Uk politics

Wednesday

Peter Hoskin

A day of disruption

Another testing day for the government, as we shift from the autumn statement to a national strike. It will certainly be more noticeable than the industrial action in June. Some 2 million public sector workers will be involved. According to the schools minister Nick Gibb, around 75 per cent of state schools will be closed. And on top of that, airport queues will lengthen; non-emergency operations will be cancelled; and today’s parliamentary proceedings will go untranscribed. The government’s attitude towards the unions — or, rather, union bosses — appears to have been hardening. The brothers will not have liked yesterday’s forecast that 710,000 jobs will be shed from the public sector by

Tuesday

James Forsyth

Osborne plays a tough hand well

Today was always going to be a difficult day for the Chancellor. The figures from the OBR were always going to dominate the headlines and the restrictions of coalition meant that there couldn’t be as much as the Tories would have liked on the supply side. It was striking that the loudest Tory cheer of Osborne’s statement came when he reiterated his opposition to an EU-imposed financial transactions tax. But the silver lining for Osborne and co is that Labour still lack economic credibility. It is hard for Labour to savage Osborne for borrowing more than he said he would — which he is to the tune of £158 billion

Robert Halfon-Mp

Fuelling the recovery

Today, the government has listened. In his Autumn Statement, George Osborne scrapped the fuel tax bombshell that was scheduled for January 2012.    As regular Coffee House readers will know, more than 100 MPs supported my cross-party campaign for cheaper petrol. At its height, it saw an e-petition attract more than 124,000 names — triggering a full MPs’ debate in Parliament. It has been a very long campaign, working with many organisations, from FairFuelUK and the RAC, to the independent forecourt industry, The Spectator and the Sun, to thousands of members of the public who wrote to me in support. Over several months, I have asked questions in Parliament, spoken

Fraser Nelson Fraser Nelson

Osborne has made the right choice — but it’s not without its costs

Today, George Osborne had a choice. Growth prospects have evaporated, and tax revenues along with it. Should he reopen the 2010 Spending Review and cut the spending totals? Or stick with those totals, and finance this with extra debt? He chose the latter. And I think, on balance, he was right to do so. Credibility is the most valuable currency in this eurozone crisis, and Osborne said it was a fixed five-year plan. He chose more debt over less certainty, and it looks today like the markets believe he chose correctly.  But all this comes at a cost. The government will now run deficits higher than those which Labour proposed.

Peter Hoskin

Growth has upset Osborne’s plans — and it’s likely to get worse

The real story, as everyone expected, wasn’t in the Pre-Budget Report ‘Green Book’ — but in the supplementary document produced by the Office for Budgetary Responsibility. Growth forecasts have taken a dive. And while that is both unsurprising and not all that revealing, it carries grim implications for so much else. I mean, just look at the graphs we produced in our last post: forecasts for debt, unemployment and borrowing are all up. It is not a pretty picture. But despite the dreariness of it all, I suspect that the numbers are far too optimistic. The clue comes at the start of the OBR report: ‘The central economic and fiscal

Jonathan Jones

The Autumn Statement: What you need to know

We’ve been posting some of these charts on Twitter, but here they are, collected, for CoffeeHousers. You can expect more as we mine deeper into the OBR’s supplementary document. Do shout out, also, if you spot anything yourself. 1. Weaker growth — except for a very optimistic figure for 2015 2. Higher debt — both in real terms and as percentage of GDP   3. Osborne borrowing more than he’d hoped 4. More persistent — and deeper — ILO unemployment 5. The squeeze continues until 2013

Fraser Nelson Fraser Nelson

Your Autumn Statement check-list

I very much doubt today’s Pre-Budget Report will be memorable; a shame, given the circumstances. The supplementary Office for Budget Responsibility document will be more interesting — and relevant to people’s lives — than the Budget itself. Sure, everyone focuses their attention on the Red Book (or Green Book, as it is for the PBR) and GDP projections. But even GDP isn’t really useful. You can manipulate GDP by printing money, or by borrowing money. Gets you nowhere. GDP is only useful insofar as it’s a proxy for national prosperity. And thanks to the OBR we’ll have other, more useful metrics today. Here’s my guide to them:   1. Net

Monday

James Forsyth

Osborne has a few cards up his sleeve, but no aces

In some ways, George Osborne will always be haunted by his 2007 Tory conference speech. That speech and the reaction to his commitment to raise all estates worth less than £1 million out of inheritance tax contributed to Gordon Brown not calling an early election. It has a claim to be one of the most important speeches in modern British politics — it is certainly the one that saved the Cameron project. But it has also created an expectation that Osborne has a set of aces up his sleeve every time he stands up to give a big speech. Tomorrow’s speech won’t see the Chancellor pull out any unexpected trumps.

Mats Persson

Cameron may have more leverage in Europe than he thinks

There’s just over a week to go until the crunch EU summit on 8-9 December, so David Cameron has to decide how best to play his cards — and quick. The problem, as Daniel Korski has pointed out, is that Britain faces the risk of ‘structural isolation’ in Europe in the short-term. To counter this, Cameron effectively has two options. First, work with allies on both sides of the euro divide to seek political assurances — formal or informal — against the formation of a two-tier Europe with a more integrated eurozone in the driving seat. Or, second, press ahead with UK-specific carve-outs from the EU structure. The former would

Fraser Nelson Fraser Nelson

Sifting through the rubble from the riots

Not many folk are aware of it, but there is an official riots inquiry and it has delivered its interim report today. Its conclusions are pretty clichéd and not really worth studying; David Lammy’s book is infinitely more instructive and readable. But it does produce a few figures about the rioters — or, I should say, those arrested mainly because they didn’t think to cover their face. I looked at this for my Telegraph column last week. Here’s my summary of today’s report:   1. Broken Britain. Some 46 per cent of those arrested live in the lowest ‘decile’. These guys are not working class, but welfare class. Abandoned by

James Forsyth James Forsyth

Preparing for the strike

Wednesday’s strike is going to be big — unlike the one in June, which I suspect most people didn’t really notice. You’re not going to be able to miss this one as 90 per cent plus of schools shut — compared to a third in June — and it takes half a day for anyone coming to Britain to pass through passport control. Michael Gove’s speech this morning is being widely seen as the government taking a more confrontational attitude to the strike. But I think that’s only half the story. What Gove was trying to do was appeal to the union membership while attacking those union leaders who really

Peter Hoskin

Those gloomy OECD projections in full

Thanks to the tremors along Westminster’s grapevine, we already knew that today’s OECD Economic Outlook would make for pretty dreary reading. But now that the report is actually out, we can see the organisation’s numbers for ourselves. The headline point appears to be that the eurozone is in, or is facing, ‘mild recession’. Or to put it in graphic form: And the current situation isn’t look particularly encouraging for the UK either. The first heading in the section on us reads ‘The economy is weakening sharply’. And a subsequent pair of graphs predicts, first, that we’ll experience a mild recession of our own across the next two quarters, and then

Peter Hoskin

The trouble with the NHS’s working week

If you like your literature gloomy, then, at first, there may not be much to interest you in the latest Dr Foster Hospital Guide. A double-page diagram, across pages 10 and 11, is mostly about the positive trends of the past ten years: declining mortality rates and waiting times, that sort of thing. The only particularly sour note sounds out from the timeline at the bottom of the spread, which notes the creation of that big, galumphing NHS computer system in 2002, and then its abolition this year for not ‘achieving objectives’.   But keep pressing on, because there is much to be concerned about in the pages that follow

Sunday

Daniel Korski

Tobin tactics

The biggest bone of contention between the UK and its EU allies these days is the ‘Tobin tax’, the idea of levying a tax on financial transactions. To the UK this is folly. Unless it is levied globally, a tax will force business to move elsewhere. And there is a greater chance of Silvio Berlusconi being elected ECB chief than the Tobin tax being levied globally.   Based on the experiences of Sweden in the 1990s, the tax will achieve none of what its proponents believe it will — and at a considerable cost to Britain’s and Europe’s economy, as companies look to list elsewhere to avoid it. As Ryan

Patrick Nolan

Why infrastructure isn’t a magic tonic for the economy

Growth plans are a high growth industry — with every day bringing yet another set of ideas, from one quarter or another, for how the government can fix the economy. And one suggestion pops up quite frequently in all these plans: bring forward spending on infrastructure. This is often presented as a simple thing to do, with few (if any) downsides. But how realistic is this? We know that infrastructure is important for growth. Economic texts generally suggest that the ‘multiplier effect’ (when government spending leads to more private spending later on) from is higher for infrastructure spending than for spending in other areas, such as health and welfare. We

Peter Hoskin

The shape of the Budget battleground

There are still two days and a couple of hours to go until George Osborne’s Pre-Budget Report — but, already, we have a good idea of what will be said. The emphasis, beyond just plain ol’ jobs and growth, will be on combatting youth unemployment; helping smaller businesses; and relaxing the squeeze on middle-income folk. Most of the measures either announced or suggested so far — from the Youth Contract to the credit easing scheme to the suspension of January’s fuel duty rise — fall into one of those compartments. Whether they’ll work or not is a different matter entirely.      As for Labour’s response, they’re already making it —

Saturday

Daniel Korski

How can Cameron protect our interests in Europe in the short term?

Chatting to people in Brussels last week, I couldn’t help feeling that David Cameron’s EU problem is one of timing. The PM will probably be able to piece together a repatriation package that includes measures such as a withdrawal from the over-implemented Working Time Directive and a reduction in the EU budget. But none of this is likely to be enough for his party. Indeed, I suspect the budget won’t be finalised until two minutes to midnight during the Lithuanian EU Presidency in 2013. Add to this the Tobin Tax, where there seems to be little leeway for the British government. Barosso, Merkel and Sarkozy are determined to introduce it,

Peter Hoskin

Cameron cross-questioned

A quick post just to add the Guardian’s interview with David Cameron to your Saturday reading list. It takes the unusual approach of fielding questions to the PM from a range of ‘public figures’ — and, although many of those questions reduce down to ‘why aren’t you giving more money to X?’, the results are still generally engaging and occasionally insightful. And so we learn, after an enquiry by The Spectator’s own Toby Young, that Cameron doesn’t keep a diary. And we also have the PM justifiying his stance on Europe to Nigel Farage; skipping over a question about what he may or may not have inhaled during his time

Fraser Nelson Fraser Nelson

Wrestling over cuts

Britain’s economic debate has been reduced to WWE-style wrestling, where two figures adopt semi-comic personas and have at each other for the entertainment of the crowd — while not doing any real fighting at all. So it is with Osborne and Balls. Rhetorically, they are poles apart; one championing cuts, the other spending. But you’ll notice that neither quantifies the cuts. That’s because Osborne is simply enacting an only-slightly-souped-up version of Darling’s plan and the real difference between the two parties is tiny. This was the point of last night’s Newsnight, where David Grossman filed a report (in which yours truly was interviewed) about the great pretend fight between two

Peter Hoskin

Without growth, Osborne’s best-laid schemes will go awry

Strikes, Olympic boycotts and obesity league tables — it’s a dreary set of newspaper front covers this morning. But none of them are quite so dreary as the Telegraph’s, which speaks of ‘The return of recession’. According to their story, the OECD has told ministers that its latest set of forecasts, released on Monday, will have the UK economy shrinking for the first six months of next year. They’re not the first forecasting organisation to suggest a double-dip — going by the Treasury’s overview of indpendent forecasts, Schroders Investment Management have economic ‘growth’ at -0.4 per cent in 2012 — but they are the most prominent so far. Shudder ye