Society

Thursday

The Spectator

In this week’s Spectator | 10 December 2009

The latest issue of The Spectator is released today. If you are a subscriber you can view it here. If you have not subscribed, but would like to view this week’s content, you can subscribe online here, or purchase a single issue here. A selection of articles from the latest issue are available for free online to all website users: James Forsyth argues that David Cameron could learn a lot from Boris.   The Spectator condemns Gordon Brown’s toxic legacy. Allister Heath believes that Alistair Darling’s budget was bad; but George Osborne’s complicity was worse. Rod Liddle wants everyone to calm down and understand what the internet is about. And

James Forsyth James Forsyth

An expensive piece of spin

Labour briefed out its plan to tax banks that pay bonuses so extensively that everyone in the City knew it was coming. The result is that a slew of banks paid their bonuses out early. Small, private banks that aren’t encumbered by bureaucracy moved to award their bonuses early as soon as these stories started appearing in the papers. The legislation says that the moment when the tax is awarded is when the tax applies, so if a bank awarded its bonuses as late as Monday — when the details of this plan were all over the papers — they avoided the charge. As one City accountant who works with

Mark Bathgate

The markets’ verdict on the PBR

The press didn’t like Darling’s budget – and neither do the markets. What Darling didn’t say yesterday is that the Treasury is looking to borrow £243 billion from the City by the end of the financial year – this info was slipped out by the debt management office (link here). Brother, can you spare a quarter of a trillion quid? The markets are not sure they can. Gilts are being hammered today – biggest single day sell off for some time – 13bps so far this morning on 10yr gilts. They now stand at 63bps above German bunds, the widest since the crisis started. On another measure, Credit Default Swaps,

Peter Hoskin

The Darling deception

Alistair Darling normally strikes us as an honest man dropped into an impossible situation. But whether he misspoke, or whether he set out to mislead, he told a lie on the Today Programme this morning which needs to be highlighted. So what was it?  That non-ringfenced departmental budgets would remain “pretty much flat” rather than receiving significant, if not sufficient, cuts.  As Fraser demonstrated yesterday, there were spending cuts hidden in the Budget   and we’ll see the full extent of those as soon as the IFS processes the numbers later today.  Last time around, after April’s Budget, they calculated cuts of 7 percent across three years.  Thanks to a

Peter Hoskin

Last orders in the last chance saloon?

It’s the set of headlines which Labour must have dreaded after their recent progress in the polls.  The Times: “The axeman dithereth … but the taxman cometh”.  The Guardian: “Darling soaks the rich … and the rest of us too”.  The Mail: “The Buck Passer’s Budget”.  And so on and so on.  It doesn’t look too good inside the papers either.  The FT rails against a  “lack of clarity on public spending plans”, while the Independent says that “rarely has a pre-Budget report promised so much and delivered so little”.  The Sun’s opposition may not be too surprising, but it’s there in bucketfuls: “Britain is staring into the abyss. After

Wednesday

Alex Massie Alex Massie

American Exceptionalism & the Decline of Limited Government

Via Megan McArdle, a sentence to ponder from Tyler Cowen: One implication [of this book] is that the United States kept “small government” for an artificially long period of time, due to North-South splits and the resulting inability to agree on what a larger government should be doing. I suspect there’s something to that. The realignment of American politics over the past 40 years has created coherent parties that, while disagreeing on the details, agree that the Federal government needs more power. Republicans may pay lip-service to federalism but their record in office tells a different story. It was a Republican President (George W Bush) that gave new powers to

Andrew Haldenby

What to do if you can’t tax or borrow out of trouble

Today one Finance Minister in the British Isles cut spending, cut borrowing by 1 per cent of GDP compared to his last Budget and cut the national debt by 5 per cent.  It wasn’t Alistair Darling. Brian Lenihan cut Irish public spending by 7 per cent (equivalent to a £40 billion cut in the UK).  He cut the public sector headcount, pay, pensions for new entrants and unemployment and child benefits. Alistair Darling postponed the inevitable reckoning on the finances until the pre-election Budget, the post-election Budget or a currency or debt crisis if that comes first.  Brian Lenihan gave us the flavour of what that reckoning will be and

Fraser Nelson Fraser Nelson

The public’s right to know

The Treasury have just banned transcripts of the all-important briefing they give to journalists after the budget. Coffee House broke the mould after the April budget by producing the first-ever transcript – releasing to the public the spin which journalists are given in the precious few hours they have to write up the Budget. This shows how journalists were wrongly told that there were no spending cuts, when there were in fact cuts of 7 percent over three years. Here is an example of their misleading briefing last year Q: Why are you cutting spending by more? A: By more? (quizzical look on his face) Q: Well not reducing the

Neil Obrien

A whole batch of Brownies

There are some pretty cheeky claims in today’s Pre-Budget Report. One is that “Cyclically-adjusted borrowing is lower than at Budget across the medium-term forecast.” (page 171). That makes it sound like it’s all under got a bit better since the Budget. But in fact the “cyclically adjusted” improvement is entirely because of a redefinition of the cycle – not because of any actual reduction in the deficit.  For example, the PBR forecasts the deficit for 2013/4 as 5.5 percent of GDP – exactly the same as that in the 2009 Budget.   Another claim is that “The annual pace of consolidation set out in this Pre-Budget report is faster than

Mark Bathgate

How much more will Darling have to borrow?

The figure of £178 billion in the Budget – for 2009/10 – is by no means the full story. For that we have to turn to the Debt Management Office, which is in charge of flogging the IOU notes. It just now confirmed that it will need £223.3 billion by the end of this financial year – £5 billion more than expected. And a staggering amount, which I suspect the government simply could not raise if it did not have the Bank of England printing presses working overtime. Why the gulf between the two? Because of the bank crisis. This financial year a further £42 billion has needed to by

Peter Hoskin

Pre-Budget Report live blog | 9 December 2009

Stay tuned for live coverage of Alistair Darling’s statement from 1230. 1231, PH: PMQs is still going on.  Tune into David’s live blog of that here. 1233, PH: Here’s Darling.  One sentence in and he’s already refering to the global crisis and “unprecedented action”.  He adds: “The task today is to ensure the recovery and to promote growth.”  1234, PH: One minute in, and it’s already dividing line heavy.  “The choice is between going for growth or endangering the recovery … investment … cuts”.  Yada, yada, yada. 1235, PH: Darling is pointing to signs of global recovery – US housing market stabilising etc.  Shame we’re still in recession here. 1237,

Stephen Bayley

Happy Kitschmas everyone

London is the creative capital of the planet. The city’s abundant talent — in design and media, in commercials and special effects, food, leisure, architecture, publishing, retailing and telly — will drive the economy from today’s precipice of the dark abyss to tomorrow’s sunkissed higher ground of recovery. Birds will sing and soft zephyrs will blow. So long dismissed as the visually illiterate of Europe, we are now known for our point and style. We are smart. And my own office is in the sturdy left ventricle of this powerfully pumping urban heart. Immediately, I am surrounded by the designers who work with me. Some of the world’s best restaurants

Karl Ludvigsen

Not so sclerotic: the truth about General Motors

Karl Ludvigsen is irritated by ill-informed criticism of the troubled American auto giant — which was once a model of quick, responsive and decentralised decision-making Outraged is too mild a word for the way I felt after reading a piece in the 12 November edition of the New York Times about General Motors. Focusing on the faults of this once-great company, its author said the following: For all its financial troubles and shortcomings as an automaker, no aspect of GM has confounded its critics as much as its hidebound, command-and-control corporate culture. When GM collapsed last year and turned to the US government for an emergency bailout, itcentury-old way of

Tuesday

Fraser Nelson Fraser Nelson

Darling carves up the spending pie

It’s the eve of the Pre-Budget Report, and the lunacy has already begun. Tomorrow’s FT says that Darling will copy the Tories’ plans to protect the NHS budget – and throw police and schools in to the protected status as well. This is introduced as “the biggest squeeze in pubic spending for a generation,” with the headline figure of 14 percent cuts. How to make sense of that? My guide: 1. Any sentence that starts “A Labour government would…” can be ignored. Darling can promise to fund free beer for everyone after 2011 – he won’t be in office. These are decoys for the media: the wilder his claims, the

Peter Hoskin

Ringfence-a-rama

Just watching Newsnight, and the show’s economics editor, Paul Mason, has said we can expect several budgets to be ringfenced from spending cuts in tomorrow’s PBR – hospitals, schools and perhaps even the social security budget.  If so, it’s another sign of how political the document is set to be.  Ringfenced budgets are the other side of the soak-the-rich coin: sending out the twin message that Labour will batter the “City fat cats,” while also “investing” in public services “for the many”.  Just a shame that it’s all insufficient to the scale of the debt crisis.

Peter Hoskin

Clocking on

As publicity stunts go, the debt clock the Tories beamed onto Battersea Power Station this evening is quite a decent idea.  Their thinking’s pretty clear – get some coverage in tomorrow’s papers, and increase the likelihood that the horrendous state of the public finances becomes the story of the PBR – but it’s probably no less effective for it.  Anyway, here are some pictures so you can judge for yourself: P.S. Yes, I know it’s out of sync with the Coffee House debt counter. We’re going to update our numbers on the back of tomorrow’s PBR.

Andrew Haldenby

Tackling the deficit

Reform’s report, The Front Line, focused on the how of the public finance question – how to get the deficit down in practice.  We pointed out that since the public sector workforce accounts for around a third of the total government deficit, it should contribute a third of the reduction in the structural deficit.  That would mean reducing the costs of the public sector workforce by £30 billion, equivalent to a reduction of one million of the six million public sector jobs in the UK.  That would take public sector employment back to the levels of 1999 when the recent period of major spending increases began.  It means reducing the

Amander Baillieu

My week as a climate change denier

The Spectator’s Global Warming special is only in the shops for a couple more days.  If you’ve missed it – or if you still need convincing to buy it – here’s an extended version of the article by Amanda Baillieu from within its pages: When a work colleague sent a tweet to his 2000 followers comparing me to Nick Griffin I realised I was heading for my Jan Moir moment. A few days before, I had written an opinion piece with the rather attention seeking headline Is global warming hot air?  I’d wanted to see if my readers, who are mainly architects, agreed with the line now adopted by the

David Blackburn

How long until the plug is pulled?<br />

Moody’s AAA sovereign monitor was published today, and whilst the UK’s AAA status remains ‘resilient’ the situation is far from rosy. The report states: ‘The UK economy entered the crisis in a vulnerable position, owing to the (overly) large size of its banking sector and the high level of household indebtedness. Both continue to weigh on economic performance. Net bank lending to the UK business sector has continued to contract through Q3 2009, and repairs to household balance sheets (i.e. the rising savings ratio) may weigh on demand for some time to come. The depth of the crisis has been mirrored by the ongoing deterioration of public finances (with gross

David Blackburn

Luck shines on the brave

Nevermind the bankers, the UK Border Agency should have been awarded £295,000 in performance bonuses. Phil Woolas’s defence that “brave” border workers deserved remuneration beyond their basic salaries is imaginative, though unremittingly egregious. The agency is plainly maladroit. Keith Vaz’s Home Affairs Select Committee has found: ‘There is still a huge backlog of unresolved cases and UKBA simply must get through them faster than they have promised. What is really surprising and disappointing is the number of cases where the UKBA is basically saying “we don’t know” exactly what has happened to these applicants – over half the applications are concluded for some “other” reason than being granted or denied