Economy

Thursday

Jonathan Jones

Poll round-up | 23 June 2011

We haven’t dwelt on the polls very much on Coffee House recently, although we have flagged up some nuggets on Twitter. Here are some of the measures of public opinion that provide an interesting backdrop to Westminster’s machinations: Labour in trouble despite poll leads Two weeks ago I reported on a poll that showed the extent of Ed Miliband’s unpopularity. There have since been a few more polls to compound his unease. ICM found that he had worse approval ratings even than Nick Clegg: YouGov find that 58 per cent of the public think he’s doing a bad job, but perhaps more worrying for “Red Ed” is that he even

Daniel Korski

Apparently, Britain is less stable than a country in danger of collapse

If there is one global index it is best not to be on, it is the Fund for Peace’s annual Failed States Index. It ranks 177 countries using 12 social, economic, and political indicators of pressure on the state. This year, the FSI ranked Somalia as number one for the fourth consecutive year, citing widespread lawlessness, ineffective government, terrorism, conflict, crime, and pirate attacks against commercial vessels as reasons for the country’s billing. Finland, on the other hand, has displaced Norway at the bottom of the index. “Slight fluctuations in demographic and economic indicators, though minimal, lowered Norway’s scores, allowing Finland, with its continued stability, to slip in front of

Anne Dawson

Why Belfast is ablaze

I live three miles away from where the rioting was happening in East Belfast last night, and heard the helicopters whirring overhead. It was the kind of sound that anyone living in the city hoped never to hear again. As a child, I’d lie in bed and hear bombs and sirens and helicopters — and we had all hoped that dark chapter had been closed. A tipping point of violence has now been reached. A press photographer has been shot, another given a fractured skull after a second night of riots. And in the aftermath, the blame game cacophony begins: Who started it? It was them. No it was them

Wednesday

James Forsyth

How the Tories intend to keep Westminster talking Balls

When Ed Balls is around, there are no shortages of stories. Balls, as is so often the case, has been the talk of Westminster today. First, there was the chatter generated by the FT’s story that members of the shadow Cabinet were irritated that Balls’ proposed VAT cut hadn’t been run past them. Then, there was Alistair Darling strikingly failing to endorse Balls’ VAT cut on the Daily Politics and to round it all off the shadow Chancellor was leading for Labour in its opposition day debate on the economy. The Tories are convinced that Balls’ relations with his fellow shadow Cabinet members is a weak spot for Labour. Indeed,

Daniel Korski

Euro-bondage

At a time when the Euro is looking so weak, it is a wonder that so many countries are still queuing up to join. Estonia has recently joined, while Hungary and Bulgaria are keen as mustard to join as well. Make no mistake, these countries want to join. They go to lengths to stay for two years in the European Exchange Rate Mechanism, while keeping inflation inline with the EU average. At a meeting this morning, the Hungarian foreign minister capped off his country¹s EU Presidency by declaring that Hungary is still focused on joining. But, even if these countries did not want to join the Euro, or felt perhaps

Tuesday

David Begg

High-speed rail is an opportunity, not a waste

Having spoken to civic leaders in Leeds yesterday about the impact of high-speed rail investment, I cannot recognise the world lived in by Matt Sinclair and the campaign against HS2. In the Midlands and the North, high-speed rail represents opportunity. Opportunities for business people to reach new markets, quickly, cheaply and with minimal hassle. Opportunities for bread-winners to reach new employers. Yes, it’s a massive investment. But the potential for our national wealth is also massive At the “Yes to HS2, Yes to Jobs” action days in Manchester and Birmingham, you felt some of this excitement among the businesspeople, civic leaders and young people who came out to show their

Monday

James Forsyth

Hoban wobbles in the House

Mark Hoban has just turned in a remarkably unconvincing performance at the despatch box. Summoned to the Commons to answer an urgent question from Gisela Stuart, one of the best backbenchers in the House, on what contingency planning the government was doing for a Greek default, Hoban attempted to stonewall.   But Hoban’s stonewalling could only carry him so far. Strikingly, he declined several opportunities to confirm that the British government thinks that the euro will survive in its current form with all its current members.   By contrast, Jack Straw was quite happy to make predictions. He told the House that ‘the euro in its current form is going

Peter Hoskin

Boris’s one-two punch against the coalition

Boris, we know, has never had any compunctions about distinguishing his views from those of the coalition government. Take his recent proclamations on the unions or on the economy, for instance. But his latest remarks are still striking in their forthrightness. Exhibit A is the article he has written for today’s Sun, which — although it doesn’t mention Ken Clarke by name — clearly has the Justice Secretary in mind when it exhorts that “it’s time to stop offering shorter sentences and get-out clauses.” And Exhibit B is his column for the Telegraph, which waxes condemnatory about Greece and the euro. As George Osborne struggles to limit our involvment in

Sunday

Daniel Korski

How the IMF might save Afghanistan from its leaders

The International Monetary Fund used to be hated, blamed for the privatisation programmes it imposed across the world in exchange for loans. Then it spent a decade in relative obscurity. Now, as countries like Greece are forced to beg for loans, the Bretton Woods institution has again become a popular bogeyman. Every Greek protester thinks that all would be well if only their government had a Love, Actually moment and told the IMF where to go. But the IMF — with its hard-nosed, unsentimental policies — is often what is needed to save governments from themselves. Take Afghanistan. As The Guardian reported yesterday, the Afghan government will struggle to pay

Friday

Peter Hoskin

Don’t dismiss Davies out of hand

Touchpaper, meet match. That’s the explosive situation engendered by Tory MP Philip Davies and his comments about disabled people this afternoon. His suggestion, made in the Commons, was that disabled people could work for less than the national minimum wage. And his justification? That the minimum wage “prevents those people from being given the opportunity to get to the first rung on the employment ladder.” Charities such as Mind have since lambasted Davies for even broaching such a thing. The phrase “nasty party” is gushing around Twitter with tidal abandon. But before we pile on, it’s worth noting that Davies has identified an issue that is more shades of grey

James Forsyth James Forsyth

How the Tories could capitalise on the eurozone’s woes

With events in Greece moving at pace, next week’s European Council meeting (which was scheduled to be a low-key affair) could be the place where attempts to resolve the crisis in the eurozone take place. I’m told that Number 10 has now woken up to this possibility and is doing some preparatory work on the matter.   But, frustratingly, there’s still no strategy for how David Cameron could use this crisis to advance the British national interest. As I wrote last week, if the eurozone countries decide that a solution will require a treaty change, then Britain has a veto over that — and could use the negotiations to secure

Daniel Korski

Danny’s maths

And so Danny Alexander has further angered unions by making it clear that “painful decisions” are needed to reform public-sector pensions, including raising the retirement age. But his proposals should no come as a surprise. Rapid demographic transitions caused by rising life expectancy and declining fertility mean that the proportion of old to young is growing rapidly. But when the Lib Dem minister says that “people are living much longer now,” he is in fact underplaying how dramatic the change has been in the last decade. According to the Office of National Statistics, the proportion of people in Britain aged 65-and-over increased from 15 per cent in 1984 to 16

Peter Hoskin

Greece on the precipice

Europe is a doom-monger’s paradise at the moment. Riots in Greece; summary Cabinet reshuffles; meetings between Merkel and Sarkozy to save the single currency — and there’s still the potential for things to get worse, much worse. If the Greek government defaults on its debts, then there’s no knowing where the contagion will spread, only that it it will spread wide: from Spain and Portugal to markets across the world. Share indices have already been trembling at the prospect, although many of them rallied slightly today. One consolation, however scant, is that all this crystallises just what can happen to governments who operate beyond their means. Indeed, this seems to

Thursday

Fraser Nelson

Balls’ bloodlust gets the better of him

Ed Balls’ problem is his killer instinct. If he were a Twilight vampire, he’d be a Tracker: someone whose uncontrollable bloodlust takes him to places he should avoid. His position on the deficit is so extreme — more debt, more spending — that he’s pretty much isolated now. People are mocking him. John Lipsky, the acting IMF chief came two weeks ago and rubbished Balls’ alternative (as Tony Blair did) — so Balls, ever the fighter, has today given a long speech where he sinks his fangs into Lipsky and says (in effect) “I’ll take on the lot of you!” But Balls is brilliant. Often George Osborne seems not to

Wednesday

James Forsyth

Osborne to sell off the Rock

George Osborne will use his Mansion House speech tonight to, in the words of one source, “fire the starting gun” on the sale of Northern Rock.   Robert Peston, who had the story first, reports that “The chancellor hopes that the sale of Northern Rock will send a powerful signal that the banking industry is on a path back to more normal conditions, following the crisis of three years ago.”   In an attempt to maximise return for the taxpayer, the whole of the “good bank” part of Northern Rock will be sold off to a single bidder. This means that the whole issue of discounted bank shares, which splits

Daniel Korski

Bring on the strikes

An old boss of mine once said to me: when you start a new assignment, seek out a fight — and win it. The same advice should be given to incoming Prime Ministers. U-turns, as Mrs Thatcher knew, just create demand for more U-turns. If the government is willing to revise its NHS plans, then why not reopen the Defence Review, or alter the pledge to spend 0.7 of our national income on overseas aid (or at least abandon the questionable idea of legislating for it)? But seeking out and winning battles, while avoiding too many retreats, is not enough. To be great, a Prime Minister needs good enemies. Mrs

Peter Hoskin

Osborne comes to a decision on the banks — but the story doesn’t end there

In his speech to Mansion House last year, George Osborne asked a question of his frosted and cumberbunded audience: “Should we restrict or split the activities of banks?” In his speech tonight, he looks set to deliver an answer of his own. As Robert Peston reports, the Chancellor is to announce that the investment and retail arms of banks will be ringfenced off from each other, so that the dice rolls of the Masters of the Universe cannot tumble across everyday savers’ cash. This does not mean a complete, Glass-Steagall-style separation between the two halves. But, rather, it follows the recommendations of the interim report of the Vickers Commision: banks

Tuesday

David Blackburn

Pressure at the pumps

Away from the clamour in the chamber over the bowdlerisation of the NHS reforms, a group of MPs led by Robert Halfon convened in Westminster Hall earlier this afternoon to debate how rising fuel costs might be abated. Treasury minister Justine Greening attended for the government. With the average price of unleaded at 136.9p/litre and diesel at 141.5p/litre last month, fuel costs are now a major concern for ordinary families. According to the campaign group Fair Fuel UK, who are working with the MPs, the average motorist who has to drive to work spent £33/week on petrol last year, taken from median pre-tax earnings of £499/week in 2010. With inflation

Fraser Nelson Fraser Nelson

Inflation: cock-up, not conspiracy

Britain has the worst inflation in Western Europe; this is today’s story. CPI is 4.5 per cent and RPI is 5.2 per cent. This masks even worse rises which, as the IFS says today, hit the poor hardest. The price of a cauliflower is up 38 per cent to £1.26, potatoes are up 13 per cent to £1.54 a kilo. For millions, these are the most important metrics. Historically, it’s pretty bad. You’d think a Bank of England legally mandated to keep CPI inflation at 2 per cent would be horrified at this, and start vowing to tame the cost of living. After all, this isn’t just a statistic: it

Monday

James Plunkett

Inflation hits work incentives

New inflation stats are out tomorrow and they’re expected to show further rises in CPI and RPI.  Aside from their brief peak in 2008, headline rates of inflation are now at their highest levels for 19 years.  That’s prompting more discussion about the way rising prices are playing out for Britain’s households, from a nice graphic in today’s Times (£) to a new report due out tomorrow from the IFS.  But one implication of today’s higher inflation environment is receiving less attention – the impact of rising prices on work incentives. Inflation and work incentives aren’t often mentioned in the same breath.  But when work-related costs rise more quickly than