It seems absurd to describe our dour and jowly Prime Minister as an eternal optimist, but he is. Rachel Sylvester’s column contains this delicious snippet of gossip: ‘When Mr Darling said that Britain was facing the worst recession for 60 years, Mr Brown telephoned him to tell him the downturn would be over in six months.’ Prudent foresight, there’s nothing like it.
Ok, so tomorrow’s Pre-Budget Report is shaping up to be a horrendously political affair. But, rest assured, it could have been so much worse. In what is, by now, a familiar Budget-time story, Alistair Darling is fighting the good fight against some of Brown’s most inharmonious fiscal brainwaves. According to Rachel Sylvester’s column today, here are just some of the measures that the Chancellor has resisted: — A long-term windfall tax on bankers’ bonuses (Darling favours a temporary, one-year tax). — A call to lower the 50p tax threshold from £150,000 to £100,000. — A reversal of the plan to make it easier for couples to pool their inheritance tax
Both parties want to be seen as the party of public sector efficiency. The Tories want to be able to show that they can do more with less and that cuts therefore need not mean worse services. While Labour wants to contrast their supposedly ‘smart cuts’ with the Tories’ ‘hatchet approach.’ So, this morning we had Gordon Brown delivering a speech outlining how the government would save £12 billion over the next three years; many of the policies he proposed were rather familiar to those of us who have been listening to the Tories on this subject. The Tories then tried to trump Brown’s speech by announcing the formation
Ok, so all Brown Budgets are political – but signs are that this week’s PBR could be his most blatantly partisan yet. I mean, just look at his speech this morning on improving efficiency in the public sector. Some of its measures are welcome – for instance, pledging to cut the pay of senior servants, and the general idea of using technology more effectively in government. But, as other folk have pointed out (see Guido and Iain Dale), the measures are insufficient to the scale of the debt crisis, and many are old news. All in all, the signs are as we expected: Brown is paying only lip service to
If everyone concentrates on the actual numbers in the PBR then it will be a disaster for Labour. So, instead Labour will try and distract us all with small but eye-catching measures — a new rate of inheritance tax for estates worth more than £5 million, that kind of thing. The aim will be to move the debate from the grim reality of the country’s fiscal situation to Labour’s dividing lines. There will be a lot of pressure on Cameron and Osborne to denounce Labour’s soak the rich measures. But the most important thing for them to do is to get the debate back to the state of the public
My posh Tory friends get really irritated when I talk about class. Almost as annoyed as my posh Labour friends. The idea that class was somehow excised from the political discourse by New Labour is absurd. We live in a country where the two dominant political parties are essentially representative of their class. And why not? It is completely understandable that a political coalition would coagulate around the interests of business and big money. It would be a pretty rubbishy ruling class that didn’t protect its position. We should also be proud of living in a country which has developed a major political party (and a moderate one at that) to
Things are shaping up nicely for Gordon Brown ahead of the Pre-Budget Report next week. The Tories were 17 points ahead on ICM in October – now it’s 11. Cameron would have a narrow majority on this basis but, given the margin of error, we’re back into hung parliament territory. And this has a self-reinforcing effect on the Tories. A shrinking opinion poll means they tend to get paralysed, avoid arguments, play it safe, wait for Labour to screw up again. As I say in my News of the World column today, the voters who are looking for leadership then don’t really see it. This, of course, softens the Tory
The Telegraph reports that Alistair Darling will allow married couples to continue to pool their inheritance tax allowances. Downing Street has pressed the Treasury to abolish pooled allowances in order to demarcate between Labour, the party that promotes fairness, and the Tories, the party that entrenches privilege. For all the recent polls and bravado, the near-bankrupt Labour party is still fighting an intensive rearguard. If it is avoid annihilation, the party has to hold on in Scotland, Wales and urban Northern England. Darling’s pledge illustrates that there is more than one way to fight a defensive battle. Theoretically, tax free pooled allowances worth up to £600,000 help middle income
The further revelations about the astonishing costs of the bank bailouts so far indicate just how much taxpayers’ money is now being used to plug the holes in the banking system. A key cause of the bank crisis is explained by the above IMF graph, charting the decline of some of the trillions of AAA structured credit assets created during the boom. AAA means “extremely strong capacity to meet financial commitments”, but now over 80% of the US AAA Collateralised Debt Obligations (CDOs) created between 2005 and 2007 are rated BB or lower, somewhere between junk bonds and default (and in some cases almost entirely worthless). In terms of getting things totally
Gordon Brown’s much heralded tripartite regulatory system failed the first time it was faced with a financial crisis, proof that taking away regulatory powers from the Bank of England was a massive mistake. Now, Ben Bernanke — who is trying to secure a second term as Fed Chairman and keep the Fed’s regulatory powers intact — is citing the Brown model as what not to do, telling the Senate banking committee: “[O]ver the past few years the government of Britain removed from the Bank of England most of its supervisory authorities. When the crisis hit – for example when the Northern Rock bank came under stress – the Bank of
Ed Balls has given an interview to The Times Educational Supplement which contains a comically audacious attempt to rewrite history. When asked about whether he really wants to be in his current job, Balls tells the interviewer, “I have resisted moving”. Now, I suspect this will come as a bit of a shock to Alistair Darling who fought off an effort by Balls to take his job.
The conventional wisdom in Westminster is that the election will be on May 6th. But a few shadow Cabinet members have told me that they think Brown will actually go in March, an idea that they have been pushing for a while. Their argument is that this quarter’s GDP figures will be quite good, boosted by the Christmas rush, and Brown would want to go to the country before, another more disappointing set of numbers came out. Second, Brown will want to avoid people seeing the effects of the new tax arranegements which will come into force in April. Finally, if the election was on May 6th, the first week
The news that Nicolas Sarkozy has cancelled a proposed flying visit to London, in order to smooth over the fall out from his attack on the City, has got tongues wagging. Adam Boulton reports: ‘It’s claimed Sarkozy asked for this week’s meeting to patch things up. So by implication their (his Westminster sources) argument goes – if it isn’t happening it’s because Brown is snubbing Sarko and not the other way round.’ This line doesn’t convince. According to the Elysee’s diary, Sarkozy is otherwise engaged tomorrow, so the finance cordiale will now take place at…wait for it… the European Council meeting in Brussels next week. Why would Brown give away
With the largest transfer of liabilities in British history – the insurance of the risk of loss on £240 billion of toxic RBS assets by taxpayers – proceeding, there is worryingly little information being given about either what these assets may be or what risks there are to the taxpayer. Rather than the parliamentary enquiry and detailed disclosure Swiss parliamentarians demanded when UBS needed similar assistance, a small press release noting such exotics as “structured credit assets “ has been issued. The spin continues to be that there is nothing to worry about and all this money will come back fine. Bank of England data shows that UK bank exposure
If you’d like a step-by-step preview of Labour’s next election campaign, then do read Alastair Campbell’s latest blog post. All of Brown’s attacks from PMQs are in there, and then some: “tax cuts for the rich”; a lack of “policy heavy lifting” on Cameron’s part; the Tories “haven’t really changed”, etc. etc. The spinmeister has been in closer contact with Downing Street recently, and it shows. It’s all gone a bit bar-brawling. The Tories now face a choice between, broadly speaking, three different responses: i) Ignore Campbell. Even though James was right to highlight the differences between now and the Crewe & Nantwich byelection – which I wrongly skipped over
The Tories are in mild shock following PMQs, they never expected Cameron to get clunked like that. Brown is clearly going to try and use Tory inheritance tax policy to ram home the message that a Cameron government will be a government of the rich, by the rich, for the rich. But the Tories are taking comfort from their belief that Brown’s ugly class war politics won’t work, pointing to how they failed in Crewe and Nantwich. But the attacks on Edward Timpson backfired, at least in part, because Timpson was a bad target. It is hard to portray someone as an out of touch, uncaring toff when their family
A terrific PMQs today. This exchange had it all. Noise, laughter, rhetoric, anger, humiliation, jokes, and dramatic swings in the balance of advantage. We even had a sighting of that great Westminster rarity – a fact. Cameron’s first question elicited simple information. Would our troops start returning from Afghanistan in 2010 or 2011? Brown didn’t quite answer it but said that by 2011 the combined forces, including Afghans, would number 300,000, by which point the military burden ‘will start to change’. Cameron clarified. ‘That sounds more like 2011.’ Brown didn’t demur. Turning to the economy Cameron asked why Britain is the last G20 country to come out of recession.Brown:
A quick tour around the political blogoshpere, and it seems everyone is saying Brown came out on top in today’s PMQs. For what it’s worth, I’d agree with them – but only to a point. On the one hand, Cameron was unusually clumsy, which allowed Brown to land some pretty decent blows. But, on the other, I suspect some of those blows won’t play well on TV later. And, let’s not forget, the entire point of PMQs, from the leaders’ perspectives, is to score some coverage on the Ten ‘O’ Clock News. It all depends on what the broadcasters pick up on. If it’s Brown’s gag that the Tories’
I sympathise with Alistair Darling and his defence of the City. When he’s not contending with Gordon Brown’s suicidal Tobin tax proposals, Darling has to confront Nicolas Sarkozy’s calculated anti-Anglo popular politics. Yesterday, the Elysees’s Puss-in-Boots delivered a deliberately provocative and economically senseless attack on what he described as the “unconstrained Anglo-Saxon market model.” Sarkozy sees the appointment of Michel Barnier as EU financial regulation supremo as a “victory” for France; he expressed himself in those exact terms: “Do you know what it means for me to see for the first time in 50 years a French European commissioner in charge of the internal market, including financial services, including the
Oh dear. The Labour leadership speculation is back in full effect, thanks to Paul Waugh’s scoop in the Standard. According to Paul, Andy Burnham is “prepared to throw his hat into the ring” to succeed Gordon Brown, should it all go wrong for Labour in the next election. Apparently, he’s even lined up Tessa Jowell as his campaign manager – although, naturally, the Health Minister is downplaying the claims. One thing’s for sure: this story is badly timed for Labour – with their recent progress in the polls – and Brown could well do without another bout of leadership wrangling to undermine his premiership. But what about Burnham – has
