Economy

There are still rumours in Westminster that David Cameron will cut taxes to stimulate the economy, but the speech he gave to the Canadian parliament on Thursday rather scotches this idea. Here’s what jumped out at me 1) No Obama-style deficit-financed tax cuts, please, we’re British. “The economic situation is much more dangerous and the solution for most countries can not be simply to borrow more. Because if the government doesn’t have the room to borrow more in order to cut taxes or increase spending, people and markets start worrying about whether a government can actually pay back its debt. And when this happens confidence ebbs away and interest rates

There is a strange pre-Lehman feeling in the air right now: the idea that something awful is going to happen, but no one knows what or when. This is laden with political ramifications. The problem for the Tories last time was not that George Osborne had been caught aboard HMS Deripaska. The greater problem was that a crash had arrived and the Shadow Chancellor had nothing to say. Brown, at least, seemed to have an agenda, and the Tory poll lead was reduced to one vulnerable point. I admire Osborne, but he can do far better in making the case for the government’s economic strategy. If there is a second

David Cameron’s much trailed speech to the UN is tinged with frustration. He will say, “You can sign every human rights declaration in the world but if you stand by and watch people being slaughtered in their own country, when you could act then what are those signatures really worth? The UN has to show that we can be – not just united in condemnation, but – united in action acting in a way that lives up to the UNs founding principles and meets the needs of people everywhere.” That seems to be a fairly thinly veiled reference to the global community’s indifference to oppression in Syria. The lack of action

Listening to Nick Clegg’s speech today, there was little doubt which party he’d rather be in coalition with. There were some coded slights at the Tories’ expense—the emphasis on how the Lib Dems had been ‘fighting to keep the NHS safe’ and his commitment that the Human Rights Act was here to stay—but they were nothing compared to the full frontal attacks on Labour. Clegg derided Miliband and Balls as the ‘backroom boys’ before warning the country to ‘never, ever trust Labour with the economy again.’ This line reveals something very important, the Lib Dem leadership believes that the more the economy is in trouble the more important it is

The Telegraph’s splash on Europe indicates that the issue, which proved so toxic to the last Conservative government, has risen again. Writing a stern op-ed for the paper, serial rebel and anti-Cameroon Mark Pritchard calls for a referendum. This will have irritated Downing Street no end, which is understood to have hoped that the whip-sanctioned Eurosceptic grouping that has formed around George Eustice might have contained the party’s factious elements. But some disgruntled MPs on the right privately say that last week’s well attended meeting of Eustice’s group turned into something of a disappointment. The insistence that an exit from the EU was off-limits for the moment was apparently met

Sandals are being rattled in Birmingham this morning. The Liberal Democrat conference opens to a chorus celebrating the party’s achievements in government. Nick Clegg tells the Independent that “Liberal Democrat fingerprints” are all over flagship coalition policies on schools, welfare, pensions, banking reform and the NHS reforms. He says of the latter that the Liberal Democrats have tempered the Conservatives. Clegg will reiterate this point at a rally later this afternoon. Despite news that the Liberals seek an electoral accommodation with the Conservatives, senior party figures are at pains to accentuate their differences with the Tories. Danny Alexander informs the Financial Times that he views the new backbench Tory Eurosceptic

It is hard to overstate how serious the crisis in the eurozone is or what it might do to the politics of Europe. The European project is putting in danger the very political stability in Europe that its supporters have always claimed to be its strategic and moral justification. I understand that American banks are now so nervous about the situation on the continent that they have effectively stopped new lending to European banks. The view in Westminster today is that the Greeks will avoid default for a little longer. But few can see them making it to Christmas. Indeed, the expectation seems to be a default sometime in October.