Here’s the PM’s defence of cutting £20/week from 6m households in October. The argument = “we need to cut it because we care about jobs.” This is nonsense - here’s why… 🧵
1. loads of the people having their benefits cut ARE WORKING. The share of Universal Credit claimants working has actually gone UP in the crisis (35% before to 37% now). We’re talking 2m people gov.uk/government/sta…
2. The PM’s implicitly saying we must cut benefits so people have an incentive to work. But that incentive is VERY strong: if we cut the £20 benefits would be at their lowest level EVER vs earnings Image
Put it another way: The basic level of unemployment support a single person without kids gets would be under 20% of the earnings they’d get from a full-time minimum wage job by the end of this Parliament. Benefit street isn’t the high life.
3. PM says we need to do this because the problem in the labour market right now is labour shortages rather than job shortages. In some sectors it’s hard to hire but overall That’s nonsense - we’re working 5% fewer hours than pre-crisis and it’s easier to hire than it was in 2019 Image
The better/more honest argument for the cut is that it costs quite a lot of money and 1) the govt has other priorities (basic state pension/social care) 2) doesn’t want to raise taxes.

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More from @TorstenBell

8 Jul
This whole "we need to cut Universal Credit to boost jobs" thing is really winding me up. There are six million people on Universal Credit, in a lot of different circumstances....
2.6m are already working or preparing to work - how does them having £20/week less to live on create any jobs?
1.2m aren't working and it's government policy that they shouldn't (e.g they've got a child under 1). Has the government changed their mind and their policy to say they should work? No. So it's just making them poorer.
Read 5 tweets
7 Jul
This is political and economic madness bbc.co.uk/news/uk-politi…
Cutting the incomes of 6 million households by £1,000 a year from October is a huge hit to family incomes just as the recovery is getting going. The poorest households in the country will see their incomes fall by 5% overnight
Even if you somehow think (despite widespread food insecurity amongst poorer families) that the current level of benefits is too high, here's three reasons why the context of this Autumn means a huge cut isn't a good idea
Read 8 tweets
11 May
Hard not to conclude that's a fairly thin Queen's Speech.
Reasonable people might say that's understandable given the Government has had this pandemic thing to deal with. But it's quite a contrast with Biden and government's own build back rhetoric.
I'm broadly a fan of the main substance that is in there economy wise. On skills adult learning guarantee is desirable when we've still got 40% of the population without A-level equivalent qualifications (in contrast am sceptical that loan access will make much difference)
Read 8 tweets
10 May
What marks out this levelling up agenda piece from @racheljanetwolf is:
- it has an actual agenda
- it's an argument for the Tories becoming French (specifically the 20th Century French right) ie focusing on liveability of places not their productivity conservativehome.com/platform/2021/…
I basically support a lot of what's in here. Liveability should be prioritised. The real trick is to combine it with sorting out our second cities productivity disasters too
That's what gives you the chance of ecosystem change for regional economies. The politics is towns vs cities but the economics is the opposite.
Read 7 tweets
10 May
This morning’s @BBCr4today not a great advert for the state of British politics - guests manage substance free debate on economics of towns (the new govt focus) while Labour MPs debate ending freedom of movement (which has already ended)
As a small thing @bbcnickrobinson - Tory vote INCREASE was biggest in more deprived areas not their actual vote
Just to be clear - the issues (of the economics of towns and migration) are massive deals. It was the nature of the conversations that was grim
Read 4 tweets
12 Apr
Big day for the economy (as well as the quality of our hair) today as retail and hospitality sectors open back up. Consumer spending = 62% GDP and was down around 10% last year.
Our priorities: eating out and getting our hair cut (shockingly we're four times as likely to want to eat out as go to the gym...)
For hospitality this is unmitigated good news - they've been the epicentre of this crisis (over half have limited cash reserves left) and those businesses able to operate under new rules (ie outdoor space) will see fast bounce backs in activity from incredibly low levels
Read 9 tweets

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