Posts Tagged ‘Joe Anderson’

NICs currently penalise 3.4m of the lowest paid workers. This must change.

27/01/2014, 12:51:14 PM

by Joe Anderson

The rise in zero-hour contracts since 2010 is well-documented. The ONS estimates that the percent of people in employment on zero hour contracts has increased from 0.57% in 2010 to 0.84% in 2012. Ed Miliband is therefore right to call for a ban on their exploitative use. What, however, has not been often discussed is how the National Insurance system inflicts extra hardship onto workers on zero-hour and many other flexible contracts.

Unlike income tax, class 1 National Insurance contributions (NICs) are calculated on a weekly—rather than annual—basis. Whilst this may seem like a subtle difference, it has profound effects for those whose earnings vary significantly on a week-by-week or month-by-month basis, such as those on zero-hour contracts.

The class 1 NIC primary threshold in 2013/14 is £149, meaning employees earning over £149 in a given week are liable to make NICs. Yet, a significant number of people earning less than £7,775 per year (the annualised equivalent of the weekly primary threshold) will still be compelled to pay NICs. The reason for this is because if they earn more than £149 in any week (or £646 in any month, if paid monthly), they will be required to pay NIC, regardless of their annual income.

To illustrate the perverse effects of this anomaly, consider our conjectural protagonists, Jack and Jill.

(more…)

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Labour should properly embrace elected mayors, says Andy Westwood

11/10/2010, 09:00:52 AM

Back in 1997 Labour’s big idea for local government was the election of city mayors. But it appeared and then disappeared in an instant. After creating the office of mayor of London (and then a few others in places like Middlesborough, Newham and Hartlepool), Labour enthusiasm quickly waned as an independent Ken Livingstone fought and won it. After a second term as the Labour candidate, he lost it again. But Ken has been rehabilitated once more and has been selected to fight again in 2012. Does his return suggest that we should take a moment to rethink our rather lukewarm attitude to mayors in England’s other larger cities? Mayoral elections are now in the pipeline with the government committed to introducing the offices in England’s twelve largest cities.

But we should pause and take a breath. This is far from a popular idea – among many in the Labour party and perhaps even more so in the wider electorate. Some readers will already be writing their comments – and they won’t be positive. Most local councillors in cities across England are not keen. National politicians have been happy to drop the idea given the degree of opposition from some town halls. Even Eric Pickles has been lobbied by Tory and coalition councils to back off. And perhaps they all have a point. After all, we’ve started to win back many of the city councils that we lost during our time in government. But we really should think about it more deeply – not least because we will need to fight any mayoral elections every bit as hard as we plan to do to in London. (more…)

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