George osborne

Saturday

Fraser Nelson

Double deficit

What’s at the heart of the row over defence funding? George Osborne hinted at it today when he told the Telegraph that “frankly, of all the budgets I have seen, the defence budget was the one that was the most chaotic, the most disorganised, the most overcommitted”. The problem is that during the Labour years, various accounting scams were deployed to shunt costs further into the future – but this was not matched by resources. So they would, for example, delay an order by two years. There would be a price to pay for this delay, but it would be a cost that came after the election so Labour didn’t mind. (One

David Blackburn

Labour’s historic mistake

I’ve already mentioned George Osborne’s interview with the Telegraph, but it certainly merits another. As Ben Brogan says, Osborne is in a rich vein of ‘election that never was’ form. As befits the inveterate schemer, Osborne’s tactical grasp is impressive. He is quietly vociferous about Labour’s ‘historic mistake’ in electing Ed Miliband. Revealing senior Tories’ continued respect for the electoral tenets of Blairism, he says: “They have chosen to move off the historic centre ground of British politics. I’ve seen more pictures of Neil Kinnock on television in the past week than I’ve seen in 20 years. That’s old politics.” The old politics is the preserve of captive minds, wedded

David Blackburn

Fox, Osborne and Cameron engaged in Whitehall’s oldest battle

Tory on Tory is a brutal cock-fight when defence is concerned. After the leaking of Liam Fox’s now infamous letter and David Cameron’s measured retaliation, George Osborne has broken his silence. Making unspoken reference to the £38bn black hole in the MoD’s budget, Osborne tells this morning’s Telegraph that he was ‘not thrilled’ to learn of Fox’s ‘do we really want to cut defence this much letter’ and says that Labour left the MoD in ‘chaos’, signing Britain up to ‘expensive and pointless projects’. The press will run this as a conference Tory splits story. There are clear differences between ministers, but they actually reflect entrenched positions within the MoD:

Friday

James Forsyth

Cameron needs to show that life is better under the Conservatives

The election of a new Labour leader means that proper politics has resumed. David Cameron now knows who he needs to beat to win the next election. As I argue in the magazine this week (subscribers), if the Tories are to secure a majority in 2015, they’ll need to do better among those in households with an income of thirty-odd thousand or so, what pollsters call the C1s. The last time the Tories won outright, they got 52 percent of the C1 vote—more than double Labour’s total. But in 1997, Labor and the Tories split this group evenly. The Tories have never fully recovered from this.  In 2010, the Tories

Monday

Peter Hoskin

The IMF delivers a boost for George Osborne

The proclamations of economists and economic bodies shouldn’t be taken as the be-all-and-end-all of fiscal policy – for every one claiming that a decision is right, you can find another insisting that it is wrong. But the coalition will still be pleased by the influential International Monetary Fund’s latest report, here. It begins: “The UK economy is on the mend. Economic recovery is underway, unemployment has stabilized, and financial sector health has improved. The government’s strong and credible multi-year fiscal deficit reduction plan is essential to ensure debt sustainability. The plan greatly reduces the risk of a costly loss of confidence in public finances and supports a balanced recovery. Fiscal

Thursday

Peter Hoskin

A salesman for the cuts

One of the biggest problems facing the coaltion has been presentational: how to sell the cuts? In the absence of a coherent, vigourous message, the Balls school of economic thought has been allowed to grease onto the scene – to the extent that some polls have three-quarters of respondents rejecting the government’s deficit reduction plan. But now, at last, signs that the coalition is getting into gear. It’s a process which began last week, when Matthew Hancock – a new Tory MP and former adviser to George Osborne – highlighted falling interest rates in Parliament (column 606, here); a point he has been pushing around Westminster ever since. And today

Wednesday

Fraser Nelson

The trouble with Cable’s posturing

What are we to make of the fact that No.10 gave the thumbs-up to Vince Cable’s bizarre anti-capitalist rhetoric today? “Capitalism takes no prisoners and it kills competition where it can,” he fumed – and you can argue that, technically, he is paraphrasing Adam Smith. But he has been in politics long enough to know what signal his speech sent out (and the reaction it would trigger). Mood music counts for a lot in politics, and in business. And the mood music from this government sounds like a bunch of politicians happy to tax the bejesus out of the high-paid – regarding them as ATM machines to be raided, rather

James Forsyth James Forsyth

Bonuses: a question of political economy

There is a reason why the coalition has used the Lib Dem conference to step up its rhetoric about the bankers and their bonuses. The coalition believes, rightly, that balancing the budget is a matter of political economy. It is acutely aware, and has been for some time, that the sight of banks paying out huge bonuses later this year just as the public sector begins to lay people off and cut services would be disastrous. This view is shared by everyone in the coalition from Cable to Osborne. Bumper bonuses would increase calls for new punitive measures against the banks and produce precisely the kind of political atmosphere that

Sunday

James Forsyth

Alexander’s arguments

Danny Alexander’s announcement of a £900 million clampdown on tax avoidance, evasion and fraud is designed to reassure Lib Dems that the coalition’s policies are fair, that it isn’t balancing the budget on the backs of the poor. In a deliberate echo of George Osborne’s comments about welfare, Alexander said that the years when people could treat tax avoidance and evasion as a “lifestyle choice” were over. This Alexander announcement is a preview of what we’re going to see at this conference, a series of sweetners to show the party that the Liberal Democrats are influencing government policy. But Alexander also tried to gird the party for the challenges ahead,

Thursday

Ruth Richardson

Pulling off a public finance rescue mission

This is the next of our posts with Reform looking ahead to the Spending Review. Earlier posts were on health, education, the first hundred days, welfare, the Civil Service, international experiences (New Zealand, Canada,Ireland) and Hon Ruth Richardson’s recent speech and selling the case for cuts to the public.   George Osborne was right to frame the forthcoming UK Spending Review as a once in a generation opportunity to reshape government.  While it is convenient to see the current fiscal debate as cyclical, the truth is that heavily indebted countries such as the UK have a structural problem rooted in the overreach of government. So Mr Osborne will succeed if

Wednesday

Peter Hoskin

Another difference of opinion on welfare?

For the briefest of moments, the welfare war seemed to have quietened down. But, this morning, a new front may have flared open. Answering questions from the work and pensions committee, Iain Duncan Smith has struck out against the figures for benefit cuts that emerged at the weekend. The Guardian’s Haroon Siddique reports: “During questioning by the work and pensions committee, Duncan Smith was at pains to play down newspaper reports that he and Osborne were at loggerheads with each other. But when asked by committee chair Anne Begg about a variety of figures that had been ‘bandied about’ including the £11bn savings set out in the June budget and

David Blackburn

A Whitehall cabal has Fox by the short and curlies

The Defence Select Committee delivers a familiar litany this morning. The Strategic Defence Review (a structural reform of Britain’s defence establishment) is being driven by savings not threat, consultation has been insufficient and cuts will be implemented at terrifying speed. The committee’s report concludes that the review will be to the detriment of Britain’s defence capabilities. Liam Fox’s summer battle with Downing Street has been overshadowed by IDS’ belligerence. In truth Fox has already lost. The National Security Council, the Treasury and the Cabinet Office have put him in a strait-jacket and hijacked his review. The opportunity to reform procurement and phase out obsolete heavy merchandise and training, both of

Tuesday

David Blackburn

A Tory-Liberal pact is possible if the coalition lasts the distance

The outrider has returned to stables. Nick Boles MP, a one-time Cameroon confidante tipped for promotion, formally introduced the possibility of a Tory-Lib Dem electoral pact, it made a few cursory headlines and then David Cameron and Nick Clegg promptly denied any such intention. It had the appearance of the classic three-card trick. A formal alliance or non-aggression pact is highly unlikely unless the coalition survives to 2015. The government will collapse before then if enough Liberal Democrats believe its record is indefensible. However, if it doesn’t then the parties must defend their joint record and in doing so will offer a collaborative future. The alternative is absurd. Nick Clegg

Peter Hoskin

Cameron readies his forces

Carry on cutting – and carry on making the case for cuts. That’s the message that David Cameron drilled into his ministers during a political session of Cabinet this afternoon. Paul Waugh has a typically precise account of what was said, and the Press Association has a decent round-up, but the key observation is just how forceful Cameron was in making his point. The government, he said, should take on the “vested interests” arguing against cuts – and the Budget was the right action taken at the right time. The PM, you sense, is limbering up for a fight. As Ben Brogan suggests over at the Telegraph, Cameron is right

Peter Hoskin

A worrying – but not disastrous – poll for the government

This morning’s Times/Populus poll (£) will have supporters of the coalition grimacing into their cornflakes. The headline finding is bad enough, if rather familiar, with Labour closing the gap between themselves and the Tories to only two points. But what follows is worse. According to the poll, around three-quarters of voters reject the government’s deficit reduction strategy – preferring, instead, what are loosely the approaches advocated by Labour and the unions. And, what’s more, economic pessmism is arrowing upwards. The number of respondents who think “the country as a whole will fare badly,” has risen by 13 percentage points since June. The number who think “me and my family will

Monday

Peter Hoskin

Osborne and Cooper’s knockabout

Far more heat than light generated by this afternoon’s urgent question on welfare spending – but a telling spectacle nonetheless. The question had been put forward by a dissenting Lib Dem voice, Bob Russell, and it was up to George Osborne to answer it. He did so with sweeping observations, and attacks on Labour, rather than specifics. And so we never really got into the small print of those £4 billion extra benefit cuts, but Osborne did wonder why Labour have never apologised for “leaving the country with the worst public finances in its history.” It was knockabout stuff.   This is not to say that Osborne was ineffective. In

Sunday

David Blackburn

Benefit reform – one theatre in Cameron’s war

The Observer has received letters revealing that George Osborne plans to deliver net savings of ‘at least £2.5bn’ from the Employment Support Allowance by limiting the amount of time people can spend claiming it. Here is Osborne’s letter to IDS, Cameron and Clegg: ‘Given the pressure on overall public spending in the coming period, we will need to continue developing further options to reform the benefits as part of the spending review process in order to deliver further savings, greater simplicity and stronger work incentives. Reform to the employment support allowance is a particular priority and I am pleased that you, the prime minister and I have agreed to press ahead

David Blackburn

The government should return the unions’ fire

The TUC is mustering in Manchester and its leaders are in bellicose mood. Brendan Barber has called for a general strike; Bob Crow, brimming with the satisfaction of having wrecked London’s transport earlier in the week, has called for his members to ‘stand and fight’ the government’s cuts. These statements have a ‘Me and my executive’ air to them, so ludicrous as to be beyond parody. But the message is rousing and clear. Not so the government’s – as Fraser argues today in his News of the World column. The government is caught in an intellectual cul-de-sac. Its sole refrain is that these cuts are Labour’s cuts and they are

Thursday

Peter Hoskin

Robert Chote is the new head of the OBR

Now this should dispel any worries that the Office for Budget Responsibility is partisan in the government’s favour. Robert Chote, director of the Institute for Fiscal Studies and scourge of Osborne’s “regressive” Budget, has been appointed as the body’s new chief. It is, in many repsects, the most sensible and obvious choice. Not only is Chote respected across the political divide, but the OBR is an attempt to institutionalise the kind of fiscal oversight that his IFS has provided for years. I can’t imagine that the Treasury Select Committee will try to block this appointment. In case you missed it first time around, Fraser interviewed Chote for the magazine back

Peter Hoskin

A banking split

Blame Bob Diamond. Until the “unacceptable face of banking” (© the utterly acceptable face of politics, Peter Mandelson) was appointed chief executive of Barclays, the issue of banking reform was trundling along noiselessly in the background. But now it has spilled, violently, back out into the open. Critics of Diamond say that his very presence makes the case for splitting the retail and investmet divisions of banks – you can’t, they say, have someone who made their money via “casino banking” presiding over a high street banking chain. But the banks are warning that any such split would force them, and their tax dollars, abroad.   The government’s official position is