Treasury

Just in case you didn’t see the front cover of the Guardian, let me tell you: it’s a big day for George Osborne.  This, after all, is the day when he finally launches the Office for Budget Responsibility’s audit of the public finances – zero hour for the age of austerity.  Accordingly, then, Osborne has given his first major newspaper interview since becoming Chancellor.  Here, from that, is a quartet of observations for you: Office for Budget Responsibility.  The more I hear about it, the more I like this Office for Budget Responsibility.  Sure, it’s another quango of sorts.  But anyone who has lamented the government’s wildly optimistic growth forecasts,

The cover of today’s Sunday Times spells out what we all suspected anyway: that the Labour government left behind acre upon acre of scorched earth for the Tories to contend with.  There’s the £13 billion contract for tanker aircraft, the £1.2 billion “e-borders” IT project, a £420 million spend on schools, and so on – most of them put in place just before the election.  As James said earlier, Sir Alan Budd’s audit of the public finances is likely to show that things are much worse than the last Budget dared admit. All this throws open the wider question of our debt position.  Even by Labour’s measures, our national debt

The election is six days away, Labour civil war is seven days away. And Alistair Darling has today delivered a rather nice put-down to Ed Balls for BBC Campaign Straight Talk. Here is his conversation earlier today with Andrew Neil: Andrew Neil: Has Mr Brown given you any indication that you’d stay as Chancellor if he wins? Alistair Darling: Yes he has, and I would. AN: You would? AD: Yes. AN: And you’d be happy to do so? AD: Very happy. AN: So Ed Balls should not be packing his bags to move into Number 11? AD: I don’t think Ed has got any intention of doing that. AN: Well

After reading Brown’s claims in the Guardian today, this Kill A Minister mechanism in his speech today rather jumped out at me: “I will set out a clear and public annual contract for each new Cabinet Minister, detailing what I expect them and their department to deliver to the British people, and that their continued appointment is dependent on their delivery just as it would be in a business or any other organisation.” I mean, you can just imagine what Alistair Darling’s first “contract” would look like: You, the Chancellor, will undertake to deliver the following to the British people: i) Economic growth of 5 percent in 2010-11 ii) A

There’s been some hubbub on the good ol’ blogosphere about Darling’s claim that Labour spending cuts would be “deeper and tougher” than Thatcher’s.  Did Thatcher actually cut spending?  What would that indicatate about Labour’s plans?  And so on. Part of the confusion is caused by the different metrics that are referred to as “spending”.  So here’s a quick guide to what Darling might have had in mind: OPTION 1: Real-terms total spending.  As the below graph from the IFS shows (taken from this excellent blogpost by the FT’s Alex Barker), real-terms total public spending only fell in two years of the Thatcher premiership.  In all the other years it rose. 

After delivering an insipid, insufficient Budget yesterday, Alistair Darling has now smuggled a little bit of honesty into the fiscal debate.  In interview with Nick Robinson, he has claimed that if Labour is re-elected its spending cuts “will be deeper and tougher” than Thatcher’s.  Needless to say, that’s a message which will not sit well with his Cabinet colleagues like Ed “investment vs cuts” Balls. And this is precisely why Darling is such a confusing figure.  Yes, he deserves some praise for being more upfront about the public finances than his predecessor ever could be, and for restricting the wilder excesses of Brown and Balls.  But it’s hard to forget

Yep, it’s that time of the year again – when the government starts briefing about the contents of the Budget.  First up, there’s the news that Alistair Darling may cut projected borrowing figures by £5-10 billion, thanks to higher-than-expected tax receipts.  And then there’s Peter Mandelson’s claim that new tax rises would have to be considered a year from now – implying, perhaps, that there won’t many in this year’s Budget. Many folk around Westminister were surprised that the government was putting out a pre-election Budget – especially given the sorry state of the public finances.  But Labour’s plan is becoming clearer now: lower borrowing figures, no significant tax hikes,

Yes, I know, cause and correlation aren’t the same thing – but Mike Smithson’s latest graph over at Political Betting is still incredibly striking.  It shows that the Tories’ strongest poll position over the last few years coincided with a high in the petrol price.  It also shows that the smallest gap between Labour and the Tories coincided with when petrol prices were at their lowest.  Which all makes today’s Telegraph story about petrol potentially hitting a new high of 120p a litre, as the election approaches, very resonant indeed. The problem for the government is twofold.  First, rising petrol prices are something which millions of people will understand and

So now we know.  Gordon Brown has just announced that the Budget will be on 24 March – which strongly implies an election date of 6 May.  Brown could dissolve Parliament on 6 April, the manifestos would be published on 12 April, and then we’d be into the campaign proper.  Which means even more speeches, polls and dread speculation than we’re getting now. As for the Budget’s general flavour, we’ll probably get an idea of that today, too.  Brown’s currently giving a speech in which he’s brushing over recent tremors in the markets, to say that we are “weathering the storm; now is no time to turn back”.  Which comes

Has another dividing line faded into the sand?  It sure looks like it, going off this Times report on how both Labour and the Tories are considering hiking VAT to 20 percent.  If you recall, it was thought that Brown blocked Alistair Darling’s plan to introduce the rise in last year’s Pre-Budget Report – and all so he could attack the Tories over reports that they would do similar.  The PM will find it a lot harder to stage that attack after this morning. A few weeks ago, the rumour was that Labour would make keeping VAT at 17.5 percent a “main election pledge”.  Whether that pledge now appears, or

Well, well, well – Darling’s Times interview, which James reported earlier, sure is a significant moment, and one which more than deserves a place on the spending cut timeline which I put together last week.  In fact, let’s see what it would look like alongside a few of the most recent entries: 9 December 2009: Pre-Budget Report 2009 forecasts Public Sector Net Borrowing of £176 billion, and Public Sector Net Debt of £986 billion, in 2010-11. 10 December 2009: Alistair Darling puts in a bizarre performance on the Today programme, claiming that the PBR implies that departmental budgets would remain “pretty much flat.” 10 December 2009: The IFS works out

It has started. The Labour attack unit is out today talking about a “Tory VAT rise” – as per Paddy Hennessy’s scoop. Osborne stated his (to me, relatively paltry) position on the deficit: that he’d reduce it faster than Labour but can’t say how much. The Labour attack unit keeps partying like its 1999 with the “Tory cuts” line, now augmented with a “Tory tax rise.” Here are the words which the attack unit has crafted for Stephen Timms, chief secretary to the Treasury: “George Osborne refuses to say what services he would cut or what taxes he would increase in order to cut the deficit ‘further and faster’ than