George osborne

Tuesday

Jonathan Jones

The Lib Dems step up their push for £10,000

Set your TiVos. At 6.55 tomorrow evening, BBC1 will air the Liberal Democrats’ latest party political broadcast. For those of you who can’t wait, here’s a sneak preview: In the video, Nick Clegg describes his proposed increase in the income tax personal allowance as ‘a £700 tax cut for ordinary working people — that’s an extra £60 in your wages every month’. I’ve remarked before on the similarities in both rhetoric and policies between the Lib Dems and Barack Obama, but Clegg’s ‘£60 a month’ pitch is as close as you get to the way Obama sells his payroll tax cut extension as ‘about $40 in every paycheck’. We can now surely

Fraser Nelson Fraser Nelson

Osborne accidentally makes the case for more savings

Rhetoric aside, what’s the difference between left and right in British politics? You won’t catch either party quantifying it, because the answer embarrasses both. The ever-cautious George Osborne is cutting just 0.6 percentage points a year more from government departments than Labour planned to (see table, above). The great joke is that the difference between the two parties is actually within the margin of error. Government is a gargantuan machine that just can’t be controlled to that degree of precision: a billion quid is, to Whitehall, a rounding error.   Today’s public finances have demonstrated that. The UK government had actually intended to borrow around £102 billion at this stage

Sunday

Jonathan Jones

The tax debate at the heart of the Budget

The run-up to last year’s Budget was all about fuel duty. This year it’ll be all about direct taxes. The Lib Dems are determined to put their manifesto pledge of raising the income tax personal allowance to £10,000 front and centre. They already managed to turn this promise into government policy in the Coalition Agreement, and last year’s Budget announced that the threshold would rise to £8,105 in April this year. But Nick Clegg’s made clear that he wants to go ‘further and faster’ on this. The Conservative response at the Treasury – according to today’s Telegraph – is simple: ‘how are they going to pay for it?’ Initially, Nick

Fraser Nelson Fraser Nelson

Balls the tax-cutter?

‘Balls urges tax cuts’, we’re told. Has he had a Damascene moment? Has the borrowed penny dropped? Nope, this is his longstanding and cynical campaign to cut VAT. Under the Labour years, when Balls was encouraging Brown to adopt a ‘scorched earth’ policy to the public finances, he urged against raising VAT to 20 per cent as Alistair Darling wanted. Not because he didn’t think it was necessary, but because he knew that if Darling didn’t do it, Osborne would. So VAT could be an election campaign tool, and then a stick with which to beat the wicked Tories (and the Lib Dems, who dropped the ‘VAT bombshell’ that they

Wednesday

Peter Hoskin

Post-Moody’s, King backs Osborne

Moody’s doubts might not be making much difference to the actual economy, but they could make a good deal of difference to the political battle being waged over it. George Osborne, of course, is citing this as further proof of the need for fiscal consolidation. Ed Balls, meanwhile, is redoubling his call for a ‘change of course’ — and somewhat misleadingly too. But what does Mervyn King think? Thanks to his comments in a press conference this morning, we don’t have to guess. Here’s how Bloomberg reported them earlier: ‘“It’s a reminder that we are facing a very challenging path to reduce the scale of our deficit so that, at

Tuesday

Art Laffer and Others

How to kick-start the economy

This morning’s news is a stark reminder of the desperate need to get the UK’s economy growing faster than the 0.9 per cent it managed in 2011. So far, George Osborne’s seemed short of ideas in this area, so, back in November, we asked a select group of economists and politicians to suggest some for him: Cut the 50p tax Arthur Laffer, Chairman, Laffer Associates Reducing the burden which government places on the economy, through tax cuts, is the surest way to promote growth. I have never heard of a country that taxed itself into prosperity. Yet Britain last year raised the top rate of income tax from 40 per

Fraser Nelson Fraser Nelson

A warning for Osborne and his economic agenda

Why did Moody’s downgrade Britain to AAA with a negative outlook, but leave other countries on AAA? One crucial factor is the scale of our debt increase: 60 per cent over the parliament. You won’t find it mentioned much today. The Chancellor is talking about austerity, helped by Balls who talks about his harsh deep cuts. Osborne today swears to keep ‘dealing with the debt’ — but his definition of ‘dealing with debt’ would even make an Italian blush: As Balls said on the radio this morning, the plan isn’t working. But Balls’ narrative — that Osborne is cutting harsh and deep — is untrue, as Moody’s knows. Osborne’s real

Peter Hoskin

Labour’s plan would have cost us our AAA rating

For Ed Balls this morning, there is only one conclusion to be drawn from the news about our credit rating: ‘A change of course is needed.’ But to what? Balls no doubt means a shallower course of deficit reduction — less far, less fast. But Moody’s are clear that we have been placed on a negative outlook because of doubts that our fiscal consolidation will continue strongly enough. Specifically, they say that, ‘Any further abrupt economic or fiscal deterioration would put into question the government’s ability to place the debt burden on a downward trajectory by fiscal year 2015-16.’ So how would Labour have fared? We already know that they

Peter Hoskin

Moody’s puts UK’s AAA rating on negative outlook

‘It’s now clear that Britain’s economic reputation is on the line at the next general election, another reason for bringing the date forward and having that election now … For the first time since these ratings began in 1978, the outlook for British debt has been downgraded from stable to negative.’ So said George Osborne when S&P placed Britain’s AAA credit rating on a negative outlook in May 2009, when Labour were in power. But guess what? Another credit-rating agency — Moody’s — has just done the same to our rating this evening. Given how much Osborne made of Britain being a ‘safe haven’, it’s rather a tricky one for

Sunday

James Forsyth

Warming up for the Budget

The Budget negotiations within government are now underway. The quad of Cameron, Clegg, Osborne and Alexander held a meeting last week to discuss their priorities for the Budget on March 21st. They’ll continue this conversation over a working dinner tomorrow night. Already, we know that the Liberal Democrats main priority will be to get the personal allowance as close to £10,000 as possible. As The Sunday Times reports, they’re suggesting paying for this by taking away various reliefs for higher-rate taxpayers and closing some of the loopholes in the tax system. I also understand from Liberal Democrats close to Clegg that they’re also interested in some new green taxes. For

Thursday

Peter Hoskin

Cameron’s quotas: a policy or a threat?

We’ve heard enough about David Cameron’s woman troubles to regard anything he says about the fairer sex as a naked pitch for votes. But I reckon his comments today, about getting more women into boardrooms, are just as much motivated by concerns about the economy. ‘The drive for more women in business is not simply about equal opportunity, it’s about effectiveness,’ is how he put it earlier, ‘It’s about quality, not just equality.’ It’s a claim that reflects both the thinking of Masters of Nothing — a book by two highly-regarded members of the 2010 intake, Matthew Hancock and Nadhim Zahawi — and its continuing influence in Cameroonian circles. Part

Tuesday

James Forsyth

Osborne defends ‘rewards for success’

George Osborne’s speech to the Federation of Small Businesses tonight tries to offer some reassurance that the coalition isn’t caving into the anti-business zeitgeist. Referring to the recent rows over executive pay, he deplores rewards for failure before saying ‘a strong, free market economy must be built on rewards for success. There are those who are trying to create an anti-business culture in Britain – and we have to stop them.’ How reassuring business leaders will find this remains to be seen. As Robert Peston reported yesterday there’s a lot of grumbling from them about the government’s handling of the Hester bonus and other matters. (To be fair to Osborne,

Wednesday

James Forsyth

Labour vote to the Tories’ benefit

Labour has just marched into the trap that George Osborne set them and voted against the benefits cap — again. As one gleeful Tory says, ‘we’re going to make sure everyone in the country knows how they voted on this.’   I suspect that in every Labour-held marginal that the Tories need to win to get a majority in 2015 the benefit cap will feature prominently on Tory literature. Labour MPs will be faced with the unenviable task of explaining why an able-bodied household where no one works should receive more in benefits than the average wage.   The cap chimes with the public’s sense of fairness — as the

Peter Hoskin

Your six-point guide to the Green Budget

As promised earlier, here’s my more detailed supplementary take on today’s IFS Green Budget. I’ve distilled it down into six points, but obviously there’s much, much more in the actual document itself. I’d recommend that you read the chapters on public sector pensions and pay, the 50p rate, and child benefit, in particular, if you’re so minded — as they’re very good summaries of some complicated fiscal areas. Anyway, here are my points: 1) The scary graph. As it does every year, the IFS has produced what I call the ‘scary graph’. It shows what our debt/GDP ratio would look like for decades hence under various circumstances. Even extending Osborne’s

Peter Hoskin

The view from the Institute for Fiscal Studies

It’s the halftime coffee break here at the launch of the Institute for Fiscal Studies’ Green Budget, so I thought I’d send CoffeeHousers a quick update. But first, just to be clear, that’s green meaning green, not green meaning environmental. This is the IFS’s annual, different-hued version of the Treasury’s Red Book. It’s their overall take on the economy and public finances. So far, there has been little that will surprise or disconcert George Osborne as he prepares his own Budget: the picture is expectedly grim. As John Walker, chairman of Oxford Economics, put it in his warm-up routine on the general economy, 2011 was ‘disappointing’ and 2012 will be

Sunday

James Forsyth

Peston: Hester will not take bonus

Stephen Hester’s decision to waive his bonus, revealed by Robert Peston just after 10 o’clock, will be a source of great relief to David Cameron and George Osborne. A story that could have dragged on for weeks, undermining their argument about fairness has just lost most of its potency. Ed Miliband, though, will be able to claim — with some justification — that it was the threat of a Commons vote on the matter that led to Hester renouncing his bonus. But this isn’t quite the end of this business. There’s now the question of what happens to the bonuses for other members of staff at RBS and then there

Friday

Fraser Nelson

Osborne needs to come up with radical growth policies, and soon

When it comes to defending the free market, and making the case for fiscal sanity, there’s scarcely anyone better than David Cameron. He was on superb form in Davos yesterday, giving much-needed blunt advice to the continentals. ‘Eurozone countries must do everything possible to get to grips with their own debts,’ he said. And he’s right. The snag, as I say in my Daily Telegraph column today, is that Cameron’s definition of getting to grips with debt involves increasing it more than Labour planned to, more than France, Germany, Italy or Portugal. On the first sign of trouble, his government gave up on its deficit reduction timetable – it will now

Thursday

Peter Hoskin

A Lib Dem demand that the Tories should get behind

Remember those Lib Dem calls for a mansion tax at the weekend? I said at the time that, ‘the Lib Dems appear to be drawing more attention to which of their own policies they are fighting for within government, whether those policies make it to the statute books or not.’ Well, now they’re at it again. Nick Clegg is giving a speech this morning in which he’ll urge George Osborne to go ‘further and faster’ in raising the income tax threshold to £10,000 a year. It was the stand-out policy of the Lib Dem manifesto, so it’s hardly controversial that Clegg should want to see it enacted ASAP. But it’s

Wednesday

James Forsyth

Europe gives Osborne the context he needs

The political implications of today’s growth numbers are complex. On one level, a contraction in the economy should provide Miliband and Balls with an opportunity to make their economic case against the government. Indeed, Balls is already out with a statement calling the GDP figures a ‘damning indictment of David Cameron and George Osborne’s failed economic plan’. I suspect that Miliband is also looking forward to PMQs rather more than normal.   But on the other hand, as long as Cameron and Osborne enjoy a big lead on the economy — 18 points in the last ICM survey — bad economic news will reinforce voters’ tendency to stick close to

Peter Hoskin

Bad news doesn’t have to be surprising

I’m still of the mind that Westminster fusses too much about these quarterly growth figures, particularly when parts of the country have been in economic decline for decades. But there’s no doubting that they have the capacity to shift the political mood, both here and around the country. There is something disheartening about the idea that the economy returned to shrinkage in the final quarter of last year (even if today’s preliminary figure of -0.2 per cent might be revised upwards, or downwards, in due course). You can expect Ed Miliband to make much of it in this afternoon’s PMQs. The politics of the situation are not stacked entirely against