Economy

When Sir Alan Budd was head of the Office for Budget Responsibility, there was an insistent argument in opposition circles that the independent body was biased in favour of the coalition. Much of this cented around the OBR’s growth predictions. How on Earth, came the question, can growth hit 2.3 percent next year and 2.8 percent the year after? Isn’t that a bit optimistic in view of all the warnings about a double dip? Won’t the cuts stifle growth? And so on and so on. A few months ago, I produced a graph which showed that, when compared to a range of independent forecasts, the OBR’s growth predictions weren’t really

We all know that the state grew enormously under thirteen years of Labour government. The most obvious manifestation of this was public spending – an increase of 60 percent in real terms took Britain from having one of the lowest levels of government spending in the OECD in 2000 (36.6 percent of GDP) to having one of the highest in 2010 (52.5 percent of GDP). But while reducing spending is clearly the most pressing issue facing the coalition government, we should not overlook another area where the state has grown dramatically: regulation. The British Chambers of Commerce’s ‘Burdens Barometer’ estimates that net cost of major regulations passed since 1998 is

After one of the many sections in Ed Balls’ speech on the economy, there was a telling moment as Ed Miliband clapped half-heartedly with a thoughtful look on his face. One could almost see him trying to work out with whether he agreed enough with what Balls was saying to make him shadow Chancellor. There are dangers in both him making Balls’ shadow Chancellor and not. If he does make Balls shadow Chancellor, then it be a Neil Kinnock and John Smith situation all over again: the leader will have ceded control over economic policy. But if he doesn’t, then he’ll have an aggrieved Balls on his hands and considering

Admittedly, this is but an item of marginalia in the notebook of British politics – but I’d appreciate CoffeeHousers’ views on it nonetheless. I’m talking about the Tories’ efforts to squeeze an apology out of Labour for the state of the public finances. This is something that they’ve been trying to do since the election, but the strategy has been reheated in the aftermath of Ed Miliband’s election. As Sayeeda Warsi put it on Saturday, “what I noticed in his acceptance speech was that there was … no apology for the role that he had played in the current economic mess.” Other Tory folk have called for that to be

Politics Home has published an important poll, showing the staggering level of support for Vince Cable’s conference speech. The government will be pleased that its political attack on the financial services industry’s continued excess at time of austerity is cutting through; on the other hand, this could be seen as support for Cable’s emotive rhetoric. Worse still, the poll suggests that traditional Tory voters are the only group for whom Nick Clegg is more impressive than Cable. The business secretary has to be kept in government – the coalition can’t afford to have a charismatic wreaking havoc from the backbenches. Support for Vince Cable conference speech Who are the impressive

What are we to make of the fact that No.10 gave the thumbs-up to Vince Cable’s bizarre anti-capitalist rhetoric today? “Capitalism takes no prisoners and it kills competition where it can,” he fumed – and you can argue that, technically, he is paraphrasing Adam Smith. But he has been in politics long enough to know what signal his speech sent out (and the reaction it would trigger). Mood music counts for a lot in politics, and in business. And the mood music from this government sounds like a bunch of politicians happy to tax the bejesus out of the high-paid – regarding them as ATM machines to be raided, rather

After stumbling in his crusade for a graduate contribution, Vince Cable seemed to go a bit quiet. But this morning he’s roared back into the newspapers with another attack on coalition policy. The target of his anger is, once again, the immigration cap – but he’s being far less equivocal about it this time around. The way in which the cap is being implemented this year, he tells the FT, is “very damaging to the UK economy.” To force the point home, he says he has a  “file full” of companies who are suffering because of it. And, for good measure, the word “damaging” gets deployed once or twice more.

Watch or read much of the economics coverage in Britain and you sometimes get the sense that we’re entering the final round of a peculiar game. Let’s call it ‘Russian Roulette for Economists’. The rules are simple: teams of academics and economically-literate politicos line up on either side of an issue and hurl abuse at one another. The winner will be declared when something significant changes in the macro-economic position of the UK. The game was played when Britain entered the ERM (those who said it would be a disaster won). The current double dip debate is another example. This time, the principal players on one side are the former