Economy

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

Less soap opera, and more policy grit, in today’s batch of Ed Balls files. There is, for instance, a lot on Gordon Brown’s proposed Bill of Rights (here, here, here and here), which is as ambrosia for future political historians, but is fairly turgid reading even for today’s political anoraks. Likewise the charts and doodlings related to the structure of Brown’s Downing Street. Yet some things do stand out. Here are a few of them: i) What the Treasury says, Brown didn’t do. You’ve got to admire the Treasury’s attempt to inject some realism into the fiscal calculus back in 2006. “Flat real” spending — i.e. public spending that rises

To an extent, British politics is still determined by whether or not you agree with Tony Blair. For more than a year, the coalition and the opposition have been debating whether to continue Blair’s public service reforms; this is a testament to his failure as Prime Minister as much as it to his success. Today, has given an interview to the Times (£), coinciding with the release of his memoirs in paperback. He uses it to question the Labour party’s current journey back into “nostalgia”. He says: “The attraction of a concept like Blue Labour is it allows you to say that there’s a group of voters out there we

Ed Balls walked into two traps on Newsnight yesterday evening. First, he seemed stumped when Jeremy Paxman asked him if he was praying that George Osborne was right. Paxman’s ‘gotcha point’ was that if Osborne isn’t right the country is in deep trouble and Balls wouldn’t want that. But Balls’ more serious slip was to say, “My view, though, is that the central outcome isn’t that we see a resumption of growth.” This, as coalition sources have been pointing out today, allows them to present any growth as a vindication of their strategy. For all the talk about the NHS today, the economy still remains the central battleground in politics.

While Dominque Strauss-Kahn was in a New York court room, pleading not guilty to charges of sexual assault, his former IMF colleagues were delivering their verdict on the UK economy at the Treasury. The IMF are very polite guests and their report has provided some timely support for the coalition’s fiscal approach by declaring that there is currently no need for a Plan B. The Osborne operation has been quick to point out that even in various alternative scenarios the IMF set out in their report, they don’t call for more spending or smaller cuts. But there are things which the IMF says that won’t be music to Osborne’s ears.

A couple of days ago, I wrote about the deleterious effects of political consensus on energy policy. A good example of this has emerged today. According to Politics Home, Luciana Berger and Caroline Lucas are seeking an amendment to the Green Deal to impose a target for domestic carbon reduction. A number of salient points emerge from this. First, it’s a fine instance of the obsession with targets; itself an indication that this area of policy is largely a top down initiative – driven by targets, taxes and penalties. The Green Deal, as it currently stands, is one of the few areas that put incentive before directive. The idea was