Economy

There is now a general acceptance that the Tories’ 2015 election manifesto will contain a pledge, dare one say a cast-iron guarantee, that voters will be offered a referendum on Britain’s relationship with the EU. James first revealed this in his magazine column a few weeks ago. The aim is to see off the surge from UKIP, prevent Labour from opportunistically seeking Eurosceptic ground, and to counter Boris Johnson’s popular adoption of the People’s Pledge. Since then it has been taken as read that George Osborne is responsible for this gambit, which is reasonable given that he is the Tories’ chief strategist, and a likely contender in a future leadership

No government likes to u-turn, and particularly not on a Budget measure. So, tonight’s changes to the VAT regime proposed by the Budget for Cornish pasties and static caravans are embarrassing for the coalition. It is also worth noting that they have come after they have taken most of the political heat they were likely to take for the changes, including in the House of Commons where there were decent-sized rebellions on both issues. One of the lessons that I suspect that politicians, and particularly the coalition, will learn from this episode is: don’t try and deal with the anomalies in the VAT system. Voters, for obvious and understandable reasons,

Theresa May’s suggestion that Britain could suspend the free movement of people in the event of a Eurozone break up is a reminder of just how transformative an event the falling apart of the single currency would be. The Home Secretary is a cautious politician who picks her word carefully, so when she says that the government ‘will be doing contingency planning’ about the immigration implications of a Eurozone break-up you know it is serious. One of the things that makes this such an intriguing development is that it suggests a shift in government thinking on the severity of the crisis that could be coming. A few months ago, a

Treasury Select Committee Chairman Andrew Tyrie recently explained he would support cutting back the size of the state even if our public finances were in balance. I doubt whether the leadership of the Conservative party agrees. Cameron and Osborne seemed settled on the Brownite consensus until the financial crisis threw them a curved ball. This, in many ways, makes the so-called ‘austerity’ programme more difficult for them to implement. Without the argument that they genuinely believe in smaller government for economic or moral reasons, the party has had to adopt the ‘we wish we weren’t doing this but we have to’ line. It’s meant they’ve been unable to spell out

Fred Michel’s testimony this morning at the Leveson Inquiry was embarrassing but not devastating. The texts between him and Jeremy Hunt are cringe-worthy but my read is that the Culture Secretary is not in a weaker position than he was this morning. More important for Hunt’s survival prospect is the appearance of his former spad Adam Smith this afternoon. The question is, did Hunt not know of the extent of contact between Smith and Michel? Everything going on at Leveson, though, is a sideshow compared to the economic news and the storm brewing on the continent. On that note, it does seem odd that Nick Clegg is suggesting that the

What do Ed Balls and Mitt Romney have in common? They both want you to think that Barack Obama is spending government money like never before. For Mitt Romney, it’s an attack: he wants to make Obama a Big Government bogeyman who’s failing to tackle America’s deficit. ‘I will lead us out of this debt and spending inferno,’ the Republican nominee promises. For Ed Balls, it’s an example for Britain to follow: ‘I will lead us into this debt and spending inferno’, the shadow chancellor promises. Well, essentially. But the Obama camp is pushing back hard against such claims, highlighting a Wall Street Journal article yesterday titled ‘Obama spending binge

It’s no surprise that the Lib Dems aren’t keen on Adrian Beecroft’s proposals for hiring and firing. This intra-coalition disagreement has been rumbling on for months now, after all. But when Vince Cable spoke out against them yesterday, it wasn’t entirely clear whether this was his party’s line or just Vince being Vince. Other Lib Dems might have taken a more conciliatory approach. Today, however, it’s clear that they’re not going to. Nick Clegg himself has charged in behind Cable, saying that ‘I don’t support [Beecroft’s plan for “no-fault dimissals”] and I never have, for the simple reason that I have not seen any evidence yet that creating industrial scale

Have you noticed the weird hold that François Hollande has over our politics? If you haven’t, then let me tell you: his name has been almost inescapable in Westminster over the past couple of weeks. Even in PMQs this week, David Cameron and Ed Miliband couldn’t resist of spot of Hollandery. Behind-the-scenes, too, there is much consideration being given to how the new French President should be treated. Political strategists recognise, as I’ve suggested before, that his election could be a significant moment in the life of the Eurozone and the European Union. Potentially, it’s the moment when the supranational consensuses of the past couple of years broke down, leading

Even as our attention is gripped by a crumbling eurozone, another huge economic entity is emerging in the marketplace — Facebook, which has just upsized its number of IPO shares by a quarter before its $100 billion flotation tomorrow. Providing the crisis in Europe does not blow out into a huge political standoff (and just stays the gigantic economic mess it currently is), which entity would future historians regard as the defining business model of our age? Both the eurozone and Facebook, in a way, try to deal with the problems of geography — how to connect people from different places and cultures. But they do it in radically different