Coalition

One of the advantages the governing party has during an election campaign is the ability to set the baseline. It is your plans which every other parties’ are measured against. So, if they plan extra spending you can accuse them of a ‘tax bombshell’ or if they want to spend less than you, then you can say they want ‘savage cuts.’ After Tuesday’s autumn statement, Treasury sources were adamant that there would be a spending review before the end of this parliament setting out the cuts the coalition would make to meet its fiscal mandate. Danny Alexander confirmed on Newsnight that these would be jointly-agreed coalition cuts. But Nick Clegg

Yesterday night’s news that a senior FCO official lobbied Oxford University on behalf of Saif al-Islam Gaddafi adds more ordure to the already fetid story of Britain’s role in Colonel Gaddafi’s rehabilitation. The Woolf Inquiry into Saif’s dealings with British universities and businesses found that, ‘It was made clear [to Oxford] … that the FCO would appreciate help in this case since Libya was opening up to the West again.’  Oxford resisted; but this episode has hardly covered Britain’s elites in glory: the civil service, BAE and august universities are all criticised in Woolf’s report. Murmurs of disquiet about the Labour Party’s relationship with the Gaddafi clan continue to sound in certain quarters

Today was always going to be a difficult day for the Chancellor. The figures from the OBR were always going to dominate the headlines and the restrictions of coalition meant that there couldn’t be as much as the Tories would have liked on the supply side. It was striking that the loudest Tory cheer of Osborne’s statement came when he reiterated his opposition to an EU-imposed financial transactions tax. But the silver lining for Osborne and co is that Labour still lack economic credibility. It is hard for Labour to savage Osborne for borrowing more than he said he would — which he is to the tune of £158 billion

In some ways, George Osborne will always be haunted by his 2007 Tory conference speech. That speech and the reaction to his commitment to raise all estates worth less than £1 million out of inheritance tax contributed to Gordon Brown not calling an early election. It has a claim to be one of the most important speeches in modern British politics — it is certainly the one that saved the Cameron project. But it has also created an expectation that Osborne has a set of aces up his sleeve every time he stands up to give a big speech. Tomorrow’s speech won’t see the Chancellor pull out any unexpected trumps.

Growth plans are a high growth industry — with every day bringing yet another set of ideas, from one quarter or another, for how the government can fix the economy. And one suggestion pops up quite frequently in all these plans: bring forward spending on infrastructure. This is often presented as a simple thing to do, with few (if any) downsides. But how realistic is this? We know that infrastructure is important for growth. Economic texts generally suggest that the ‘multiplier effect’ (when government spending leads to more private spending later on) from is higher for infrastructure spending than for spending in other areas, such as health and welfare. We

Chatting to people in Brussels last week, I couldn’t help feeling that David Cameron’s EU problem is one of timing. The PM will probably be able to piece together a repatriation package that includes measures such as a withdrawal from the over-implemented Working Time Directive and a reduction in the EU budget. But none of this is likely to be enough for his party. Indeed, I suspect the budget won’t be finalised until two minutes to midnight during the Lithuanian EU Presidency in 2013. Add to this the Tobin Tax, where there seems to be little leeway for the British government. Barosso, Merkel and Sarkozy are determined to introduce it,