A renewed income squeeze is set to be even more severe than that seen in the last parliament due to lower earnings growth, higher inflation and ongoing welfare cuts detailed in the Autumn Statement, according to a new report published today (Thursday) by the Resolution Foundation analysing the impact of the Autumn Statement 2016.
The report finds that on average incomes are set to grow by less than half the exceptionally weak growth seen between 2010 and 2014 as the country recovered from the financial crisis.
In contrast to the last parliament, which saw slow income growth across the income distribution but with higher earners marginally the most affected, low and middle income families are set to be the hardest hit in this one. That’s because of the government’s decision to press ahead with significant cuts to welfare, including Universal Credit, and because the recent jobs miracle which has seen employment climb to a record high is unlikely to be repeated. The Foundation says that the entire bottom third of the income distribution is on course to see their incomes actually fall in the years ahead.
The Foundation also finds that the weak outlook for real average earnings, which the OBR forecasts to be £830 lower in 2020 than previously expected, means that the decade from 2010 to 2020 is set to be the weakest one for wage growth since the 1900s. Real weekly earnings are forecast to grow by just 1.6 per cent over the decade, compared to 12.7 per cent in the 2000s and over 20 per cent in every other decade since the 1920s.
Other findings, which look at the public finances as well as family budgets, include:
- The increase in borrowing set out in the Autumn Statement is so severe that national debt as a percentage of GDP is expected to be higher at the end of the parliament than the beginning.
- The Chancellor has effectively abolished the role of fiscal rules in providing an anchor for fiscal policy. Instead he has loosened them to such an extent that they are able to accommodate another public finances hit on the scale of Brexit and still have further leeway of £9 billion in 2020.
- The welcome increase in public investment announced by the Chancellor has been wiped out several times over by an expected fall in private sector investment. Overall investment as a share of GDP is set to fall by 6 per cent by the end of the parliament, relative to expectations at the last Budget.
Torsten Bell, Director of the Resolution Foundation, said:
“Most of the initial reaction to the Autumn Statement has understandably focused on the big hit to the public finances, but just as important is the very real impact on family finances.
The combination of lower growth, higher inflation and the government’s decision to press ahead with big welfare cuts, means that households risk experiencing even slower income growth
“The combination of lower growth, higher inflation and the government’s decision to press ahead with big welfare cuts, means that households risk experiencing even slower income growth in this parliament than they saw in the aftermath of the financial crisis . But unlike the last parliament, it will be low and middle income households who feel the tightest squeeze this time round.
“Tacking this renewed income squeeze will be a key challenge for the Chancellor and government in the months and years ahead.”
Matt Whittaker, Chief Economist at the Resolution Foundation, said:
“The last three Chancellors have made a habit of breaking their own fiscal rules. The new Chancellor has guarded against that by loosening his to such a degree that they are best seen not as rules guiding fiscal policy but as a worst case fiscal ceiling.
“Such a loosening is understandable given the high degree of uncertainty in any forecasts, but it also reflects a decision to allow borrowing to rise so significantly that national debt is now expected to end the parliament higher than it started, despite very significant cuts to public spending and welfare.
“Behind this fiscal deterioration lies a far weaker outlook for earnings, which means that workers are on course to experience the weakest decade of pay growth in over a century.”
Is Wood Burning Sustainable For Your Home?
Wood is a classic heat source, whether we think about people gathered around a campfire or wood stoves in old cabins, but is it a sustainable source of heat in modern society? The answer is an ambivalent one. In certain settings, wood heat is an ideal solution, but for the majority of homes, it isn’t especially suitable. So what’s the tipping point?
Wood heat is ideal for small homes on large properties, for individuals who can gather their own wood, and who have modern wood burning ovens. A green approach to wood heat is one of biofuel on the smallest of scales.
Is Biofuel Green?
One of the reasons that wood heat is a source of so much divide in the eco-friendly community is that it’s a renewable resource and renewable has become synonymous with green. What wood heat isn’t, though, is clean or healthy. It lets off a significant amount of carbon and particulates, and trees certainly don’t grow as quickly as it’s consumed for heat.
Of course, wood is a much less harmful source of heat than coal, but for scientists interested in developing green energy sources, it makes more sense to focus on solar and wind power. Why, then, would they invest in improved wood burning technology?
Solar and wind technology are good large-scale energy solutions, but when it comes to small-space heating, wood has its own advantages. First, wood heat is in keeping with the DIY spirit of homesteaders and tiny house enthusiasts. These individuals are more likely to be driven to gather their own wood and live in small spaces that can be effectively heated as such.
Wood heat is also very effective on an individual scale because it requires very little infrastructure. Modern wood stoves made of steel rather than cast iron are built to EPA specifications, and the only additional necessary tools include a quality axe, somewhere to store the wood, and an appropriate covering to keep it dry. And all the wood can come from your own land.
Wood heat is also ideal for people living off the grid or in cold areas prone to frequent power outages, as it’s constantly reliable. Even if the power goes out, you know that you’ll be able to turn up the heat. That’s important if you live somewhere like Maine where the winters can get exceedingly cold. People have even successfully heated a 40’x34’ home with a single stove.
Benefits Of Biomass
The ultimate question regarding wood heat is whether any energy source that’s dangerous on the large scale is acceptable on a smaller one. For now, the best answer is that with a growing population and limited progress towards “pure” green energy, wood should remain a viable option, specifically because it’s used on a limited scale. Biomass heat is even included in the UK’s Renewable Heat Initiative and minor modifications can make it even more sustainable.
Wood stoves, when embraced in conjunction with pellet stoves, geothermal heating, and masonry heaters, all more efficient forms of sustainable heat, should be part of a modern energy strategy. Ultimately, we’re headed in the direction of diversified energy – all of it cleaner – and wood has a place in the big picture, serving small homes and off-the-grid structures, while solar, wind, and other large-scale initiatives fuel our cities.
New Climate Change Report Emphasizes Urgent Need for Airline Emission Regulations
In less than two months, the United States has grappled with some of the worst natural disasters in its history. Hurricanes battered the south central United States. Fires destroyed homes throughout Northern California. Puerto Rico experienced some of the worst storms ever. A massive windstorm caused more damage to the northeastern United States then any other storm on record before winter even struck.
These recent incidents have spurred discussion on the dangers of climate change. A recent report from the University of London has shed some light on the discussion. The new report suggests that new regulations are needed, including stricter EPA regulations on Airlines.
Review of the new report
The new report was published in the British medical Journal, Lancet. The report concluded that climate change is a “threat multiplier” for a variety of social problems, including diseases and natural disasters. While numerous studies have processed the risk that climate change plays with creating natural disasters, University of London report is among the first to explore the relationship between climate change and disease.
The authors warned that the problems are becoming irreversible. They will continue to get worse if risk factors are not adequately addressed.
The most concerning part of the report is that these problems are having the most serious impact on the most vulnerable communities in the world. Countries that depend on agriculture and other issues will suffer the most if climate change escalates.
“The answer is, most of our indicators are headed in the wrong direction,”said Nick Watts, a fellow at University College London’s Institute for Global Health and executive director of the Lancet Countdown, one of the lead researchers of the paper. “Broadly, the world has not responded to climate change, and that lack of response has put lives at risk. … The impacts we’re experiencing today are already pretty bad. The things we’re talking about in the future are potentially catastrophic.”
Airline industry discovers climate change is a two-way Street
The airline industry is coping with the problems of climate change, while also coming to terms with the fact that it has helped accelerate the problem. Earlier this year, American Airlines was forced to cancel four dozen flights near Phoenix. Cancellations were called due to excessive temperatures. The air was over 120 degrees, which is too hot for some smaller jet planes to get off the ground.
One anonymous airline executive privately admitted that their business model has facilitated climate change. They warned that the problem may become twice as bad in the next few years if proper safeguards aren’t implemented. Representatives from Goindigo have echoed these concerns.
The EPA has stated that airplanes account for 11% of all emissions. They are expected to increase over 50% within the next 30 years. This could have serious repurcussions if newer, greener airplane models don’t become the new standard in the very near future.
This is driving discussion about the need for new policies.The EPA has been discussing the need for new airline regulations for nearly two years. An EPA ruling made in July 2016 set the tone for new regulations, which could be introduced in the next year.
The new policies may be delayed, due to the new president’s position on climate change. He hired an EPA chief that has sued the organization about a dozen times. However, the Trump Administration may not be able to oppose climate change indefinitely, because a growing number of people are pressing for reforms. Even younger conservatives primarily believe climate change is a threat and are demanding answers. This may force the EPA to follow through on its plans to introduce new solutions.