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6 Jul, 8 tweets, 3 min read
Tonight on @BBCNewsnight we'll be taking a closer look at the politics and economics of the Triple Lock in light of the @OBR_UK warning today that it could add £3bn to state pension bill next year unexpectedly.

Some thoughts on the figures...

bbc.co.uk/news/business-…
...If average wages do rise at a rate of 8% year-on-year in July, a possibility flagged by the OBR, that would be the highest growth rate in the records of the ONS's Average Weekly Earnings (AWE) current series going back to 2000...ons.gov.uk/employmentandl… Image
...but what about beyond that?

Haven't got a monthly series, but using the BoE's dataset, which has annual estimates of compensation per employee & splicing it with the July AWE growth rates from the ONS it looks like it would be the fastest rate since the early 1990s... Image
...although bear in mind that this 8% in July - if it happens - is expected to fall away very quickly because of pandemic-related statistical distortions.

The most recent 2021 full year average earnings forecast from the OBR in March is just 1.9%....
...and the Bank of England in *May* projected -0.5%!

Yes, negative growth - check it here... 👇

bankofengland.co.uk/-/media/boe/fi…
...I suspect that Bank estimate will get revised up.

But it's still unlikely to be anywhere close to 8%...
...And that's the point about the Triple Lock - by taking the figures from May-July each year the government is set this year could be set to get a massively distorted figure for up-rating next years' state pension...
....which is why many suspect the Chancellor will try to use a smoothed figure, which adjusts for this distortion and hope that no one cries foul over the Tories breaking the Triple Lock manifesto promise.

More on @BBCNewsnight from 2230 on BBC TWO

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More from @BenChu_

Ben Chu Profile picture
8 Jul
UPDATE on the flat cladding/fire safety crisis.

FT reports government asking banks if they can help solve it - meeting with ministers (including PM) & bank bosses on Tuesday....

ft.com/content/226d30…
...Banks won't lend to people seeking to buy flats with cladding/safety issues helping to make them impossible to sell.

Sounds like banks are proposing government guarantee on mortgages made on flats that could be identified as dangerous to help unlock bank lending...
...Would this work?

Seems to miss the fact that even if someone *could* get lending to buy one of these flats, why would they if they could be hit with bill of up to £100k after purchase?...
Read 5 tweets
Ben Chu Profile picture
5 Jul
Important thread from @lewis_goodall here on the new Building Safety Bill - points which will be reflected in tonight's @BBCNewsnight from 22.30...

...as Lewis says, the Government has now accepted two key points of principle.

1) Leaseholders should not pay...
2) Substandard builders should be sued...
...given this - and given the manifest difficulties in leaseholders & even freeholders suing builders - would it not be the natural solution, as Sir Peter Bottomley advocates, for the Government to pay for the repairs upfront...
Read 9 tweets
Ben Chu Profile picture
14 Jun
I gather the Treasury has decided NOT to introduce any additional financial support for hospitality firms alongside the extension of restrictions beyond 21 June.

- 10% employer furlough contribution to kick in from 1 July

- no extra grants/loans
...will not go down with hospitality sector and business lobby groups who had argued that restriction extensions should be accompanied by additional support...
...Treasury sources say local authorities still have £1bn in grants to distribute to struggling firms from previous support packages - also point out that hospitality VAT cut still in place and access open to Recovery Loan Scheme...
Read 8 tweets
Ben Chu Profile picture
11 Jun
Here's Boris Johnson's remakrs today opening the G7.

Says after global financial crisis policy mistakes were made & "the recovery was not uniform across all part of society"...

gov.uk/government/spe… Image
...actually what mainly characterised the period after 2008 was how feeble it was relative to previous UK recoveries, rather than how unequal it was 👇

independent.co.uk/news/business/… Image
...inequality, as measured by the Gini co-efficient, was broadly flat in the decade after 2008... ons.gov.uk/peoplepopulati… Image
Read 4 tweets
Ben Chu Profile picture
4 Jun
Does trying to defund fossil fuel companies make economic and environmental sense?

🏭💸🔨🌎

A thread…🧵1/14
Extinction Rebellion has been exerting pressure on banks over their financing of fossil fuel companies.

Asset managers have come under increasing pressure to sell shares in these firms too...2/

independent.co.uk/climate-change…
Some argue such financial divestment campaigns are foolish and counterproductive.

Bill Gates claims they haven’t done any good...3/

ft.com/content/21009e…
Read 14 tweets
Ben Chu Profile picture
3 Jun
The framing of this polling by @PublicFirst_PF is questionable.

Why would taxes need to rise to pay for *catch up* tuition?

By definition it's a *one-off* bump in expenditure not an increase in the structural deficit requiring remedial fiscal action...

cps.org.uk/files/reports/… Image
...clear argument, as @TimPitt11 says, for treating it like emergency furlough spending & temporarily increasing public borrowing to cover it....
...especially as one can plausibly argue that the long-term fiscal benefits will outweigh the short-term fiscal costs due to an increase in the future earning power of the kids affected...
Read 6 tweets

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