SPERI British Political Economy Briefs
No.6. Local authority spending cuts and the 2014 English local elections
In this Brief the Sheffield Political Economy Research Institute (SPERI) considers the variable impact of local authority spending cuts across England, with reference to differences based on regional location, levels of deprivation and the political composition of councils. It also considers evidence on the cuts experienced by the specific councils affected by the 2014 English local elections, that is, those won by Labour, lost by the Conservatives, or where the UK Independence Party (UKIP) made significant gains. It shows there is a clear pattern to the cuts experienced by local authorities in England: councils in the North, in more deprived areas, and/or controlled by Labour have, generally speaking, been most affected by reductions in spending power at the local level. The extent to which the 2014 local elections were influenced by this differential impact is less clear, although some interesting trends are apparent.
No.5. The evolution of the UK tax base
Taxation takes many different forms, encompassing progressive taxes such as income tax, regressive taxes such as Value Added Tax, and taxes targeted on private enterprises such as corporation tax. The economic downturn significantly affected tax revenues, and the Coalition Government since 2010 has sought to cut some taxes, to boost economic recovery, but at the same time raise others, in support of deficit reduction. It is important to consider, therefore, what impact these changes have had on the nature of the UK tax base as a whole. The evidence shows that regressive taxes now make up a higher proportion of tax revenues, and both progressive individual taxes and taxation targeted on private enterprises make up a lower proportion. Furthermore, revenue from business taxes is set to contract even further, even as economic growth returns, as proposed cuts are fully implemented.
No.4. Food bank provision and welfare reform in the UK
This brief is focused on the impact of recent welfare reform in the UK on driving need for food bank provision. It is based on research conducted as part of a three-year study, funded by the Economic and Social Research Council (ESRC), into the growth of nationally co-ordinated or facilitated emergency food provision in the UK. This analysis is relevant to developing an understanding of the evolving boundaries of responsibility for welfare provision between state and civil society. The brief suggests that the All-Party Parliamentary Inquiry into hunger and food poverty should examine this issue closely, with a key emphasis on the fairness and adequacy of social protection. Welfare reform and the role it will leave for food banks should be examined by the Inquiry in terms of responsibility and be guided by the question of whose responsibility it is to protect people from hunger.
The brief has been authored by Hannah Lambie-Mumford in the University of Sheffield’s Department of Geography. You can contact Hannah at firstname.lastname@example.org.
No.3. The regional impact of increasing the personal tax allowance
In this brief the Sheffield Political Economy Research Institute (SPERI) considers the differential regional impact in England of raising the income tax personal allowance – a measure announced by George Osborne at the Budget on 19th March 2014. The measure has been championed by both coalition partners as a form of support for the low paid workers. However, the extent to which individuals benefit depends on the extent of their income that is ‘taxable’, and the proximity of their income to other tax thresholds. The evidence presented in this brief shows that those who do not benefit at all – as a result of earning less than the current allowance – are more likely to live in Northern regions (particularly Yorkshire and the Humber) and the South-West. The measure therefore neither benefits the lowest paid, nor alleviates regional inequality.
No.2. Sterling depreciation and the UK trade balance
In this brief the Sheffield Political Economy Research Institute (SPERI) considers the relationship between the relative value of sterling and the UK trade balance. When a country’s currency depreciates in value relative to its major competitors, its exports become cheaper (and imports become more expensive); the depreciation of sterling experienced in the wake of the financial crisis should therefore have boosted policy-makers’ efforts to rebalance the economy towards exports and away from the domestic consumption of imported goods – as occurred following depreciation in the 1970s and early 1990s. However, there is no evidence of an improved trade balance following the recent depreciation of sterling, suggesting significant imbalances in the UK economy.
No.1. Pay in manufacturing and finance
In this brief the Sheffield Political Economy Research Institute (SPERI) considers what levels of pay across different sectors tells us about the experience of economic rebalancing since the financial crisis. In an economy rebalanced towards manufacturing, and away from financial services, we would expect to see the pay gap between these two sectors beginning to close. However, the gap has increased rather than decreased. Furthermore, pay in real estate activities is catching up to pay in manufacturing, further undermining the role of manufacturing in boosting exports and technological dispersion.