Politics

Britain is now as likely to go bust as RBS – this is the official verdict of the markets. At the bottom of this post is Bloomberg’s Graph of the Day, which shows how Britain’s dodgiest bank and Europe’s dodgiest government now have the same “credit default swap” rating – the yardstick the markets use to guage whether something’s about to go bust. No wonder, you may say, given that RBS is state-owned. But my point is that this has major implications for our ability to borrow – and borrowing is what both Cameron and Brown will be relying on to pay the bills. Spain lost its AAA rating yesterday, and the

Ken Clarke walked back into the chamber to cheers as if he’d just won a by-election, itself an indication of how little we’ve seen from the man who took an MP’s salary for the last 11 years but has seldom been seen around the House. It was his first time, ever, on an opposition front bench and he looked around at the view. Together with Cameron, he flanked Osborne. Clarke hasn’t worked out yet that his job is to make facial expressions of support when Osborne speaks, and to feign disdain at Darling. It’ll take a while to relearn the techniques of active politics. Osborne was on good form. How

So it’s official – Ken Clarke is back in a reshuffle to be announced tomorrow, replacing Alan Duncan as Shadow Business Secretary. Clarke promised to behave over a lunch with Cameron and Osborne yesterday. He apparently told them he does not accept the party line on Lisbon or the EPP, but will shut up about it and not try to change the party line. No moves in the top jobs (i.e. Hague and Gove staying put, as are Fox and Grayling), yet I hear there may be extensive reshuffling in the lower ranks. My initial take: 1. Cameron is taking a large gamble. Clarke has said precisely what he thought

Will Gordon Brown’s stimulus serve only to suck in more immigrants? The Prime Minister should ask himself this as he visits the London Olympic 2012 site – it’s a classic example of the problem. Sure, there have been plenty of jobs created by the construction. But which English borough registered the biggest increase in National Insurance numbers to foreign nationals last year? Newham – where the site is based. A full 21,510 of them (Fig6, pdf) – and this is in a constituency where there are 32,800 working-aged people on benefits. As I argued in the News of the World last October, most of these have been claiming for five years or more.

If the Tories really didn’t want a third runway at Heathrow they should have called for one. That would have stopped Gordon Brown. He is only going ahead because he thinks it will draw a dividing line between the supposedly pro-business Labour and naïve tree-hugging Tories. And I confess that I started out being in favour of it, so fatuous were the environmental arguments against it. Farting cows produce more greenhouse gas than aircraft (or cars), as does rice production – and do we see Greenpeace activists campaigning outside Aberdeen Angus steakhouses or Chinese restaurants’? But the debacle over Terminal Five brought home to me a more important point. Britain

Gordon spent Christmas learning the catechism from Peter Mandelson. Today we heard the result. And it sounded robotic. ‘Do nothing’ is his clockwork description of the Tories. ‘Real help’ is the mantra for Labour. The first question at PMQs came from a government stooge asking about loan guarantees. Gordon stood up and re-announced his scheme to underwrite £10 billion worth of business debts. ‘Real help’ he said. Again and again. I lost count after the fifth repetition. Cameron responded by departing from his script. ‘Planted question, copied policy.’ This was his best moment. A powerful point succinctly made and he seemed justifiably pleased that the government has adopted a measure

Now that Brown has copied the Tory proposal to underwrite bank loans, what’s the real picture on interest rates? Since the UK debt crisis started, the Bank of England base rates have become woefully detached from the rates charged to real people. This is powerfully summarised by three graphs from Citi, which I reprint here.. Over last year, BoE base rates fell by three points. Only half of this fall was “passed on” by fixed-rate and variable mortgages, while the cost of borrowing money actually rose for overdrafts, credit cards and personal loans. As the graph shows: The most misery will be felt by those who have unsecured personal loans