Retail bloodbath continues...

Yesterday Jane Norman, today TJ Hughes, and Thornton's shutting 120 stores...retail bloodbath continues... tweets Allister Heath of City AM. We should now be very worried at the lack of demand management in the economy by the Coalition. Retailers provide an advanced warning of problems coming down the line and this blog has consistently called for more demand and greater growth in the economy, preferably through raising the tax threashold to £10,000 - something which should have been done at the time of the last Budget in April - with the ultimate aim of achieving parity, through legally syncing the two in statute, with the level of the minimum wage - aroung £11,400. 

Living wages

Miliband's IFS document on the living wage makes interesting reading. Not only does it incentivise work over welfare, it directly helps the lowest paid, and does so in a way that attaches social responsibility to business practices. The key detail is:

An increase in wages for everyone in the private sector to the level of the
"living wage" (£7.85 in London and £7.60 in the rest of the UK) would lead to an increase in gross earnings of between £11.4 billion and £12.0 billion, of which about £4.5 to £4.9billion would accrue to the Government through higher income tax and employee national insurance payments and lower spending on benefits and tax credits. Employers would also pay about £1.4 to £1.5 billion more in Employers’ National Insurance. In total, the Treasury would gain between £5.9 billion to £6.3 billion.

Dizzy had an interesting take on it yesterday morning re welfare reform. Note the calculation involves 'everyone in the private sector' including SME's paying a lot less in corporation tax (21%) than larger enterprises (28%), with little consequent scope for tax reductions. But this is just the type of initiative the treasury needs to be looking at.