaton, is a predatory brand of capitalism in the US that enriches corporations and the wealthy at the expense of working people, deepens inequality of wealth and opportunity, and - although many Americans will deny it - is fuelling the rise of a class system. As he picks the system apart, Deaton zeros in on the evident absurdities of claims about the purity of the market.

"If you need an ambulance, you are not in the best position to find the best service or to bargain over prices; instead, you are helpless and the perfect victim for a predator," he writes.

The results are clear. Real wages have stagnated since 1980 while productivity has more than doubled and the rich cream off the profits. The top 10% of US families now own 76% of wealth. The bottom 50% own just 1%.

The time has come, Deaton argues, for economists to get back to serving society.

"The discipline has become unmoored from its proper basis, which is the study of human welfare," he writes.

The deepest forms of inequality are these sort of personal inequalities where not everyone is given equal value as a human being

Angus Deaton

At Cambridge University in the 1960s, Deaton was steeped in the Keynesian economics of government intervention and a regulated market. In 1983 he took up a teaching post at Princeton University in New Jersey. Ronald Reagan was in the White House and the Chicago school held sway over policy in both the US and Margaret Thatcher's Britain.

But while the impact of Thatcherism came under intense scrutiny in the UK, Deaton was surprised to discover that American economists were largely uninterested in how their policies contributed to inequality and hardship.

Deaton ticks off the list of Nobel prizes for economics won by the Chicago school's highly regarded minds, including Milton Friedman and George Stigler. He does not doubt what he calls their intellectual contributions.

"Yet it is hard to imagine a body of work more antithetical to worrying about inequality," he writes.

"A friend of mine, a conservative economist and deeply religious man, is fond of saying that 'fair' is a four-letter word that should be expunged from economics."

Deaton is now a US citizen married to an equally renowned economist, Anne Case, who coined the term "deaths of despair" to describe the rising mortality rate among white, middle-aged Americans driven by drugs, alcohol and suicide, a unique phenomenon in wealthy countries. The pair's shocking findings drew the attention of then president Barack Obama and his successor, Donald Trump.

Deaton and Case then wrote a bestselling book, Deaths of Despair and the Future of Capitalism, highlighting the part played in reducing life expectancy by the US economic system, not least its lamentable health industry in killing staggering numbers of patients while making Americans poorer.

For all of Deaton's attachment to his adopted country, his British roots and upbringing cut the lens through which he interprets the US.

Deaton said that at the heart of the difference between his two nations lay opposing views about the role of government. After growing up in a country where many people saw the state as "a friend in times of trouble", he was appalled to hear his American colleagues proclaim that "government is theft".

"The very strong view in Chicago was that government attempts to do anything to fix the economy would make it worse. They really believed that the government couldn't do anything at all, which is absurd," he said.

Deaton said the evidence of successful state intervention is all around even if governments sometimes get it wrong. He points to president Lyndon B Johnson's 1964 "war on poverty" legislation pulling families back from the breadline and improving lives with food stamps, housing assistance, and federal health care for the poor and elderly among other programmes.

The way poverty is measured means that the war on poverty can never be won by sending money to the poor

Angus Deaton

Deaton said rightwing politicians and economists fixed the numbers so they could claim, in the words of Ronald Reagan, that in the war on poverty, poverty won. Official income statistics left out welfare payments so those receiving them often appeared to still be living below the poverty line when, by other measures, government assistance demonstrably helped.

"No matter how successful antipoverty cash transfer policies are at reducing want, their effects do not show up in the official counts," Deaton writes.

"The way poverty is measured means that the war on poverty can never be won by sending money to the poor. This statistical stupidity, which the politics makes so hard to fix, is a constant source of mischief and misunderstanding."

Put another way, Deaton said, "the war on poverty has become a war on the poor".

The Trump administration went in the other direction. Deaton said it lowered the poverty line to the point where millions no longer fell below it, and then claimed that poverty was no longer an issue. But the move was made with the same intent of greatly reducing access to welfare payments and discrediting state intervention.

Still, in time Deaton came to understand why Americans might be suspicious of government given that in the US it often works "not to protect ordinary people but to help rich predators make ordinary people poorer". The political system, he said, is "more responsive to the needs of those who finance it than to its constituents".

Deaton argues that the system is also increasingly weighted by access to higher education, itself increasingly an industry that drives students deeply into debt.

"One of the things I've learned is that the deepest forms of inequality are these sort of personal inequalities where not everyone is given equal value as a human being. That is the inequality that is so worrisome in America today. To have high status, to have access to good jobs, to be recognised valuable member of society, you have to have a four year college degree," he said.

"If you don't, you don't get to be part of the ruling class. You don't get to participate in Congress. You don't have access to good jobs. You're excluded from the successful cities, and all sorts of bad stuff happens to you."

Deaton said that what's emerged from decades of a system weighted in favour of those with a university education is a form of class system, although Americans do not like to talk about it in those terms.

"That's the difference with Britain where they always knew they had a class system. But the US has moved to something much closer to the class system," he said.

Deaton describes his own hopes as an immigrant 40 years ago as tempered by the corruption of the American economy and its politics to an extent that threaten democracy. But he is not without hope.

"With the right policies, there is a chance that capitalist democracy can work better for everyone, not just the wealthy. We do not need to abolish capitalism or selectively nationalize the means of production. But we do need to put the power of competition back in the service of the middle and working classes. There are terrible risks ahead if we continue to run an economy that is organized to let a minority prey on the majority," he writes.

Deaton sees other reasons for hope too. He said the huge popularity of the French economist Thomas Piketty's book, Capital in the Twenty-First Century, which argued that inequality is a feature not an accidental consequence of capitalism that can be offset only through government intervention, is evidence that even in the US the debate is shifting.

"I think Americans are learning that there's more than one way of thinking about the world," he said. "One of the things I've been arguing is that all of us, including me, were a little too ready to accept the arguments that markets can solve things. We should have known."

Deaton also spies change because of immigrants like him. He points to the Turkish-born American, Daron Acemoglu, as an economist whose thinking is changing the discipline.

"Seventy per cent of economics PhDs in the US are non-American. I compare it to the Jews who came to America between the wars who completely changed physics. Economics is being completely changed by this influx. I'm not the only immigrant who comes in to America and finds it a strange place," he said.

This article was amended on 7 October 2023. An earlier version misspelled the names of Thomas Piketty and Daron Acemoglu.
Economics in America: An Immigrant Economist Explores the Land of Inequality is published 3 October by Princeton University Press

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Angus Deaton on inequality: 'The war on poverty has become a war on the poor'

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The Nobel prize winner and author of new book Economics in America argues economists must get back to serving society

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UK cloud computing market faces inquiry amid Microsoft and Amazon concerns

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U7: More bad news for Amazon as CMA launch investigation into UK cloud computing 

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U7: More bad news for Amazon as CMA launch investigation into UK cloud computing 

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The UK's communications regulator has referred the cloud computing market to the competition watchdog for a formal investigation after a study raised concerns about industry leaders Amazon and Microsoft.

Ofcom has asked the Competition and Markets Authority to launch an inquiry, saying it is "particularly concerned about the position of the market leaders Amazon and Microsoft".

Cloud computing, or the delivery of IT services such as data storage and computing power over the internet with a pay-as-you-go pricing structure, is widely used by businesses and has emerged as a major piece of infrastructure in the development of the next generation of artificial intelligence (AI) models.

Fergal Farragher, the Ofcom director who oversaw the watchdog's study into the cloud market, said companies had expressed concerns about the difficulty of switching or mixing and matching cloud providers. He said industries ranging from TV production to telecoms networks and AI "rely on remote computer power that goes unseen".

"Some UK businesses have told us they're concerned about it being too difficult to switch or mix and match cloud provider, and it's not clear that competition is working well," he said in a statement. "So, we're referring the market to the CMA for further scrutiny, to make sure business customers continue to benefit from cloud services."

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UK cloud computing market faces inquiry amid Microsoft and Amazon concerns

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Media watchdog refers sector to competition regulator amid 'particular concern' over position of two market leaders

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Amazon: US accuses online giant of illegal monopoly

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US regulators have sued Amazon, alleging that the internet giant is illegally maintaining monopoly power.

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US regulators have sued Amazon, alleging that the internet giant is illegally maintaining monopoly power.

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James Clayton & Tom Espiner

US regulators have sued Amazon, alleging that the internet giant is illegally maintaining monopoly power.

The Federal Trade Commission (FTC) said Amazon uses "a set of interlocking anticompetitive and unfair strategies" to push up prices and stifle competition.

Amazon said the lawsuit was "wrong on the facts and law, and we look forward to making that case in court".

It is the latest technology giant to be sued by US regulators.

The FTC's boss, Lina Khan, has had Amazon in her crosshairs for years.

In 2017, Ms Khan, then only 29, published a major academic article arguing the online retailer had escaped anti-competition scrutiny.

"With its missionary zeal for consumers, Amazon has marched toward monopoly," she said at the time.

Since her surprise appointment as FTC Chair in 2021, this case has been widely expected - and viewed as a crucial test of her leadership.

The dominance of a handful of powerful tech firms has led some US politicians to call for action that would promote more competition in online search, retail and social media.

However, the FTC under Ms Khan has had little to show for its strong rhetoric against Big Tech.

In February it lost its attempt to stop Meta from buying VR company Within.

And in July it lost an attempt to block Microsoft from completing its deal to buy the maker of Call of Duty.

There is pressure on Ms Khan to make at least one high profile complaint stick - and at the FTC they have high hopes for this case.

The agency, along with 17 state attorneys, claims that Amazon is a "monopolist" that stops rivals and sellers from lowering prices.

The regulator also alleged the internet giant's actions "degrade quality for shoppers, overcharge sellers, stifle innovation, and prevent rivals from fairly competing against Amazon".

However, Amazon says that if the "misguided" FTC lawsuit is successful, it would mean fewer products to choose from, higher prices, and slower deliveries for consumers.

The key part of the case involves consumers losing money - getting worse deals - because of the alleged monopoly.

US anti-competition legislation is complicated, but generally, prosecutors have to show companies have acted in a way that hurts consumers financially.

That isn't always an easy thing to prove when it comes to Big Tech, as many of their services are free - like Google's search engine or Meta's Instagram.

Earlier this month, a court battle began between Google and the US government, which has accused it of having an advertising technology monopoly.

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Amazon: US accuses online giant of illegal monopoly

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The Federal Trade Commission alleges Amazon uses "unfair" and "illegal" strategies to keep power.

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FTC lawsuit accuses Amazon of wielding monopoly power over online retail

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FTC (US version of CMA) accuses Amazon of weilding monopoly power over online retail 

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FTC (US version of CMA) accuses Amazon of weilding monopoly power over online retail 

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What is included in my trial?

During your trial you will have complete digital access to FT.com with everything in both of our Standard Digital and Premium Digital packages.

Standard Digital includes access to a wealth of global news, analysis and expert opinion. Premium Digital includes access to our premier business column, Lex, as well as 15 curated newsletters covering key business themes with original, in-depth reporting. For a full comparison of Standard and Premium Digital, click here.

Change the plan you will roll onto at any time during your trial by visiting the "Settings & Account" section.

What happens at the end of my trial?

If you do nothing, you will be auto-enrolled in our premium digital monthly subscription plan and retain complete access for $69 per month.

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FTC lawsuit accuses Amazon of wielding monopoly power over online retail

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Case is biggest test yet of Lina Khan's fight against power of Big Tech

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In ditching a wealth tax, Labour is rejecting growth and embracing bad economics | Josh Ryan-Collins

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Is Labour doing the right thing by refusing to consider a wealth tax?

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Is Labour doing the right thing by refusing to consider a wealth tax?

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abour's shadow chancellor, Rachel Reeves, confirmed last weekend what many progressives have long feared: the party has no serious plans for reforming Britain's regressive taxation system. There will be no new property taxes or wealth tax. Nor will tax rates on capital gains - unearned income from increases in the value of property or financial assets - be raised to match those on wages.

The politics of maintaining the tax status quo can be debated. History suggests that Britain's swing voters in marginal constituencies may be particularly averse to tax rises or reforms. But the economics of this stance are unambiguously flawed, and here Labour is taking an almighty gamble. For without major tax rises and reforms, it is impossible to see how Labour will generate the levels of growth it has made one of its central missions when in government.

Reeves asserted: " I don't see the way to prosperity as being through taxation." This would appear an implicit backing for "trickle-down" economics: encourage the "wealth creators" by keeping taxes low and the cake will get bigger for everyone. This central tenet of neoliberalism has been thoroughly discredited. There is no evidence that the reductions in taxation on the rich that have proliferated over the past half century have led to higher rates of growth; rather, they have simply increased inequality.

Reeves claims to be a supporter of "Bidenomics". But Joe Biden's administration has fully and publicly rejected trickle-down economics, embarking on aggressive tax rises to support a massive fiscal expansion as part of the Inflation Reduction Act that has helped the US so effectively recover from the pandemic.

The truth is that the UK is a leading global example of an economy where the tax system incentivises a form of "wealth creation" that doesn't actually support growth. By taxing capital gains less than income (as much as 50%, less according to a recent study) and instigating a swath of tax breaks favouring property ownership and housing investment, we have supported the creation of a sophisticated form of " rentier capitalism ".

In such a system, the majority of investment flows into the capture and ownership of assets such as property, infrastructure or financial assets. This money does not then flow into the creation of new businesses, inventions or socially useful infrastructure, nor rising wages for middle- and low-income earners.

Instead, it goes to private domestic and international investors and households, whose assets further inflate. None of the income generated goes into productive investment. Instead, the rest of society faces higher house prices and rents. The banking and asset management sectors have fully embraced this approach, preferring bigger loans against less risky assets, such as property, to lending to small firms.

This capital misallocation is a key structural driver of the UK's stagnant growth and low productivity. A key mission of the Labour party is to have the highest rate of growth in the G7; but to do so, the country must move from the bottom of the G7 league table for private capital investment.

Factors other than the tax regime have also contributed to this record of course, including the lack of an industrial strategy, a national obsession with home ownership and, since the financial crisis of 2008, fiscal austerity. But to pretend the tax system has nothing to do with this is deeply flawed.

Added to this long-term, structural problem of capital misallocation is the more immediate challenge posed by inflation. The major increases in spending on public services and the green transition that Labour will be expected to deliver become much more challenging in an environment of high core inflation, which - in the UK, currently, at least - is proving persistent.

The way to temper the inflationary effects of such spending is to tax spending power out of other parts of the economy where it is less needed: most obviously from the wealthy. By raising taxes on capital gains or other forms of wealth while increasing public spending and investment, Labour has a good chance of repeating what Biden's administration appears to have managed: a progressive deflation where the wages of lower earners are allowed to catch up with those of the rest, and growth remains healthy.

What is even more remarkable about the Labour leadership's current position on tax is that it is out of sync with nearly the entire official economic establishment. The OECD, IMF, Institute for Fiscal Studies and Financial Times have all come out in favour of higher taxes on property and wealth in recent times as a means to support public investment and growth and reduce inequality.

Labour finds itself siding with an increasingly small minority of economists who continue to believe that taxing wealth and less than income will support growth. It's poor company for them to be in.

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In ditching a wealth tax, Labour is rejecting growth and embracing bad economics | Josh Ryan-Collins

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Rachel Reeves has tied her party's hands and placed it on the wrong side of the argument, says Josh Ryan-Collins, an associate professor at UCL

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Why I joined 70 economists and human rights experts urging Labour to change course | Kate Pickett

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Labour seems to believe in austerity and inequality. How are they different from the Tories?

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Labour seems to believe in austerity and inequality. How are they different from the Tories?

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ourteen years ago Richard Wilkinson and I published our book The Spirit Level. Arguably, the onset of the financial crash should have been an auspicious moment for our work to hit the bookshelves. Just as old economic certainties seemed to have been discarded, we were arguing for a new approach to macroeconomic policy focused on reducing inequality, improving human wellbeing and safeguarding the planet. There could be no better time for a reassessment of the values embedded in and outcomes expected from our economic system.

Of course, the coalition and subsequent Conservative governments chose a quite different path. Motivated by political ideology over and above economic literacy, they opted for swingeing cuts, punitive social security and tax policies engineered to benefit a wealthy minority. It has left our country poorer, weaker and more divided. Healthy life expectancy has fallen, child poverty rates have increased and inequality has grown - and the pain seems only to worsen.

The lesson? Disruptions on the scale of the financial crash open doors to new ideas. These moments of soul-searching have to be seized by progressives or else the narrative will be told by those with less socially minded or ambitious intentions in mind. Labour lost the argument in 2010. I am concerned it is about to lose it all over again.

This is why I joined 70 other economists and human rights experts, and the thinktank Compassion in Politics, in writing a letter to Sir Keir Starmer this week urging him to reconsider his current, too-limited economic vision. My concern is not just that he is about to tie his colours - and the fate of the British public - to several more years of economic suffering. It is also because I fear he is closing the door on an unprecedented opportunity to reshape the economic agenda.

A recent report found that the public already think austerity has failed and weakened our public services. Starmer and other politicians need to build on this opportunity for change, not reverse it. While governments outside of Westminster are experimenting with exciting new ideas - doughnut economics, wellbeing economics, universal basic incomes, and a human-rights focused economic agenda, to name a few - Britain looks set for another four years of austerity (or at least austerity-lite) government. It's like we are entering the 14th series of a programme that should have been cut right after the pilot.

We don't have to go back too far in our history to see how differently things can play out. Immediately after the second world war, Britain's economy was on its knees. Debt had risen to 270% of GDP (three times what it is today). Industries were devastated. Hundreds of thousands of British soldiers had been killed or wounded. International trade was in crisis.

The economic vision that won out has largely been attributed to the genius of John Maynard Keynes, who argued that straitened economic times call not for fiscal conservatism but a generous and ambitious package of public spending. Britain's postwar economy needed investment to get it back on its feet. That had to be coupled - as William Beveridge argued and championed - with a social safety net that ensured everyone could lead a decent life. The spirit of collectivism that saw Britain through the war had its legacy in the political and economic agenda that followed it.

Philip Alston, the UN special rapporteur on extreme poverty and human rights, in north Belfast, November 2018. Photograph: Bassam Khawaja/United Nations/PA

Fast forward three-quarters of a century and that spirit has, in many political circles, been forgotten. The UN's special rapporteur to Britain, Philip Alston, remarked in 2018: "British compassion for those who are suffering has been replaced by a punitive, mean-spirited, and often callous approach." Policies such as the benefit cap, the two-child limit on child benefits, the bedroom tax and the extensive use of sanctions to punish those already in need of financial support are the embodiment of that approach. One would expect that a party seeking its first electoral victory in 18 years would seek to distance itself from the pain and hardship that has been experienced by so many for too long.

And yet, the initial signs from Labour are that the party itself is now trapped, spellbound by an economic argument that is as empty in ethics as it is destructive in impact. Starmer has said the party will maintain the two-child limit on child benefits and the shadow chancellor Rachel Reeves recently ruled out a wealth tax. Like the Conservatives in 2010, they are pursuing a politicalrather than an economic agenda - believing that by aping Conservative arguments on spending they will march their way to No 10.

And then what? Find they have no mandate to introduce the kind of changes this country desperately needs. This period of opposition should be one in which they can influence the public narrative on the economy. They can use it to explain why spending actually benefits everyone and stimulates the economy, rather than holding it back. They can make the moral case for progressive taxation. They can debunk the myths that the national economy is in any way analogous to a household budget. And they can tell voters why our shared humanity dictates that we mustincrease social security and ensure that everyone can lead a good life.

But our letter was about more than just urging Starmer to do better. It's also an invitation. We know that he has to balance political expediency with economic need. We know that it isn't easy communicating a fresh vision. We can be an ally to any party that has the courage and wisdom to commit to change. We hope Sir Keir will take our offer seriously.

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Why I joined 70 economists and human rights experts urging Labour to change course | Kate Pickett

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Labour seems spellbound by the Tories' economically illiterate cult of austerity - but there is another way to help Britain thrive, says Kate Pickett, co-author of The Spirit Level

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Poor people 'surviving not living' as UK social contract collapses, says report

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U8 Article discusses recent report on poverty reduction

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U8 Article discusses recent report on poverty reduction

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The collapse of the UK's social contract is leaving millions of low-income families "surviving not living" and forced to endure unacceptable levels of poverty, according to an independent cross-party report.

The Poverty Strategy Commission, which seeks to forge a new national political consensus on reducing poverty, and which includes former ministers from the three main parties, says poverty levels are too high and hardship is becoming more extreme. It warns a "more of the same" approach to poverty in the future will fail.

It estimates the broad annual cost of significantly reducing poverty in the UK at £36bn - equivalent to £6,000 a year for 6 million families in poverty - a figure reached through a combination of benefits and wage increases, and investment to lower housing and energy costs, and improved health services.

The interim report of the commission, published on Tuesday, seeks to put poverty reduction back on the party political agenda before the next general election. It is concerned at the lack of urgency from the two main parties over the scale and nature of poverty, and society's failure to offer adequate protection to its poorest.

The report says not only have overall relative poverty rates barely budged at between 21% and 24% over the past two decades, but even in areas where some progress was made - such as reducing pensioner and single-parent poverty - they have started to go into reverse.

It also highlights the rise in the proportion of people in poverty experiencing "deep poverty" - measured as at least 50% below the poverty line. It says nearly a third (31%) of those officially in hardship are in deep poverty and struggling to buy sufficient food, energy and clothes, pay rent and meet other everyday bills.

While the government often implies there is a "social contract" between state and citizen, the commission says in practice this does not exist, noting that the social security system routinely fails to protect people from poverty even when they are working, are unable to work through disability, or are pensioners.

Its interim recommendations include a 5% uplift in benefits and wages for people in poverty, outside any inflation increases, although it says poverty cannot be tackled by raising incomes alone, and highlights housing and childcare costs, the additional costs of disability, and energy and travel costs as areas to be addressed.

The chair of the commission, Lady Philippa Stroud, is a Tory peer and former political adviser to Iain Duncan Smith when he was welfare secretary between 2010 and 2016. She put the commission together to try to forge a new political momentum for tackling poverty, and attempt to engineer broad agreement over how it should be done.

She said: "Poverty in the UK is too high and the experiences of many people in poverty are now getting worse. Governments of all colours have worked hard to change that picture, but as a society, we have failed to make significant progress."

The commission, which has been meeting for 18 months, includes the Conservative MP and former work and pensions secretary Stephen Crabb, the former Liberal Democrat MP and coalition minister David Laws, and the Labour MP and former Treasury minister Stephen Timms. Thinktanks from left and right, charities including the Trussell Trust food bank network, and academic experts are also members.

The commission member Miatta Fahnbulleh, the head of the New Economics Foundation, said: "Everyone in 21st-century Britain should be able to afford the basics they need to avoid poverty. It's shameful that instead millions of families are on the edge of destitution."

She added: "In recent years, we've made little progress in tackling the causes of poverty: low wages, an inadequate social security system and sky-rocketing housing costs. As the commission shows, the solutions are there to tackle these issues. What we need now is the collective will."

The final report of the commission is expected to be published at the end of the year.

Mel Stride, the secretary of state for work and pensions said:"We have helped nearly two million people out of absolute poverty after housing costs since 2010, including 400,000 children, and it's absolutely right we have a joined-up approach to ensure this downward trend continues.

"Our record financial support - benefits and pensions up by 10.1%, £900 in direct Cost of Living payments to some of the most financially vulnerable, and our boost to the National Living Wage - has cushioned those most in need from the worst of the cost of living pressures and we will continue to support them.

"I look forward to reading the commission's full report next year, and continuing with a collaborative approach across government and society to reduce poverty and support the most vulnerable."

This article was amended on 5 September 2023 to add a comment from Mel Stride, the secretary of state for work and pensions.

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Poor people 'surviving not living' as UK social contract collapses, says report

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Exclusive: Commission including former ministers voices concern at lack of urgency from two main parties over scale of poverty

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UK social mobility at its worst in over 50 years, report finds

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U8 Inequality: Do working class kids really stand a chance in Britain? Social mobility in Britain is the worst it's been for 50 years.

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U8 Inequality: Do working class kids really stand a chance in Britain? Social mobility in Britain is the worst it's been for 50 years.

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Moving up the social ladder in Britain has become harder than at any point in more than half a century for children born into poor households, according to the country's foremost economic thinktank.

Exposing a striking breakdown in social mobility, the Institute for Fiscal Studies (IFS) said those growing up in the north of England and the Midlands, as well as those from a minority ethnic background, would find it a lot harder than others to become wealthier than their parents.

The IFS said children from poor households were finding it harder than 40 years ago to move into higher income brackets, made worse by years of sluggish growth in average earnings. It found that inheritances were becoming more important in determining lifetime income.

"It may be harder now than at any point in over half a century to move up if you are born in a position of disadvantage," said David Sturrock, a senior research economist at the IFS.

Analysing income data for those born in the 1960s, 70s and 80s, the IFS report, called Intergenerational Mobility in the UK, found parental income had become a much stronger predictor of the earnings people born from the 1970s onwards could expect by the age of 28.

On top of this, the IFS said the growth of inheritances for the children of wealthy parents was likely to drive a further decline in social mobility for the 1980s generation compared with previous decades.

After an explosion in house prices in recent decades - helping parents already on the property ladder to pass on greater wealth to their children - it said inheritances would be twice as big on average for those born in the 1980s as for the 1960s.

The findings come as Rishi Sunak comes under pressure from the right of his party to abolish inheritance tax as part of the Conservatives' manifesto for the next general election. The party continues to trail Labour in the polls.

Rachel Reeves, the shadow chancellor, has also ruled out Labour imposing a wealth tax if it wins the next election, as the party doubles down on efforts to demonstrate economic competence.

The IFS said the challenge of moving up income and wealth brackets was more striking for some people than others.

It said there were marked regional differences for earnings mobility, with children born in and around London likelier to earn more than their parents compared with those from big northern English cities - including Manchester, Leeds, Newcastle, Hull and Middlesbrough.

The report found men who grew up on free school meals in the highest areas for social mobility - around London - were paid £8,700 more at age 28 than if they grew up in the lowest-mobility areas, in the north of England. The difference for women was £8,100.

Those with parents living in London also stood to inherit about twice as much as those in the north-east or Yorkshire and the Humber, reflecting the surge in property values in the capital in recent decades compared with weaker growth elsewhere.

The IFS said there were also striking differences between ethnic groups, including a difference of £8,000 in the earnings of young men from a black Caribbean background who grew up on free school meals compared with someone from an Indian background.

It also found that men from Pakistani, black African and black Caribbean backgrounds who grew up on free school meals end up earning less than white men who had been in the same position.

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UK social mobility at its worst in over 50 years, report finds

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Institute for Fiscal Studies finds stark disparities in earnings based on geography and ethnicity

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Microsoft's new Call of Duty deal set for approval

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U7: CMA allows Microsoft purchase of Activision to go through.

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U7: CMA allows Microsoft purchase of Activision to go through.

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Microsoft's new Call of Duty deal set for approval

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The revised offer "opens the door" to the deal being cleared, the UK competition watchdog says.

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Now it’s clear: hard work doesn’t make you rich. Surely that’s the death knell for the myth of social mobility | Faiza Shaheen

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U8 Inequality: Social mobility in the UK is all but dead

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U8 Inequality: Social mobility in the UK is all but dead

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Now it’s clear: hard work doesn’t make you rich. Surely that’s the death knell for the myth of social mobility | Faiza Shaheen

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Where you are born in the UK and the wealth of your family are the key factors that determine life outcomes, new figures reveal says Faiza Shaheen, a visiting professor at the London School of Economics

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UK pub chain Stonegate Group to charge more at peak hours

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U7 Market Structures: Price discrimination inaction. Dynamic pricing by pub chain.

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U7 Market Structures: Price discrimination inaction. Dynamic pricing by pub chain.

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Business reporter, BBC News

The pub group that owns Slug & Lettuce and Yates bars has said it will charge about 20p more per pint during peak hours due to cost increases.

Stonegate Group, the UK's biggest pub chain, says 800 of its 4,000 pubs will introduce "dynamic pricing" during evenings and weekends.

It said the price rise reflected the higher costs the company was facing, including extra security.

Peak-time pricing is used by other sectors like travel when demand spikes.

Stonegate said customers would be alerted to the price increases through notices in their pubs.

The move prompted an angry response from some customers on social media.

"It's already happening at my local pub - something like £3.40 a pint before 7pm, £4.20 after. It's backfired I think, it's often empty after 7pm," said one.

"If they push on with this there will be no such thing as a busy Stonegate pub," said another.

The company has introduced temporary price increases before. The chain charged up to 50p a pint more when England football matches were shown in their pubs during the last two world cups. Prices returned to normal after the matches.

Ride-sharing companies like Uber also use peak-time pricing, and it is commonly used by the hotel and airline industries.

"Like all retail businesses, we regularly review pricing to manage costs but also to ensure we offer great value for money to our guests," a Stonegate spokesperson said.

"This flexibility may mean that on occasions pricing may marginally increase in selective pubs and bars due to the increased cost demands on the business with additional staffing or licensing requirements such as additional door team members."

Stonegate said that part of its "dynamic pricing" strategy also included the ability to offer deals during less busy times, including 2-for-1 cocktails, happy hours and discounts on food and drink. Many other sectors do the same to encourage business during quieter times of the week.

'It's very difficult to make any money'

Speaking to Radio 4's Today programme, chef and pub owner Tom Kerridge said he would not be surprised if the company was dropping prices at certain points, "maybe at lunchtime, or at times in the business where it's a little bit quieter".

"I imagine the prices will be the same on a Saturday night, but it will be cheaper at quieter times."

Mr Kerridge, who has spoken often about the struggles the hospitality sector is facing because of Brexit, Covid, and the rising cost of energy, said the industry was under huge pressure.

"It's very difficult to make any money," he said.

"Beer is an incredibly expensive commodity. The process of brewing has gone up by an incredible amount. It's ridiculous. That end result does have a knock-on effect."

Pubs across the UK have been struggling with increased costs, including energy, leading to record closures across England and Wales.

In May, data from consultants CGA and AlixPartners suggested the number of licensed premises since March 2020 declined 12% in British cities, with central London being hit the hardest.

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Slug & Lettuce owner to charge more at peak hours

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Stonegate, which owns Slug & Lettuce and Yates bars, will add about 20p to a pint during busy periods.

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Student finance: How much does university cost and does it increase earnings?

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The economics of going to university. (Hint: do an economics degree)

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The economics of going to university. (Hint: do an economics degree)

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Students starting university in England this year face big changes to the way student loans work.

And with these changes coming alongside the cost-of-living crisis, some are wondering whether university makes financial sense.

What does going to university cost?

The combined cost of tuition fees and accommodation for an undergraduate UK student varies:

England: £49,887

Wales: £45,494

Northern Ireland: £32,091

Scotland: £27,775

Students also need to budget for other big expenses which are not included - food, transport, course materials and going out.

How much are tuition fees?

The cost of tuition per year also varies:

England: £9,250

Wales: £9,000

Northern Ireland: £4,710 for Northern Irish students, or £9,250 for other UK students

Scotland: Free for the majority of Scottish students, and £9,250 for other UK students

What does student accommodation cost?

If you are leaving home to study, it is generally cheaper to live in university-owned accommodation.

In 2021-22 (the latest figures available) average rent for university-owned rooms was £6,227 per year, and £7,732 for private rooms.

There are big differences between areas.

In London, the average cost for university-owned rooms was £7,546 per year and £12,034 for private rooms.

In England overall, it was £6,471 a year for university-owned rooms and £7,833 for private accommodation.

Scotland was £5,809 for university accommodation and £7,322 for private.

For Wales it's £5,106 and £6,694, and for Northern Ireland it's £4,565 and £6,698.

How do student loans work?

Most UK students take out student loans.

loan for the tuition fees - paid directly to the university

maintenance loan - paid into the student's bank account in instalments

Most people are entitled to the tuition fee element, which is equal to the annual cost of your course up to £9,250 per year.

The maintenance loan is intended to cover accommodation, food, books and equipment.

The amount you get depends on your family's household income. If your parents earn above a certain amount they will be asked to contribute to your living costs.

You might get extra money if you are disabled or have children.

If you're under 25 and have no contact with your parents, you might be able to apply as an "estranged student" which means their finances are not considered.

Students in England can borrow up to £9,978 a year for a maintenance loan if living outside London and away from their parents. This increases to £13,022 in London.

In Scotland, the maximum annual maintenance loan is £8,000. In Wales it is £10,720, and in Northern Ireland the maximum loan is £6,776.

Students are charged interest on their total loan from the day they take it out.

How are student loan repayments changing in England?

If you live in England and are starting university in September 2023, you will pay back 9% of your earnings over £25,000 from the April after you graduate. This is lower than the current threshold of £27,295.

You will also have to pay the loan back for longer.

However, the amount of interest charged is being cut. New students will be charged interest equal to the retail price index (RPI) measure of inflation, instead of the current rate of RPI plus 3%. (The current RPI rate is 10.7%).

The government says this means new students "will not repay more than they originally borrowed over the lifetime of their loans, when adjusted for inflation".

Labour also said the changes will "hit those on low incomes hardest".

What extra financial help is available?

Eligible students in Wales and Northern Ireland can also claim maintenance grants which are not repaid.

Will I earn more money?

Most students will leave university owing money. The average debt for students who start university in England this year, for example, will be about £43,000.

However, it suggests the extra money earned as a result of a university education has reduced over time.

According to data from HESA's survey of 2020-21 graduates, the average salary reported 15 months after gaining a degree was £27,340.

How much graduates earn also depends on the subject studied and university attended.

Research by the IFS think tank in England suggests, on average, women who studied creative arts and languages degrees earned the same amount in their lifetime as if they had not gone to university.

Women who studied law, economics or medicine earned more than £250,000 more during their career than if they had not got a degree.

Men who studied creative arts on average earned less across their lifetimes than if they had not attended university. Male medicine or economics graduates earned £500,000 more.

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Student finance: How much does university cost and does it increase earnings?

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Given rising costs, some students are wondering whether going to university makes financial sense.

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France to spend €200m on destroying excess wine as demand falls

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What possible justification is there for such behaviour?

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What possible justification is there for such behaviour?

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The French government has announced it is to set aside €200m to fund the destruction of surplus wine production in an attempt to support struggling producers and shore up prices.

Several major wine-producing regions in France, particularly the Bordeaux area, are struggling because of a cocktail of problems including changes in consumption habits, the cost of living crisis and the after-effects of Covid-19.

A fall in demand for wine has led to over-production, a sharp fall in prices, and major financial difficulties for up to one in three winemakers in the Bordeaux region, according to the local farmers' association.

An initial EU fund of €160m for wine destruction has been topped up to €200m by the French government, the agriculture minister, Marc Fesneau, told reporters on Friday.

The money was "aimed at stopping prices collapsing and so that winemakers can find sources of revenue again", but he stressed that the industry needed to "look to the future, think about consumer changes ... and adapt".

The south-west Languedoc region, the country's largest wine area, known for its full-bodied reds, has been hit hard by the fall in wine demand.

The alcohol from destroyed wine can be sold to companies for use in non-food products such as hand sanitiser, cleaning products and perfume.

"We're producing too much, and the sale price is below the production price, so we're losing money," said Jean-Philippe Granier, from the Languedoc wine producers' association.

In June, the agriculture ministry also announced €57m to fund the pulling up of about 9,500 hectares of vines in the Bordeaux region, while other public funds are available to encourage grape-growers to switch to other products, such as olives.

Europe last suffered a "wine lake" in the mid-2000s, which forced the EU to reform its farm policy to reduce the massive overproduction of wine that was being stimulated by its own subsidies.

The 27-member bloc still spends €1.06bn annually on the sector, according to EU figures.

As well as a long-term trend of consumers switching to beer and other drinks, the industry was badly hit by the Covid pandemic that shut restaurants and bars worldwide, leading to a sharp fall in sales.

Recent rises in the prices of food and fuel, linked to rocketing global energy prices and the Russian invasion of Ukraine, have also seen buyers reduce their spending on non-essential goods such as wine.

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France to spend €200m on destroying excess wine as demand falls

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Fund aims to help struggling winemakers as they adjust to consumers' changing habits

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UK competition watchdog raises concerns over housing market

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Can't believe it's taken this long for the CMA to look into the UK's highly dysfunctional housing market 

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Can't believe it's taken this long for the CMA to look into the UK's highly dysfunctional housing market 

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UK competition watchdog raises concerns over housing market

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Some landlords could be breaching consumer protection rules, while CMA is also investigating land held by largest housebuilders

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The uses — and the limits — of ‘nudge’ economics | Financial Times

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Behavioural economics is being increasingly questioned.

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Behavioural economics is being increasingly questioned.

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The uses — and the limits — of ‘nudge’ economics | Financial Times

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Reputational hits to behavioural science have cast undue doubt on its policy application

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A one-off Bob Dylan recording could sell for £1m

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£1 million+ for a single song? It's all about demand and supply 

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£1 million+ for a single song? It's all about demand and supply 

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A one-off Bob Dylan record is expected to fetch up to £1m when it is auctioned at Christie's on Thursday.

The disc features a new version of the star's classic song Blowin' In The Wind, made in March 2021 with his long-time collaborator T Bone Burnett.

"It felt holy," he tells BBC News. "It always feels holy for me, playing with Bob - and I think we did it in one take, if I'm not mistaken."

It is the first new studio recording of the song since Dylan wrote it in 1962.

The one-off release also showcases a new type of record that combines some of the materials used in CDs and vinyl, and promises better sound quality and durability than vinyl.

Playable on any regular turntable, the new format is described as "the pinnacle of sound" by Burnett, who helped develop it.

Ultimately, only one deep-pocketed Dylan fan will get to own the new version of Blowin' In The Wind. However, fans can go to Christie's in London to hear the record before it is sold.

There, they will be ushered into a sedate side-room of the auction house, where the 10-inch disc is handled with silk gloves before being placed on a £30,000 hi-fi system.

Listening on headphones, the warmth and precision of the sound is immediately apparent, save for a few pops and cracks (maybe four in total) attributable to dust or static on the surface of the record.

Dylan's voice is smooth and dextrous throughout, having benefitted from an extended break in touring during the Covid-19 pandemic.

When it appears, his characteristic rasp only adds to the weight of the lyrics, which are inextricably linked to the civil rights movement of the 1960s.

Lines like, " How many times can a man turn his head / and pretend that he just doesn't see?" resonate harder than ever when sung from the perspective of an 81-year-old who's witnessed history repeat decade after decade after decade.

As a result, the song becomes more contemplative, a rumination on our failures. Dylan stretches out his syllables as though he's contemplating every line anew; taking almost a minute longer to reach the song's conclusion.

Unlike the original, the 2021 re-recording features a full band, recorded live in the studio as Dylan sang. Their subtle and sympathetic arrangement - with Greg Leisz on mandolin and Don Was on bass - adds a new dimension to the song, without stealing focus from the message.

It almost seems a shame that, in the words of the Christie's catalogue, "this is the only copy of Bob Dylan's 2021 recording,.... that will ever be manufactured. No other versions of this recording will be released or sold".

"We're only making one because we view this work as the equivalent of an oil painting," says Burnett, who is best known for his Grammy-winning work on Raising Sand by Alison Kraus and Robert Plant, as well as the soundtracks for O Brother, Where Art Thou? and The Big Lebowski.

He hopes that future releases in the format will "help develop a music space in the fine arts", allowing artists to combat "the devaluing of our work by the commoditisation of the internet".

"I don't know what an original recording of Bob Dylan singing one of the most important songs of the last century is [worth] today, but I know it's not point $0.001 divided by 5 billion, which is the reality that musicians face now."

The exclusivity of the new recording has informed its estimated sale price of between £600,000 and £1 million.

Peter Klarnet, Christie's senior specialist in Americana, says it was hard to calculate an estimate, as nothing of this nature has ever been sold before. The closest analogy is the Wu-Tang Clan album Once Upon a Time in Shaolin, which was limited to a single CD copy in 2015.

That record was initially bought by hedge fund manager Martin Shkreli for an unspecified sum. When he was later convicted of fraud, the US Department of Justice re-sold the album for a reported $4m (£3.35m), making it the most expensive work of music ever sold.

Klarnet says the Dylan record is unlikely to top that sum, but suggests his initial estimate is on the conservative side.

Meanwhile, Burnett is enthused by the potential of his new physical audio format - known as an Ionic Original.

Announced in April, it consists of "lacquer painted onto an aluminium disc, with a spiral etched into it by music".

This is essentially the same technology that the music industry has used for decades to create test pressings, known as acetates or dubplates.

Musicians generally agree that these acetates sound better than vinyl - but they degrade quickly, as the force of the needle pushing into the groove melts the lacquer.

"So we started looking into what they use on the Space Station to shield it from the direct light of the sun," says Burnett. "And we've been able to coat the acetate with that, and it removes enough friction that the acetate doesn't degrade over thousands of plays."

He says the coating - made from a gradient of sapphire and quartz - also reduces the crackle associated with vinyl.

"Friction creates static electricity, which attracts dust, which causes pops," he explains. "So with this coating removing friction, if some dust does land on the needle, it cleans it out. So the discs are essentially self-cleaning."

At the time of writing, the discs cannot be mass produced, meaning they are likely to remain collector's items and investment opportunities for now. But Burnett hopes they will be more widely adapted in the future.

"I don't look at this as a replacement for anything," he says. "I just look at it as another arrow in the quiver for every musician in the world [and] a whole new way of earning a living that we've never had before."

This isn't Burnett's first venture into audio formats. In 2008, he developed a hi-fidelity technology known as ΧΟΔΕ (or Code), which allowed listeners to play "studio quality" recordings from a DVD player.

Releases on the format included John Mellencamp's Life, Death, Love and Freedom - but the format died out relatively quickly.

Follow us on Facebook, or on Twitter @BBCNewsEnts. If you have a story suggestion email entertainment.news@bbc.co.uk.

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A one-off Bob Dylan recording could sell for £1m

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A one-off Bob Dylan record is expected to fetch up to £1m when it is auctioned at Christie's on Thursday. The disc features a new version of the star's classic song Blowin' In The Wind, made in March 2021 with his long-time collaborator T Bone Burnett. "It felt holy," he tells BBC News.

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Big pay rises for top earners in London have masked cuts in rest of UK, says IFS

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Averages can mask massive differences as UK pay rises go to certain jobs in London and the South East.

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Averages can mask massive differences as UK pay rises go to certain jobs in London and the South East.

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Big pay increases for highly paid workers in London and the south-east have masked real wage cuts across large swathes of the economy and led to a widening in the UK's geographical earnings gap, a leading thinktank has said.

A study from the Institute for Fiscal Studies (IFS) found that while workers in some sectors - such as manufacturing, education and hospitality - had fallen in inflation-adjusted terms, there had been significant rises for those employed in the business services sector, the City and IT.

Yet, despite evidence of labour shortages since the end of Covid-19 lockdown, many workers - including those in London - were now between 1% and 4% worse off than they were before the virus first arrived in the UK. There are more than 1m job vacancies, with employers saying they are having trouble hiring staff.

Using payroll data from HMRC, the IFS said pay growth since the start of the pandemic has been concentrated in well-paid parts of the economy that tended to be located in London.

That had led to real mean earnings for employees living in London rising by 5% since February 2020 - to £4,400 a month before tax - compared with a national increase of 2.7%. Workers who live in London's commuter belt received a real pay rise of 4.5% on average.

Xiaowei Xu, the senior research economist at the IFS, said:"Inequality in mean earnings across the country had been falling in the two decades leading up to the pandemic, with the poorest areas seeing the highest pay growth. Since 2020 we have seen a reversal of this trend, with strong pay growth in business services benefiting London's top earners.

"But not everyone in London has had a big pay rise. Middle earners in London have only seen their pay go up by 1.7% over the last three years, which is low by both national and historical standards."

The IFS study showed the biggest real pay increases in the 2020-23 period had been enjoyed by workers in the energy and the administration and support sectors, which saw rises of close to 10%. Business services recorded increases of 8.6% and wages in finance - despite a fall from their peak in mid-2022 - were 7.6% above their pre-pandemic level. Earnings in information and communications were up by 5.5%.

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By contrast, there were 10 sectors in which inflation-adjusted earnings were lower than they were at the start of 2020. The biggest drop - close to 4% - was in the real estate sector, but there were also declines of 1% or more in mining and quarrying; accommodation and food; manufacturing; transportation and storage; construction; arts and entertainment; education; water; and public administration.

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Big pay rises for top earners in London have masked cuts in rest of UK, says IFS

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Britain's earnings gap is growing as business services, finance and IT workers prosper, thinktank finds

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Calls for inquiry into appointments of Ofwat chairs past and present

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The regulatory capture of water is a national scandal 

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The regulatory capture of water is a national scandal 

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The appointments of the current and previous chairs of the water regulator Ofwat should be investigated, campaigners say, as the Liberal Democrats call for the watchdog to be abolished.

Jonson Cox, a former chair of the regulator, had multimillion-pound links with the privatised water industry before taking up the role. The chair, Iain Coucher, remains a senior adviser to a global private equity firm that has interests in the water industry in the US.

Cox and Coucher declared all their interests when they were appointed by the government. Campaigners say their respective appointments represent a failure of the system and have written to Thérèse Coffey, the environment secretary, calling for an independent investigation.

Ofwat is under increasing pressure because of the scale of debts England's water companies have been allowed to build up - £60bn - while paying out more than £72bn in dividends since privatisation. Ultimately the environment secretary is responsible for the appointment of the chair of the regulator.

Ash Smith, an activists from the group Windrush Against Sewage Pollution, said in the letter to Coffey: "The failure of the regulators is now obvious, so the reasons why supposedly highly regulated water companies have done so well by exploiting captive bill-payers should, we think, be an important subject for the secretary of state ultimately responsible for the sewage scandal. 'Regulatory capture' or worse are obvious features that surely require investigation.

"I urge you to order an independent investigation, but this time to extend across the board of water industry regulation; to include the influence of conflicting interests and the revolving door of employment between the regulated and the regulator."

Tim Farron, the environment spokesperson for the Lib Dems, on Wednesday supported calls for an inquiry into the regulator and the industry as a whole.

The party is calling for Ofwat to be abolished and replaced with a more powerful new regulator.

Farron said: "An urgent inquiry into the entire water industry is desperately needed. There are serious questions about how water companies have been allowed to build significant debt, still pay out millions in dividends all whilst failing to fix leaks or stop sewage dumping and we need answers."

Cox spent years working at the top of Anglian Water and Yorkshire Water and declared a pension from the latter's owners, Kelda Group, when he was appointed as chair of Ofwat in 2012. When Cox left Anglian in 2010 he received a payout of £9.5m.

At the time of his Ofwat appointment he said he appreciated he might be seen as "a poacher turned gamekeeper".He held the chair until 2022, by which time water company debts had reached £54bn.

Cox also had a small financial interest - under 1% - in a startup, which specialises in high-frequency pressure monitoring and leak detection in water industry pipes networks. The company, Syrinix Ltd, was sold this year for £15m.

Coucher was appointed the chair of Ofwat in 2022 by George Eustice, the then environment secretary. Coucher remains a senior adviser to HIG Capital, a Florida-based global private equity firm that has bought into the water industry in the US. He has declared the interest.

In England, more than 70% of the privatised water industry is owned by foreign-based private equity firms, investment companies, banks and pension funds. They are part of a complicated web of ownership of water companies and in some cases have been accused of asset stripping.

At a pre-appointment hearing before the environment, food and rural affairs committee, Coucher was challenged about his lack of awareness about the environmental impact of the industry.

"We were surprised, however, that he had not given greater consideration to the way in which environmental sustainability should be incorporated and rewarded in Ofwat's regulatory role," the MPs said, but they approved his appointment.

Under Ofwat rules, no board member of the regulator may at any time have any interest directly or indirectly in an equity or other financial interest in any water and sewerage undertaker in England and Wales, or gain any employment, consultancy, directorship or any other remunerative agreement from water and sewerage companies.

But the regulator also says: "In appropriate circumstances, which are likely to be exceptional, the board may decide that what would otherwise be a prohibited interest should not be classified as such for the purposes of these rules of procedure for a particular period or with respect to particular decisions or categories of decisions."

A spokesperson for Cox said: "All Jonson Cox's previous appointments and interests were fully disclosed, and accepted, before and throughout his appointment and entirely in accordance with all applicable rules.

"He was specifically appointed by government, with support of the parliamentary select committee, for his knowledge and track record. His success in holding companies to account on many performance standards, improving board leadership, constraining dividend policies and degearing over-indebted capital structures are well documented.

"All this won him no friends among companies and investors. Once new flow meters confirmed evidence of unacceptable environmental performance of many sewage works in 2021, he and his board investigated immediately and brought six major enforcement cases in 2022, which are ongoing."

An Ofwat spokesperson said: "Mr Coucher is an advisor to HIG Capital's European fund due to his background in rail infrastructure. HIG Capital has no interests in the UK water sector. Iain's role at HIG Capital was fully disclosed at the time of his appointment by the secretary of state, and to the environment, food and rural affairs committee who conducted the pre-appointment hearing."

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Calls for inquiry into appointments of Ofwat chairs past and present

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Campaigners raise concerns about water industry links as Lib Dems say watchdog should be abolished

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Supermarket fuel prices up due to lack of competition

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A fantastic contextual example of tacit oligopolistic collusion and CMA intervention

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A fantastic contextual example of tacit oligopolistic collusion and CMA intervention

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Supermarket fuel prices up due to lack of competition

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Drivers paid an extra 6p per litre for fuel last year because of weaker competition, says watchdog.

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Exclusive: UK water giants recruit top staff from regulator Ofwat

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Terrifying example of regulatory capture 

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Terrifying example of regulatory capture 

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Two-thirds of England's biggest water companies employ key executives who had previously worked at the watchdog tasked with regulating them, the Observer can reveal.

Cathryn Ross, the new interim joint chief executive of Thames Water and a former head of watchdog Ofwat, is one of several ex-employees working for water companies in senior roles such as strategy, regulation and infrastructure.

An analysis by the Observer has found 27 former Ofwat directors, managers and consultants working in the industry they helped to regulate, with about half in senior posts.

The findings have raised fresh concerns over a revolving door between the regulator and the industry.

"There is a merry-go-round between the core regulators and the regulated utilities," said Sir Dieter Helm, a former government adviser and professor of economic policy at Oxford University.

"Regulators are not paid very well, and if there is the potential of future jobs in the firms they regulate, it creates potential conflicts of interest."

Tim Farron, the Liberal Democrats' environment spokesperson, said there should be more robust rules and vetting procedures for former regulators moving to the private sector.

Calls for a crackdown on the revolving door come amid concerns that Thames Water is at risk of collapse from about £14bn of debts. There is public anger that water companies were allowed to pay out billions of pounds to shareholders by borrowing vast sums against their previously publicly owned assets.

Cathryn Ross, a former Ofwat boss, is now interim joint chief executive of Thames Water. Photograph: Thames Water

Six of the nine water and sewerage companies in England have hired directors of corporate strategy or heads of regulation who previously worked at Ofwat, including former director of strategy Andrew Beaver, now at Northumbrian Water, and former director of strategy and planning Iain McGuffog, now at South West Water.

When she headed Ofwat, Ross defended the regulation of the industry after a Financial Times article criticised Thames Water and said that "water privatisation looks little more than an organised rip-off".

In addition to Ross at Thames Water, Jonathan Read, director of regulatory policy and investigations, and Giles Stevens, director of regulatory strategy and innovation, also worked as directors at the regulator.

The Observer has established that another executive from the regulator was recruited by Thames Water as recently as March this year as a "regulatory engagement lead". The advertisement for the "mid-senior level" role stated that "you'll be leading relationships with the core regulation stakeholders" and securing "regulatory buy-in" through policy development.

At Severn Trent, there are at least nine employees who were previously at Ofwat. They include Shane Anderson, director of strategy and regulation, and Jonathan Ashley, head of economic regulation. Both have previously worked as directors at the regulator that oversees water and sewerage firms in England and Wales.

None of the former Ofwat employees has acted improperly or broken any rules around appointments of former civil servants. The regulator says it can impose restrictions on civil servants leaving for the private sector, which can include the type of work they can do, and these are shared with the new employer.

Helm said that Ofwat should have regulated the balance sheets of the water companies more closely. He said: "There was a failure to stop the companies essentially mortgaging the assets and then paying out the proceeds in dividends. It was a huge regulatory mistake and we are now seeing the consequences."

A report published last week by Richard Murphy, professor of accounting practice at Sheffield University, has calculated that the nine water and sewerage companies in England and Wales benefited from a 35% profit margin before financing costs between 2002 to 2022, paying out £24.8bn of profits in dividends.

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Murphy said: "Ofwat allowed water companies to take on an extraordinary amount of debt, which was always going to explode. They were apparently unable to appraise the scale of risks inside the industry.

"It's exceptional that over 20 years, every single penny of profit that has been earned after tax has been taken out by way of dividends. The mindset was they were managing a cash cow and would keep getting dividends for ever."

The water companies have been criticised by campaigners for failing to adequately invest in infrastructure to reduce leaks and prevent sewage spills in rivers and along the coastline.

The headquarters of debt-laden utility Thames Water near Reading. Photograph: Geoffrey Swaine/Shutterstock

An Ofwat spokesperson said: "We have reported routinely on Thames Water's financial situation and have been clear that their performance isn't good enough. They need to fix it, but this isn't a situation where the business is about to fall over.

"Ofwat recruits people on the basis of their skills and experience, which can help us to hold companies to account. All employees are subject to civil service rules on independence, propriety and probity as part of our code of conduct. They are reminded of this, both when first appointed and when leaving the organisation."

Water UK, which represents the industry, said criticism of high dividends was out of date, with average returns of 3.8% for shareholders last year.

A spokesperson said debt finance was typically cheaper than equity and helped to keep costs low for customers.

Water companies say that all their employees comply with relevant appointment rules when they have previously worked in the public sector.

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Exclusive: UK water giants recruit top staff from regulator Ofwat

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Demands for an end to the 'revolving door' as ex-Ofwat directors are hired by key firms

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'It feels cynical': small independent schools on Labour's 20% VAT policy

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What will happen to the numbers in private schools once VAT is added to fees?

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What will happen to the numbers in private schools once VAT is added to fees?

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arents and children say they love the London Welsh school, the only bilingual Welsh language nursery and primary school in England. The only problem, according to the school's chair of governors, is there aren't enough of them.

For 65 years Ysgol Gymraeg Llundain has been teaching Welsh language and culture to children of the Welsh diaspora. But since Covid, the tiny independent school in west London has become even tinier.

The school began last year with 25 pupils, until the end of pandemic measures resulted in many of its families moving back to Wales. This year the London Welsh school has just eight pupils.

"The problem we've got now is the younger children haven't joined. And Covid had a part to play in that, because before lockdown families would make an effort to travel further and come to us. But because we were all told to stay local, of course children went to a local nursery and they then progressed to a local school," said Glenys Roberts, the chair of governors who has been involved with the school for 30 years as a parent and former teacher.

"It's not easy with such small numbers but the school is a happy place and full of love. We need some more children but we will carry on."

While wealthy and elite schools such as Eton and St Paul's girls school come to mind when people think of fee-paying schools, a larger number of independent schools in England are like the London Welsh school - small, precarious and catering to a niche that state schools can't provide for.

Eton and Ysgol Gymraeg Llundain may soon have something in common: a future Labour government aims to apply VAT of 20% to the fees they charge pupils. Labour says adding VAT will raise about £1.6bn a year, with the shadow education secretary, Bridget Phillipson, pledging to use the funds to recruit more staff in vital subjects such as maths and physics.

"Excellence must be for everyone - that is why the next Labour government will invest in more teachers to fill these gaps and provide expertise, paid for by ending tax breaks for private schools," Phillipson told school leaders in April.

The prospect of higher school fees has led to warnings of a sudden exodus of pupils from the private sector, with the extra cost to the government eating into the £1.6bn windfall.

Jeremy Hunt, the chancellor, used last year's autumn statement to attack Labour's policy, citing predictions that it would "result in up to 90,000 children from the independent sector switching to state schools".

A survey of parents by the Independent Schools Council (ISC) found 20% said they would "definitely" withdraw their children from private school if VAT was added, costing the government about £600m a year in additional spending on state schools. But economists who specialise in education said they were highly sceptical that adding VAT would spark an immediate exodus.

"I think the suggestion that there's some sort of mass rush as soon as the policy comes in is incredibly unlikely. It's not impossible, but it's incredibly unlikely," said Luke Sibieta, a senior research fellow at the Institute for Fiscal Studies.

One reason, according to Sibieta, is that the willingness of parents to pay for private education is not directly related to its price. In economic jargon, demand for private schooling is "inelastic", meaning that price increases do not lead to falls in pupil numbers by the same amount, if at all.

"The only honest answer we can really give is that we don't know what the effect will be. I think surveying parents is not really the best way to find out, because any parent who is asked 'do you want to pay 20% more for your child's education?' is going to say no," Sibieta said.

"That's not to say that if you put 20% VAT on fees there wouldn't be an effect on demand, because there probably would be. But demand for private schooling is often shaped by things like culture, aspirations, whether you went to a private school as a child, so it's the kind of thing that we probably think of as being quite inelastic.

"But the truth is, we don't really know what's going to happen until it actually happens."

Economists said the impact of adding VAT depends on several interlocking factors, including how much of the increase is passed on to parents, as well as their income and ability to afford the higher fees, and their unwillingness to disrupt their children's education by abruptly changing schools.

Dr Jake Anders, an economist and deputy director of UCL's Centre for Education Policy and Equalising Opportunities, said: "The VAT rules are not that you have to take what your price is today and hike it by 20%. The schools decide what changes in price they are going to make in response, and that will be informed by their costs and their ability to trim those costs in order to keep the price from rising, as well as their knowledge of what is likely to happen to demand in response to fees rising."

Adding VAT to fees would allow private schools to offset costs by reclaiming VAT on their spending, which would knock several percentage points off any increase. Anders said private schools could also copy what state schools have done when faced with shrinking budgets: allow class sizes to rise, cut back on overheads, sell off assets and appeal for donations.

Anders said his "gut feeling" is that there wouldn't be a mass exodus of pupils. "Basically, it seems unlikely to me. Apart from anything else, it seems unlikely that private schools would just stand by and watch pupils leave and not do something about their price. Ultimately, they set the price."

Sibieta said many parents who could afford current fees of £15,000 to £20,000 a year were likely to be able to afford further increases, based on past behaviour. "What we do know is that fees have been going up inexorably for the last 20 years, you see the 5% increase in fees annually, on average, over the last 20 years. And still the share of pupils in private schools has not changed almost at all over time."

But while some well-established private schools have the resources to cope, including millions of pounds in endowments, investments and property, as well as profits from overseas branches in Asia and elsewhere, others such as the London Welsh school will struggle to cope with VAT being added to fees.

The fees at the school are just over £4,000 a year - below the average per pupil funding at state schools and far lower than the £20,000 day school fees charged by ISC member schools in London. While some ISC members boast heritage buildings, science blocks and leafy playing fields, the London Welsh school holds its classes at the Hanwell community centre in Ealing.

"The ethos of the school is not really 'private school'. We are an independent school, we have to ask for fees, because we've got to run the school and we can't run it on fresh air, unfortunately," said Roberts, the London Welsh chair of governors.

The school already keeps its fees low through donations from Welsh supporters and volunteering by parents. The Welsh government also gives an annual grant to promote the Welsh language, without which Roberts says the school would be in "dire straits".

"Our fees are modest and we keep them modest because of the nature of our families. So finding even our fees might be a challenge for some of our families. But yes, I feel a hike of 20% would make a difference. Whether it would put people off, it's possible, but it would have an effect on our families," Roberts said.

The school's fans include Ofsted, which describes it as an extended family and praises its teaching for pupils learning to read "with equal confidence and fluency" in both English and Welsh. Angela Kay, whose son is a pupil at London Welsh, described it as "amazing" but lamented: "It's a shame people don't know it exists."

The Department for Education lists 2,394 independent schools registered in England. Of those, about 260 are members of the elite Heads' Conference or HMC, representing the best known private schools including Westminster and Eton. HMC schools are also part of the Independent Schools Council, whose 1,343 members in England charge nearly £17,000 a year for day pupils and educate the bulk of the more than 580,000 children attending private schools.

The ISC also includes a substantial number of privately owned schools, with more than 350 run by for-profit companies. Traditional family-owned private schools have been disappearing for decades, with recent years seeing overseas investors buying up private schools.

The London Welsh school is one of the more than 1,000 independent schools that mostly sit outside the ISC and which in many cases are nothing like their nominal peers. About 600 are special needs schools that Labour says it will exempt from VAT, while the rest range from the French government-backed Lycée Français Charles de Gaulle to others offering alternative pedagogies such as Montessori schools.

Many others are faith schools, mostly small Islamic, Jewish or Christian schools. They tend to be based in borrowed spaces within mosques, community halls or houses, with fees well below those of wealthier nearby private schools.

Emmanuel Christian school on the outskirts of Oxford is an interdenominational nursery and primary school with just 55 pupils. Lizzy Nesbitt, the school's headteacher, says its small size gives her the freedom to be innovative and "not feel bound to just follow what everybody deems to work, but to think quite creatively and thoughtfully and deeply" about how children learn as individuals.

"We really want children to understand how amazing and vast and exciting the world is. Underpinned by that is a Christian view that this is a world made for them by God the father, and he wants them to understand it and enjoy it, and appreciate it in its diversity and beauty and wonder. That then gets worked into our curriculum so that we choose really interesting topics to do with them that lights them up," Nesbitt said.

Emmanuel charges £6,500 a year, a third of the fees for junior pupils attending a nearby prep school. Nesbitt said the school's ethos and community meant both staff and parents were prepared to make financial sacrifices.

"Part of what makes it very special is that all of us do not command the salaries that we would within the state sector. Nor do we have a teacher's pension that we would have in the state sector," Nesbitt said

"Whenever we send out the fee increase letter once a year, I always say to parents that this school is built by love and everybody gives in love. The staff give in love to make it more affordable, so that's a sacrifice that staff make. Many of our parents are making sacrifices, because they're not from high income families. We have very few families who are earning six figures, I think probably 10%. So many families are making sacrifices to send their children here."

Nesbitt said that while she was confident that the school would "prevail, regardless of government policy" if VAT was added to fees, she felt sad that the state would be in effect taxing the goodwill of both staff and parents.

"I regularly have parents visit the school who say my child is doing OK [in a state school] but they don't feel known, they're getting lost," Nesbitt said.

"When these children come to us, we're taking an obligation off the state to educate that child and the parents are taking on the cost of that child's education from the state, often at great sacrifice, so their child feels better known and their needs might be more fully met. And it feels to me cynical to tax that parent, who is acting in love for the good of their child."

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'It feels cynical': small independent schools on Labour's 20% VAT policy

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arents and children say they love the London Welsh school, the only bilingual Welsh language nursery and primary school in England. The only problem, according to the school's chair of governors, is there aren't enough of them. For 65 years Ysgol Gymraeg Llundain has been teaching Welsh language and culture to children of the Welsh diaspora.

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Look at what hedge funds really do - and tell me capitalism is about 'rewarding risk'

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Modern "capitalism" is actually a great example of the principal agent problem.

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Modern "capitalism" is actually a great example of the principal agent problem.

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oming up with economic policy is a difficult, unforgiving task. To make the best of it, it helps to work with an accurate model of how the economy works. If you use a misleading model and act on it, you can't reasonably expect good outcomes: in that scenario, we end up, as JM Keynes warned in the 1930s, with "madmen in authority", acting according to the precepts of "some defunct economist".

But that's exactly where we are. One of the most deeply held and frequently heard propositions about capitalism is that it revolves around private companies and individuals taking risks. When, earlier this year, the US government arranged a rescue package for Silicon Valley Bank, for instance, among the many objections to it was the claim that the rescue contravened capitalism's risk norms.

"The US is supposed to be a capitalist economy," said the billionaire Ken Griffin, founder of the US investment firm Citadel, "and that's breaking down before our eyes." Capitalism, Griffin argued, is about taking risk. If returns are achievable without taking risk - the apparent message of the bailout - then, for Griffin at least, it is no longer capitalism.

This view of the world directly informs wide swaths of economic policymaking today. When business confidence ebbs and investment declines, an increasingly common policy response is to "de-risk" business investment - usually by subsidising it or guaranteeing returns. The prime example in recent memory was the US's Inflation Reduction Act of 2022, the kernel of which is a package of tax credits designed to make private investment in clean energy less risky.

But examine the economy, and it becomes clear: capitalism has become less and less about corporate risk-taking in recent decades. To be sure, many businesses do take significant risks. The independent small business owner who opens a new cafe in London generally faces intense competition and massive risk. But as political scientist Jacob Hacker has argued, business in general has been enormously skilled in recent times at offloading risk - principally by dumping it on those least able to bear it: ordinary households.

Paradoxically, the best example of a business usually regarded as being fundamentally about risk-taking but which in fact is not, is Ken Griffin's own: alternative asset management, an umbrella term for hedge funds, private equity and the like. ("Alternative" here means anything other than publicly listed stocks and bonds.) Asset managers are anything but marginal, exotic firms - they manage more than $100tn of clients' money globally and control everything from Center Parcs UK to your local Morrisons.

But let's look at what asset management companies in places like Britain and the US actually do. Three considerations are paramount.

First, there is the matter of whose capital is put at risk when alternative asset managers such as Citadel, Blackstone and KKR invest. In large part, it's not theirs. The proportion of equity invested by a typical hedge or private equity fund that is the asset manager's own is usually between 1% and 3%. The rest is that of their external investor clients (the "limited partners"), which include pension schemes.

Second, consider how an asset manager's investments are designed. For one thing, its own financial participation in, and management of, its investment funds is usually through a vehicle (the "general partnership") that is constituted as a separate entity, precisely in order to insulate the firm and its professionals from liability risk.

Furthermore, the fund and its manager is generally distanced from underlying investments by a chain of intermediary holding companies that protect it from the risk inherent in those investments. In leveraged buyouts, where money is borrowed to help finance a deal,the debt goes on to the balance sheet of the company the fund has acquired. This means if trouble arises in repaying the debt, it is not the investment fund that is on the hook, still less its manager.

The City of London. 'Asset managers are anything but marginal, exotic firms - in Britain, they own everything from Center Parcs UK to your local Morrisons.' Photograph: Henry Nicholls/Reuters

Third and last, fee structures also distance asset managers from risk. If a fund underperforms, they may earn no performance fee (based on fund profits), but they do have the considerable consolation - a form of risk insurance, if you like - of the guaranteed management fee, usually representing about 2% of limited partners' committed capital, year after year. Essentially, management fees pay asset managers' base salaries; performance fees pay bonuses.

In short, then, it would be far-fetched to suggest that what hedge funds and the like do amounts substantially to risk-taking. The only meaningful risk they themselves face is that of losing custom if fund returns prove underwhelming.

In reality, the business of alternative asset management is less about taking on risk than, in Hacker's terms, moving it elsewhere. So when things go wrong, others bear the brunt. This can be the employees on the shopfloor of a retailer owned by private equity who find that they've shouldered the risk when they're told they're being laid off. It can be ordinary retirement savers, who find they have a meagre pension because the alternative funds in which their savings were invested by the asset manager have tanked.

Why does this matter? Because unless elected policymakers understand how risk is produced and distributed in modern economies, they will not be in a position to act appropriately and proportionately. That is why vague talk from politicians of being "pro-business" or "entrepreneurship" mean so little; the point is to learn from economic realities as they actually are, as opposed to how economics textbooks say they could or should be.

There is one very obvious policy recommendation for alternative asset management that flows from our understanding what they actually do with "risk": taxing them more.

The main performance fee earned by alternative asset managers is "carried interest" - effectively, a profit share. In the UK and US, most asset management firms pay tax on this revenue at the capital gains rate, rather than the usually higher income tax rate. This is because the asset manager has typically been understood to be "taking on the entrepreneurial risk of the [investment]" - a standard justification for taxation as capital gain.

But as we have seen, this simply does not hold water. In 2017, the New York Times called the beneficial tax treatment of carried interest "a tax loophole for the rich that just won't die". It's time to close it. In fact, the recent confirmation by Keir Starmer's Labour party that it would do exactly that if it wins power was one of the few genuinely progressive and sensible economic policy moves it has made while in opposition.

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Look at what hedge funds really do - and tell me capitalism is about 'rewarding risk'

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oming up with economic policy is a difficult, unforgiving task. To make the best of it, it helps to work with an accurate model of how the economy works. If you use a misleading model and act on it, you can't reasonably expect good outcomes: in that scenario, we end up, as JM Keynes warned in the 1930s, with "madmen in authority", acting according to the precepts of "some defunct economist".

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Firms stick to four-day week after trial ends

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The move to a permanent 4-day week in the UK takes a significant step forward

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The move to a permanent 4-day week in the UK takes a significant step forward

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Simon Read, Lucy Hooker & Emma SimpsonBusiness reporters, BBC News

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Firms stick to four-day week after trial ends

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A trial involving nearly 3,000 workers has found working shorter hours makes staff happier and healthier.

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O2 and Virgin Mobile customers to pay 17.3% more for calls, texts and data

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Tacit collusion and price gouging the mobile network provider market? Profits expected to soar.

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Tacit collusion and price gouging the mobile network provider market? Profits expected to soar.

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Millions of consumers with O2 and Virgin Mobile contracts are to be hit with an inflation-busting 17.3% increase in their bills for making calls, sending texts and using data, adding to pressure on households amid the cost of living crisis.

The price hike is the latest in a series of big increases imposed on consumers for vital utilities, and will add to pressure on the government to step in with tougher protections.

The telecoms operators - merged under the same umbrella company since 2021 - confirmed the cost of their airtime contracts, or what customers pay for calls, texts and data, would go up by the annual rate of retail prices index (RPI) inflation announced this week, plus 3.9 percentage points.

Official figures on Wednesday showed RPI stood at 13.4% in January, landing consumers with a 17.3% increase in their airtime bills in total - almost triple the rate of growth for average workers' pay. Consumers will see the increase from April.

Rishi Sunak has promised to halve inflation this year as the cornerstone of his economic policy, while insisting teachers, nurses, and other public sector workers must accept pay deals significantly below inflation to achieve this goal.

However, the rise in mobile and broadband costs far outstrips the government's preferred consumer prices index (CPI) measure of inflation, which fell slightly to 10.1% in January but remains at among the highest rates since 1981.

It comes amid growing concern over the looming rise in telecoms bills from other providers this spring, with consumer groups warning that hard-pressed families will be forced to cut back on everyday essentials such as food, energy and clothing.

"Prices jumping by so much in one year is a serious concern," said Lucy Powell, the shadow culture secretary.

"Mobile is an essential to modern life, yet many people won't be able to afford soaring mobile bills on top of energy price, food and fuel prices going up and up."

Against a backdrop of growing pressure on telecoms providers, Ofcom, the industry regulator, launched an investigation last week into the widespread practice of above inflation price rises.

Operators including BT, EE, Vodafone and TalkTalk are all poised to make above-inflation mid-contract price increases, allowing them to make billions of pounds more annually. It is estimated consumers will be £600m more out of pocket than if the providers simply tracked headline inflation.

Consumer law does not prevent companies from increasing their prices midway through a contract, provided they do so fairly. However, around a third of mobile and broadband customers do not know their provider can do so.

Most of the UK's biggest mobile operators have chosen to increase prices by CPI or RPI, plus 3.9 percentage points. Rocio Concha, director of policy and advocacy at the consumer group Which?, said such large increases during the cost of living crisis were worrying.

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"This means millions of consumers could now find themselves trapped in a lose-lose situation where they either have to accept exorbitant mid-contract price hikes this spring or pay costly exit fees to leave their contract early.

"Which? is calling on telecoms providers to consider very carefully if this level of price increases can be justified. They should let their customers leave without penalty if they face these price hikes, and cancel 2023 mid-contract price rises for financially vulnerable consumers."

Like all businesses, telecoms providers are facing a range of cost rises, including investment in their networks to provide better, faster services and allow consumers to use record volumes of data.

A Virgin Media O2 spokesperson said that, unlike other providers, the cost of device repayments was frozen, meaning that average bills would go up by about 10%, or less than 10p a day. "This is below inflation and reflects the fantastic value we provide for connectivity that is used almost constantly."

A spokesperson for the Department for Science, Innovation and Technology, said pricing was a matter for individual companies and regulated by Ofcom. "However, we understand that price rises will have a big impact on households when families are struggling to pay their bills.

"That's why the secretary of state recently urged telecoms bosses to reconsider increasing prices above inflation during this difficult period. Thanks to our negotiations, telecoms firms have also committed to provide help with bills for customers who ask for it."

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O2 and Virgin Mobile customers to pay 17.3% more for calls, texts and data

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Millions of consumers with O2 and Virgin Mobile contracts are to be hit with an inflation-busting 17.3% increase in their bills for making calls, sending texts and using data, adding to pressure on households amid the cost of living crisis.

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The truth is out: money is just an IOU, and the banks are rolling in it | David Graeber

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, Article about the BoE report in 2014 that finally told the truth about our monetary system 

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, Article about the BoE report in 2014 that finally told the truth about our monetary system 

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ack in the 1930s, Henry Ford is supposed to have remarked that it was a good thing that most Americans didn't know how banking really works, because if they did, "there'd be a revolution before tomorrow morning".

Last week, something remarkable happened. The Bank of England let the cat out of the bag. In a paper called " Money Creation in the Modern Economy", co-authored by three economists from the Bank's Monetary Analysis Directorate, they stated outright that most common assumptions of how banking works are simply wrong, and that the kind of populist, heterodox positions more ordinarily associated with groups such as Occupy Wall Street are correct. In doing so, they have effectively thrown the entire theoretical basis for austerity out of the window.

To get a sense of how radical the Bank's new position is, consider the conventional view, which continues to be the basis of all respectable debate on public policy. People put their money in banks. Banks then lend that money out at interest - either to consumers, or to entrepreneurs willing to invest it in some profitable enterprise. True, the fractional reserve system does allow banks to lend out considerably more than they hold in reserve, and true, if savings don't suffice, private banks can seek to borrow more from the central bank.

The central bank can print as much money as it wishes. But it is also careful not to print too much. In fact, we are often told this is why independent central banks exist in the first place. If governments could print money themselves, they would surely put out too much of it, and the resulting inflation would throw the economy into chaos. Institutions such as the Bank of England or US Federal Reserve were created to carefully regulate the money supply to prevent inflation. This is why they are forbidden to directly fund the government, say, by buying treasury bonds, but instead fund private economic activity that the government merely taxes.

It's this understanding that allows us to continue to talk about money as if it were a limited resource like bauxite or petroleum, to say "there's just not enough money" to fund social programmes, to speak of the immorality of government debt or of public spending "crowding out" the private sector. What the Bank of England admitted this week is that none of this is really true. To quote from its own initial summary: "Rather than banks receiving deposits when households save and then lending them out, bank lending creates deposits" ... "In normal times, the central bank does not fix the amount of money in circulation, nor is central bank money 'multiplied up' into more loans and deposits."

In other words, everything we know is not just wrong - it's backwards. When banks make loans, they create money. This is because money is really just an IOU. The role of the central bank is to preside over a legal order that effectively grants banks the exclusive right to create IOUs of a certain kind, ones that the government will recognise as legal tender by its willingness to accept them in payment of taxes. There's really no limit on how much banks could create, provided they can find someone willing to borrow it. They will never get caught short, for the simple reason that borrowers do not, generally speaking, take the cash and put it under their mattresses; ultimately, any money a bank loans out will just end up back in some bank again. So for the banking system as a whole, every loan just becomes another deposit. What's more, insofar as banks do need to acquire funds from the central bank, they can borrow as much as they like; all the latter really does is set the rate of interest, the cost of money, not its quantity. Since the beginning of the recession, the US and British central banks have reduced that cost to almost nothing. In fact, with "quantitative easing" they've been effectively pumping as much money as they can into the banks, without producing any inflationary effects.

What this means is that the real limit on the amount of money in circulation is not how much the central bank is willing to lend, but how much government, firms, and ordinary citizens, are willing to borrow. Government spending is the main driver in all this (and the paper does admit, if you read it carefully, that the central bank does fund the government after all). So there's no question of public spending "crowding out" private investment. It's exactly the opposite.

Why did the Bank of England suddenly admit all this? Well, one reason is because it's obviously true. The Bank's job is to actually run the system, and of late, the system has not been running especially well. It's possible that it decided that maintaining the fantasy-land version of economics that has proved so convenient to the rich is simply a luxury it can no longer afford.

But politically, this is taking an enormous risk. Just consider what might happen if mortgage holders realised the money the bank lent them is not, really, the life savings of some thrifty pensioner, but something the bank just whisked into existence through its possession of a magic wand which we, the public, handed over to it.

Historically, the Bank of England has tended to be a bellwether, staking out seeming radical positions that ultimately become new orthodoxies. If that's what's happening here, we might soon be in a position to learn if Henry Ford was right.

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The truth is out: money is just an IOU, and the banks are rolling in it | David Graeber

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ack in the 1930s, Henry Ford is supposed to have remarked that it was a good thing that most Americans didn't know how banking really works, because if they did, "there'd be a revolution before tomorrow morning". Last week, something remarkable happened. The Bank of England let the cat out of the bag.

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UK labour market can't hold out much longer against impact of stagflation

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Labour Markets and macro. Stagflation, government policy and BoE policy all takes its toll, with workers paying the price (as usual).

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Labour Markets and macro. Stagflation, government policy and BoE policy all takes its toll, with workers paying the price (as usual).

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Britain's economy is suffering from a textbook case of stagflation, and the symptoms are clear from the latest labour market trends. It looks like a complex picture. The number of people looking for work rose while the number of job vacancies fell. Hours worked in the economy were down while days lost through strikes in 2022 were the highest annually since 1989.

In fact, the diagnosis is straightforward. There was zero growth in the final three months of 2022 while the annual inflation stood at above 10%. Attempts by the Bank of England to reduce inflationary pressure through higher interest rates are feeding into lower levels of activity - but only slowly. There has been no sudden collapse of the sort seen during the global financial crisis of 2008.

There are a few complications, as shown by the latest figures from the Office for National Statistics. The legacy of the pandemic has affected the supply of labour, largely because workers in the older age groups have given up work, either through choice or due to long-term sickness. Although the number of vacancies has fallen since last summer, it is still well above pre-pandemic levels.

Businesses and employees are responding to these trends in predictable ways. Firms are looking past the current economic slowdown and wondering whether they will be able to replace workers in the future if they make them redundant now. Mostly, they are hoarding staff, taking on part-time rather than full-time employees, and paying their workers more. Annual growth in regular pay - excluding bonuses - stood at 6.7% in the three months to December. In the private sector, earnings growth was 7.3%.

Labour shortages have made it easier for some groups of workers to secure higher pay deals. Even so, private sector pay is not keeping pace with price rises, and the resulting squeeze on real incomes is a big factor behind the sluggish state of the economy. Public sector workers are facing a bigger hit than those in the private sector, leading to widespread industrial action.

There are, though, signs that people who were formerly inactive - neither working nor actively looking for a job - are starting to return to the jobs market. Again, this is only what might be expected in light of the problems many people are having to make ends meet. Inactivity fell by 113,000 towards the end of last year as long-term sickness dropped and early retirees made themselves available for work.

The government can tackle stagflation with one of two cures. Firstly, it can try to ease the pressure for higher wages by taking steps to increase the supply of labour. It could, for example, change the pension rules to encourage more early retirees back to work. It could make childcare less expensive. It could take the advice of the British Chambers of Commerce and reform the shortage occupation list to make it easier for firms to fill job vacancies from outside the UK when they cannot recruit locally. Mel Stride, the work and pensions secretary, is looking at whether tougher benefit rules are needed to move people from welfare into work.

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The alternative is for the Bank of England to carry on pushing up interest rates until higher interest rates lead to higher unemployment and less upward pressure on wages. In all likelihood, there will be a combination of both approaches. So far, the labour market has proved to be remarkably resilient but that won't last. There are already signs from the latest data for inactivity and pay that the labour market is on the turn. The fact that unemployment has started to rise suggests one thing: this is going to hurt.

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UK labour market can't hold out much longer against impact of stagflation

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Britain's economy is suffering from a textbook case of stagflation, and the symptoms are clear from the latest labour market trends. It looks like a complex picture. The number of people looking for work rose while the number of job vacancies fell.

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Official UK jobless figures may be missing 3m people, study finds

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Could UK unemployment actually be 4.3 million (12.1%)?

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Could UK unemployment actually be 4.3 million (12.1%)?

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Unemployment in the UK could be three times higher than shown by official government figures, according to a report exposing a stark north-south divide in the number of people out of work because of long-term sickness.

Suggesting an army of people are in "hidden unemployment", the Centre for Cities thinktank said more than 3 million working-age adults could be added to the official jobless figures compiled by government statisticians.

The study found that more than 3 million people are missing from the headline unemployment rate because they report themselves as economically inactive to government labour force surveys.

It follows a dramatic rise in economic inactivity rates since the start of the Covid pandemic, fuelled by older workers quitting the jobs market and a sharp increase in long-term ill health among working-age adults.

Rather than an official unemployment rate of 3.7%, the lowest level since the mid-1970s, the report said the figure could be as high as 12.1% when including three million economically inactive people who could work if they had enough support.

This is because the official rate only measures those who are actively looking for employment and does not include people who are neither in work nor looking for a job because of circumstances outside of their control.

Almost 9 million people in the UK are classified as "economically inactive" in official labour market estimates, including students, adults with caring responsibilities, people in retirement, and those experiencing ill health.

The thinktank said about 3 million could be considered "involuntarily" inactive because they had stopped looking for work because they felt there was a lack of good job opportunities, or because they had health conditions.

Economists including Andy Haldane, a former chief economist at the Bank of England, have warned that the declining health of the UK population is preventing growing numbers of people from working, while suggesting that a lack of investment in healthcare and other public services could be partly responsible.

It comes as Mel Stride, the work and pensions secretary, considers options for boosting workforce participation amid concern at the heart of government over the rise in inactivity rates and chronic lack of staff hitting employers nationwide.

Highlighting a stark north-south divide, the Centre for Cities report found nine out of 10 places with the highest hidden unemployment rates were in the north of England, while one was in Wales. Meanwhile, eight of the 10 urban areas with the lowest rates are in the south.

In Blackburn and Middlesbrough, involuntary inactivity figures push the total unemployment rate up from just under 6% to more than 20%. This strongly contrasts to cities like Gloucester and Reading where the hidden unemployment rate is about 8%.

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The report said that to tackle inactivity, efforts to boost the number of good jobs on offer in struggling towns and cities was required. It said this required the "levelling up agenda" to focus on improving the availability of jobs and skills in places outside of London and the south-east of England.

Andrew Carter, the chief executive of the Centre for Cities, said: "With the UK now likely to enter a recession, the government must address its insufficient action on levelling up so far and act swiftly to create more opportunities to get people back into the labour force.

"This will require setting out and implementing an agenda that delivers much-needed investments in skills and public services, while supporting job creation in struggling places."

A government spokesperson said it was committed to spreading opportunity across the whole of the UK. "We recognise one of our biggest challenges is how to support people who are economically inactive which is why we are working on measures to increase workforce participation," they said.

"There are a record number of vacancies across the UK and our network of jobcentres work daily to help match jobseekers with these roles, tailoring support to the needs of the local jobs market."

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Official UK jobless figures may be missing 3m people, study finds

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Unemployment in the UK could be three times higher than shown by official government figures, according to a report exposing a stark north-south divide in the number of people out of work because of long-term sickness.

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UK benefit changes have pushed people into dead-end, low-paid jobs, says IFS

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"We spend more than £100bn each year on working-age benefits. About half of it now goes to families in work" Short article with some great labour market and benefits stats

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"We spend more than £100bn each year on working-age benefits. About half of it now goes to families in work" Short article with some great labour market and benefits stats

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Tougher benefit rules have boosted employment in the UK in the past 25 years but only at the expense of trapping workers in dead-end jobs, according to a leading thinktank.

The Institute for Fiscal Studies (IFS) said successive waves of welfare changes since the late 1990s had imposed more stringent conditions on those claiming jobless benefits and increased the incentives to find a job.

Yet its research also found that many of the jobs found were part-time, low paid and had scant chance of career progression.

As a result, the thinktank found those encouraged to enter paid work had tended to remain on low pay, were paying little in tax and were often still entitled to in-work benefits.

The IFS said there had been at least three waves of what was touted as benefit reform over the past 25 years, all of which had encouraged benefit claimants to find work.

According to the institute, a low earner with children in 1997 to 1998 on average had lost 50p in reduced benefits or higher taxes for every £1 earned when they moved into part-time work. Today that figure is 38p.

By contrast, the incentive to move from part to full-time work had been weakened. In 1997 to 1998, that transition implied losing 52p to taxes or withdrawn benefits for every £1 earned, on average. Today it results in losing 58p.

The latest official figures from the Office for National Statistics show that more than 8 million people - a quarter of the workforce - is in part-time work.

Tom Waters, a senior research economist at the IFS, said: "We spend more than £100bn each year on working-age benefits. About half of it now goes to families in work.

"This reflects changes in the underlying nature of low income in the UK, to which the benefits system naturally responds: we have high employment and chronic low earnings growth, meaning that an increasing share of the lowest-income families contain someone in paid work.

"It also reflects some major changes to benefits policy, including the introduction of universal credit, aimed very deliberately at encouraging more paid work. The challenge here is that the kind of work they have tended to produce has been part-time and low-paid - which generally does not serve as a stepping stone to higher-paid work further down the line.

"Policymakers would do well to look beyond the headline employment number when setting benefits policy, and consider how the system - and other parts of policy - can be shaped to promote longer-term career progression."

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UK benefit changes have pushed people into dead-end, low-paid jobs, says IFS

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Tougher benefit rules have boosted employment in the UK in the past 25 years but only at the expense of trapping workers in dead-end jobs, according to a leading thinktank. The Institute for Fiscal Studies (IFS) said successive waves of welfare changes since the late 1990s had imposed more stringent conditions on those claiming jobless benefits and increased the incentives to find a job.

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BBC News - Cost of living: Zero-hour jobs and the impact on mental health
https://www.bbc.co.uk/news/newsbeat-64426657

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Owner of UK care home group paid himself £21m despite safety concerns

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Neoclassical theory of wage determination falls apart when scam artists like this guy can pay themselves 

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Neoclassical theory of wage determination falls apart when scam artists like this guy can pay themselves 

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A multimillionaire dementia home boss paid himself at least £21m in five years despite inspectors finding multiple breaches of staffing, safety and leadership rules, with residents left in dirty incontinence pads and staff accused of rough handling.

Gordon Sanders owns Runwood Homes, the UK's sixth largest for-profit care home group, which charges residents more than £1,000 a week, with bills often covered by the taxpayer.

The majority of 60 homes registered as offering dementia care were ranked "good" by Care Quality Commission inspectors over the past five years. But almost one in three were rated "requires improvement".

Problems reported by inspectors include not enough care workers, meaning residents unable to get to the toilet, stuck in bed, lacking activities, feeling "trapped" and "at risk of harm".

Inspectors heard reports of "awful" food and found some staff who were not trained or checked for criminal records. In one home, inspectors found residents were restrained by staff strapping a table top to a chair.

Several breached Care Act regulations including for a lack of staff to look after people safely and protecting people from abuse.

Gordon Sanders. Photograph: Runwood Homes

Sanders, 76, is described on Runwood's website as a "successful property developer", and owns a mansion in Essex and a flat in London's Knightsbridge that Zoopla estimates suggest are worth about £4m and £4.7m respectively.

Residents representatives said the "eye-watering" payouts would spark anger and that supporting people with dementia should not be a way to "make millions".

The shadow care minister, Liz Kendall, said it was "totally outrageous for private providers to be leeching millions out of care homes while providing appalling standards for residents".

Runwood also reported it accepted £12.3m in government grants in 2020 and 2021 related to the Covid pandemic, including for infection control and the job retention scheme. Over the same years it awarded salary to the highest paid director and dividends totalling £14.3m.

Another beneficiary has been the former chief executive Nadarajah Logeswaren, 59, who was paid £15.8m in 2018 "in relation to a long-term incentive scheme", accounts show. Directors' salaries and dividends drawn from the company totalled £57m over five years.

CQC inspection reports published in the last year about Runwood care homes found to require improvement and in breach of the Care Act regulations showed:

At Silvanna Court in Wickford "insufficient staff were available, which placed people at risk of harm". One staff member said: "[residents] are always soiled but we just don't have enough of us to take [them] to the toilet." Medicines were not always managed safely.

At St Michael's Court in Norwich one person was given a sedative three times a day when it was prescribed on an as-required basis. Staff were "rushed off their feet" trying to look after two or three people at once, and people were not consistently offered enough to drink.

At Highview Lodge in Hemel Hempstead, some residents said staff "could be a bit rough when supporting them with care needs or moving". One person said: "Most of them are kind, some are rough and throw me about."

Meanwhile, at Loganberry Lodge in Colchester some people ate bread and butter and cereal because main meals were left to dry out. One worker said: "We don't really get the time to 'care', have the cup of tea or go for a walk outside, all those little things that the residents would enjoy that we can't do."

Runwood's chief executive, Jeremy Richardson, declined to comment. In its latest accounts filed in June, the company said it was "passionate about providing the highest possible care for clients and has invested £7.2m in providing new and upgraded homes during the year".

It said "the potential risk for reputational damage to arise through poor outcomes in regulatory visits remains a source of concern". Referring to the CQC, it said "the group does not take the actions issued by the authorities lightly with the directors continuing to strive to address the concerns raised and ensure lessons are learned".

The earnings illuminate the cash generated by some care businesses at a time when there are warnings of a "national crisis" in care safety. More than half of residential homes in England offering dementia care reported on by inspectors last year were rated "inadequate" or requiring improvement - up from less than a third pre-pandemic.

There are 165,000 staff vacancies and rising in England's care homes. That is equivalent to more than one in 10 posts unfilled. Wages averaged £9.50 an hour last April, according to Skills for Care.

Archie Bland and Nimo Omer take you through the top stories and what they mean, free every weekday morning
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Care assistant jobs are currently being advertised by Runwood at £10 an hour - the same as a McDonald's crew member. The current national minimum wage for workers aged over 22 is £9.50 rising to £10.42 on 1 April.

Kendall said: "Elderly dementia patients deserve to be well looked after and treated with decency. Labour will force out those who are providing a shoddy service for a heavy price, and ensure good levels of care for all who need it."

Helen Wildbore, the director of the Relatives & Residents Association, said: "There will, rightly, be anger from residents and their families at these eye-watering payouts whilst they are suffering the impact of such poor care.

"Supporting people affected by dementia should be an honour and a privilege, not a way to make millions. This highlights the sad reality of care as a commodity, where owners have very little accountability to those they should be serving."

Dementia is a growth market with 1.6 million people predicted to be living with the disease by 2040, up from 900,000 today.

Runwood bought many of its homes from local councils struggling to afford their operation including several from Essex county council in 2000, six from Nottinghamshire county council for £1.2m in 2011 and five from Doncaster council for £1.5m in 2012.

In 2018, an official investigation into Runwood's Dunmurry care home in Northern Ireland found "a horrific catalogue of inhuman and degrading treatment". The commissioner for older people for Northern Ireland concluded many people spent the last months of their lives "in appalling circumstances".

Four out of five older people in residential care homes in England are now looked after by private providers - over 300,000 people - far more than in not-for-profit, council and NHS care homes, according to LaingBuisson, a market research firm.

Around one in eight adult social care settings are rated good or outstanding, by the CQC. Providers face a constant struggle for staff and complain the government does not pay them enough to meet the true cost of care. MPs, councils and thinktanks have estimated the social care budget needs to increase by £7bn to £10bn a year. In the autumn budget funding was increased by £7.5bn over two years.

Runwood provides close to 5,000 beds. In the last two years for which accounts are available the firm made £43m in profit after tax on turnover of £301m - a 14% margin.

In addition to £18.6m in dividends paid in the last five years to Sanders, who holds 100% of the share capital, Runwood's accounts show Sanders drew £2.2m in salary in 2017, as the highest paid director. The highest paid director between 2019 and 2021 received £10.1m in total. That person is not named in accounts but may be Sanders, who served as chief executive until last summer, potentially pushing his five-year earnings to £31m.

Profitability among the largest care home chains in the UK ranges from 11% to 42% of revenue, according to LaingBuisson. The five largest groups made £578m in profit in 2020 - a 22% average return when counted using the profit measure known as Ebitdar. Unlike Runwood, which is a family-owned business, several of the other large chains are owned by private equity firms, offshore investors or international investment trusts, making their profits harder to trace.

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Owner of UK care home group paid himself £21m despite safety concerns

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A multimillionaire dementia home boss paid himself at least £21m in five years despite inspectors finding multiple breaches of staffing, safety and leadership rules, with residents left in dirty incontinence pads and staff accused of rough handling.

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On the NHS, Sunak and co seem unable to grasp economics 101: pay more

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The basic economics that explains why so many people are dying and struggling with poor physical and mental health. The effects of a decade of Tory austerity.

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The basic economics that explains why so many people are dying and struggling with poor physical and mental health. The effects of a decade of Tory austerity.

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On the NHS, Sunak and co seem unable to grasp economics 101: pay more

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Breaking out of a mindset is not easy, but this crisis, 10 years in the making, could have been avoided

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Has the pendulum really swung from capital to labour? - https://on.ft.com/3PETcpU via @FT

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Labour Markets: Job guarantee experiment in Austria is a genuine success story. Time to roll it out in the UK?

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Labour Markets: Job guarantee experiment in Austria is a genuine success story. Time to roll it out in the UK?

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In a small Austrian village, an experimental program finds-or creates-work for the unemployed.

Save this story for later.

Save this story for later.

In 1931, three researchers from the University of Vienna travelled to Marienthal, a small town about twenty miles away, to study the effects of long-term unemployment. Two years before, Austria's banking system had collapsed. The town's main employer, a textile factory, had closed, laying off hundreds of workers.

The researchers found that Marienthal had been transformed by these economic ravages. "When a cat or dog disappears, the owner no longer bothers to report the loss; he knows that someone must have eaten the animal, and he does not want to find out who," they wrote. People consumed mainly bread and coffee, the latter "stretched" with roasted figs or chicory to last longer; cabbage and potatoes vanished regularly from farmers' fields. The town's wrestling team, accustomed to success, could no longer field a heavyweight. Beyond material deprivations lay apathy and despair. A once regular reader of the newspaper explained that "now I just flip through it and then throw it away, even though I have more time." After applying for a hundred and thirty jobs with no success, another man spent half his days in bed. Political meetings shrank, fewer books were checked out from the library, and domestic quarrels and alcoholism shadowed marriages. Even children felt hopeless: "I want to be a pilot, a submarine captain, an Indian chief, and a mechanic," one twelve-year-old boy wrote in a school essay. "But I am afraid it will be very difficult to find a job."

The trio's study was published in 1933, as "Die Arbeitslosen von Marienthal" ("The Unemployed of Marienthal"). The booklet, which became an early classic of sociology, showed that employment provides much more than an income. Work is a source of structure, esteem, and motivation, and its disappearance can lead to depression, anxiety, addiction, and interpersonal turmoil. (It's estimated that as many as one in five suicides can be linked to joblessness.) As Hitler's power grew, the yearnings for activity, structure, and community articulated by the unemployed in the Marienthal study came to seem newly ominous. "On a large scale it is quite probable that part of the success of the early Hitler movement came about because large numbers of unemployed were taken into barracks and kept busy with paramilitary training," one of the sociologists wrote, in a foreword to the American edition.

Marienthal still exists, although, over the course of the twentieth century, it came to be subsumed by a neighboring village called Gramatneusiedl. In the fall of 2020, the Austrian government's public-employment agency decided to launch a job-guarantee program there-an initiative that would guarantee work to the unemployed. Anyone who has been jobless for a year or more now has the option of a guaranteed job for the duration of the program. In some cases, it's a subsidized private-sector position; in others, a nonprofit works with participants to create a job that meets local needs. The original study wanted to learn how unemployment affected people. The current experiment, which is run by the Public Employment Service of Lower Austria, and is being studied by economists at Oxford and sociologists at the University of Vienna, asks the opposite question: What happens when anyone who wants a decent job can get one?

I arrived in Gramatneusiedl on a warm July morning, in 2021. My interpreter, Helma Kinzl, couldn't believe she was really there-in Austria, "Gramatneusiedl" is sometimes used as an expression for a small town in the middle of nowhere. Looking around, I could see why. About three thousand people live in the village, which is bisected by a single quiet road, with a church, a café, and a handful of small shops and restaurants. Many shop windows were shuttered. Flat farmland stretched away in every direction.

So far, a hundred and twelve people have used the Job Guarantee, as the program is known, to find work; at least fifty more are expected to do so before 2024, when the program is scheduled to end. Participants complete an eight-week training course, then receive a job offer; they're free to decline it without losing their unemployment benefits, but so far everyone who's been offered a job has chosen to work. This is likely because participants discuss their skills and interests with social workers during the training period. Early on, a few proposed starting a carpentry workshop, and it now restores old furniture and builds new pieces; others have asked for jobs maintaining public parks and local green areas, and are now being paid to do so. People work between sixteen and thirty-eight hours a week, depending on their goals, medical needs, and caretaking obligations. Salaries, which typically range between eleven hundred and twenty-four hundred euros a month, are set so that everyone earns at least as much as they previously received in unemployment benefits. A year on unemployment-including payments, subsidies, and lost taxes-costs the Austrian government an average of thirty thousand euros. Each guaranteed job costs an average of €29,841.39.

The Job Guarantee is headquartered in a mansion where the owner of Marienthal's now demolished textile factory once lived; a single smokestack looms behind the mansion. When I arrived, about a dozen people were clustered on the building's front steps, drinking coffee and chatting before work. Inside, on the first floor, a group sat at tables covered with fabrics, bags, and sewing machines. This was a weaving workshop. A blond woman in her fifties worked on animal-themed children's backpacks, adorned with pink-and-white elephant ears or a blue dragon's tail.

"Kids like them," she said. She showed off a handbag made from old pairs of bluejeans. Most of the material the workshop used had been donated or scrounged from secondhand-clothing shops; the bags were sold at a market in town.

The carpentry studio was situated in a high-ceilinged warehouse about a hundred yards from the mansion. The carpenters, men and women ranging from their twenties to their fifties, wore protective goggles, overalls, and work shirts; they were preparing to sand and refinish dozens of collapsible wooden benches, which had just been dropped off by the local fire brigade. (It rents them out for parties, baptisms, and other events.) Orders like this generate money for the program: about five per cent of its €7.4 million budget comes from these community sales. Much of the furniture that the group restores is donated. Ancient, battered storage chests, cupboards, and headboards, as well as a collapsed early-twentieth-century hay wagon, littered the space. The restored pieces would be displayed for sale in town, in the window of a shoe-repair shop that had recently closed.

Karl Blaha, a fiftysomething cobbler who'd once run the shoe shop, gave me a tour of the space the next day. The words "Schuhe Blaha" loomed above the storefront in blocky white letters; the interior was dim and musty. Pincers, awls, shoe molds, and scraps of leather cluttered a back room. "This is where we used to work," Blaha said, with a sigh. Slender and silver-haired, he worked thirty hours a week in the Job Guarantee program, both in the carpentry studio and as a German teacher for participants who were still learning the language. "Nobody wanted their shoes repaired anymore, when they could just buy a cheap new pair like that," he said, miming the clicking of a mouse. The shop had operated for more than a hundred years, including during the original Marienthal study, but closed in 2019.

That afternoon, at a shady table outside the old mansion, I had coffee with Monika, a fifty-seven-year-old participant in Job Guarantee. Like many others in the program, Monika hadn't struggled to find work until her life underwent a sudden, dramatic change: eleven years earlier, she'd been working as an aide to the elderly when a man collapsed onto her as she was helping him from his wheelchair into the shower; her back was badly injured, and her doctor told her that she could not lift more than five kilograms. She applied to positions, but her age and medical limitations made finding a new job hard. She got one offer, but it would have required her to move to Germany, and her elderly parents live in Gramatneusiedl. "It's more important to be able to look after my parents than to go to Germany," she said.

Other participants had experienced something similar. Adnan Rizvanovic, a Bosnian man in his early sixties who now works as a gardener for the program, had once driven trucks and taxis and held a job in logistics. Pay for drivers plummeted after Uber and its local Austrian competitors entered the taxi market; after two heart attacks, Rizvanovic decided that he'd better stay off the road, lest he have another and crash. "I was psychologically destroyed," he told me, of being suddenly unemployed. "If you have worked your whole life, even with a lot of stress, then suddenly you have nothing to do, you think that you are not needed anymore," he said. "You have your breakfast, and then-what am I going to do all day?" He applied to dozens of jobs without success and began to lose hope. "At this age, after two heart attacks, it's impossible," he said. "Once they hear a certain age, it's no way." He began staying up all night, binge-watching basketball games. His daughter got him a dog so that he would leave the house more often.

Through the Job Guarantee, Rizvanovic worked twenty hours a week doing light gardening. "It's nice. It's slow. You have time to think when you water the flowers. It's like meditation," he said, gesturing at the plants around us. He was sleeping better and watching less TV. He enjoyed seeing other people at work every day, and could take breaks whenever he was getting tired-something that his cardiologist says is important. Before the war in Bosnia forced him to leave for Austria, in the nineteen-nineties, he studied philosophy and law at university. "When I'm watering the flowers, I think about Sigmund Freud and Immanuel Kant and everybody," he told me, with a wistful look.

Not every participant sees the program as a decisive improvement over unemployment benefits. A man named Gilbert-bearish, heavily tattooed, and fifty-two-told me that he had worked for decades as a technician installing and maintaining elevators before injuring his back and knee in a skiing accident. He'd enjoyed his time on unemployment, which he'd spent travelling to the Dominican Republic, riding around Austria with his motorcycle club, and fighting in raucous freestyle forest brawls that set fans of rival soccer teams against one another, before sealing the peace over beer. He wouldn't have minded a few more years of that life, he said; still, he worked thirty hours a week in the carpentry workshop, earning a little more than two thousand euros a month. "I just want to work something for the next eight years," he said-until he can take his pension. "If I earn my eighteen hundred or nineteen hundred, I'll do anything-unless I really, really don't like it."

Critics of labor-market programs such as the Job Guarantee argue that they enable precisely this sort of choice-they make it easier to decline work that one doesn't like. One program participant in his thirties told me that, while on unemployment benefits, he'd been offered a job cleaning toilets at a gas station; he'd decided that he didn't want "that sort of job," and had instead found work in the carpentry workshop. If everyone were guaranteed a reasonably pleasant job, suited to their interests and needs and paying a living wage, who would do the grungy, difficult work? Austrian employers, like those in America, are currently having difficulty hiring people to take hard, poorly paid jobs; many of the workers in Austria who wash dishes or clean hotel rooms are immigrants from Eastern Europe, and during the pandemic many of them went home, some for good. Jörg Flecker, a sociologist at the University of Vienna who is evaluating the program in Gramatneusiedl, told me that pressure from employers could prevent its expansion across Austria. "Employers say, 'There are so many unemployed. We have to have a tougher regime for them because we have jobs to fill.' "

Lukas Lehner and Maximilian Kasy, economists at Oxford who are evaluating data from Gramatneusiedl, argue that competition with the private sector is a good thing. "I think, from an economic perspective, that argument doesn't make much sense," Kasy said, of the dirty-jobs view. "If they're shit jobs, try to pay them as well as possible. Try to change the working conditions as much as possible until you reach the point that somebody wants to do them, or automate them if you can. And then, if nobody wants to do them, maybe we shouldn't do them." Kasy thinks that an important function of initiatives like job guarantees-and of universal basic incomes -is to improve the bargaining positions of people who want to change their lives. "Whether it's abuse from an employment relationship, a bureaucrat in the welfare state, or a romantic relationship, the question is, What's your outside option?" he said. "Having the safety of the basic income or a guaranteed job improves your outside option. If your boss is abusive, or doesn't respect your hours, or is harassing you or whatever, you have the option to say no."

I met Denise Berger in Gramatneusiedl, and she said she had faced exactly this sort of situation. For years, she'd been sexually abused by her stepfather; the psychological effects caused her to struggle in her job at a pastry shop. She lost her position, but was unable to move out of her parents' home. Through the Job Guarantee, she worked twenty hours a week cleaning at a kindergarten, and she could afford her own small apartment, where she lived with her two dogs. Her brothers, she said, had been harshly critical of her inability to find a job: "You're stupid, you're kind of a bad person, you don't have a job, so you're good for nothing," she recalled them saying. That changed during the pandemic, when two of them also lost work. Nothing challenges stereotypes about the unemployed, she told me, like becoming one of them.

Unemployment in Austria, as in many Western countries, has been rising gradually for decades. In 2021, the official figure was eight per cent. This likely understates the real number of unemployed people; as in the United States, Austria's official statistics don't account for those who have simply stopped looking for work. Unwanted joblessness is fairly common. And yet the stigma faced by the long-term unemployed is powerful. Flecker, the sociologist, has noticed that Job Guarantee participants are often eager to show that they're not typical unemployed people. "They say, 'Oh, well, I'm not like the others. I have a special role here,' " he told me. Many of the participants I spoke with noted that they were in the group who wanted to work, whereas some others in the program were, as they put it, lazy free riders.

On my last day in Gramatneusiedl, I had coffee with Thomas Schwab, its mayor, at the Job Guarantee headquarters. An older man who speaks with a cautious, professorial air, Schwab wrote his master's thesis on the original Marienthal study; he sees the current project against this historical background. "Maybe you know about Adam Smith, and these guys who say that the market is always right," he said. "If you don't find a job, then just work for less money. But that's completely wrong! If I have no jobs in my company, there can be a thousand people outside, and they could say, like in the nineteen-thirties, 'I will work just for something to eat.' Did they find a job? They didn't find a job, because nobody had a job to offer."

Sven Hergovich, the regional director of the Public Employment Service of Lower Austria, essentially agrees with this analysis. He thinks that rising demands for productivity and efficiency mean that, now and in the future, not everyone will be able to find a job without support. "There are not sufficient jobs available for all of the long-term unemployed," he told me. "In fact, we have only two options. Either we finance long-term unemployment, or we create a job guarantee."

Ultimately, the perceived success of any job-guarantee program depends on what you think its goals should be. Kasy, the Oxford economist, thinks that there are three factors we ought to consider. Are people doing better on objective and subjective measures of well-being? Do they participate voluntarily? And does the program cost roughly the same as, or less than, current unemployment benefits? He and his colleagues studied the Gramatneusiedl program using a randomized controlled trial, in which waves of participants who started at different times were compared against one another, against a statistical composite of similar unemployed people from similar towns in Austria that lack a job guarantee, and against other factors. So far, on a broad range of dimensions-symptoms of anxiety or depression, a sense of social inclusion, social status, financial security, and so on-the improvements in participants' lives are statistically significant. Kasy noted that the Job Guarantee costs no more per person than unemployment benefits. "It comes for free, people choose it voluntarily, and they feel like they're better off-you would think that's a slam dunk," he said.

If the aim of job-guarantee programs is to transition all participants to private-sector jobs, or to dramatically cut unemployment spending, they may be hard to defend. But, if the goals are to improve people's physical and mental health, to perform a range of tasks in a community, and to move some participants back to the private sector, then prospects look more promising. Since my visit to Gramatneusiedl, many of the participants have transitioned out of the program to other jobs. Karl Blaha, of the shoe emporium, is now a facility manager for a private logistics and transport company. Gilbert, of the forest brawls, is a restaurant manager.

And there are other, broader ways in which such programs can benefit society. Unemployment and despair are hardly the only causes of political extremism, but scholars have perceived a connection between these factors in multiple places and time periods. Before leaving Gramatneusiedl, I visited its historical museum, a quiet one-room building just off the main road. Inside, photographs from the early twentieth century showed musicians with fiddles and accordions, villagers picnicking in a garden with top hats and glasses of wine, and rows of young men in wrestling uniforms, crossing burly arms. By the early nineteen-thirties, however, the mood had shifted. Men lounged on a street corner, hands in pockets, gazes downcast; workers took sledgehammers to the old factory, destroying the place where they used to work. Within a few more years, a burst of activity again animated the town. Nazism had arrived. Pictures showed a parade, banners, bustling crowds-and, draped across the lectern of a man addressing the villagers, a swastika. ♦

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In a small Austrian village, an experimental program finds-or creates-work for the unemployed. Save this story for later. Save this story for later. In 1931, three researchers from the University of Vienna travelled to Marienthal, a small town about twenty miles away, to study the effects of long-term unemployment.

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Inequality As Policy: Selective Trade Protectionism Favors Higher Earners

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Offshoring manufacturing may have hurt many working people in America, but professionals and intellectual property have been robustly protected

Globalization and technology are routinely cited as drivers of inequality over the last four decades. While the relative importance of these causes is disputed, both are often viewed as natural and inevitable products of the working of the economy, rather than as the outcomes of deliberate policy. In fact, both the course of globalization and the distribution of rewards from technological innovation are very much the result of policy. Insofar as they have led to greater inequality, this has been the result of conscious policy choices.

Starting with globalization, there was nothing pre-determined about a pattern of trade liberalization that put U.S. manufacturing workers in direct competition with their much lower paid counterparts in the developing world. Instead, that competition was the result of trade pacts written to make it as easy as possible for U.S. corporations to invest in the developing world to take advantage of lower labor costs, and then ship their products back to the United States. The predicted and actual result of this pattern of trade has been to lower wages for manufacturing workers and non-college educated workers more generally, as displaced manufacturing workers crowd into other sectors of the economy.

Instead of only putting manufacturing workers into competition with lower-paid workers in other countries, our trade deals could have been crafted to subject doctors, dentists, lawyers and other highly-paid professionals to international competition. As it stands, almost nothing has been done to remove the protectionist barriers that allow highly-educated professionals in the United States to earn far more than their counterparts in other wealthy countries.

This is clearest in the case of doctors. For the most part, it is impossible for foreign-trained physicians to practice in the United States unless they have completed a residency program in the United States. The number of residency slots, in turn, is strictly limited, as is the number of slots open for foreign medical students. While this is a quite blatantly protectionist restriction, it has persisted largely unquestioned through a long process of trade liberalization that has radically reduced or eliminated most of the barriers on trade in goods. The result is that doctors in the United States earn an average of more than $250,000 a year, more than twice as much as their counterparts in other wealthy countries. This costs the country roughly $100 billion a year in higher medical bills compared to a situation in which U.S. doctors received the same pay as doctors elsewhere. Economists, including trade economists, have largely chosen to ignore the barriers that sustain high professional pay at enormous economic cost.

In addition to the items subject to trade, the overall trade balance is also very much the result of policy choices. The textbook theory has capital flowing from rich countries to poor countries, which means that rich countries run trade surpluses with poor countries. While this accurately described the pattern of trade in the 1990s up until the East Asian financial crisis (a period in which the countries of the region enjoyed very rapid growth), in the last two decades developing countries taken as a whole have been running large trade surpluses with wealthy countries.

This implies large trade deficits in rich countries, especially the United States, which in turn has meant a further loss of manufacturing jobs with the resulting negative impact on wage inequality. However, there was nothing inevitable about the policy shifts associated with the bailout from the East Asian financial crisis that led the developing world to become a net exporter of capital.

The pattern of gains from technology has been even more directly determined by policy than is the case with gains from trade. There has been a considerable strengthening and lengthening of patent and copyright and related protections over the last four decades. The laws have been changed to extend patents to new areas such as life forms, business methods, and software. Copyright duration has been extended from 55 years to 95 years. Perhaps even more important, the laws have become much more friendly to holders of these property claims to tilt legal proceedings in their favor, with courts becoming more patent-friendly and penalties for violations becoming harsher. And, the United States has placed stronger intellectual property (IP) rules at center of every trade agreement negotiated in the last quarter century.

In this context, it would hardly be surprising if the development of "technology" was causing an upward redistribution of income. The people in a position to profit from stronger IP rules are almost exclusively the highly educated and those at the top end of the income distribution. It is almost definitional that stronger IP rules will result in an upward redistribution of income.

This upward redistribution could be justified if stronger IP rules led to more rapid productivity growth, thereby benefitting the economy as a whole. However, there is very little evidence to support that claim. Michele Boldrin and David Levine have done considerable research on this topic and generally found the opposite. My own work, using cross-country regressions with standard measures of patent strength, generally found a negative and often significant relationship between patent strength and productivity growth.

There is also a substantial amount of money at stake. In the case of prescription drugs alone, the United States is on path to spend more than $430 billion in 2016 for drugs that would likely cost one-tenth of this amount in the absence of patent and related protections. While we do need mechanisms for financing innovation and creative work, it is almost certainly the case that patent and copyright monopolies as currently structured are not the most efficient route, even if their negative consequences for distribution are quite evident.

The structuring of trade and rules on IP are two important ways in which policy has been designed to redistribute income upward over the last four decades. There are many other ways in which the market has been structured to disadvantage those at the middle and bottom of the income distribution, perhaps most notably macroeconomic policies that result in high unemployment. While tax and transfer policies that reduce poverty and inequality may be desirable, we should also be aware of the ways in which policy has been designed to increase inequality. It is much easier to have an economic system that produces more equality rather than one that needlessly generates inequality, which we then try to address with redistributive policies.

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Inequality As Policy: Selective Trade Protectionism Favors Higher Earners

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Offshoring manufacturing may have hurt many working people in America, but professionals and intellectual property have been robustly protected Globalization and technology are routinely cited as drivers of inequality over the last four decades. While the relative importance of these causes is disputed, both are often viewed as natural and inevitable products of the working of the economy, rather than as the outcomes of deliberate policy.

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BBC News - Four-day week trial ends and some firms make it permanent
https://www.bbc.co.uk/news/business-63808326

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Labour Markets: Fabulous contextual example of a successful job guarantee trial in Austria

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Labour Markets: Fabulous contextual example of a successful job guarantee trial in Austria

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Water firms’ debts since privatisation hit £54bn as Ofwat refuses to impose limits

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When Thatcher privatised water in 1989 she said it would make the industry more efficient. Read this and make your mind up.

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When Thatcher privatised water in 1989 she said it would make the industry more efficient. Read this and make your mind up.

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Water firms’ debts since privatisation hit £54bn as Ofwat refuses to impose limits

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Customers pay on average 20% of their bill towards servicing debt and rewarding shareholders, says CMA

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A hundred UK companies sign up for four-day week with no loss of pay

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Labour Markets: Is this the start of a tsunami, or will it fade away?

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Labour Markets: Is this the start of a tsunami, or will it fade away?

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A hundred UK companies have signed up for a permanent four-day working week for all their employees with no loss of pay, a milestone in the campaign to fundamentally change Britain's approach to work.

The 100 companies employ 2,600 staff - a tiny fraction of the UK's working population - but the 4 Day Week Campaign group is hoping they will be the vanguard of a major shift.

Proponents of the four-day week say that the five-day pattern is a hangover from an earlier economic age. They argue that a four-day week would drive companies to improve their productivity, meaning they can create the same output using fewer hours. For some early adopters the policy has also proven a useful way of attracting and retaining employees.

The two biggest companies that have signed up are Atom Bank and global marketing company Awin, who each have about 450 staff in the UK. They have been accredited by the four-day week campaign, meaning they have demonstrated that they have genuinely reduced hours for workers rather than forcing them into longer days.

Adam Ross, Awin's chief executive, said adopting the four-day week was "one of the most transformative initiatives we've seen in the history of the company.

"Over the course of the last year and a half, we have not only seen a tremendous increase in employee wellness and wellbeing but concurrently, our customer service and relations, as well as talent relations and retention also have benefited."

The UK campaign is also coordinating the world's biggest pilot scheme for about 70 companies, which employ about 3,300 workers, to adopt the four-day week in a trial with researchers at the Universities of Cambridge and Oxford, Boston college and thinktank Autonomy.

In September, 88% of those companies in a survey at the middle of the trial said the four-day week was working "well" for their business at that stage of the trial. About 95% of the companies surveyed said productivity had either stayed the same or improved since the introduction.

Joe Ryle, the UK campaign's director, said there was increasing momentum in the adoption of the four-day week, even as companies brace for a long recession.

"We want to see a four-day week with no loss of pay become the normal way of working in this country by the end of the decade so we are aiming to sign up many more companies over the next few years," he said.

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"With many businesses struggling to afford 10% inflation pay rises, we're starting to see increasing evidence that a four-day week with no loss of pay is being offered as an alternative solution."

Most of the companies that have officially adopted the four-day week are in the services sector such as technology, events or marketing companies. However, the campaign said that some manufacturing and construction employers had also signed up.

Some historians have said the debate over the introduction of the four-day week has many similarities with the 19th-century campaign for a two-day weekend.

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A hundred UK companies sign up for four-day week with no loss of pay

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A hundred UK companies have signed up for a permanent four-day working week for all their employees with no loss of pay, a milestone in the campaign to fundamentally change Britain's approach to work.

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Is there a gap between public and private sector pay?

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Labour Markets: Public sector v private sector pay

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Labour Markets: Public sector v private sector pay

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By Anthony Reuben
BBC Reality Check

The Treasury has announced that the Budget and Spending Review will end the freeze on public sector pay that was announced this time last year.

Public-sector employees are generally those paid directly by the state such as teachers and members of the armed forces. All others work in the private sector.

How much their pay will go up from April will depend on the recommendations of the Pay Review Bodies.

The Treasury said that freezing pay in 2020-21 had helped "to ensure fairness between the private and public sector".

There is no question that there is a gap between pay in the public and private sectors, but whether that is fair is a tricky question.

As the Institute for Fiscal Studies (IFS) says, public-sector workers are more likely to be highly educated professionals who command higher wages in the labour market.

So the problem with comparing average earnings for the public and private sector is highly educated professionals would be expected to be earning more.

And this has increasingly been the case as successive governments have paid private-sector companies to carry out lower-paid jobs such as cleaning, security or catering.

The IFS also calculates the percentage gap between public and private sector pay if you take into account characteristics such as a worker's education and experience, which is the red line in the chart below.

Public-sector pay was frozen from 2011-13 and then capped at a 1% annual increase until 2018.

As a result, the difference between public and private-sector pay has narrowed since 2011, such that in 2019-20, there was no gap once you took into account their characteristics.

In 2020-21, the gap increased somewhat, indicating that the public sector had a somewhat better year than the private sector.

And we knew that - employees in the public sector worked very hard during the pandemic but they weren't furloughed and were less likely to lose their jobs than those in the private sector.

How much difference?

The Treasury release said that average earnings in 2020-21 had risen:

4.5% in the public sector

1.8% in the private sector

That's not the figure that the Office for National Statistics (ONS), which calculates the figures, uses.

According to the ONS, average earnings in 2020-21 rose:

5.6% in the public sector

4.6% in the private sector

The reason for the difference is that the Treasury has taken an average of all the monthly figures in 2020-21 and compared them with the same figure for 2019-20, whereas the ONS has compared average pay at the end of 2019-20 with average pay at the end of 2020-21.

So the Treasury figure is taking more account of the dip seen by the private sector during 2020, when employees were furloughed, which meant some of them were receiving only 80% of their normal pay.

You can see that dip very clearly in the blue line in the first chart in this piece.

The Treasury's way of calculating it makes the change in private sector wages look considerably worse than the ONS's headline figures.

There are other caveats about earnings figures at the moment, with the very large changes in things like bonus payments during the pandemic making the figures difficult to analyse.

Nonetheless, it is still fair to say that public sector workers had a better time overall on wages over the pandemic than their private sector counterparts.

Longer view

But if you take a longer term view, many workers in the public sector have had a difficult time.

The IFS says, for example, that pay levels for experienced teachers in 2021 are 8% lower once you adjust for rising prices than they were in 2007.

Average pay for NHS dentists fell by 32% between 2006−07 and 2017−18, and is estimated to have continued to fall since.

What about pensions?

Of course, the attractiveness of a job is not just about the amount you are paid.

This analysis excludes pension provision, which tends to be considerably better in the public sector.

On the other hand, bonuses and overtime payments are much more significant in the private sector.

And one thing that the pandemic has highlighted is the greater job security in the public sector, especially because those in the public sector were more likely to be classified as key workers.

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Is there a gap between public and private sector pay?

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By Anthony Reuben BBC Reality Check The Treasury has announced that the Budget and Spending Review will end the freeze on public sector pay that was announced this time last year. Public-sector employees are generally those paid directly by the state such as teachers and members of the armed forces.

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From today, working class people in the UK work for free

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Labour Markets: the discrimination that few people fully appreciate the extent of.

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Labour Markets: the discrimination that few people fully appreciate the extent of.

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According to a landmark study on the UK's class pay gap, on average, people from working class families earn thousands of pounds a year less for doing the same jobs as people from middle and upper class families.

The Social Mobility Foundation (SMF) found that professionals from working class backgrounds earn £6,718 less a year on average. Working class women and most ethnic minorities are also particularly disadvantaged, with professional working class women earning £9,450 less. Professional working class Bangladeshis were the worst off, earning £10,432 less.

This means that today, Monday November 14, marks the day when those from working class backgrounds working in higher professional-managerial positions essentially begin working for free until the end of the year.

The analysis used data from the Office for National Statistics' Labour Force Survey from 2014 to 2021 across professional and managerial occupations. The SMF found that working class chief executives earn £16,749 less than their peers. Finance managers are paid £11,427 less, and accountants and solicitors have a gap of more than £8,000.

Class pay gaps are less pronounced in other, less well-paid professions, but still substantial. For example, working class police officers and firefighters earn £5,229 less than their middle or upper class peers, while teachers and social workers also earn about £2,000 less.

Alan Milburn, the former health secretary and now chair of the SMF, called on ministers to legally require companies to measure and report their class pay gaps. Only three companies do, according to the foundation: PwC, KPMG, and the law firm Clifford Chance.

"Those on the receiving end of this class pay gap are being hit by a double whammy as the cost-of-living crisis also eats into their incomes," Milburn wrote in response to the findings . "Employers and the government need to take urgent action to stop hundreds of thousands of workers from being undervalued and underpaid."

"Creating a legally based register for class pay gap reporting is morally right and economically savvy," he continued. "At a time when incomes are being squeezed, such a legal change can be a part of the solution to combat the cost-of-living crisis."

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From today, working class people in the UK work for free

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According to a landmark study on the UK's class pay gap, on average, people from working class families earn thousands of pounds a year less for doing the same jobs as people from middle and upper class families. The Social Mobility Foundation (SMF) found that professionals from working class backgrounds earn £6,718 less a year on average.

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We’ve a dire lack of workers, and putting a load of them on the dole won’t help

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Labour Markets: When you read this you realise just how bad the UK's Covid recovery has been and how misleading unemployment stats are.

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Labour Markets: When you read this you realise just how bad the UK's Covid recovery has been and how misleading unemployment stats are.

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We’ve a dire lack of workers, and putting a load of them on the dole won’t help

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The real reason for last week’s rate rise was to boost unemployment and keep a lid on wage demands. But the government could instead increase the supply of labour

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UK Housing Crash 2023? Are Prices set to Fall?

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Economicshelp: Is the UK housing market going to crash in 2023?

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Economicshelp: Is the UK housing market going to crash in 2023?

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UK Housing Crash 2023? Are Prices set to Fall?

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Tesco meal deal. Contextual example of the kinked demand curve.

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Tesco meal deal. Contextual example of the kinked demand curve.

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https://twitter.com/TeachonomicsLtd/status/1587189972657995784?t=4zDQoo1riQ4kjiWfBrZv2w&s=09

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Will big 4 supermarket merger be allowed by CMA?

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Will big 4 supermarket merger be allowed by CMA?

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News, analysis and comment from the Financial Times, the worldʼs leading global business publication

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Britons buy more ‘wonky’ veg and frozen food as living costs soar

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Factors affecting demand: incomes, tastes and fashion 

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Factors affecting demand: incomes, tastes and fashion 

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Britons buy more ‘wonky’ veg and frozen food as living costs soar

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Supermarket price inflation at record high, adding £643 a year to average family’s grocery bill

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Dynamic pricing model adopted by Ticketmaster is widely criticised 

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Dynamic pricing model adopted by Ticketmaster is widely criticised 

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A new Ticketmaster pricing system, which alters the price of tickets based on demand, is being criticised by both fans and industry experts.

Called dynamic pricing, it has been used in the UK for recent sales by Harry Styles, Coldplay and Blackpink,

The system is regularly used in the US, where the resale market is a lot bigger, and touting is more prevalent.

Ticketmaster say it is being used to try to stop touts, and to give more money to artists.

But fans say they are being priced out of concerts, with some tickets doubling in price.

How does it work?

On the Ticketmaster page for Harry Styles's tour, a notice explains: "These tickets vary in price driven by demand from fans, similar to airline tickets and hotel rooms.

"We give fans an opportunity to safely buy official tickets for the events they love, right up to the date of the show."

The pricing system means Ticketmaster does not publicise ticket costs ahead of time - as they will change constantly, based on demand.

Adam Webb is a campaigner for the FanFair Alliance, a group that aims to stop ticket touting in the UK.

He told the BBC "there's a whole bunch of issues" with trying to price tickets based on demand.

"You've got the face value price, which is determined by the artist and promoter, then you have the secondary market price, which is obviously going to be a lot more because it's mostly ticket tout businesses reselling those tickets, and you're trying to inflate the primary ticket price to get closer to that."

The logic is that by increasing prices on the official website to match what touts are charging on secondary sites like Viagogo and StubHub, the touts will be scared off, meaning Ticketmaster (and the artists) can keep the extra profit.

It also prevents people from buying fake tickets, although most resale sites do offer refunds for fraudulent sales.

"I've been investigating this market for years now and most of the tickets on Viagogo are speculative, they haven't even been bought yet - so you're sort of using criminals to price your product, which is crazy really," said Mr Webb.

In Ireland ticket touting - selling tickets above face value - was banned last year.

But tickets for Harry Styles's 2023 gig at Slane Castle are being sold for more than double their original face value on Ticketmaster - €195 instead of €97.

When the BBC asked Ticketmaster about this, they said introducing dynamic pricing was "an important shift necessary to maintaining the vibrancy and creativity of the live music industry".

Its statement added: "Like sports teams, artist representatives and promoters recognise the benefit of pricing tickets closer to market value."

Some artists have been rejecting the dynamic pricing structure and trying to keep costs low for fans.

Tom Grennan said on Twitter this week "the pinch is real and I take it very seriously". He added that for his UK tour "we've worked hard to pull the cost of tickets down, and dismissed all VIP and platinum ticket options in the middle of a cost-of-living crisis".

I haven't seen enough people talking today about how brilliant the pricing of @Tom_Grennan 's arena tour is. The cheapest I've seen for a mainstream radio played artist for a long time. Fair play.
- Sinead (@sineadmcfly) October 5, 2022

The BBC is not responsible for the content of external sites. View original tweet on Twitter

Ahead of their arena tour, Paul Heaton and Jacqui Abbott told the BBC: "We're getting paid enough and we want to keep it low for you". Prices for the best tickets are capped at around £36.

'This is an absolute joke'

Rebecca McGowan is a children's clinical nurse specialist from Tamworth, and a huge Harry Styles fan.

"I went to Harry's last tour back in June and went three times. I thought the tickets were really good value for money to be fair," she told the BBC.

Rebecca paid £56 for a seated ticket in Manchester, £110 for pit standing in the same venue and £96 for a seat at Wembley Stadium.

But when it came around to buying tickets for next year's shows, which are also part of the same Love On Tour concert series, she noticed a big difference in pricing.

She put two tickets in her basket, costing £155 each for pit standing at Wembley Stadium, but when she hit "purchase" it said they were no longer available.

"I scrolled down the screen and it said, 'pit tickets £386 each' for the same area. Lo and behold I could get them - but I refused because they were the same tickets. It really annoyed me... As much as I love going to concerts, I was like 'no chance' - this is an absolute joke."

The tickets had increased in price while she was on the buying page, as Ticketmaster matched the demand from resale websites.

Tackling touts

Critics of dynamic pricing say artists can already stop touting, by applying their own ticketing rules.

Ed Sheeran has been one of the frontrunners in tackling the secondary market, by requiring IDs to be checked against tickets on doors, and cancelling any tickets listed on resale sites.

For his 2018 tour he cancelled more than 10,000 tickets, and partnered with face-value resale site Twickets to make sure tickets weren't sold on at an inflated price to fans.

The Arctic Monkeys have also set similar conditions for their 2023 tour, stating that tickets can only be resold at face value on certain approved platforms and that "tickets may be cancelled" if sold for profit on resale sites.

Another solution is selling directly to fans through fan club pre-sales, offering unique codes and limiting how many tickets can be sold.

K-Pop group Blackpink also used dynamic pricing for their 2022 tour, but those who had already paid for fan membership got access to face-value tickets first.

Laura Smith, who works as a PR consultant in Leeds, spent £25 on a Blackpink loyalty membership in December 2021, which promised early access to tour tickets - even though no tour had been announced at the time.

"I used my early-bird membership code to get online in the first hour of tickets being on sale ," she told the BBC. "The fact that I'd had that membership since December hopefully shows how dedicated you have to be to get that early access."

Laura is part of a big K-Pop community and says lots of people she knows missed out on tickets, as they couldn't afford the inflated prices: "It just feels like a way of making music less accessible to people who love going to see live music. I don't see how it benefits anyone apart from Ticketmaster."

She says not knowing how much money to put aside ahead of tickets going on sale "is very stressful".

"With tickets fluctuating it makes it so hard to budget and spend within your means - I can definitely see how you could be tempted to spend more if [inflated tickets] are the only thing available."

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A new Ticketmaster pricing system, which alters the price of tickets based on demand, is being criticised by both fans and industry experts. Called dynamic pricing, it has been used in the UK for recent sales by Harry Styles, Coldplay and Blackpink, The system is regularly used in the US, where the resale market is a lot bigger, and touting is more prevalent.

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Nuclear fusion plant to be built at West Burton A power station

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The start of the creative destruction of non-renewable energy?

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The start of the creative destruction of non-renewable energy?

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"We're talking billions in investment, we're talking about something that is really globally significant coming to north Nottinghamshire, and what that will do for jobs, investment, really it blows everything else out of the water," he told the BBC.

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Nuclear fusion plant to be built at West Burton A power station

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"We're talking billions in investment, we're talking about something that is really globally significant coming to north Nottinghamshire, and what that will do for jobs, investment, really it blows everything else out of the water," he told the BBC.

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BBC News - CMA examine Vodafone and Three potential merger. https://www.bbc.co.uk/news/technology-63118990

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Firms in four-day week trial will make it permanent

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U11 Labour Markets: Very interesting early results of massive UK experiment in 4-day week

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U11 Labour Markets: Very interesting early results of massive UK experiment in 4-day week

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Joe O'Connor, chief executive of 4 Week Global, which is running the scheme across a number of countries, said: "We are learning that for many it is a fairly smooth transition and for some there are some understandable hurdles - especially among those which have comparatively fixed or inflexible practices, systems, or cultures which date back well into the last century."

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Firms in four-day week trial will make it permanent

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Joe O'Connor, chief executive of 4 Week Global, which is running the scheme across a number of countries, said: "We are learning that for many it is a fairly smooth transition and for some there are some understandable hurdles - especially among those which have comparatively fixed or inflexible practices, systems, or cultures which date back well into the last century."

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'Polluters must pay': UN chief calls for windfall tax on fossil fuel companies

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Massive profits. Massive externalities. The polluters must pay. A windfall tax is an absolute must.

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Massive profits. Massive externalities. The polluters must pay. A windfall tax is an absolute must.

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Countries should impose windfall taxes on fossil fuel companies and divert the money to vulnerable nations suffering worsening losses from the climate crisis, the United Nations secretary general has urged.

António Guterres said that "polluters must pay" for the escalating damage caused by heatwaves, floods, drought and other climate impacts, and demanded that it was "high time to put fossil fuel producers, investors and enablers on notice".

"Today, I am calling on all developed economies to tax the windfall profits of fossil fuel companies," Guterres said in a speech to the UN general assembly on Tuesday. "Those funds should be redirected in two ways - to countries suffering loss and damage caused by the climate crisis and to people struggling with rising food and energy prices."

Guterres's appeal came in his most urgent, and bleakest, speech to date on the state of the planet, and the will of governments to change course.

His first words were: "Our world is in big trouble."

"Let's have no illusions. We are in rough seas. A winter of global discontent is on the horizon, a cost-of-living crisis is raging, trust is crumbling, inequalities are exploding and our planet is burning," he told the assembly. "We have a duty to act and yet we are gridlocked in colossal global dysfunction. The international community is not ready or willing to tackle the big dramatic challenges of our age."

The lacerating speech, delivered at the UN headquarters in New York, echoes calls from activists, and the European Union, to tax major oil and gas firms currently enjoying record profits in the wake of Russia's invasion of Ukraine. In July, Exxon announced it had made a record quarterly profit of $17.8bn, while Chevron unveiled its own three-month record profit, of $11.6bn. BP, meanwhile, made a $8.5bn profit in the same period.

Under Guterres's proposal, revenue from the taxes would flow to predominantly developing countries suffering "loss and damage" from global heating, to be invested in early warning systems, mopping up from disasters and other initiatives to build resilience. Vulnerable countries are poised to leverage the UN general assembly week to ask rich nations for a "climate-related and justice-based" global tax to pay for loss and damage.

Guterres has previously accused governments of having an "addiction" to fossil fuels and has called new investments in oil, coal and gas "moral and economic madness".

But his speech on Tuesday was particularly pointed, delivered on the grand dais of the general assembly and following the secretary general's recent visit to Pakistan, where floods from what he called "a monsoon on steroids" have submerged a third of the country and displaced millions of people.

"Our planet is burning," Guterres said, calling on world leaders to to end their "suicidal war against nature".

"The climate crisis is the defining issue of our time," he added. "It must be the first priority of every government and multilateral organization. And yet climate action is being put on the back burner - despite overwhelming public support around the world."

"We have a rendezvous with climate disaster ... The hottest summers of today may be the coolest summers of tomorrow. Once-in-a-lifetime climate shocks may soon become once-a-year events. And with every climate disaster, we know that women and girls are the most affected. The climate crisis is a case study in moral and economic injustice."

Governments must stage an "intervention" to break their addiction to fossil fuels, Guterres said, by targeting not only the extractive companies themselves but the entire infrastructure of businesses that support them.

"That includes the banks, private equity, asset managers and other financial institutions that continue to invest and underwrite carbon pollution," said the secretary general.

"And it includes the massive public relations machine raking in billions to shield the fossil fuel industry from scrutiny. Just as they did for the tobacco industry decades before, lobbyists and spin doctors have spewed harmful misinformation. Fossil fuel interests need to spend less time averting a PR disaster - and more time averting a planetary one."

Guterres said it was "high time to move beyond endless discussions" and deliver finance for vulnerable countries and for wealthy nations to double adaption funding by 2025, as they promised to do at UN climate talks in Scotland last year. A further round of talks, known as Cop27, will take place in Egypt in November, in which loss and damage is set to be a central issue.

Although governments have agreed to restrain global heating to 1.5C above pre-industrial times, almost all countries are lagging in their efforts to cut greenhouse gas emissions quickly enough to avoid this level of heating and therefore avert catastrophic climate impacts.

Emissions have already rebounded to pre-pandemic levels and an analysis this week showed there are plenty of known fossil fuel reserves in the world still left to burn - enough to unleash 3.5tn tons of greenhouse gases, which would smash the carbon budget before we get to 1.5C seven times over.

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'Polluters must pay': UN chief calls for windfall tax on fossil fuel companies

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Countries should impose windfall taxes on fossil fuel companies and divert the money to vulnerable nations suffering worsening losses from the climate crisis, the United Nations secretary general has urged. António Guterres said that "polluters must pay" for the escalating damage caused by heatwaves, floods, drought and other climate impacts, and demanded that it was "high time to put fossil fuel producers, investors and enablers on notice".

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The Guardian view on rent capping: a step in the right direction | Editorial

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Is the housing market failing? If so, how should government intervene?

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Is the housing market failing? If so, how should government intervene?

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ent rises for social housing tenants in England are to be capped for either one year or two, following a consultation. In Scotland, Nicola Sturgeon has announced plans for a rent freeze for private as well as social tenants, and a ban on evictions over the winter. With plans for longer-term rent controls already promised by the Scottish government, as part of the SNP's agreement with the Scottish Greens, these new measures are - like the Conservative plan for England - a response to an escalating cost of living and poverty crisis. That Scottish ministers are prepared to go so much further ought to worry Liz Truss, and prompt her to do more. The UK's housing market is broken, and private renters as well as social ones need help.

But councils and housing associations, too, are in a difficult situation. To hold rent rises down below the rate of inflation, without compensating social landlords for lost income, is not tenable. Comparable steps would be making school meals free without giving schools the money to pay for them, or abolishing prescription charges without funding the NHS to pay for medicines. Housing associations and local authorities need income in order to manage and repair homes and build new ones. If the government is to reduce their incomes, it must fill the resulting hole in their finances. The need for energy-efficiency measures to keep bills down and curb emissions, and the shortage of properties for social rent, make the need for investment all the more pressing.

The Treasury stands to gain from any cap on social rent rises. Because most social housing tenants rely on benefits to pay rent, ministers are effectively holding down their own bills. (Though with the cap in England to be set between 3% and 7%, rents will still rise, making it harder for those who do pay it to manage.) Social housing providers do not command public sympathy in the same way as schools or hospitals. The incentives for politicians to support them are fewer. But subsidised housing is an essential public service and must be recognised as such. A rent cap ought to be viewed as part of a policy, not a whole one.

As well as ensuring that social housing providers do not lose out as a result of short-term rent controls, the new housing secretary, Simon Clarke, must address problems in the private sector. Ministers promised years ago to end no-fault evictions, but still haven't. In addition, they should support councils that wish to undertake compulsory landlord registration - already implemented in Scotland. Buyback schemes, whereby social housing providers are funded to purchase properties that used to be council homes, should also be expanded. The current situation, in which billions of pounds of housing benefit is funding buy-to-let mortgages, helps landlords and no one else.

But the priority is to ensure that low-income tenants are protected from price rises that threaten to make their lives impossible. If ministers are serious about reaching the poorest households, they could show this by scrapping the benefit cap. Multiple studies have shown that the larger families affected by this policy, and the two-child limit, are disproportionately poor - with all the hardship that entails. Social rents should be capped for two years, as the price of energy will be. But this is just the first of many housing reforms that are needed.

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The Guardian view on rent capping: a step in the right direction | Editorial

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ent rises for social housing tenants in England are to be capped for either one year or two, following a consultation. In Scotland, Nicola Sturgeon has announced plans for a rent freeze for private as well as social tenants, and a ban on evictions over the winter.

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Google faces €25bn legal action in UK and the EU

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UNIT 7: Contextual example of CMA intervention for anti competitive behaviour 

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UNIT 7: Contextual example of CMA intervention for anti competitive behaviour 

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By Shiona McCallum
Technology reporter

Google is facing two legal cases which could result in the tech giant paying out damages of up to €25bn (£19.5bn) over its digital advertising practices.

The company is accused of anti-competitive conduct, and of abusing its dominant place in the ad tech market.

Separate legal cases, in the UK and in the Netherlands, are being filed in the coming weeks on behalf of publishers seeking "compensation" from Google.

Google has recently drawn scrutiny from anti-trust regulators after complaints.

'Anti-competitive conduct'

Ad tech powers the online adverts that people see on their smartphones or when using the web. Google is the largest, and most important, ad tech vendor - with a market share reaching over 90%.

Selling digital advertising space has become a valuable source of income for publishers including global news websites, as well as smaller operators, such as independent bloggers - all of whom agree to carry advertising on their sites for a fee,

The European Commission and its UK equivalent are investigating whether Google's dominance in the ad tech business gives it an unfair advantage over rivals and advertisers.

The French competition watchdog imposed a €220m fine on the company last year.

Johnny Ryan, from the Irish Council for Civil Liberties, told the BBC: "Google is under pressure on two big issues - one is anti-trust and the other is data protection."

Mr Ryan said more cases were coming to light as competition enforcers around the world "increasingly put demands on Google".

But he added "the fines we have seen so far from competition authorities have had absolutely no consequence whatsoever".

Damien Geradin, of the Belgian law firm Geradin Partners - which is involved in the Dutch case - said, "Publishers, including local and national news media, who play a vital role in our society, have long been harmed by Google's anti-competitive conduct.

"It is time that Google owns up to its responsibilities and pays back the damages it has caused to this important industry.

"That is why today we are announcing these actions across two jurisdictions to obtain compensation for EU and UK publishers."

A tale of two claims

The British claim, at the UK Competition Appeal Tribunal, will seek to recover compensation for all owners of websites carrying banner advertising.

If successful, this would mean a wide and diverse group could get compensation - from major media sites down to small and medium-sized businesses who produce their own online content.

Businesses which do not which to be included in the legal action can opt out.

UK law firm Humphries Kerstetter is planning to bring its case to the Tribunal next month, although the process could take years to reach a conclusion.

Toby Starr, of Humphries Kerstetter, told the BBC, it was important to bring the claim because of the reasonable expectation that the tech giant might change practices as a result.

He said the claim represented "victims of Google's anti-competitive conduct in ad tech who have collectively lost an estimated £7 billion".

"This includes news websites up and down the country with large daily readerships, as well as the thousands of small business-owners who depend on advertising revenue - be it from their fishing website, food blog, football fanzine or other online content [which] they have spent time creating and publishing."

The UK competition watchdog is also investigating Google's power in the digital advertising technology market.

Future looking

The Dutch case is open to European publishers affected by Google's actions. Geradin Partners has teamed up with Dutch law firm Stek to bring the collective claim.

Jan Bart van de Hel, from Stek, said: "Many publishers have suffered damages as result of Google's wrongful actions.

"It is important to take action against this, not only to make sure that the damages of the publishers are fully compensated, but also to make sure that Google's anti-competitive conduct is prevented for the future."

UK litigation funder Harbour is funding both lawsuits. Harbour is a privately-owned company which pays legal costs upfrong "and helps manage the costs and risks of litigation" in return for a pre-agreed share of the amount recovered if the legal action is successful.

Google did not immediately respond to the BBC's request for comment.

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Google faces €25bn legal action in UK and the EU

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By Shiona McCallum Technology reporter Google is facing two legal cases which could result in the tech giant paying out damages of up to €25bn (£19.5bn) over its digital advertising practices. The company is accused of anti-competitive conduct, and of abusing its dominant place in the ad tech market.

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Ditch price cap for ‘free basic energy’ plan to help poorest, report says

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A solution to the energy price crisis that helps the poorest households the most. Unfortunately, there is zero chance Truss will do it.

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A solution to the energy price crisis that helps the poorest households the most. Unfortunately, there is zero chance Truss will do it.

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Ditch price cap for ‘free basic energy’ plan to help poorest, report says

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New Economics Foundation sets out proposals for government to pay for gas and electricity use up to a limit

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"I didn't take the job on to starve children."

This dinner lady is dreading going back to work in October and fears many of the school's pupils will not be able to afford lunch. 

@eiecampaign

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"I didn't take the job on to starve children."

This dinner lady is dreading going back to work in October and fears many of the school's pupils will not be able to afford lunch. 

@eiecampaign https://t.co/UF5zbBxk7x

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"I didn't take the job on to starve children."

This dinner lady is dreading going back to work in October and fears many of the school's pupils will not be able to afford lunch. @eiecampaign pic.twitter.com/UF5zbBxk7x
— PoliticsJOE (@PoliticsJOE_UK) August 30, 2022

# data[].attributes.attachment_link.metadata.attachment_props_source.data.text
"I didn't take the job on to starve children."

This dinner lady is dreading going back to work in October and fears many of the school's pupils will not be able to afford lunch. 

@eiecampaign https://t.co/UF5zbBxk7x

# data[].attributes.attachment_link.metadata.attachment_props.original_text
"I didn't take the job on to starve children."

This dinner lady is dreading going back to work in October and fears many of the school's pupils will not be able to afford lunch. 

@eiecampaign https://t.co/UF5zbBxk7x

# data[].attributes.attachment_link.metadata.attachment_props.text
"I didn't take the job on to starve children."

This dinner lady is dreading going back to work in October and fears many of the school's pupils will not be able to afford lunch. 

@eiecampaign

# data[].attributes.wish_content.attachment_props.text
In Finland all children get free school meals. A standard Finnish response to why they do this is: "You wouldn't expect a student to buy a chair or a desk, so why would you expect them to buy a meal?" They see it as a fundamental part of a good education. So should we. https://t.co/x6hLvHqAJI

# data[].attributes.wish_content.attachment_props.original_text
In Finland all children get free school meals. A standard Finnish response to why they do this is: "You wouldn't expect a student to buy a chair or a desk, so why would you expect them to buy a meal?" They see it as a fundamental part of a good education. So should we. https://t.co/x6hLvHqAJI

# data[].attributes.wish_content.attachment_props.referenced_tweets[].text
"I didn't take the job on to starve children."

This dinner lady is dreading going back to work in October and fears many of the school's pupils will not be able to afford lunch. 

@eiecampaign https://t.co/UF5zbBxk7x

# data[].attributes.attachment_link.embed_code
In Finland all children get free school meals. A standard Finnish response to why they do this is: "You wouldn't expect a student to buy a chair or a desk, so why would you expect them to buy a meal?" They see it as a fundamental part of a good education. So should we. https://t.co/x6hLvHqAJI
— Roonomics (@Roonomics) September 1, 2022

# data[].attributes.attachment_link.metadata.attachment_props_source.data.text
In Finland all children get free school meals. A standard Finnish response to why they do this is: "You wouldn't expect a student to buy a chair or a desk, so why would you expect them to buy a meal?" They see it as a fundamental part of a good education. So should we. https://t.co/x6hLvHqAJI

# data[].attributes.attachment_link.metadata.attachment_props_source.includes.tweets[].text
"I didn't take the job on to starve children."

This dinner lady is dreading going back to work in October and fears many of the school's pupils will not be able to afford lunch. 

@eiecampaign https://t.co/UF5zbBxk7x

# data[].attributes.attachment_link.metadata.attachment_props.original_text
In Finland all children get free school meals. A standard Finnish response to why they do this is: "You wouldn't expect a student to buy a chair or a desk, so why would you expect them to buy a meal?" They see it as a fundamental part of a good education. So should we. https://t.co/x6hLvHqAJI

# data[].attributes.attachment_link.metadata.attachment_props.text
In Finland all children get free school meals. A standard Finnish response to why they do this is: "You wouldn't expect a student to buy a chair or a desk, so why would you expect them to buy a meal?" They see it as a fundamental part of a good education. So should we. https://t.co/x6hLvHqAJI

# data[].attributes.attachment_link.metadata.attachment_props.referenced_tweets[].text
"I didn't take the job on to starve children."

This dinner lady is dreading going back to work in October and fears many of the school's pupils will not be able to afford lunch. 

@eiecampaign https://t.co/UF5zbBxk7x

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Can you spot the complex argument employers always seem to bring up?

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Can you spot the complex argument employers always seem to bring up?

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Just so well done. Watch the whole thing.

# data[].attributes.wish_content.attachment_props.original_text
Just so well done. Watch the whole thing. https://t.co/WgDllz0uqQ

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Just so well done. Watch the whole thing. pic.twitter.com/WgDllz0uqQ
— Ben Phillips (@benphillips76) August 25, 2022

# data[].attributes.attachment_link.metadata.attachment_props_source.data.text
Just so well done. Watch the whole thing. https://t.co/WgDllz0uqQ

# data[].attributes.attachment_link.metadata.attachment_props.original_text
Just so well done. Watch the whole thing. https://t.co/WgDllz0uqQ

# data[].attributes.attachment_link.metadata.attachment_props.text
Just so well done. Watch the whole thing.

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Truss's jibe at British workers shows that she fails to understand the problem | Larry Elliott

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The UK's productivity puzzle can't be solved with gut feeling mixed with prejudice 

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The UK's productivity puzzle can't be solved with gut feeling mixed with prejudice 

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It will doubtless come as a surprise to British workers toiling in distribution warehouses, call centres or the NHS that Liz Truss thinks they could do with showing "more graft".

Judging by comments made when she was chief secretary to the Treasury, the frontrunner to be prime minister thinks the UK's economic problems are down to a working culture quite different from that in communist China.

Truss is right in one respect. The UK does lag behind many other western countries in the productivity league table. Across the G7 group of major industrial countries, the average worker produces 13% more an hour than the average British worker and the gap is getting bigger.

Official data also appears to show a divide between London and the rest of the country, with workers in the capital apparently 80% more productive than the national average. Truss suggests this is a mindset issue.

The idea, though, that the UK's deep-rooted economic problems are caused by shirking or a lack of effort does not stand up to serious scrutiny. Britain has one of the most deregulated labour markets in the developed world and the average British worker puts in more hours a week than the European average.

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Monitoring and surveillance in many workplaces are intense, with disciplinary measures for those that fail to meet quotas. This is a country where management has the whip hand and, for the most part, workers are not protected by unions. To the extent Truss's analysis was ever true, it harks back to a labour market that has long since disappeared - now replaced by one in which an army of gig economy and self-employed workers toil away to make a living.

The real reason for Britain's poor productivity lies elsewhere. UK business investment as a share of national output, or gross domestic product, is the lowest in the G7. It is a similar story with research and development, to which the UK devotes 1.7% of GDP annually, compared with an average of 3.1% for members of the developed country club, the Organisation for Economic Cooperation and Development.

Britain's economic model is based on an abundance of cheap labour and under-investment in up to date capital equipment and product innovation. Skills levels are higher in a country such as Germany because the Germans invest more in training.

The difference between Britain and better performing countries is not that they work harder than we do, but that they work smarter than we do. Foreign-owned companies in the UK tend to have higher productivity, so if "mindset" is the issue then it is the mindset of management that counts.

Nor is it really the case that productivity is higher in London because workers in the capital have a "can do" spirit lacking elsewhere. As a paper from researchers at Sheffield Hallam University found, once adjusted for factors including the size of the working age population, the concentration of high productivity jobs in finance and the number of hours worked, the gap virtually disappears.

Truss's team say the remarks made some years ago have been taken out of context but they seem pretty clear. If Boris Johnson's probable successor thinks more graft is needed, she is completely misdiagnosing the problem.

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Truss's jibe at British workers shows that she fails to understand the problem | Larry Elliott

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It will doubtless come as a surprise to British workers toiling in distribution warehouses, call centres or the NHS that Liz Truss thinks they could do with showing "more graft". Judging by comments made when she was chief secretary to the Treasury, the frontrunner to be prime minister thinks the UK's economic problems are down to a working culture quite different from that in communist China.

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This is my big tip for a Labour Markets essay for next year's micro paper. More specifically, what can we do about it?

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This is my big tip for a Labour Markets essay for next year's micro paper. More specifically, what can we do about it?

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"We're off course and getting more off course"

#Newsnight economic editor @BenChu_ looks at the reasons behind the growing number of economically inactive people in Britain

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"We're off course and getting more off course"

#Newsnight economic editor @BenChu_ looks at the reasons behind the growing number of economically inactive people in Britain https://t.co/ctEUuD0r7v

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"We're off course and getting more off course"#Newsnight economic editor @BenChu_ looks at the reasons behind the growing number of economically inactive people in Britain pic.twitter.com/ctEUuD0r7v
— BBC Newsnight (@BBCNewsnight) August 16, 2022

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"We're off course and getting more off course"

#Newsnight economic editor @BenChu_ looks at the reasons behind the growing number of economically inactive people in Britain https://t.co/ctEUuD0r7v

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"We're off course and getting more off course"

#Newsnight economic editor @BenChu_ looks at the reasons behind the growing number of economically inactive people in Britain https://t.co/ctEUuD0r7v

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"We're off course and getting more off course"

#Newsnight economic editor @BenChu_ looks at the reasons behind the growing number of economically inactive people in Britain

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A one-off Bob Dylan recording could sell for £1m

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It used to he about honesty and truth for Bob, but it's all about demand and supply in 2022.

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It used to he about honesty and truth for Bob, but it's all about demand and supply in 2022.

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A one-off Bob Dylan record is expected to fetch up to £1m when it is auctioned at Christie's on Thursday.

The disc features a new version of the star's classic song Blowin' In The Wind, made in March 2021 with his long-time collaborator T Bone Burnett.

"It felt holy," he tells BBC News. "It always feels holy for me, playing with Bob - and I think we did it in one take, if I'm not mistaken."

It is the first new studio recording of the song since Dylan wrote it in 1962.

The one-off release also showcases a new type of record that combines some of the materials used in CDs and vinyl, and promises better sound quality and durability than vinyl.

Playable on any regular turntable, the new format is described as "the pinnacle of sound" by Burnett, who helped develop it.

Ultimately, only one deep-pocketed Dylan fan will get to own the new version of Blowin' In The Wind. However, fans can go to Christie's in London to hear the record before it is sold.

There, they will be ushered into a sedate side-room of the auction house, where the 10-inch disc is handled with silk gloves before being placed on a £30,000 hi-fi system.

Listening on headphones, the warmth and precision of the sound is immediately apparent, save for a few pops and cracks (maybe four in total) attributable to dust or static on the surface of the record.

Dylan's voice is smooth and dextrous throughout, having benefitted from an extended break in touring during the Covid-19 pandemic.

When it appears, his characteristic rasp only adds to the weight of the lyrics, which are inextricably linked to the civil rights movement of the 1960s.

Lines like, " How many times can a man turn his head / and pretend that he just doesn't see?" resonate harder than ever when sung from the perspective of an 81-year-old who's witnessed history repeat decade after decade after decade.

As a result, the song becomes more contemplative, a rumination on our failures. Dylan stretches out his syllables as though he's contemplating every line anew; taking almost a minute longer to reach the song's conclusion.

Unlike the original, the 2021 re-recording features a full band, recorded live in the studio as Dylan sang. Their subtle and sympathetic arrangement - with Greg Leisz on mandolin and Don Was on bass - adds a new dimension to the song, without stealing focus from the message.

It almost seems a shame that, in the words of the Christie's catalogue, "this is the only copy of Bob Dylan's 2021 recording,.... that will ever be manufactured. No other versions of this recording will be released or sold".

"We're only making one because we view this work as the equivalent of an oil painting," says Burnett, who is best known for his Grammy-winning work on Raising Sand by Alison Kraus and Robert Plant, as well as the soundtracks for O Brother, Where Art Thou? and The Big Lebowski.

He hopes that future releases in the format will "help develop a music space in the fine arts", allowing artists to combat "the devaluing of our work by the commoditisation of the internet".

"I don't know what an original recording of Bob Dylan singing one of the most important songs of the last century is [worth] today, but I know it's not point $0.001 divided by 5 billion, which is the reality that musicians face now."

The exclusivity of the new recording has informed its estimated sale price of between £600,000 and £1 million.

Peter Klarnet, Christie's senior specialist in Americana, says it was hard to calculate an estimate, as nothing of this nature has ever been sold before. The closest analogy is the Wu-Tang Clan album Once Upon a Time in Shaolin, which was limited to a single CD copy in 2015.

That record was initially bought by hedge fund manager Martin Shkreli for an unspecified sum. When he was later convicted of fraud, the US Department of Justice re-sold the album for a reported $4m (£3.35m), making it the most expensive work of music ever sold.

Klarnet says the Dylan record is unlikely to top that sum, but suggests his initial estimate is on the conservative side.

Meanwhile, Burnett is enthused by the potential of his new physical audio format - known as an Ionic Original.

Announced in April, it consists of "lacquer painted onto an aluminium disc, with a spiral etched into it by music".

This is essentially the same technology that the music industry has used for decades to create test pressings, known as acetates or dubplates.

Musicians generally agree that these acetates sound better than vinyl - but they degrade quickly, as the force of the needle pushing into the groove melts the lacquer.

"So we started looking into what they use on the Space Station to shield it from the direct light of the sun," says Burnett. "And we've been able to coat the acetate with that, and it removes enough friction that the acetate doesn't degrade over thousands of plays."

He says the coating - made from a gradient of sapphire and quartz - also reduces the crackle associated with vinyl.

"Friction creates static electricity, which attracts dust, which causes pops," he explains. "So with this coating removing friction, if some dust does land on the needle, it cleans it out. So the discs are essentially self-cleaning."

At the time of writing, the discs cannot be mass produced, meaning they are likely to remain collector's items and investment opportunities for now. But Burnett hopes they will be more widely adapted in the future.

"I don't look at this as a replacement for anything," he says. "I just look at it as another arrow in the quiver for every musician in the world [and] a whole new way of earning a living that we've never had before."

This isn't Burnett's first venture into audio formats. In 2008, he developed a hi-fidelity technology known as ΧΟΔΕ (or Code), which allowed listeners to play "studio quality" recordings from a DVD player.

Releases on the format included John Mellencamp's Life, Death, Love and Freedom - but the format died out relatively quickly.

Follow us on Facebook, or on Twitter @BBCNewsEnts. If you have a story suggestion email entertainment.news@bbc.co.uk.

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A one-off Bob Dylan recording could sell for £1m

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A one-off Bob Dylan record is expected to fetch up to £1m when it is auctioned at Christie's on Thursday. The disc features a new version of the star's classic song Blowin' In The Wind, made in March 2021 with his long-time collaborator T Bone Burnett. "It felt holy," he tells BBC News.

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Fuel prices: Why is petrol so expensive in the UK?

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The Petrol Retailers Association, which represents independent retailers, points out that customers bought 15% less fuel in 2021 as a result of Covid. It says retailers have to make higher profits on each litre sold to cover costs.

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Fuel prices: Why is petrol so expensive in the UK?

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The Petrol Retailers Association, which represents independent retailers, points out that customers bought 15% less fuel in 2021 as a result of Covid. It says retailers have to make higher profits on each litre sold to cover costs.

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From Thatcher to Johnson: how right to buy has fuelled a 40-year housing crisis

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How leaving housing to the free market for 40 years has created a housing crisis 

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How leaving housing to the free market for 40 years has created a housing crisis 

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‘I t feels like a way to change your fortunes – that’s the British dream,” says the writer and housing journalist Vicky Spratt on right to buy. When she began researching Tenants, her new book about Britain’s dysfunctional private housing market, she knew that Margaret Thatcher’s flagship policy, which has seen 2m homes bought by council tenants at massive discounts since 1980, was important.

By the time she finished it, Spratt realised it had “entered the public consciousness like no other policy, and in that respect it’s one of the most successful of all time”.

Thatcher would be disappointed, though. Forty-two years later, the “property-owning democracy” she craved is receding from view. When right to buy was launched as part of the Housing Act 1980, 55% of householders were homeowners. The figure peaked at 72% in the early 00s but currently stands at 65%. Meanwhile, council housing has decreased, too. In 1979, there were 6.5m council homes; now there are 2.2m, while 4.4m households rent privately, twice as many as 15 years ago.

Nevertheless, Boris Johnson recently announced that right to buy will be extended to tenants of housing associations – not-for-profit organisations that let homes to about 2.5 million people at rents of up to 80% of the market rate. Millions of right-to-buyers have “switched identities and psychology”, Johnson claimed, from state dependence to proud self-reliance, echoing Thatcher’s fixation on “the independence that comes with ownership”.

Polly Neate, the chief executive of the housing charity Shelter, has said that extending the right to buy now, when the waiting list for social housing in England stands at 1.6m, is “baffling, unworkable and a dangerous gimmick”.

This is because although right to buy has succeeded spectacularly as a political slogan, its benefits have been starkly unequal. While an older generation of working- and lower-middle-class people gained their first big asset upon buying council homes in the 80s, millions of mostly younger people have now been forced into insecure, grotty, privately rented accommodation.

An aerial view of Forest Gate in Newham, east London. Photograph: AP S (uk)/Alamy

In England, at least, right to buy is implicated at every stage of a housing crisis that has been 40 years in the making. I only fully understood this when I spent several months last year making a BBC radio series, A Home of Our Own, about the ways in which people’s lives have been shaped, for better or worse, by their housing options.

I spoke to Phil Salter, a 79-year-old retired carpenter in Cornwall, who bought his council house in Devon in the early 80s for £17,000. When it was valued at £80,000 in 1989, he sold up and used the equity to put towards a £135,000 fisherman’s cottage in St Mawes. Now it’s valued at £1.1m. “I was very grateful to Margaret Thatcher,” he said.

But back in south London, where Salter had spent his childhood in poor-quality private rented housing, I met Danielle Nicole, a 32-year-old who graduated 11 years ago, still living with her mum in the terrace house she bought in 1990 using proceeds from right to buy. Danielle, an NHS worker, could neither afford to buy – flats in the area cost upwards of £350,000 – nor rent privately, and with no dependants and a reasonable salary she would spend up to a decade on the waiting list for social housing.

Salter and Nicole’s mother bought their homes at significant discounts – the original maximum discount was 50%, rising to 70% in 2012. The trouble was, their children had no chance of getting on the property ladder – at least, until they were able to inherit the home.

A combination of low levels of housebuilding, “landbanking” by property developers and the equity pumped into the housing market by newly flush right-to-buy sellers carried on driving house prices upwards, while wages failed to keep up. As the first wave of right-to-buy beneficiaries sold up and moved on, ex-council homes started to enter the private rental market in ever greater numbers. Former right-to-buy properties now make up 40% of all available private rented housing across England, reaching a staggering 70.9% in Milton Keynes.

Last year I met Dorine, a 30-year-old in Crawley, who lived with her husband, three small children and Dorine’s two teenage sisters in a poky, crumbling, two-bedroom ex-council flat that was now owned by a private landlord based in India. Universal credit paid most of their rent, but when their benefit was suddenly cut because Dorine’s husband did an hour’s overtime one week, they went into arrears on a flat covered in black mould that its owner had never even visited.

Spratt heard a similar story, this time in Wythenshawe, a large garden city-style estate built on the edge of Manchester in the 1920s. She met Amy and Dan (not their real names), a young couple with children living in an ex-council house owned by a bullying local builder-cum-landlord who, they said, was “absolutely wadded” from letting local properties. “Dan’s own family had benefited from right to buy,” says Spratt. His mother had bought her council house, which she still lived in. “But he could see it was the reason there was no social housing and why they were stuck on the waiting list.”

This persistent theme, of housing security for older people resulting in stress and precarity for their children’s generation, is echoed by the ethnographer Joy White in her book Terraformed, an immersive study of race, class and the effects of gentrification in her native Forest Gate, east London. Forest Gate is in Newham, a densely populated borough with as much 1960s council (or ex-council) housing as there are Edwardian terraces. Newham is associated with the partial collapse of Ronan Point, a poorly constructed council tower block, in 1968 and, more recently, with its policy of trying to relieve pressure on its housing waiting list by moving local applicants to homes as far away as Stoke-on-Trent and Liverpool.

“Some people did very well from right to buy. It’s important to say that for some people it worked, and it worked very well, individually,” says White. “But for society, the cost was high.”

A row of terrace houses in Milton Keynes, where former right to buy properties make up almost 71% of rented properties. Photograph: Chunyip Wong/Getty Images/iStockphoto

In Terraformed, White writes about how she was able to move out of her family home and live independently at the age of 20, buying her own flat in Forest Gate on her sole earnings as a civil service clerk. Watching her now grownup daughter and her friends come of age in a time where there are no such options was one motivation for writing her book, which addresses the despair and fury of young working-class adults whose “options and choices are very, very limited. I don’t think people realise just how cut off and shut down those opportunities are. Most of the properties that were bought under right to buy came back on the market as private rented, and now we’re seeing the fallout.”

T he history of right to buy is longer than most of us realise – Thatcher was merely the ideal salesperson for it. She capitalised on the decent incomes and thwarted consumer aspirations of many working-class people at the turn of the 70s and 80s. In fact, the earliest legislation on council housing, from the late 19th century, required local authorities to sell the housing they built within 10 years.

From 1936, the minister of health could authorise councils to sell houses to individual tenants, a practice that stopped abruptly – though temporarily – when Labour was elected immediately after the war, putting Aneurin Bevan in charge of health and housing. Bevan imagined the building of excellent-quality council housing not only as essential to narrowing inequalities in public health, but as a way of forging a society where class mattered less. He pushed forward a programme of building large, several-bedroomed council houses with gardens to be rented by middle-class as well as working-class people, and not to “be sold to others merely because they have the money to buy them”.

Conservative MPs didn’t like this one bit. The Oxford historian Aled Davies has documented how in 1947, David Gammans, the MP for Hornsey, north London, pressurised Bevan to allow the local council to sell its houses to sitting tenants. When Bevan refused, Gammans accused him of “turning the British people into a race of propertyless proletarians”, declaring that every citizen ought to have “the unchallengeable right to buy his own house”.

Gammans was in luck. Labour lost the 1951 election, partly because Bevan was perceived to have been too slow to address the massive need for new housing after the war. (For his part, Bevan believed: “While we shall be judged for a year or two by the number of houses we build … we shall be judged in 10 years’ time by the type of houses we build.”) Throughout the 1950s, the Tories built plenty of council housing, but much of it in the form of flats and smaller houses, while the sale of more desirable council homes, usually inhabited by better-off tenants, recommenced on the quiet and grew in pace.

Bevan conceived of, and defended, council housing as a source of collective pride and a world-class public resource, just like his most celebrated creation, the NHS. Harold Macmillan, his successor as minister for housing, and later the Tory prime minister, was happy to build council housing as long as the goal of “a property-owning democracy” was maintained. Renting from the council wasn’t a lifelong state, merely a stepping stone to owner-occupation – and, ultimately, that’s the way it has stayed.

“A lot of Labour advisers (in the 1970s) were very, very frustrated because they knew if they didn’t do it, the Tory party would walk in and do it,” the author Andy Beckett told me in 2017 on Streets Apart, a BBC radio series tracing the history of social housing. Covertly, said Beckett, “it appealed to [Thatcher’s] idea of the respectable working class”.

The right to buy didn’t benefit all council tenants. “It was particularly attuned to the needs of wealthier, often skilled, working-class, older voters and those were the kinds of people Thatcher wanted to secure as Conservative voters. It wasn’t really a policy for single mothers or the poor because they couldn’t afford to buy and Thatcher was keen to peel off the skilled working class from the Labour party.”

Margaret Thatcher, as leader of the opposition in 1978, handing the deeds of a council house over to its new owners in Balham, south London. Photograph: David Ashdown/Getty Images

In August 1980, Thatcher visited Margaret and James Patterson, the 12,000th tenants to buy their council home under the new legislation, at their house in Harold Hill, east London. In the photos, the PM looks as pleased as they do – suspecting, perhaps, that she was on to a winner. The Pattersons weren’t so lucky. The couple couldn’t afford to keep up the mortgage payments at a time of double-figure interest rates, leading to their divorce – and forcing Margaret to live in a caravan when she had to sell the house.

Labour formally abandoned its opposition to the policy in the mid-1980s, when council-house sales ran at more than 150,000 a year.

Prof Becky Tunstall, a fellow at York University’s Centre for Housing Policy, has spent decades researching the fortunes of 20 council estates in different parts of England – some peripheral, some inner-city.

In 1980, all 20 estates were classed as “hard to let” – that is, people offered homes on them tended to turn them down, whether because of reputation, location, size or a combination of all three. Right to buy had little effect on these estates for decades, says Tunstall. “It wasn’t really until the late 90s that residents in those estates began to take it up.”

That wasn’t so much because the properties had improved, she says, but because the shockingly high unemployment rates on many estates in the 80s had begun to fall, and many, though not all, tenants had money for the first time. And crucially, “the total stock was shrinking. Over the 90s and 00s, [social housing] became more of a precious commodity.” Estates became easier to let because would-be tenants had fewer housing options to choose from.

The economic geographer Brett Christophers, author of The New Enclosure and of Rentier Capitalism, has argued that right to buy is one of the biggest acts of privatisation ever undertaken, transferring £40bn in the last 42 years directly to the Treasury. This money was effectively never seen again, lost in a soup of national debt repayments and tax cuts. It has served as a way of funnelling money and power away from the local authorities which once built and maintained millions of homes.

Boris Johnson with Anne-Marie Trevelyan, Michael Gove and Nadine Dorries in Blackpool, where the prime minister delivered his speech on housing. Photograph: Oli Scarff/AFP/Getty Images

“Right to buy was very much part and parcel of the defanging of power at the local political level in the UK,” he says. “That’s been a much wider process, the centralisation of power, both temporally and geographically, but it was a very important part of that process, partly because it was implemented in such a way that the housing couldn’t and wouldn’t be replaced. Councils were basically denied the ability to stop it happening.”

The net result is not only that local authorities can do relatively little about their local housing problems without deferring to central government, but that right to buy devalues renting as opposed to owning. “The more that rental housing comes to be seen as something that is not desirable, not worthy, and not part of the ‘normal’ aspirational life,” says Christophers, “the more you pump up the bubble around home ownership. Right to buy is not just a problem of, and in, the rental sector, it’s a problem for housing as a whole.”

Tunstall adds that what’s needed is more good housing with security of tenure, regardless of whether it’s owned or rented. “Now is the time to argue for more housebuilding, as everyone knows the cost of living crisis is not just about pasta. Housing takes a huge chunk out of people’s budgets. Really, housing costs are the cost of living crisis. Now, more than ever, we need to think about housing for everybody.”

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From Thatcher to Johnson: how right to buy has fuelled a 40-year housing crisis

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Ever since the 80s Tory leaders have dreamed of creating a ‘property-owning democracy’. But selling off social housing has left millions of Britons in grotty privately rented accommodation

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Fuel retailers accused of profiteering as UK petrol prices hit record

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Wholesale fuel costs have plummeted, but the price at the pumps is sky high...

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Wholesale fuel costs have plummeted, but the price at the pumps is sky high...

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Fuel retailers have faced accusations of profiteering as petrol prices hit new highs despite easing wholesale costs.

Unleaded petrol reached a fresh record of 191.05p a litre on Sunday, while diesel hit new highs of 199.09p on Saturday, meaning a 55-litre family car would cost £109.42 to fill up.

The price rises will intensify the debate around pricing at the forecourts while Britons battle the cost of living crisis.

Retailers have been accused of not passing on a 5p cut in fuel duty, announced in Rishi Sunak's spring statement in March, to consumers. The Competition and Markets Authority is investigating the matter and is due to report back on 7 July.

Fuel prices had been pushed up as oil soared after Russia invaded Ukraine, but prices of the commodity have eased off in recent weeks amid increasing fears over a global recession.

The RAC fuel spokesperson, Simon Williams, said: "We are struggling to see how retailers can justify continuing to put up their unleaded prices as the wholesale cost of petrol has reduced significantly.

"This is sadly a classic example of 'rocket and feather' pricing in action, and one which the Competition and Markets Authority will no doubt be looking at very closely. It seems as if retailers are making matters worse for themselves by not lowering their forecourt prices despite having a clear opportunity to do so."

Williams said retailers may be "protecting profits" in case wholesale costs soar again.

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Retailers have argued that they only make a few pence a litre, that oil refineries are making greater margins and that a weaker pound against the dollar is also pushing up costs.

Howard Cox, the founder of the FairFuelUK Campaign, said: "I don't think it's fair to blanket all retailers together.

"There are certainly some of the big branded retailers who are unscrupulous but there are many independents who are making a few pence a litre. The role of the refineries has to be looked at and I just hope the CMA has the teeth on this one."

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Fuel retailers accused of profiteering as UK petrol prices hit record

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Fuel retailers have faced accusations of profiteering as petrol prices hit new highs despite easing wholesale costs. Unleaded petrol reached a fresh record of 191.05p a litre on Sunday, while diesel hit new highs of 199.09p on Saturday, meaning a 55-litre family car would cost £109.42 to fill up.

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Profiteering bosses, not workers, are pushing up inflation. Here's how to fight back | Aditya Chakrabortty

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U11 Labour Markets + Inflation: Great article about the real causes of inflation and the change in direction of the UK's biggest trade union under it's new leader, Sharon Graham

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U11 Labour Markets + Inflation: Great article about the real causes of inflation and the change in direction of the UK's biggest trade union under it's new leader, Sharon Graham

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ome days it seems the entire country has slipped back half a century, to the 1970s. Abba are once again playing arenas, the Sex Pistols are gobbing all over our screens, and every chunk of masonry tumbling off Parliament gifts the headline writers another crack at their favourite decade. Government in chaos? It's the 70s all over again! Record inflation? Seventies, obvs. And the strikes breaking out across the UK? Why, they're about as 70s as Red Robbo, Reliant Robins and Reg Varney.

In all honesty, I'm not so horrified about time-travelling to the decade that saw the economy regularly growing two or three times faster than today, while keeping a far smaller gap between rich and poor. If that's meant to be dystopia, I've read worse from scientists at the Intergovernmental Panel on Climate Change (IPCC) - and they're talking about what lies around the corner.

But to abide by the current laws of physics, the whole story is, as that perceptive analyst of British affairs Johnny Rotten might say, bollocks. Trade unions are a fraction of the size and strength they were in 1979 and, from sick pay to strikes, British workers get among the roughest treatment in western Europe. One result is that average wages are falling at their fastest rate in two decades, and many workers rely on benefits or even food banks to get by. Whatever the caricaturists may say, that is the backdrop to tomorrow's march through London by union members.

The biggest threat to what remains of our tattered social contract isn't 1970s-style unions but 2020s-era capitalism. From privatised trains to high-street chemists and care homes, industry after industry is today owned by multinational investors with tentacles around the world who treat our basic needs as tiny income streams to suck up and siphon off into palm-treed tax havens.

Among the many questions this raises, one of the most fundamental is: how do workers win against such overmighty opponents? Some of the best answers come from a woman whose name you may know only vaguely. Sharon Graham was last year elected head of the UK's second-largest trade union, Unite. She wasn't meant to win: her predecessor Len McCluskey had picked his own man, while Keir Starmer backed another. But members had their own ideas, and Graham stormed it. Rather than take a victory lap at last September's Labour conference and sink a few bevvies with the brothers, she went off to a picket line. She does a lot of that.

Since taking over eight months ago, Graham has led 52,000 members into more than 300 disputes. Of those that have been resolved, Unite has won three out of four. In the past few months alone, workers at Gatwick have scored a 21% pay rise, those at Devonport dockyard in Plymouth have won 13%, and employees at the BMW Mini plant in Oxford have accepted a 21% rise over the next three years. She has pioneered a strategy called leverage. When battling multinationals, she will call in forensic accountants (Unite has just hired its own) and other analysts to go through every detail of the company, its owners and shareholders and their various advisers.

Documents are produced over many weeks that stretch to many hundreds of pages. Then a "dirt dossier" is put together, and Graham and her team start pushing on contractors, clients and foreign governments considering giving business to her corporate opponents. It has proved to be a devastatingly successful strategy. She has warned City analysts that Unite's response to British Airways' fire and rehire policy will damage its business, and has lobbied the Norwegian government against awarding a contract to a bus company. And time and again, she has won.

Many academics and commentators look on modern financialised businesses and produce a literature of despair. I have made my own contributions to that particular bookshelf. But Graham is the first person I have met who has looked at how the modern corporation is globalised, outsourced and often dependent on states, and turned those very factors against it.

When we met this week, her office still looked more squatted than occupied: a couple of boxes of files in a corner, some thank-you cards on a window sill and, by her monitor, photos of her 13-year-old son. Notable by their absence were big prints of her gripping and grinning with politicians. That's one core principle of Graham's politics: she isn't fussed about Labour. Despite the rumours, Unite will remain affiliated to the party, but outside election time Graham wants the majority of its £20m political fund to be spent on community organising. The hole this could blow in Starmer's campaigning budgets is potentially huge: one Labour veteran estimates it adds somewhere in the region of £6-10m over an election cycle.

In his recent memoir, McCluskey devoted hundreds of pages to Ed and Jeremy and Keir, with one solitary chapter on the outlook for trade unionism. Graham, on the other hand describes her members as "disappointed" with Starmer, and has privately told the Labour leader that he acts as if he is "embarrassed of the trade union movement". This isn't the usual left-right factionalism; when I broach ideas that are fashionable among the Labour left, such as a four-day week or universal basic income, she mutters under her breath, "God help me." Instead of ventriloquising its demands through Labour, Graham wants Unite to speak in its own voice.

Her officials are already mapping out key constituencies where Unite will put up its own billboards with its own demands on pension schemes at work, the triple lock and good quality social care. "Whoever picks up the baton is going to get our vote." She is also forming her own in-house thinktank to generate analysis and policy that reflects union members' demands and experiences. Until a few weeks ago, the entire trade union movement had only one formally designated economist, Geoff Tily at the TUC (who works with some very able policy officers). Graham has hired two economists and has just this week advertised for another to do a Unite-funded PhD.

The first fruit of this strategy is a report shared exclusively with the Guardian. It shows that whatever Johnson and the Bank of England's head, Andrew Bailey, warn about a wage-price spiral, there is no evidence of one. While global forces pushed up the cost of essentials such as oil and gas, a careful study of the accounts of the big FTSE-350 companies shows executives are now using this as cover to push up their profit margins - by 73%. Take out energy firms, and the numbers are still huge: over 50%. While the Bank of England is jacking up the rates on your mortgage and credit cards, and hastening a recession, policymakers are fighting a war that is half a century old. It's not workers who are pushing up inflation; it's often their employers.

Threadneedle Street knows this is happening. Its chief economist, Huw Pill, talked last month of companies pushing up prices to "pass on" costs, and of a "further strengthening of margins". The obvious answer would be for Westminster to crack down. But while Bernie Sanders and others in the US are threatening a profiteering tax, Starmer's team is paralysed by the fear it may be seen as too much in hock to the very labour movement that founded it.

As workers across the country push for higher wages, Graham is about to get a lot more prominent and attract much more bile from the right. She has her own issues at Unite, a bureaucracy that after a decade of McCluskey has still plenty of Len-inists. But for my money, she is asking the right questions about capitalism and correctly focusing her energies outside an increasingly tepid Westminster. "My experience of politicians is they follow - they don't lead," she says. "So let's get leading."

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Profiteering bosses, not workers, are pushing up inflation. Here's how to fight back | Aditya Chakrabortty

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ome days it seems the entire country has slipped back half a century, to the 1970s. Abba are once again playing arenas, the Sex Pistols are gobbing all over our screens, and every chunk of masonry tumbling off Parliament gifts the headline writers another crack at their favourite decade.

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Smoking age in England should rise by a year each year, review says

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Report suggests we should effectively copy New Zealand's smoking policy

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Report suggests we should effectively copy New Zealand's smoking policy

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The age at which people can legally buy tobacco in England should rise from 18 by one year every year until eventually no one can buy tobacco, a radical government-commissioned review has recommended in an effort to end smoking-related harm.

The review recommends 15 interventions to give the government the best chance of meeting its national target to be smoke-free by 2030. They include promoting vapes as an effective "swap to stop" tool to help people quit smoking, as well as improving prevention in the NHS so smokers are offered advice and support to quit at every interaction they have with health services.

Other interventions recommended in the report include a tobacco licence for retailers to limit its availability across the country, a rethink of the look of cigarette sticks and packets to further reduce their appeal, and a mass media campaign to encourage smokers to quit.

Almost 6 million people in England smoke, and tobacco remains the single biggest cause of preventable illness and death.

Dr Javed Khan, the former chief executive of children's charity Barnardo's, who led the review, said: ""Without immediate and sustained action, England will miss the smoke-free target by many years and most likely decades.

"A smoke-free society should be a social norm - but to achieve this we must do more to stop people taking up smoking, help those who already smoke and support those who are disproportionately impacted by smoking. My holistic set of recommendations for government will deliver this, whilst saving lives, saving money and addressing the health disparities associated with smoking.

"My proposals are not just a plan for this government, but successive governments too. To truly achieve a smoke-free society in our great country, we need to commit to making smoking obsolete, once and for all.

"It was a privilege to work on this review and get the opportunity to improve the health of people across the country, and I look forward to seeing the government's response."

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Grace Everest, a policy fellow at the Health Foundation, welcomed the review but said it would only mark a significant step towards creating a smoke-free society if the government "chooses to deliver" on its recommendations.

"But it remains to be seen whether the review's key proposals - such as raising the age of sale for tobacco and making the 'polluter pay' for additional investment in tobacco control - will be implemented in practice.

"With smoking a major cause of preventable ill health and early death in England and a driver of our stark inequalities in life expectancy, failing to do so would be a major missed opportunity to improve and level up the nation's health. Now is the time for bold action."

The findings of the independent review will now be considered by ministers and a response will be published as part of the government's health disparities white paper.

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Smoking age in England should rise by a year each year, review says

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The age at which people can legally buy tobacco in England should rise from 18 by one year every year until eventually no one can buy tobacco, a radical government-commissioned review has recommended in an effort to end smoking-related harm.

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The workers getting 100% pay for 80% of the hours

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The first step in the UK adopting a 4-day week?

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The first step in the UK adopting a 4-day week?

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Thousands of UK workers are starting a four-day week trial from today.

Around 70 companies are taking part in what is thought to be the world's biggest pilot scheme into the working pattern over the next six months.

The experiment has been organised by a group campaigning for a shorter working week, but for no loss in wages.

During the trial, employees will get 100% pay for 80% of the hours they would usually work, with the aim of being more productive.

Academics from Oxford and Cambridge universities, as well experts at Boston College in the US, will manage the experiment in partnership with the think tank Autonomy.

Companies ranging from office-based software developers and recruitment firms to charities and a local fish and chip shop are taking part.

Sam Smith, whose North London brewery business Pressure Drop, said it felt "like a good time" for the firm to be trying different working practices.

"The pandemic's made us think a great deal about work and how people organise their lives," he added. "We're doing this to improve the lives of our staff and be part of a progressive change in the world that will improve people's mental health and wellbeing."

Mr Smith's challenge during the pilot scheme is pretty simple. His nine-strong team have to produce and package the same amount of beer as they do now, but in four days instead of five.

"I think it's about how you use your time," said Mr Smith. "So when I talk about being productive I don't mean being faster at the task you're doing right now, it might be making use of the natural downtimes you have to prepare better for the following day."

'More focused'

Clare Doherty, who helps run the office for the firm, said the trial is "fantastic" and part of a "natural progression of how we work".

She explained that having worked with the business for more than four years and knowing she can do her job has led her to feeling confident she can get her work done efficiently with one day less.

"It'll take those extra few minutes of scrolling through the internet out of your day because you have to be just that bit more focused to get what you need done in the time you have," she said.

Meanwhile, Craig Carmichael, who works on the shop floor, thinks an extra rest day will motivate him to work harder.

"If I know I have to get stuff done in four days' time to enjoy that extra day, I think that will be a good incentive," he told the BBC.

The experiment, involving some 3000 UK workers, is part of worldwide initiative and is running alongside similar, smaller trials in Ireland, the US, Canada, Australia and New Zealand.

"The UK trial is historic", said Juliet Schor, the lead researcher on the Global 4-day week project, and an economist and sociologist at Boston College.

"The basis of this movement is that there's activity going on in many workplaces, particularly white collar workplaces, that's low-productivity and that you can cut without harming the business."

She said the trouble with the five-day week is that work can simply expand to fit the time available.

"Sticking to a rigid, centuries-old, time-based system doesn't make sense," Ms Schor added.

"You can be 100% productive in 80% of the time in many workplaces, and companies adopting this around the world have shown that."

However, the researcher admitted the idea might not suit everyone and every profession, such as health care and teaching, where staff could already be over worked and stressed out.

But even if workers are just 10% more productive the economics can still stack up, she argued, if it leads to lower sickness rates, fewer staff leaving and making it easier to attract new recruits.

Girling Jones, a small construction recruitment firm in Exeter switched to a four-day week in January, but has also signed up to the trial

Productivity is up and so are profits, the boss and company founder Simon Girling said.

"All our inputs - calls, meetings, interviews, are up...quite simply everyone is doing more in less time," he added.

Staff are happier too - Ellen Andreassen said she uses her day off to relax.

"I'm definitely more motivated. One thing I've noticed is sleep. I'm sleeping a lot better and getting up is a lot easier."

Her colleague Josh Cockerill said spending more time with his daughter was helping him save money on nursery fees.

"You know the fact that you've got a day off in the middle of the week, it gives you more incentive to work harder towards that day off," he said.

After upending daily routines through the Covid pandemic, the business was ready to try new working patterns.

"About three years ago I was lucky enough to start a four-day week and it was life changing," said Mr Girling.

"When we came back from the pandemic, we did a lot of research into it and I couldn't see any downside.

"I think being part of this four-day week pilot, there's going to be some really detailed stats on this. I'm not sure it would work across all industries or businesses but it's a really good opportunity for a lot of firms to change how they work and maybe improve."

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The workers getting 100% pay for 80% of the hours

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Thousands of UK workers are starting a four-day week trial from today. Around 70 companies are taking part in what is thought to be the world's biggest pilot scheme into the working pattern over the next six months. The experiment has been organised by a group campaigning for a shorter working week, but for no loss in wages.

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Branko Milanovic: ‘The forces of self-interest and technology cannot be undone’ - https://on.ft.com/37s5fFf via @FT

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Assorted economics podcasts from Spotify

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Assorted economics podcasts from Spotify

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U11 Labour Markets: The momentum towards a 4-day week is strong, and if this study yields positive results, it may become unstoppable

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U11 Labour Markets: The momentum towards a 4-day week is strong, and if this study yields positive results, it may become unstoppable

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https://www.theguardian.com/business/2022/apr/04/thousands-of-uk-workers-to-take-part-in-four-day-week-trial?CMP=Share_AndroidApp_Other