Portillo: the Tories won't succeed in cutting public spending - they'll have to raise taxes

Ever the contrarian, Michael Portillo makes a case that you don't hear from many on the right in his interview with Andrew Neil on Straight Talk this weekend.  George Osborne has given "a fair amout of detail" about the Tories' debt-reduction plans, he says, but that could be the wrong approach:

"I wouldn’t seek probably to give very much more detail ....  You know, I was with Margaret Thatcher when she came in to Government in 1979, we faced a big public spending problem.  It was terrible.  It was a hard slog

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Fatal inexperience

The Government debt mountain grew by a further £11.4billion in October. The UK now has one of the most expensive governments in the European Union – now materially above the Eurozone average and within touching distance of France and Sweden in spending above 50% of GDP.  Blaming large Government per se for economic problems is overly simplistic – larger Government spending countries like Sweden and Finland have managed to build export market shares and provided stock market returns over the past couple of decades that put the UK to shame. Spain now has thousands...

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The gathering storm

The UK inflation rate again “surprised” to the upside today, registering at 1.5%. As the above chart shows, the UK now has by some margin the highest inflation rate in G7. Were it not for the temporary VAT cut – which takes about 1% off the current CPI rate – the rate would be moving quickly above the Bank of England’s target of 2%. It would seem that the deflation threat, used as justification for the Bank of England deciding to finance the Government’s deficit this year through printing money, has not transpired. A severe...

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On the road to recovery? Don’t be daft

I’d forgotten what it felt like to read positive news about the British economy. To be honest life is full of much more thrilling experiences, but my lack of enthusiasm is partially explained by the fact that a 6,000 employment rise is not proof of recovery.

That half the population of Cranleigh have found employment over three months is seen as salvation puts Britain’s economic reality firmly into perspective. If you delve into the Labour Market Statistics the picture becomes clear. Unemployment was expected to rise and will continue doing so, but the...

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G20: the way ahead ignores unresolved issues

Home of golf and full of five star hotels, St. Andrews is a lovely spot for a weekend shindig, so it’s no surprise that the G20 have convened there for their latest navel-gaze.
 
This meeting was supposed to be the preserve of finance ministers, but you can’t keep a statesman down. Gordon Brown delivered an impromptu lecture on 'the way ahead' to ministers who have, by some fluke obviously, stewarded a return to growth in their respective countries. Brown is adamant that curbing stimulus packages and inaugurating exit strategies be...

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Road to perdition

It is another black day for Gordon Brown. The financial news from America, contrasted with continuing decline here, indicts Brown’s recession strategy. Playing the long game, Osborne is being vindicated, and Guido is correct that the ongoing UK recession negates Labour’s attack line on Osborne: the novice has trumped the alleged master.

More damaging though is the resurfacing of Damian McBride and the ‘omerta’ of Brown’s inner circle, with its sordid and cynical connotations. The news that Nadine Dorries will receive £1,000 from McBride reflects poorly on the Prime Minister. Worse...

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Once again, Britain stands alone

It’s fortunate that pluck and stoicism are fundamental British characteristics and that we are at our best when backs are to the wall. Figures published today suggest that the US economy grew by an annualised 3.5 percent in the third quarter. Britain is now alone among developed countries in fighting a shrinking economy. So much for Mr Brown’s confidence last autumn and Alistair Darling’s growth forecasts. Even Italy is doing better.

One crumb of comfort for Labour is that the American consumer has regained confidence thanks to government stimulus: sales of...

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The quangocracy laid bare

At last the full facts about our burgeoning quango state are laid bare. The conclusion of a report published today by the TaxPayers’ Alliance is that it’s "big, bloated and more expensive than ever before."

The TPA document provides the most comprehensive and up-to-date listing available of all 1,152 'semi-autonomous public bodies' operating in the UK, along with details of how many staff each employs and how much they spend. More than £90 billion of taxpayers’ money was spent on or channelled through quangos/SAPBs in 2007-8 (up £13 billion on the year before)....

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The Tories develop their de facto Glass-Steagall Act

The most striking aspect about George Osborne's speech today is how it concentrates on retail banks - the banks you and I do business with - rather than the big investment banks.  He's expected to announce that retail banks should stop paying "excessive cash bonuses" to their senior staff, but should instead reward them with shares in the company and use the cash they would have dished out to increase the amount of credit in the economy.  This won't apply to investment banks.

The separation rather recalls the American Glass-Steaghall Act, which...

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