George osborne

Osborne mulling child benefit u-turn

Eric Pickles makes no bones that his bin policy is aimed at Middle Britain, and the Tories may soon announce more measures to butter up that vital electoral constituency. The Times reports (£) that Cameron and Osborne are seriously considering a u-turn on their controversial cut to child benefits over families in which parent earns more than £42,475, which is due to be introduced in January 2013. George Osborne apparently never does anything unless it yields a political dividend and this is an intriguing development, if it materialises. It reiterates that the Tories know they have a woman problem; identified by Melanie McDonagh in a magazine cover piece earlier this

Tories pray for no more from Europe

Tory strategists had hoped to keep Europe off the agenda at this year’s party conference, but they seem to have failed already. The European Commission’s threat about welfare claims has forced IDS into action. Ben Brogan reports that the work and pensions secretary was nothing short of visceral in his contempt for the “land grab”, which will apparently cost £2.5 billion a year. But, IDS’s rage is quiet compared to John Redwood’s, who asks “Why won’t he [William Hague] get on with renegotiating the UK position [in Europe]?” Next is the EU’s Agency Workers Directive, which comes into force tomorrow. Businesses complain that this will significantly increase their costs and have

Miliband’s three mistakes

Three things puzzled me about Ed Miliband’s conference speech yesterday. First, I didn’t understand why Miliband did not attack Cameron for having talked about the need for ‘moral capitalism’ and then have not delivered it. It would have been far harder for Miliband’s speech to be caricatured as left wing if he had pointed out that Cameron had promised ‘to place the market within a moral framework – even if that means standing up to companies who make life harder for parents and families’ – and then not delivered on that pledge. The second thing was the absence of any policy at all. Any shadow minister sent out to defend the

How’s Miliband doing?

In a word: badly. Ed Miliband has now led Labour for a full year, but has made no progress with regards to its standings in the polls. When he took over, the Labour party was at 37 per cent in the polls, according to Ipsos MORI. Considering that 60 per cent give the Coalition government the thumbs down, he’s had ample opportunity to improve this figure. And yet he’s failed. In their latest poll, MORI again have Labour on 37 per cent.   When it comes to his own personal ratings, the picture is even worse. As Miliband has become more well-known and more people have formed an opinion of

Balls’ Brownies

In his speech today, Ed Balls proved himself worthy of the “Son of Brown” tag, slipping in more than a few “Brownies”. I thought CoffeeHousers would be interested in some of the figures behind his claims… Balls claimed that “we went into the crisis with lower national debt than we inherited in 1997”. That is flatly untrue. Public sector net debt when Labour took over was £350 billion. In 2006-07 it was £500 billion. Even adjusting for inflation, Brown and Balls had added £62.8 billion in today’s money to the national debt they “inherited” by the time the crisis started: Balls’ defenders will say that he meant “debt ratio” – and, to

Welfare worries

Away from Liverpool, the big stories of the day are the markets’ reaction to the putative Eurozone deal, which has been mixed so far, and the Telegraph’s splash about the progress of the Universal Credit, the coalition’s flagship welfare reform. The scheme is designed to simplify the benefits system and save circa £5 billion a year by reducing the scope for claims to be duplicated and errors made; it is a crucial cog in the coalition’s plan to make work pay. James Kirkup reports that the Treasury has apparently put the credit at the top of its “to watch” list of government projects that are at risk of running over

Fraser Nelson

Balls’ new rules

It’s Ed Balls’ speech today, and he’s cleared it with Ed Miliband – a courtesy that Gordon Brown never extended to Tony Blair. He promises to introduce a new set of fiscal rules, which I’m sure will make the nation’s heart leap, given how well the last set of fiscal rules worked. But what jumps out at me is his pledge to use any money raised from flogging off the banks for deficit reduction, rather than a giveaway. Here’s what Balls is expected to say, ‘Even as bank shares are falling again, David Cameron and Nick Clegg are still betting on a windfall gain from privatising RBS and Lloyds to pay

Osborne’s dire warning

This morning’s headlines are apocalyptic: “Global economy on the brink”, “Six weeks to save the Euro”, “Collective action needed now”. The unifying theme is the lack of leadership in the Eurozone: someone must grasp the nettle, say external politicians and commentators. Meanwhile, Charles Moore points out, with typical understatement, that Europe is leaderless by nature: no one is in charge and that is its tragedy. Moore doesn’t mention the European President, who could, conceivably, offer direction and insist on fiscal discipline; but Herbert Van Rompuy is yet to meet that challenge. You wonder if someone of Tony Blair’s international standing might have succeeded where Van Rompuy has so far failed. Perhaps, but Europe’s

Fraser Nelson

Read my lips: no new tax cuts

There are still rumours in Westminster that David Cameron will cut taxes to stimulate the economy, but the speech he gave to the Canadian parliament on Thursday rather scotches this idea. Here’s what jumped out at me 1) No Obama-style deficit-financed tax cuts, please, we’re British. “The economic situation is much more dangerous and the solution for most countries can not be simply to borrow more. Because if the government doesn’t have the room to borrow more in order to cut taxes or increase spending, people and markets start worrying about whether a government can actually pay back its debt. And when this happens confidence ebbs away and interest rates

Is Osborne ready for the next crisis?

There is a strange pre-Lehman feeling in the air right now: the idea that something awful is going to happen, but no one knows what or when. This is laden with political ramifications. The problem for the Tories last time was not that George Osborne had been caught aboard HMS Deripaska. The greater problem was that a crash had arrived and the Shadow Chancellor had nothing to say. Brown, at least, seemed to have an agenda, and the Tory poll lead was reduced to one vulnerable point. I admire Osborne, but he can do far better in making the case for the government’s economic strategy. If there is a second

Labour is caught on a fork

Listen to John Prescott on the Today programme this morning and you may begin to understand the complexity of the task Labour faces. Prescott was putting the best gloss he could on Labour and the vastly incompetent civil service wasting hundreds of millions on regional fire stations. Listening to his bluster, even the most loyal Labour supporter might have been glad that the party was no longer in office. Prescott showed no remorse; no appreciation that the burden of taxation falls on working and middle class people, who need to hold on to every penny they can. As with so many left-of-centre politicians, he did not regard the waste of

JFK: a tax-cutting headbanger

Given that Vince Cable was once a lecturer in economics, it’s odd to see him feign ignorance over its basic concepts. Listen to his speech today.”There are politicians on both left and right who don’t [get it]. Some believe government is Father Christmas. They draw up lists of tax cuts and giveaways and assume that Santa will pop down the chimney and leave presents under the tree. This is childish fantasy. Some believe that if taxes on the wealthy are cut, new revenue will miraculously appear.” It’s perhaps worth quoting one such ‘childish’ politician who was articulating this long before Art Laffer doodled on a cocktail napkin. In 1962, John F

Osborne’s £12bn question

The FT makes for grim reading this morning (£). The paper claims to have replicated the Office for Budget Responsibility’s methodology and it has found that the structural deficit is £12 billion larger than was thought. If this is true, and coalition ministers are scrambling to deny it, then George Osborne is unlikely to have virtually eliminated the structural deficit by the end of this parliament, his avowed aim. The strategic implications are clear: the 2015 election would become a much tougher prospect for the Conservatives, as Osborne might to struggle to present them as the party that delivered the economy from disaster. There have been clear indications that all

The real 50p split

Nick Clegg’s interview on Andrew Marr this morning subtly shifted the Lib Dem position on the 50p tax rate. When Marr asked him what he would do if the George Osborne commissioned HMRC study showed that it raised no money, Clegg replied ‘then I of course think we should look at other ways in which the wealthiest pay the amount that we’d expected through the 50p rate.’ So, in other words, he’ll accept its abolition if something else is put in its place. But, crucially, Clegg wants any replacement to raise not what the 50p rate actually raises but what it was supposed to raise. This presages the next debate

Clegg biography claims the Lib Dems want a new coalition agreement

Lib Dem conference this year brings with it the serialisation of Jasper Gerard’s biography of Nick Clegg. The focus will be on the claims that deputy Prime Minister has promised his wife he’ll only serve one term and that senior Lib Dems are interested in a soft electoral pact with the Tories. But, to my mind, the most interesting point is that the Lib Dems are keen on a new coalition agreement to cover the second half of the parliament. Coalition insiders have always admitted that the legislation mentioned in the agreement should have been mostly passed by 2012. But the Tories have been keen to spend the second half

Osborne: I know what it’s like to be in business

George Osborne spoke to Telegraph’s Festival of Business this morning and he gave a speech that was dominated by the issue of growth, or rather its absence. He reiterated the tax cuts and entrepreneurial relief measures first unveiled in March’s Budget. Osborne didn’t limit himself to his list of accomplishments. It was an empathetic speech. He related his memories of the “ups and downs” of his father’s business, the drapers Osborne&Little. He acknowledged the pressures of running your own enterprise in conjunction with a busy family life; a constant struggle that is exacerbated during hard times. “I know the kinds of pressure you are under,” he said. Osborne is frequently

Britain sues the ECB

As the EU debt drama continues unspooling like a perversely watchable soap opera (the FT’s Neil Hume describes it as ‘eurozone crisis porn’), an intriguing sub-plot has emerged: Britain is suing the European Central Bank. The Treasury is unhappy with an ECB move to limit the kind of euro-denominated products that can pass through UK clearing houses, suspecting it’s a bid to shift financial activity from London to Paris/Berlin. So it’s taking legal action, the first of its kind by an EU member state. This is not the first UK-EU disagreement that has surfaced in recent months, underlining the tensions between Britain and the Continent as financial centres across Europe

A brutal no score draw at PMQs

Cameron and Miliband went six rounds on the economy at PMQs. Miliband tried to portray Cameron as just another Tory who thinks that “unemployment is a price worth paying”. Cameron, for his part, wanted to paint the Labour leader as someone whose policies would send Britain tumbling into a sovereign debt crisis. At the end, it felt like a bit of a no-score draw. Interestingly, Cameron stressed that “every week and every month, we’ll be adding to that growth programme”. We’ll have to see whether he’s talking about more small-bore measures, or something bigger on infrastructure investment. Labour had a new tactic today, trying to fact-check all of Cameron’s answers

A report to worry the two Eds?

The Institute for Fiscal Studies enjoys quasi-divine status in Westminster: chancellors and their shadows bother it for its blessing, and Budget Day is never complete until its judgment has been passed. Both parties have bent a suppliant knee before the institute in the past, but the IFS became particularly important to Labour after it declared last autumn that George Osborne’s policies to be ‘regressive‘. This is why the IFS report on the tax system, released today, is important. The review, conducted by Sir James Mirrlees, is a damning indictment on tax system that has fallen from 5th to 95th in the World Economic Forum’s tax competitiveness rankings. Mirrlees’ findings have far

Inflation target missed again

Today’s inflation figures remind us of the trouble the Bank of England will have if – as most analysts suspect – it embarks on another phase of Quantitative Easing. CPI inflation was 4.5 per cent in the year to August, and RPI at 5.2 per cent, both up a touch from July.  CPI inflation has now overshot the Bank of England’s 2 per cent target for 60 of the past 75 months. It has been at more than 3 per cent since the start of 2010. As a result of last month’s figure, Governor Mervyn King wrote his now-standard letter to George Osborne to “explain” why inflation is above the