The Great Debate UK

Inequality in the UK: the paradox under Labour

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Alastair Murid B0133P 0248-Ali Muriel is a Senior Research Economist at the Institute for Fiscal Studies. The views expressed are his own.-

Start with two (apparently contradictory) facts about income inequality in the UK:

1. Since coming to power in 1997, Labour has changed the tax and benefit system to make poor people better off, and rich people worse off.

2. The gap between rich and poor is now larger than when Labour came to power.

So Labour has acted to reduce inequality – and yet inequality has gone up. This presents us with something of a puzzle. Your first thought might be that one of the facts above simply isn’t true – that either Labour hasn’t redistributed as much as they claim, or the gap between rich and poor has been exaggerated – but we can illustrate both facts with simple charts.

from MacroScope:

Britain heading for rude awakening?

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There is a divisive election ahead for Britain, the threat of a ratings downgrade on its sovereign debt and a deficit that has ballooned into the largest by percentage of any major economy.  UK stocks, bonds and sterling, however, are trundling along as if all were well. What gives?

For a fuller discussion on the issue click here, but the gist is that all three asset classes  are being support by factors that may be masking the danger of a broad reversal. UK equities have been driven higher by the improving global economy, bonds held up by the Bank of England's huge buying programme and sterling by valuation and the distress of others.

Are the markets right to fear a hung parliament?

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-David Kuo is director at The Motley Fool. The opinions expressed are his own -

There is a well-trodden saying that markets hate uncertainty. Elections are inevitably uncertain, so until the votes in the next election are counted we cannot be certain which party will govern the UK.

Currently, there are suggestions that no single party may get sufficient votes to form the next government outright. It is true that the Conservatives have a strong lead over its rivals. However, with a first-past-the post voting system, it only takes a small swing away from the Conservatives to change the complexion of the next parliament.

A tough spring in store for the pound

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foley- Jane Foley is research director at Forex.com. The opinions expressed are her own.-

The pound has started the year on a negative note.  Ongoing concerns over the budget deficit, an impending general election, the prospect that the Bank of England (BoE) may yet increase quantitative easing (QE) and a drop in consumer confidence are all clouding the outlook.

Why we need a bond market crisis

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copelandLaurence Copeland is a professor of finance at Cardiff University Business School and a co-author of “Verdict on the Crash” published by the Institute of Economic Affairs. The opinions expressed are his own. -

The spirit of Britain’s Christmas is looking disconsolate this morning. Santa Claus has failed to deliver what our democracy most needed. No, not a deal to let the French have the 2012 Olympics in exchange for a bottle of Beaujolais Nouveau.  Nor the nomination of Tony Blair for the Nobel Peace Prize. Number one on this year’s wish list was something more realistic, and maybe far closer:  a gilt market crisis.

from UK News:

Has Alistair Darling done enough to revive Labour’s electoral hopes?

So how was it for you?

Chancellor Alistair Darling threw the dice in his pre-budget report in an attempt to bolster Labour's chances of winning the general election in 2010.

From hitting bankers with a one-off bonus tax to lowering bingo duty, Darling played to the Labour heartlands, while hoping to win back voters who have been telling pollsters that they are done with Gordon Brown.

from Matt Falloon:

Labour lays down policy gauntlet


The Conservatives might be wishing they could have held their party conference before Labour.
Prime Minister Gordon Brown's address to his party conference in Brighton on Tuesday has thrown down a flood of new ideas, policies and initiatives from faster cancer diagnosis to choosing how Britain votes in what read more like an mini-election manifesto than a speech.
Brown played to his strengths (policy) and avoided trying to overcome his well-known weaknesses (not much of a political entertainer) in public. Trying to be someone else could have been a disaster for a man way behind in the polls to the Conservatives.
Whether it will be enough to make any difference to the polls remains to be seen -- Labour needs a miracle there after all.
But, for now, going for the policy jugular seems to have done the trick -- giving his browbeaten party something to get excited about and hitting the Conservatives where it hurts.
David Cameron's Conservatives have been accused of not giving enough detail on how they would govern the country if the polls are correct and they are to win power next year.
They will have to start showing their hand soon if they are going to convince voters that they have the ideas to run the country and aren't just a vote for change for the sake of it.

Economic outlook remains fragile

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John Monks-John Monks is general secretary at the European Trade Union Confederation. The opinions expressed are his own.-

One year on from the collapse of Lehman Brothers, we can see that that wreckage was the first of many.

Why the results of the European elections matter

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justin_fisher- Justin Fisher is Professor of Political Science and Director of the Magna Carta Institute at Brunel University. The opinions expressed are his own. -

It’s fair to say that the results of the European elections in Britain were something of a shock. Of course, it was evident that Labour was going to do badly and the BNP’s success in winning its first European seats did not come entirely out of the blue. But the collapse of Labour’s vote exceeded what most had predicted, and the realisation that the BNP now has 2 of the UK’s 72 MEPs is more dramatic than the possibility that it might occur.

What European election campaign?

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Richard Whitaker- Richard Whitaker is a lecturer in European politics at the University of Leicester, UK. The opinions expressed are his own. -

Europe rarely features highly in European election campaigns in Britain. In the 2004 campaign the word Euro more often than not referred to a football tournament rather than the single currency. And for at least two reasons, we shouldn’t expect European integration to be much discussed.

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