Treasury

Thursday

Peter Hoskin

Clegg leads the fightback

On Monday, I wrote that the question of whether the Budget is fair or not will “pursue the coalition more doggedly than any other”. Yesterday, we saw just how dogged that pursuit will be. But there’s no need for the coalition to panic as Mark Hoban did on the Today Programme yesterday. Instead, with policies from welfare reform to low taxes for low-income earners, they have built a firm redoubt from which to stage a counterattack. They can put the chase to their opponents. It is encouraging to see Nick Clegg do just that with an effective article in the FT today. He was bluntly dismissive of the IFS report

Tuesday

Peter Hoskin

The double dip predictions

Hark, there seems to be a lot of noise about a double dip recession at the moment – added to, yesterday, by Dr Martin Weale of the Bank of England. So I thought I’d collect some of the more recent, more prominent warnings and predictions for posterity’s sake. Do let me know (either in the comments or on phoskin @ spectator.co.uk) if there are any that are worth adding: Sir Alan Budd, 16 August Sir Alan was asked on BBC Radio 4’s Today programme whether he believed Britain would avoid slipping back into negative growth. “I’m not confident of it,” he said. “Our fan charts show that it is a

Sunday

David Blackburn

Seconds out…IDS versus Osborne

Infamously, George Canning and Viscount Castlereagh fought a duel over a policy disagreement; Iain Duncan Smith and George Osborne will follow suit at this rate. I had thought they’d resolved their differences over the upfront costs of IDS’ welfare reform; but the Mail on Sunday reports otherwise, glorying in the glares, savage bon mots and expletives. This is the conundrum: if IDS doesn’t find £10bn in savings, he will not get the £3bn needed to enact his reforms to make work pay. There is something quite heart-warming about IDS’ fight against the institutionally overbearing Treasury, but George Osborne is right: it is unacceptable to give one department, however well intentioned,

Friday

Peter Hoskin

What can Green achieve?

Handbags across Whitehall this morning, as Vince Cable responds to the government’s appointment of Sir Philip Green as an efficiency adviser in a disgruntled, if evasive, manner. He tells City AM: “There’s a lot I could say on this, but I’d better miss this one out … I’m tempted to comment, but I think I’d better not.”   And it’s clear why the Business Secretary, and many others, might be a little peeved. A hard-partying, perma-tanned, rotund and ostentatious figure, with question marks hanging over his tax status, Sir Philip is simply not designed for this age of austerity. He is nothing like the cadaverous technocrats who usually sift through

Tuesday

Peter Hoskin

The questions surrounding Cameron’s benefit crackdown

There were hints of toughness in his article at the weekend, but now David Cameron has rolled up his shirt sleeves and pulled out the baseball bat. In a combative piece for the Manchester Evening News the PM outlines out a zero tolerance approach to welfare fraud and administrative error. The two problems “cost the taxpayer £5.2 billion a year,” he says, “that’s the cost of more than 200 secondary schools or over 150,000 nurses. It’s absolutely outrageous and we can not stand for it.” And so IDS is going to prepare “an uncompromising strategy for tackling fraud and error,” which will be published this autumn.    Two things are

Monday

Peter Hoskin

Maintaining the private sector motor

There’s a lot of economic speculation swirling around the Westminster washbowl at the momment, but little of it is as eyecatching as today’s report from the Chartered Institute of Personnel and Development. Its finding that a third of employers are expecting to cut jobs in the next quarter is bound to spark double-dip fears, even if that expectation is more keenly felt in the public sector than in the private. 36 percent of public sector employers foresee job losses, against 30 percent in the private sector. Perhaps more worryingly, both sectors are expecting more redundancies than they did in last quarter’s report. Look below the headline figures, though, and there

Saturday

Peter Hoskin

The Treasury’s cutting difficulty

Among the most eyecatching, and potentially important, stories of the day is this one in the Telegraph. It suggests that various departments have “failed” to outline a “worst case scenario” of 40 percent cuts that was demanded by the Treasury. And it even names and shames Caroline Spelman’s Department for Environment, Farming and Rural Affairs as one of the offenders. Mrs Spelman, we’re told, has now “been forced to use the time before her holiday to work up the projections with her officials and permanent secretary.” Nothing like a last minute job, then. To be fair to Whitehall civil servants, there is a general sense that they have set about

Friday

Peter Hoskin

The unions up the ante

The front cover of the Times (£) provides a dreary snapshot of what the coalition can expect once the cuts start to bite. Unison have responded to job losses in the NHS by arguing that the government is “conning” the public over the impact on frontline services. And they’re threatening to all get all litigious about it. As one of the union’s spokeswomen tells the paper, “If we are not happy with the [government’s reply], we are reserving the right to issue urgent judicial review proceedings.” You wonder whether they’d have done the same against Labour’s proposed 20 percent cuts. And this will be just the start of it. As

Wednesday

Peter Hoskin

The equality landmines that Labour have left the coalition

Oh dear, the Treasury is mired in another controversy about equality after the Guardian published a letter which Theresa May sent to George Osborne before the Budget. In it, she warned that the government could face legal action if it is unable to show that its decisions were made with a consideration to “existing race, disability and gender equality duties.” As she puts it: “If there are no processes in place to show that equality issues have been taken into account in relate to particular decisions, there is a real risk of successful legal challenge by, for instance, recipients of public services, Trade Unions or other groups affected by these

Monday

Peter Hoskin

Tyrie asserts himself once again

Few MPs have made quite so many waves recenty as last year’s Spectator backbencher of the year, Andrew Tyrie. Under his chairmanship, the Treasury Select Committee seems to have gained a new vitality and edge. And it has certainly accumulated more powers, with the ability to veto the government’s appointments to, and dismissals from, the Office for Budget Responsibility. As he put it himself in an interview with the Independent last week, “The fight back by Parliament is beginning now.” Just how aggressively he intends to prosecute that fight back is suggested by his comments in the Times (£) today. Responding to George Osborne’s recent demands for the banks to

Peter Hoskin

Dannatt’s departure means one less cook stirring the defence broth

So Sir Richard Dannatt has departed the Tory fold almost as curiously as he entered it. Sure, have been no gaffes from Chris Grayling this time around – but when it was announced last October that the former head of the Army was advising David Cameron, it was widely expected that he’d graduate to become a peer and a minister in any Tory government. But today he announces his “retirement” as neither. The Tories are downplaying all this, eager to avoid a repeat of the speculation that surrounded Sir Alan Budd’s departure. And, to be fair, there are few signs, as yet, that this is a viciously unamicable split. But

Fraser Nelson Fraser Nelson

There is no Cabinet rift on benefit reform

Here’s me about to go on holiday, and the welfare wars seem to be opening up. Neil O’Brien has a piece on it over at the Telegraph website. And Hopi Sen, one of the better leftie bloggers, has written a response to my post yesterday. Partly, he wants to stir: it’s not so much that the Treasury want to block IDS’s reforms, he says, but rather that they are following Osborne’s orders to reduce the deficit. And so it’s one part of the government at war with another. By contrast, the Whitehall wars I outlined are hangovers from the Brown days, where the Treasury set policy for all other departments

Sunday

Peter Hoskin

Getting credit flowing will be one of the coalition’s toughest challenges

In interview with the Sunday Telegraph today, George Osborne stresses that the banks have got to start lending again – and he’s right to do so. The easy availability of cheap credit may have done much to get us into this mess, but now we face a converse problem. As a recent Bank of England report shows, net lending from the banks to businesses remains negative – or, in other words, more is being paid back than given out – and the situation is getting worse. With small and medium businesses so reliant on credit to get themselves off the ground, this doesn’t augur well for a powerful recovery. But

Fraser Nelson Fraser Nelson

Cameron must take this chance to end the giant evil of welfare dependency

There’s been plenty political drama in these past few weeks, but the most crucial agenda – and by some margin – is Iain Duncan Smith’s proposed overhaul of welfare. It doesn’t deserve to be categorised as just another political tussle. As I say in the News of the World today, it is easily the most important issue in Britain, and it is overlooked because of an affliction which most of our political class suffers: that of moral long-sightedness. No one wears wristbands for the British poor, Prime Ministers pledge to “eradicate illiteracy” in Africa yet are strangely indifferent to the illiteracy on our own doorstep. The plight and lives of

Thursday

Peter Hoskin

A solid performance from Osborne

If only PMQs were more like select committee sessions. Sure, the latter aren’t completely free from tribalism, even if it takes a subtler hue – but they are still considerably more insightful than Wednesday’s pantomime in the chamber. Frequently, they play like a demonstration of how democracy can, and should, work. Such was the case with George Osborne’s appearance before the Treasury Select Committee this morning.  The questions, particularly those on whether the Budget hits the poorest hardest, were generally measured and insistent.  But Osborne stood up well through it all, pointing out how any party in power would have to implement hefty spending cuts and tax rises.  And he

Tuesday

Peter Hoskin

Are the OBR’s growth forecasts too optimistic?

Much ado about the Office for Budget Responsibility’s growth predictions in the Treasury Select Committee earlier, especially as an OBR official admitted that the cuts and tax hikes in the Budget could conceivably tip us into a double-dip recession. So are the OBR’s official forecasts too optimistic, as some are now claiming? Only time will tell, but we can get a decent sense of things by comparing them with the independent forecasts that the Treasury collect here. And this is the result: In other words, the OBR growth forecasts stick pretty closely to the average independent forecast, although they are a touch more optimistic. Admittedly, these independent forecasts were collected

Sunday

Peter Hoskin

Osborne to strengthen Parliament’s role in OBR appointments?

It may not be the sexiest story in today’s newspapers, but the ongoing Office for Budget Responsibility row is certainly among the most important.  After all, a great deal rests on how it is resolved.  Not only could we end up without a body capable of restoring trust in fiscal forecasts, but the government’s promising transparency agenda could be sunk before it has even had chance to sail.  Much will depend on how far George Osborne goes to reinvigorate the OBR’s independent credentials. In which case, it’s worth highlighting the Sunday Telegraph’s summary of Sir Alan Budd’s proposals to do just that.  The departing OBR chief is expected to outline

Friday

Peter Hoskin

Fighting talk from IDS

Iain Duncan Smith is on a roll, and the roll continues with his interview on Straight Talk with Andrew Neil this weekend. Supporters of welfare reform will hear plenty to encourage them, even if only on a rhetorical level. Duncan Smith discuses how the fiscal climate makes this a “once in a generation opportunity and chance to change [welfare] now,” and how Beveridge’s original intentions have been subverted by a system which traps people out of work. But the most reassuring segment, by far, is this: “I, well, certainly, you know, I’ll be honest with you, there was certainly a discussion about that, everything was in the discussion, but my

Peter Hoskin

A question of independence

And so this morning’s Office for Budget Responsibility story rumbles on, with various Labour figures questions whether the organisation is as independent as it should be.  The most significant intervention, though, is from the government.  As the FT reports, George Osborne’s Treasury team is hanging onto its ability to select the next head of the OBR. Of course, this doesn’t necessarily mean that the next OBR chief will be a placeman, sympathetic and mouldable to the Tories’ wishes.  In fact, my guess is that Osborne will go out of his way to find an uncontroversial, neutral replacement for Sir Alan Budd.  But with a PoliticsHome poll showing that only 16

Tuesday

Peter Hoskin

The malleability of ringfences

Rachel Sylvester is on top form in the Times today, and I’d urge CoffeeHousers to delve behind the paywall (or borrow someone’s copy of the paper) to read her column.  Its central point?  That ministers are discovering ingenious ways to exploit and undermine the ringfenced health and international development budgets.  The Home Office is saying that drug rehab programmes should fall under health spending.  The Foreign Office is trying to pass off some of their spending as development, and so on.  And, crucially, the Treasury seems to be going along with it: “The Treasury seems to be tacitly endorsing this approach, with officials emphasising that departmental boundaries are artificial.” As