Economy

Tuesday

Jonathan Jones

Can Scotland make it on its own?

What would an independent Scotland’s public finances look like? ‘Good, actually,’ says the SNP as they present their ongoing case for independence. They like to claim that, discounting the rest of the UK, Scotland was in surplus for ‘four out of the last five years’ — it’s Westminster, not Holyrood, that can’t manage the public’s money.  Which would be a powerful argument were it actually true. You see, the SNP are talking about the ‘current budget balance’, which excludes the £6.4 billion a year that Scotland spends on capital. When you include that spending — according to the Scottish government’s own figures — there has been a deficit for every

Peter Hoskin

Miliband’s speech fails to excite

Was Ed’s Big Speech worth the extended wait? Not really. It wasn’t a stone-cold terrible speech, but neither was it the rambunctious, attention-grabbing number that his leadership could do with. In fact, we could have saved ourselves the effort by simply reading his New Year’s message again. That was considerably shorter, and covered almost all of the same ground. Squeezed middle? Check. Tackling vested interests? Check. An admission that Labour will need to cut? Ch… oh, you get the point. The best that could be said about today’s speech is that it presented some of these arguments more clearly than in the past. Indeed, the attack on George Osborne’s fiscal

Saturday

Fraser Nelson

The Miliband puzzle

So why did Ed Miliband stop his brother being leader of the Labour Party? As each month of his uninspiring leadership passes, it becomes more of a puzzle. In today’s Guardian interview, we learn that he can solve a Rubik’s Cube in 90 seconds. Perhaps David Miliband took two minutes, leaving Ed to regard him as being intellectually inferior. The rest of the interview shows Ed trying to row back towards positions that David Miliband would have adopted from the offset: trying to claim fiscal responsibility, and credibility. The ‘In the black Labour’ movement is also an attempt to repair the repetitional damage being wreaked by Balls, whose calls for

Jonathan Jones

Miliband comes out swinging

After being mostly absent in an embarrassing week, which culminates in today’s Sun headline of ‘Block Ed’ referring to the Labour leader’s Twitter gaffe yesterday, Ed Miliband has emerged with a self-assured interview in the Guardian. In parts, he is even boastful. Miliband declares himself ‘someone of real steel and grit’ and brags ‘I am the guy who took on Murdoch… I am the guy that said the rules of capitalism as played in the last 30 years have got to change’. He claims – contrary to Maurice Glasman’s criticism this week – to have ‘a very clear plan’ about what needs to change in Britain. And what is it

Sunday

Matt Cavanagh

Immigration to fall in 2012 — but still not on track to hit the Tory target

Immigration will remain at the heart of political debate in 2012. Economic downturns tend to heighten concerns about migrants competing for jobs and depressing wages, and spending cuts tend to sharpen resentment over migrants claiming benefits or adding to pressure on public services. The latest e-petition to garner a hundred thousand signatures will get its reward of a day in parliament, debating the effects of immigration on Britain’s growing population. And while Labour and the Liberal Democrats might be reluctant to talk about immigration, the Tory leadership clearly see it as useful in handling those on the right who are unhappy with life in coalition — commentators as well as

Wednesday

Peter Hoskin

Clegg tries to reassure his troops

Only a few weeks ago, a statement from Nick Clegg in firm support of the coalition wouldn’t have been noteworthy at all. It’s just what he, as Deputy Prime Minister, did. But now, after his very public palpitations over Europe, the New Year’s message that Clegg has broadcast today is a little more eyecatching than it would otherwise have been. This is no provcation to rile the Tories, but a more or less sober assessment of what the Lib Dems have achieved in government, along with a few lines about how fixing the economy ‘remains the number one priority for our party and the coalition.’ Most strikingly of all, Clegg

Tuesday

Peter Hoskin

Russia looms significant across 2012

The Christmas weekend was, I’m sure you noticed, rich with political incident. And yet, from continued turbulence in the Middle East to continued turbulence in Chris Huhne’s career, few things stood out as much as the protests against Vladimir Putin in Russia. They were, by most reasonable estimates, the largest in that country since the fall of the Soviet Union. And they add to the wave of disgruntlement that has been swelling since even before this month’s disputed parliamentary elections. The wave, of course, hasn’t broken yet. But few seem sure about how far it will travel and how much change it will wreak. The best article I’ve read on

Thursday

Jonathan Jones

The rising cost of Christmas dinner

While we’re talking Christmas, how about this release from the Office for National Statistics today? It reveals how the cost of certain ‘Christmas shopping basket’ items has risen over the past year. We’ve put them into a table below — but let’s just say, you might want to start stocking up on carrots.

Tuesday

James Forsyth

Why ‘starving the beast’ may not work

Steven F. Hayward’s audit of the state of American conservatism, which David Brooks judges to be one of the best magazine articles of the year, argues that the Reaganite ‘starve the beast strategy’ has failed to halt the growth of government. Hayward writes: ‘Thirty years after the arrival of the Reagan Revolution, government is bigger than ever. The Reagan years appear to have been little more than a mild speed bump in the progress of ever-larger government. The regulatory state advances relentlessly on every front. The soaring national debt threatens economic oblivion sooner or later. In short, the Reagan era, for all that was accomplished, was not an analogue to

Peter Hoskin

Another fine mess at HMRC

Today’s report by the Public Accounts Committee hasn’t so much been released as detonated onto the Westminster scene. The Exchequer is owed around £25 billion, it suggests, from major companies that have been handled too leniently, or just plain wrongly, by HM Revenue & Customs. And much of the blame is attached to Dave Hartnett, the outgoing civil servant in charge of revenue collection. Interviewed on the Today Programme earlier, the chair of the committee, Margaret Hodge, implied that Hartnett had too ‘cosy’ a relationship with big business. She went on to add that, ‘you’re left feeling that the sort of deals that are made with big business — “sweetheart”

Monday

James Forsyth

The latest act in Europe’s comic opera

If it was not all so serious, the efforts to save the single currency would be worthy of a comic opera: the Germans could compose the score, the Italians could write the libretto, and the French could take care of the stage directions. The latest IMF-related effort is, perhaps, best described by the website ZeroHedge, which is required reading during these troubled times: “Germany will be responsible for €41.5 bn, France at €31.4 billion, and Italy will need to provide €23.5 billion and Spain another €15 billion. To, you know, bailout Italy and Spain” What is becoming increasingly clear, when you take this news combined with the comments of the

Ed Holmes

Obsorne’s banking reforms are only the start of a solution

‘The most far-reaching reforms of British banking in modern history.’ That’s how George Osborne called it in Parliament this afternoon, in a statement that contained few surprises. What the government’s doing, in large part, is to follow exactly the recommendations contained in September’s Vickers Report. But is that really as far-reaching, or as radical, as the Chancellor would have us believe?   Certainly, many of these reforms are encouraging: measures such as ‘bail-ins’ and ‘living wills’ should facilitate the orderly winding-up of insolvent institutions, and reduce the necessity for taxpayer bailouts. But other parts of the government’s reform package are less convincing. For instance, additional capital buffers and reductions in

Mats Persson

Rudd’s straw man argument about our EU membership

As the isolation hysteria over Cameron’s EU veto starts to fade, attention is now shifting to the more existential question of what kind of relationship the UK should have with Europe. In a piece for today’s Times (£), the chairman of Business for New Europe, Roland Rudd — who, incidentally, used to argue passionately in favour of the UK joining the euro — takes aim at those who want Britain to replicate a Norway-style model of European cooperation. Arguing that Norway endures so-called ‘fax machine diplomacy’ — no influence over EU laws that it must nonetheless accept — Rudd says that ‘the choice now is to do what Norway does,

Peter Hoskin

The coalition tees up its banking reforms

That was easy. Only a few months after Sir John Vickers released his final recommendations for reforming the banking sector — and after much less intra-coalition struggle than we might have expected — the government is set to announce that it will adopt them ‘in full’. Vince Cable revealed yesterday that he and George Osborne have reached common agreement on the matter. And, for his part, Osborne will appear before MPs today with further details.  As Robert Peston has already explained, ‘in full’, in this case, doesn’t quite mean 100 per cent — but it’s close. The main proposal to ringfence retail banking off from riskier investment banking will be

Friday

James Forsyth

Clegg rebukes French PM

Normally, ‘read-outs’ on telephone calls between members of the British government and their counterparts overseas are fairly bland affairs. But today’s one on a conversation between Nick Clegg and the French Prime Minister Francois Fillon is an exception to this rule. Clegg, we are told, informed the French PM that ‘that recent remarks from members of the French Government about the UK economy were simply unacceptable and that steps should be taken to calm the rhetoric.’ To be sure, there is some more diplomatic language before and after this (the full text is at the bottom of this post) but the willingness of the deputy Prime Minister to be quite

Peter Hoskin

Miliband is trapped in his own foggy argument

With one well-timed jab in PMQs, David Cameron turned much of this week’s political debate – in domestic terms, at least – into a debate about Ed Miliband’s leadership. And how is Miliband responding? Predictably, for the most part. His celebratory speech in Feltham and Heston this morning reduced down to the claim that the result ‘offers a verdict on the Government’s failed economic plan’. And his interview in today’s FT covers much of the same territory. But the FT interview is also revealing in one particular regard: it demonstrates, once again, how Miliband is caught in a strange, undefinable strategy somewhere between attack and defence. This was, if you

Thursday

Fraser Nelson

The growth script still needs writing

The Times is being a bit harsh on Cameron in its leader this morning. ‘On the economy’, it says, ‘Cameron has contracted out policy to George Osborne and then followed the usual (although not invariable) practice of postwar prime ministers of supporting his Chancellor’s decisions. But he has not added to this a convincing contribution of his own.’ Yes, Cameron has not done very well articulating his government’s growth policy. I’ve also noticed that he is not much good at describing the Loch Ness Monster and for the same reason. Unconfirmed rumours of its existence whirl around now and again. Grainy photos of something supposed to be a UK growth

Wednesday

Mats Persson

26 versus 1 — really?

Judging from much of the coverage in UK media, you would be forgiven for thinking that Britain is on the fast track to becoming the North Korea of Europe — eccentric and completely isolated from the rest of the world. Indeed, the media narrative over the past couple of days has largely treated the agreement reached at the summit as concrete, supported in full by everyone apart from Britain. Or ‘27-minus’, as Commission President Jose Manuel Barroso put it. The reality, of course, is quite different. Leaving aside whether Cameron could have played his cards better (he could have), as Gideon Rachman pointed out in yesterday’s FT, ‘the picture of

Tuesday

Peter Hoskin

Inflation down, but the squeeze goes on

Has Mervyn King’s downwards trend in inflation, promised for over a year now, finally arrived? After all, going by today’s figures, inflation has now dropped for two months running. CPI inflation is at 4.8 per cent, and RPI is at 5.2 per cent. What’s more, we can expect them to fall even further once the effect the VAT rise is removed in January: But I wouldn’t get too excited just yet, CoffeeHousers. Sure, most forecasters have inflation going down from here into the foreseeable future — but, don’t forgot, we’re still being subjected to pretty high inflation, with CPI over double its target level. And, crucially, even by the OBR’s

Sunday

Daniel Korski

The government’s Sarkozy problem (and other euro dilemmas)

This week’s European Council meeting has been analysed by diplomats and commentators alike, but a number of issues have not been brought out as clearly as they need to be. The first is that Britain will now achieve political advantage, at the cost of economic setback, if the euro collapses. Although the government insists both that it is still wedded to the success of the euro and that it will not be isolated in Europe now or in the future, the simple fact is that eurofailure will ensure that efforts to organise among the 26, rather than the full 27, will finish. The economic costs would be considerable — possibly