Economy

Thursday

Toby Young

Forget Mandarin. Latin is the key to success

As promised, here is an extended version of an article from the skills supplement in this week’s issue of the Spectator. On the face of it, encouraging children to learn Latin doesn’t seem like the solution to our current skills crisis. Why waste valuable curriculum time on a dead language when children could be learning one that’s actually spoken? The prominence of Latin in public schools is a manifestation of the gentleman amateur tradition whereby esoteric subjects are preferred to anything that’s of any practical use. Surely, that’s one of the causes of the crisis in the first place? But dig a little deeper and you’ll find plenty of evidence that this particular

Peter Hoskin

A new golden rule

The last few days have given us enough evidence for a new economic rule: the better the news about the economy, the less we’ll see of Ed Balls. As Tim Montgomerie notes over at ConservativeHome, the shadow chancellor was plastered right across the airwaves when last week’s growth figures were announced. This week – when the economic omens have been more encouraging – not so much. On Tuesday, as Fraser blogged, we had a record rise in manufacturing activity. Yesterday, there were heartening figures for the construction sector. And, today, the services sector has followed suit, with its strongest showing for eight months. Here’s the graph for all three: Sterling

Carole Stone

Much more than a networking event

What’s the point of Davos? This is a question seldom addressed in the reports filed from the five-day “World Economic Forum” which ended on Sunday. Many speeches are made, many issues debated, but it is not a place where decisions are taken. It is not a G20. Manifestos are not launched there. It exists to serve a very particular function: every year for a short period of time it becomes the temporary capital of the globalised world. Top business and political leaders, distinguished academics and journalists – all committed to improving the state of the world – flock there to meet each other, swap ideas and then go home. This

David Blackburn

Council gorillas get on the buses

The cold war in Britain’s localities is warming up. Buried in the Telegraph and the Financial Times is the news that councils are cutting local bus services, and central government is being apportioned blame. An organisation called Better Transport has launched a campaign titled Save Our Buses. It claims that straitened councils have been forced to shed £34 million from the subsidised funding of local buses; 70 percent of routes have been affected so far.   This is a prime example of local government conniving to avoid responsibility for spending contractions. With adroit calculation, councils bastardise vital services to inconvenience those they represent. Local bus routes are a necessity, particularly

Peter Hoskin

Introducing Britain’s skills crisis

Did you know: Britain trails well behind other countries such as the US, Germany and Poland when it comes to educating its workforce? Did you know: the number of young people not in employment, education or training has risen by around 40 per cent over the last decade? Did you know … oh, you get the idea. All the statistics, and more, are in the booklet on Britain’s Skills Crisis that is included in this week’s Spectator. For CoffeeHousers who don’t buy the magazine (although you should, etc – purchasing options here), you can read the supplement for free via this snazzy, page-turning whatsit. We’ll also put one or two

Wednesday

James Forsyth

Rooting out the cause of the crisis

David Frum is doing a great series on the Financial Crisis Inquiry Commission report. The report is, obviously, US-centric but its argument that the problem was not with the regulation but the regulators strikes me as highly important: “[W]e do not accept the view that regulators lacked the power to protect the financial system. They had ample power in many arenas and they chose not to use it. To give just three examples: the Securities and Exchange Commission could have required more capital and halted risky practices at the big investment banks. It did not. The Federal Reserve Bank of New York and other regulators could have clamped down on

Matthew Hancock-Mp

IFS say Labour’s policy would mean higher interest rates

From the start of the financial crisis, the Conservatives have argued that when a country¹s finances are in a mess, the best way to manage demand is through monetary activism and fiscal responsibility. Going into this crisis, Britain¹s finances were indeed in a mess. We had the biggest structural deficit among major developed economies (according to the IMF, OECD, oh, and Alistair Darling). To claim there was no structural deficit is to oppose the truth. The principles of monetary activism and fiscal responsibility underpin the approach to the recovery too. By dealing with the fiscal mess, we can keep interest rates lower for longer, and avoid the sorts of financial

Tuesday

Fraser Nelson

Treading the road to recovery

It will have been a quiet morning in the Balls household. Fresh economic indicators suggest that the British economy is not in some cuts-induced recession but, instead, doing rather nicely, thank-you. As I said last week, economic health is assessed by all manner of indices – and the ONS (which is forever having to tear up its GDP forecasts) might just have boobed last week with its preliminary Q4 GDP figures. Today we have the Manufacturing PMI surging to heights not even reached in the early 1990s:   Now, this might be a flash in the pan, you say. But then consider corporate liquidity – that is, how much debt

Monday

Peter Hoskin

What are Osborne’s options?

One of the most eyecatching political reports of the weekend was squirrelled away on page 16 (£) of the Sunday Times. It’s worth clipping out for the scrapbook, even now. In it, Marie Woolf reveals some of the fiscal sweeteners that Osborne might sprinkle into the Budget. There are two particularly noteworthy passages: i) Raising the personal allowance. “The income tax threshold is already set to increase by £1,000 to £7,457 from April 1. However, Osborne is expected to raise it by about a further £500. Details of the additional concession are still being worked on, but it marks a victory for the Liberal Democrats, who have been arguing within

Thursday

David Blackburn

Spelman’s a lumberjack and she’s ok

The coalition’s plans to privatise Britain’s woodlands have received what is euphemistically termed ‘a mixed reception’. Caroline Spelman’s consultation document and accompanying article in today’s Times (£) may change that fact. Both are historically conscious and upholstered with reassuring pastoral interludes – an elegant departure from most ministerial rambles.   But, this government’s politics breaks well clear from the literary immersion. There is a dose of Thatcherism. Spelman is adamant that the state should not be managing forests, and she wants private companies to exploit commercially valuable forests. She writes: ‘It’s time for the Government to step back and allow those who are most involved with England’s woodlands to play

James Forsyth James Forsyth

Deregulation is the path to growth

The government’s decision to increase the period which employees have to serve before they can bring a case of unfair dismissal from one to two years is welcome. But if it wants to encourage small and medium sized enterprises, the engine of the economy, to hire more people then they need to take the shears — not nail scissors — to regulation and employee protection laws. Camilla Cavendish has a cracking example of the absurdity of the current system in her column (£) today: ‘A London neighbour of mine, Mr B, runs a small business that is doing well. Last year he took over an insolvent company where the staff

Wednesday

Peter Hoskin

The Big Society in 1997

Titter ye might. The Big Society? In 1997? If the idea was of, erm, limited electoral worth in our last general election, then it was certainly of little use when Tony Blair hurtled into power all those years ago. Yet there is was, mostly speaking, in the “Civic Conservatism” espoused chiefly by David Willetts. Danny Finkelstein, writing for the pre-paywall incarnation of Comment Central, has already alluded to the intellectual debt that Steve Hilton et al owe to Willetts’ thinking back in the 1990s. Fraser did likewise in an interview with Willetts from four-and-a-half years ago. I mention this now for two conjoined reasons. First, the source texts of Civic

Lloyd Evans Lloyd Evans

This Ed’s no Goliath

Ed Milliband took up his position at PMQs today flanked by Caroline Flint and Ed Balls. Between a rock and a hard face. His proximity to so many colleagues who wish him ill can hardly have helped his performance. He was like a stale doughnut. Layers of stodge surrounding a hole in the air.   His battle-plan wasn’t entirely useless. He wanted to tempt the prime minister into foolish speculation about the causes of last quarter’s poor growth figures. Cameron stood up and admitted that the numbers were pretty lousy whether the weather were blamed or not. And that whether-the-weather left Miliband completely stuffed. He’d expected Cameron to shift at

James Forsyth James Forsyth

Winning in 2015

Danny Finkelstein’s column in The Times today (£) is well worth reading. Finkelstein sets out two worries, first that the Tories do not have enough of a strategy for winning re-election and second that the NHS reforms might compromise Cameron’s standing as a different kind of Tory. On the latter point, Finkelstein is echoing the views of an increasing number of Tory MPs and ministers. They worry that these poorly understood reforms have put the NHS back on the political table and that, as is so often the case when this happens, the Tories will suffer. Finkelstein’s first worry is that if the government sets out deficit reduction as its

Peter Hoskin

A businesslike State of the Union address

Jobs, people, work, new, years, make. You can get a good sense of Obama’s State of the Union address purely from its most frequently used words. Yes, this one was all about the future, and – another popular word – “investing” in it. As the President himself put it, sounding like some freakish amalgam of David Cameron and Gordon Brown, “If we make the hard choices now to rein in our deficits, we can make the investments we need to win the future.” The President wasn’t short of ideas for the investment half of that equation, even if – as others have noted – there was an absence of specifics.

Tuesday

Peter Hoskin

Why our national debt went up by £1,300 billion today

It’s not just the growth figures, you know. Today, the Office for National Statistics also released its latest estimates for the state of the public finances. Among the headline findings was a crumb of consolation for the Treasury: it is on track to meet its borrowing target for the financial year. But that’s by the by when compared to this other snippet from the ONS release: our national debt went up by £1,300 billion in December. Don’t worry, though – it’s not really as terrible as all that sounds. What’s happened is that the human calculators have finally worked out how to account for Lloyds and RBS on the public

Peter Hoskin

Brown takes the opportunity to peddle his “global growth plan”

As Iain Martin and Guido have noted, Ed Balls – and, for that matter, Ed Miliband – could probably have done without Gordon Brown hovering from the political graveyard to cast judgement on today’s growth figures. But hover he has, as the above video of his appearance on CNBC News testifies. It’s almost as though he wants to remind people that his spirit lives on in Labour’s rearranged top team. As for the content of his interview, it was stodgy mix of the arguments in his recent book and the attacks that Balls was making earlier. “Europe and America, but particularly Europe,” he said, “are now implementing policies that are

Daniel Korski

Call in a bulldozer for growth

As the coalition considers how to develop a growth strategy, it would do well to call in Paddy Ashdown and hear about the ‘Bulldozer Initiative’ he launched while in Bosnia working for the United Nations. Not a highway programme, the Bulldozer Initiative was instead one of the smartest pro-business schemes I have seen. And something like it is now needed here. The brainchild of a French businessmen and based on the ideas of Peruvian economist Hernando de Soto, it involved building a partnership between politicians and businessmen to identify specific legislation and regulations that prevented companies from expanding their businesses and creating more jobs. The steering committee, made up of

Peter Hoskin

Ed Balls: I don’t think a double dip is the most likely outcome

And this, folks, is a day where Ed Balls is having his cake and eating it too. Not only is he basking in the grim light of the growth figures, but he is using the opportunity to recast his own stance on the economy. Speaking on the Daily Politics just now, he de-emphasised the argument that in-year cuts were to blame for today’s numbers, instead claiming that people have “changed their behaviour in anticipation of what’s coming in the future.” And, more ear-catching still, he added: “I don’t think [a double dip] is the most likely outcome.” This, as Fraser suggested earlier, is surely necessary caution on Balls’s part. He

Fraser Nelson Fraser Nelson

What to make of the GDP fall?

“Recession here we come, a snow-dabbed double-dip” tweeted Faisal Islam, Channel Four’s economics editor. He summed up much of the hysterical reaction. It may spoil a good story, but here is what I suspect the broadcasters won’t tell you today. 1. Erratic GDP swings are common when recovering from a recession. Remember how stunned everyone was with the surging quarter three data? Now, we’re all shocked by plunging quarter four figures. I’d advise CoffeeHousers to treat these two imposters just the same. After the 80s recession, quarterly growth rates swung between -0.7 percent and 1.5 percent. Following the ERM-induced recession in the 90s, growth rates swung between -0.2 percent and