Economy

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

Monday

David Blackburn

Outgoing head of the CBI slams the government on growth

Richard Lambert has launched an uncompromising but constructive assault on the government’s growth strategy, or lack of it. He said: “The government is…talking about growth in an enthusiastic and thoughtful way… But it’s failed so far to articulate in big picture terms its vision of what the UK economy might become under its stewardship. “What I feel is that a number of their initiatives – I’m thinking of the immigration cap, I’m thinking about their move on the default retirement age, about the carbon reduction commitment – have actually made it harder for companies, or less likely for companies to employ people. And what we want, actually, is a sense

Daniel Korski

The government must continue to liberalise Europe’s market

For a long time, the terms of Britain’s Europe debate has been about the merits – or otherwise – of membership. This has occluded discussion about the need to promote a deregulated and economically liberal single market, for which the Conservatives have fought so successfully since Britain joined the then EEC in 1973.   Now Lord Brittan has shown the way. In a speech to Business for New Europe, he takes aim at the many illiberal practices that hamper economic development across Europe and hurt British business: “Portugal still has rules governing the minimum distance requirements between driving schools; and in Greece, directors of dancing schools need to live within

Sunday

David Blackburn

The Irish government folds

Yesterday, Brian Cowen resigned; today his government has imploded. The Green Party, which was bolstering Cowen’s ruling coalition (if such a phrase is applicable in this instance), have left the government. The Fianna Fail-led coalition is now two votes short of a majority, and therefore the finance bill may not pass in its current form. If that is so, Ireland may return to the precipice on which it found itself a couple of months ago, and its principal creditors and trading partners with it. But there is more to this than balance sheets. In his statement, the leader of the Greens said that the people had lost confidence in the political process. It’s

Fraser Nelson Fraser Nelson

Exposing the con man

  To the chagrin of CoffeeHousers, I have long rated Ed Balls and his abilities. He has a degree of brilliance, albeit tragically deployed in the services of a destructive economic agenda. But as we welcome him back, it’s worth reminding ourselves that his abilities are of a specific type. He understands economics (even though he did PPE) but his speciality is in creative accounting. His only tactic is to spend, borrow and cover both up by cooking the books. He is a trickster, not an economist. More Arthur Daley than Arthur Laffer. In my News of the World column today (£) I say he is dangerous to Labour as

Saturday

Friday

Peter Hoskin

How things are different now that Balls is shadow chancellor

The timing could hardly have been more resonant. On the day that Tony Blair is paraded, once again, in front of the Iraq Inquiry, Team Brown is firmly back in charge of the Labour party. For, I’m sure you’ve noticed CoffeeHousers, three of the four great shadow offices of state are occupied by former members of the Brown coterie: Ed Miliband, Ed Balls and Yvette Cooper. The fourth belongs to someone who doesn’t sit easily in either half of the TB-GB divide: Douglas Alexander. The question, of course, is what this means for Labour’s economic policy. And the answer according to Miliband is “nothing much”. The Labour leader has been

Thursday

James Forsyth

The Tories waste no time in getting stuck into Balls

One thing worth noting before we discuss Balls’ appointment is that the reasons Johnson have resigned are personal. It is not about his competence or otherwise. The Tories are wasting no time in getting stuck into Ed Balls. One just said to me, ‘the man who created this economic mess is back. He designed the fiscal rules that failed, he designed the FSA that failed…’ Certainly, the Tory attempt to make Labour’s economic record the premier political issue has just become a lot easier. Balls will be a more aggressive opponent for Osborne. But I suspect that he will prefer facing Balls to Yvette Cooper. I expect we will hear

Fraser Nelson Fraser Nelson

Renaissance Balls

Balls is back. The author of Gordon Brown’s economic policies for 15 years. The man who bears more responsibility for anyone else – other than Brown – for the asset bubble and the consequent crash. But I suspect that, right now, Theresa May is doing cartwheels and George Osborne cursing. Balls, for all his many drawbacks, is the most ferocious attack dog there is. His brilliance (and I hate using that word) at using numbers as weapons far surprassed anything the Tories could manage in Opposition. His policies are reckless: to borrow, and to hell with the consequences. His modus operandi is to launch around-the-clock attacks. He has powerful media

James Forsyth James Forsyth

Balls replaces Alan Johnson

Ed Miliband has just taken the biggest risk of his leadership in appointing Ed Balls as his shadow Chancellor. Balls’ is not a man who take orders and his view on the deficit is noticeably different from Ed Miliband’s. He is also the person most closely associated with Gordon Brown’s economic record. George Osborne will relish this fight. During the vacuum between Ed Miliband winning the leadership and the shadow Cabinet elections, Osborne prepared for facing Balls. He told friends, ‘we’ve circled around each other long enough. It is time to get on with it now.’  

Wednesday

Daniel Korski

Aussie rules | 19 January 2011

William Hague has been visiting Australia in the last couple of days, alongside half of the National Security Council. But you would not know it. Except for a few comments in the blogosphere, there has been little write-up of the visit in the newspapers. In many ways this encapsulates one of the government’s key foreign policy dilemmas. Many of the world¹s problems require cooperation with the US, Europe and the BRICs ­ but especially the BRICs, who, for all their flaws and faults, are the fast-growing countries on the planet. If you want to force an end to Iran¹s illegal nuclear enrichment programme, then you need China. If you have

Tuesday

Matthew Hancock-Mp

Miliband can’t credibly complain about both inflation and growth

Today’s shocking inflation figures have sparked a fascinating debate. I laid out my take earlier, and I thought CoffeeHousers may appreciate a different perspective. Matthew Hancock MP is a member of the Public Accounts Committee, former economist at the Bank of England and former chief of staff to George Osborne. Fraser Nelson. Last week, growth. This week, inflation. Ed Miliband is complaining about both. But the trouble is: the two can’t be taken in isolation. For the main weapon against inflation is for the Bank of England to raise interest rates. Yet the main weapon to support growth is for the Bank of England to keep interest rates lower for

James Forsyth James Forsyth

Laws: the 50 percent rate should be abolished asap

David Laws has penned a robust defence of the coalition’s economic policies for The Guardian. He points out that the big dividing lines in politics are on the economy and then goes onto say: ‘Ed Miliband is betting that economic recovery will be derailed, and while trying to reconcile many divergent views in his party, he has generally taken the position that cuts should be delayed and that high tax rates (including the 50% tax rate) should be retained. Ed is getting all the big economic decisions wrong, and leading his party into an economic policy cul-de-sac.’ What is striking about this passage is Laws’ mention of the 50p rate

Sunday

Peter Hoskin

Labour may be doing alright, but Miliband is still dodgy on the public finances

Ed Miliband’s leadership may be young, but his trickery on the public finances is already well worn. We got it all in his interview with Andrew Marr earlier – and then some. There was the claim that Labour “paid down the debt” (that I dealt with here). There was the claim that Labour’s spending was responsible (my response here). And there was a straight-up lie about Miliband’s forecast for a double-dip. So far, so Brown. What caught my ear, though, was this exchange: Andrew Marr: I mean Tony Blair said in his memoir that by 2005, he was worried that the party was spending too much. And Alistair Darling said

Gavin Kelly

Breaking the curious silence on upcoming tax changes

This week, Nick Clegg added his name to the fast-growing list of politicians addressing the critical question of living standards. His phrase of choice was ‘alarm clock Britain’, in effect his version of Ed Miliband’s ‘squeezed middle’. It is, of course, a clunking label for what is a serious topic (hardly the first time a politician has achieved such a feat). But quibbles over terminology aside – and as Miliband’s article on Friday confirmed – these are the first serious shots in the political battle to frame the coalition’s crucial March Budget. It is now increasingly clear that at the heart of that struggle will be attempts by party leaders

Saturday

Matthew Hancock-Mp

Miliband in denial

Did he get cold feet? Or was his new spin-team overenthusiastic in their pre-briefing? We were told we’d get an apology from Ed Miliband in today’s speech, but instead he entrenched himself in his position that Labour did nothing wrong on the deficit. I’m surprised at this decision. Surely Ed Miliband understands, as his Shadow Chancellor understands, the central importance to an opposition party of economic credibility. That credibility will not return while Miliband bases his economic argument on a denial of the facts. First, and critically, he argues that Britain’s deficit was not a problem going into the crisis. Not only is this disputed by an impressive array of