Readers Question: What are the factors that influence the fixing of a minimum wage? The UK’s first National Minimum wage was established in 1999 and was set at £3.60 for those over 21. It was feared by business that a minimum wage would cause unemployment. However, over the period between 1999 – 2007, in the …
I wrote an article in this months (April) edition of Economic Review on the theme of spending cuts. It offers detailed arguments for spending cuts and also the problems of cutting spending in the current economic climate. It was written back in September quite a few months ago. A brief summary of the article. Arguments …
Readers Question: My question is if some many people are aware of this debt and credit problem, why are governments continuing this policy? Debt is nothing more than future taxes which has a crowding out effect. It is a statement that says, government is a more efficient player in the market than individuals. (from Rapid …
2010 will be a difficult year for the UK economy. After the deepest recession since the 1930s, the outlook is for a sluggish recovery. Though recovery is welcome, it still leaves the problem of spare capacity, high unemployment and record levels of peacetime government borrowing. It will be a difficult tightrope between boosting economic growth …
Readers Question: Indicate the problems which are created for the government’s finances as a result of having to help avoid an even deeper recession. In a recession, automatic fiscal stabilisers automatically cause a rise in borrowing. The UK recession hit tax revenues hard. Income tax receipts fell as top earners were made unemployed. Corporation tax …