Politics

Read about the latest UK political news, views and analysis.

Wednesday

Mark Wallace

The EU must face cuts too

This is a balancing act Budget. At every stage and on almost every topic there’s a bit of good news and a bit of bad news for taxpayers. Spending cuts are (finally) on the way, but at over £30 billion by 2014-15 they aren’t large enough, and there is plenty of dead wood that the Coalition intends to leave in place. Similarly, the rise in the income tax threshold is extremely welcome, but the VAT hike will hit the poorest hardest of all. And so it goes down the list of Government financial activities. Indeed, the theme the Government are keen to communicate is one of leaving no stone unturned,

Alex Massie Alex Massie

New Politics, Same Old Media

When Jeremy Paxman grilled Danny Alexander on Newsnight yesterday he spent most of his time on politics, not economics. Fair enough. That’s what the media does and one wouldn’t expect it any other way. But it was the type of attack Paxman employed that was both mildly interesting and futile. This was because Paxman decided to tear into Alexander and attack him for all the things in the budget that weren’t in the Liberal Democrat manifesto. Some of them, as Paxo pointed out time and time again, were actively opposed by the Lib Dems. Gotcha! Hypocrites! Why, he sneered, should anyone ever listen to anything you have to say in

Tuesday

James Forsyth James Forsyth

A well-crafted Budget but the spending review will hurt more

George Osborne’s Budget today was the first dose of pain. The second will be the spending review in October, which I suspect will put far more of a strain on the Coalition than today did. Non-protected departmental Budgets, everything apart from health and DFID, are going to be cut by 25 percent on average. But Osborne told the House he would hope that the cuts to defence and education would be significantly less than that. The unspoken part of that is that the cuts to some other Budgets will have to be significantly bigger than that; I expect there are a few people at BIS and DCMS looking around rather

Peter Hoskin

Our rising debt burden

Debt may start falling as a share of GDP at the end of this Parliament (see p.2 here), but it’s still going up in cash terms.  Here’s a comparison with Labour’s last Budget:

Peter Hoskin

Budget 2010 – live blog

1343, PH: Harman has sat down now, so we’ll draw the live blog to a close.  I’ll write a summary post shortly. 1342, FN: I wish I could trash Harman’s response, but it’s actually quite good.  Many a Tory would be secretly cheering her trashing of the LibDems. “The LibDems denounced early cuts, now they’re backing them – how could they support everything they fought against, how could they let down everyone who voted for them?” Again, a fair point. “The LibDems used to stand up for people’s jobs, now they only stand up for their own.” Her main point – that forecasts for unemployment have risen – is a

Matthew Sinclair

George Osborne must put spending cuts ahead of tax rises

In 2009, Britain borrowed more, as a share of its national income, than any country that isn’t being bailed out by the IMF and the Eurozone (Greece) or already making drastic spending cuts (Ireland).  That huge deficit is the critical challenge to our economic stability that George Osborne needs to tackle with the Budget today.  We have got away with high borrowing so far on the understanding that cuts are coming now the election is out of the way.   If you think tax hikes are the answer, then you’re asking the wrong question.  Our present fiscal crisis is built on a decade of bumper rises in spending, not tax

Patrick Nolan

Back into the black

George Osborne has an historic opportunity to begin to turn the UK’s public finances back into the black. As Reform noted in an alternative budget released last week, while this will require making the toughest spending choices for a generation, history will smile on him if he does this in the right way. What the right way is will largely reflect three key things. First, George Osborne’s Budget needs to be ambitious in its timeframe for reducing the deficit. Setting out to, say, simply “eliminate the bulk of the structural deficit in the term of this Parliament” will not be enough. Delay will make fiscal consolidation harder as interest payments

Peter Hoskin

Osborne makes the “progressive” case

During the Brown years it was “stability,” but it looks as though the watchword for Chancellor Osborne’s first Budget will be “progressive”.  This is the word that’s being bandied about behind-the-scenes, and the coalition seems confident that it has the policies to match the rhetoric.  As the Guardian reports today, it’s likely that the personal income tax allowance will be raised by £1,000 or so, to help shield the least well-off from tax rises elsewhere.  And the paper quotes a Tory aide saying that the richest will pay more, “both in absolute terms and as a percentage of their income.” Whether he drops the p-word or not, the arguments behind

Monday

Peter Hoskin

Osborne looks to the long-term

There are plenty of details for Budget-spotters to look out for tomorrow, but among the most important is just how far Osborne reaches into the future.  The current expectation in Westminster is that he will offer quite a few glimpses into the long-term.  A possible commitment to reduce the main rate of corporation tax to 20 percent over the next five years, perhaps.  Or similar provisions for making the first £10,000 of income tax-free. There are, of course, economic and political motives behind this.  Economically, the plan will be to reassure the markets that the coalition has a deliberate plan which extends beyond the next few months (which was a

Peter Hoskin

The two sides of the VAT question

There are two main aspects to the VAT issue: one distasteful, the other less so.  The distasteful one is the issue of whether the government has a mandate for hiking VAT in tomorrow’s Budget.  Of course, government is often the art of the unexpected, so we shouldn’t be surprised to see measures implemented that weren’t explicitly raised in the election campaign – particularly when it comes to tax rises.  But all the claims that there were “no plans” to raise VAT do jar against reports like: “Osborne insisted the budget measures would be spread fairly across society, suggesting capital gains tax will rise and promising a new banking levy. But

Peter Hoskin

Nick Clegg’s Big Week

With the cuts comes the candy: the sweet-tasting morsels which, it is hoped, will prevent tomorrow’s Budget from being too much of a collective downer for the nation.  We’re already hearing that a council tax freeze will be pencilled in for next year, and you can expect a few more treats besides. National insurance, for instance, is looking like an obvious candidate. From George Osborne’s perspective, these sunnier measures will serve a two-fold purpose.  Like I say, it will be hoped that they keep the public on board with the government’s project: stick with us, the message will run, and you’ll get more of this in future.  But they will

Sunday

Peter Hoskin

What will the Labour attack be in a year’s time?

It’s days like this when you realise just how stuck Labour are in a Brownite groove.  Everywhere you turn, there’s some leadership candidate or other attacking the government for choosing to cut public spending this year.  Ed Miliband claims that the Lib Dems have been “completely macho … completely cavalier” about cuts.  Andy Burnham says that this year could “damage us in the long run”.  And even those who aren’t chasing the leadership are getting in on the act: Alistair Darling writes that the coalition has “a fiscal policy that undermines fragile growth”. So we already know what Labour’s broad response to this week’s Budget will look like.  But it

Saturday

The Spectator

Prison works

One of the many ludicrous Liberal Democrat policies which Tories enjoyed rubbishing during the general election was their plan to send far fewer criminals to prison. But, alas, it seems that some bad ideas are infectious. Last week Ken Clarke, the new Justice Secretary, suggested that we can no longer afford to keep so many prisoners — so we should sentence fewer, and for shorter periods. Why, he asked, is the prison population twice what it was when he was at the Home Office in 1993? Isn’t it time to cut costs? As George Osborne prepares for his budget next week, he should be wary of this false economy. Locking

Peter Hoskin

Assorted LibDem-ery

Alastair Campbell is right on two counts.  First, that this snippet from George Parker’s Budget preview is pretty fascinating: “Senior Lib Dems whisper that Vince Cable, the Lib Dem business secretary, never really believed his pre-election rhetoric that cuts should be delayed until 2011.” And, second, that the claim about Cable is downright unbelievable.  I mean, this is the man who attacked Tory spending plans at every opportunity he could, and more venomously than any of his colleagues.  The man, indeed, who pushed the line that “the economy will be plunged back into prolonged recession” as a result of early cuts.  And the man who, by many behind-the-scenes accounts, encouraged

Peter Hoskin

The Budget: compromise and non-compromise

It’s hard to overestimate the significance of Tuesday’s Budget. George Osborne’s statement won’t just determine the course of our economy for the next few years, but also the political life of this government. Spending cuts and tax rises may not inevitably “fracture the coalition,” as Peter Oborne puts it in the Mail today. But they certainly have the potential to. Happily for the coalition, the current political mood is so geared towards fiscal restraint that there will be little immediate opposition to Osborne’s general plans.  That will come once the effects of spending cuts are felt in individual constituencies  – months, even years, down the line. But there are a

Peter Hoskin

Lord Ashcroft clarifies a few things

After all the hoo-haa about Lord Ashcroft’s tax status, it’s only fair to mention this passage from his interview with the Telegraph today: “He explains that new laws brought in under the Coalition mean that all members of the Lords will have to be fully taxed. Yes, I reply, but when does he plan to come onshore? ‘I already am.’ Really? There has been no public announcement. So he is now paying all of his taxes, including everything that comes from his businesses around the world? ‘Yes. So I say to people don’t go moaning on about it because it is no longer an issue. The point is moot… Can

Peter Hoskin

Cameron previews the austerity budget

Tick, tock, tick, tock: only three-and-a-bit days to go until George Osborne’s long-anticipated austerity Budget, and the coalition is gearing up its efforts to prepare us for the worst.  Exhibit A is David Cameron’s interview in the Times this morning, which contains few pleasantries and a whole heap of stern talk  – particularly for those in the public sector.  As the PM puts it: “There is no way of dealing with an 11 per cent budget deficit just by hitting either the rich of the welfare scrounger … there are three large items of spending that you can’t ignore and those are public sector pay, public sector pensions and benefits.”

James Forsyth James Forsyth

The Miliband brothers may yet drown each other in a butt of malmsey

James Forsyth reviews the week in politics From a distance, Tony Blair might be able to persuade himself that the Labour party contest now underway is the fulfilment of his dreams. The ‘brothers’ everyone is talking about are not trade union heavies but two Oxford PPE graduates who have worked their way up through the New Labour machine. But to listen to what they say, there is scant evidence of Blair’s election-winning philosophy. The candidates are outbidding each other on making punitive levels of taxation on the rich permanent, denouncing Labour’s rapprochement with big business and committing to abolishing tuition fees. Not that anyone is listening much to what they

Gerard Baker

Germany’s eurozone dilemma: should they stay or should they go?

As the euro continues to dance on the brink of calamity, the people responsible for the deepening debacle have finally come up with a scheme that will save it once and for all. It’s a cunning plan that draws heavily on that old joke about a European heaven and hell. You’ll be familiar with it: in heaven the police are British, the cooks are French and the engineers are German; while in hell, the police are German, the cooks are British and it’s all organised by the Italians. The euro version goes like this: fiscal policy is run by the Greeks, the Spanish and the Italians; interest rates are set

Andrew Gimson

The Tories’ history man

Andrew Gimson talks to Alistair Cooke, the godfather of the Cameroons, about Dave’s temperament and Hilton’s penchant for ponchos As David Cameron solicits approval for deep spending cuts, he has assured the public: ‘We’re not doing this because we want to, we’re not driven by some theory or ideology.’ Cameron remains very anxious not to be taken for a closet Thatcherite, who beneath the cloak of necessity is pursuing ideological politics. If the Prime Minister wished to make a properly Tory case for cutting himself free from an outdated programme, he could do worse than turn to Alistair Cooke, who played a part in the political education of most of