Economy

Sunday

Peter Hoskin

Getting credit flowing will be one of the coalition’s toughest challenges

In interview with the Sunday Telegraph today, George Osborne stresses that the banks have got to start lending again – and he’s right to do so. The easy availability of cheap credit may have done much to get us into this mess, but now we face a converse problem. As a recent Bank of England report shows, net lending from the banks to businesses remains negative – or, in other words, more is being paid back than given out – and the situation is getting worse. With small and medium businesses so reliant on credit to get themselves off the ground, this doesn’t augur well for a powerful recovery. But

Wednesday

David Blackburn

Beating up the ASBO

Theresa May has taken the truncheon to the previous government’s rather singular anti-social behaviour policy. The ASBO, of which more than half were ignored in 2008, will be a thing of the past; supermarkets will not be able to sell alcohol at less than cost price; and 24 four hour drinking licenses will be subject to local vetoes, even if the residents do not live near or adjacent to pubs and clubs. On confronting anti-social behaviour, May pledges that ultimate political cliché – a coherent and comprehensive strategy. At the moment, there are few details beyond fines for selling drink to underage drinkers. Limiting booze intake is welcome, but alcohol

David Blackburn

David Cameron is not cutting it with India’s media

The British press has worked itself into a gibbering mass of excitement about Cameron’s visit to India. The Indian press has barely noticed it. There is no mention of Cameron on the front page of The Times of India’s website, which is dominated by the spat between cricketing legends Bishen Bedi and Muttiah Muralitharan – in fact, those two are all over the press. Also, the Hindustan Times leads with a scintillating description of a parliamentary point of order; the Calcutta Telegraph splashes with an account of army operations against Maoist rebels in northern Bengal. India Daily has coverage of the Wikileaks saga. And IndiaTV is fixated by an extraordinary

Tuesday

David Blackburn

Dave’s pageant is all very well, but India wants to talk immigration

In 1690, Thomas ‘Diamond’ Pitt led an opulent delegation of the East India Company’s Madras factors, bearing their wares, to the Nawab of the Carnatic, the richest man in southern India, with the intention of buying him out. They succeeded, but Pitt had nothing on David Cameron’s delegation.  Six cabinet ministers, more than 10 CEOs and God knows how many diplomats are accompanying the Prime Minister. The only person missing is Nick – but that sort of thing is frowned upon by Delhi’s Edwardianly genteel political classes. As I wrote yesterday, pageantry titillates commercial diplomacy, and Cameron is staking everything on this mission. As the Independent reported yesterday, current Anglo-Indian bilateral trade is worth

Robert Mcilveen

Forging a cheaper green policy

The debate over climate change is one of the most polarised in UK politics, between those advocating doing everything possible (no matter what the cost) and those who refuse to think about doing anything at all. If, like us, you take the view that the science tells us there are major risks from climate change – albeit with uncertainty around how bad, when and where the risks might bear out – but that costs matter, you are likely to find yourself simultaneously denounced by both sides as a ‘denialist’ and a ‘warmist’. Our new report, Greener, Cheaper explores how we can cut the costs of cutting carbon. We assume that

Monday

David Blackburn

Cameron’s foreign policy is music to the ears of a resurgent FCO

Tim Montgomerie observes that the FCO now stands for Foreign and Commerce Office. David Cameron is determined to conduct British foreign policy in our economic interest. And, in that spirit, he is off to charm India in the hope of gaining access to that enormous emerging market – last week’s magazine has exhaustive coverage of the trip. Tim also claims that the Foreign Office won’t like this ‘redirection of their mission’. I’m not so sure. From what I hear, the Foreign Office is loving it; it’s just like old times. The FO was marginalised under the previous government; Labour cut staff in embassies and consulates around the globe. The coalition

Peter Hoskin

The Hayward saga draws to a close

There has been an inevitability about Tony Hayward’s departure from BP ever since the first aftershocks of the Deepwater Horizon disaster. But now, despite BP’s peculiar denials this morning, that inevitability has reached fever pitch – and it’s widely expected that Hayward will be booted out of his job tomorrow morning. As a thousand comment writers have quipped, he can now get his life back. The question on most observer’s minds is, does he deserve it? And it’s a question which Allister Heath answers persuasively in City AM today. My quick take is that, yes, Hayward came under unfair and politically-motivated fire at times, but much of the criticism flung

Peter Hoskin

Guess who’s back | 26 July 2010

Oh look, Gordon Brown has continured his return to public life with a sizeable interview in today’s Independent.  It’s a generous portrait which seems designed to dispel any rumours about the former Prime Minister’s wellbeing. Apparently, he “looks healthy and fit … seems quite cheerful.” And we’re treated to descriptions of his face, “like a map of a man’s soul.” For those who can read any further, there are accounts of his constituency work and his aspirations to “do more on international development”. The world shudders. Despite his claims to the contrary, there are ominous signs that Brown is keen to impact upon our national politics. His clearest boast in

Friday

Fraser Nelson

Will GDP rise be Osborne’s get out clause?

Alistair Darling has been on Sky News doing a lap of honour for today’s GDP growth figures. “Vindicates everything we did,” he said – his narrative being that the extra debt did indeed boost the economy and produced 1.1 percent growth in this quarter. This chimes with what I wrote in the Daily Telegraph a few weeks ago: that the economy is better, not worse, than the Tories thought. Even if, or should I say when, the ONS say the figure was wrong and needs to be revised downwards it will still mean tax revenue churning in at a far faster rate than thought. This will give Osborne a get-out

Wednesday

David Blackburn

Howard versus Clarke

Michael Howard appeared on today’s Daily Politics and laid into Ken Clarke’s ‘caricature’ of a policy to reduce prison places. There is, Howard argues and John Denham supported him, a correlation between increasing the number of those incarcerated and a fall in crime. In other words, prison still works. Howard criticised Clarke’s ‘rather foolish’ denial of that link. Howard echoes the Spectator’s editorial line that early release endangers society, and that it costs less in real terms to keep criminals in prison. Howard’s off-message critique is the most total I have yet seen, particularly on the statistical case against the government’s position. It is significant that it came from a

Tuesday

David Blackburn

Osborne keeps it simple

George Osborne has talked of simplifying the tax system for years, and today he launched the OTS, The Office for Tax Simplification. The OTS will be chaired by Michael Jack, s Treasury minister in the Major government, and John Whiting of PWC and Chartered Institute of Taxation. The OTS looks suspiciously like a quango, but some public bodies are necessary and welcome. The tax system is unintelligible, and, needless to say, Gordon Brown complicated it further with morass of stealth taxes, tax credits and new loopholes opened more by chance than design. This has particularly affected small businesses and the OTS will identify salient businesses taxes and recommend their simplification.

David Blackburn

A special relationship in the making?

I’ve spent the morning contending with the WSJ’s Heath Robinson-esque subscription service so you don’t have to. Inside the paper, David Cameron explains what the Special Relationship means to him. 1). The Special Relationship is close and robust because British and American values are essentially the same, which explains why our national interests are often aligned: ‘The U.S.-U.K. relationship is simple: It’s strong because it delivers for both of us. The alliance is not sustained by our historical ties or blind loyalty. This is a partnership of choice that serves our national interests.’ There may be differences in emphasis and application, but, Cameron argues, Britain and America stand together on Afghanistan, global

Monday

David Blackburn

Green gold

Most of Tim Yeo’s proselytising on climate change must be resisted. He calls for a dramatic reduction in carbon emissions in the short-term, which would paralyse Britain’s already geriatric economic competitiveness. He also endorses a policy that would push consumer energy prices to punitive levels in the hope that their behaviour is moderated. And he is adamant that David Cameron’s Husky photo-op was the last word in political positioning. But, his central point, one shared with John Redwood and Peter Lilley, is unanswerable: ‘Working towards a low carbon economy is not a “luxury”; it is essential to our future prosperity. If we fail to decarbonise our electricity industry, our transport

Sunday

Fraser Nelson

Clueless Chuka

Given that the Labour leadership campaign is so dull, we should thank Chuka Umunna for cheering us up with his comedy economic analysis. Now on the Treasury Select Committee, he has regaled us with an ‘Open letter to George Osborne’ where he makes many entertaining points. It’s worth looking at, because it sums up a few errors swirling around the Labour benches.   1)   During our exchange, you insisted your budget was “progressive”… you stood by your decision to apply a 10 percent cut to the housing benefit of those who have been on JSA for more than 12 months. Osborne has to use words like “progressive” to assuage the

Friday

Fraser Nelson

Making work pay | 16 July 2010

What is the purpose of the welfare state? To protect British people from unemployment, or to protect them from jobs like fruit-picking and working in Pret A Manger? I listened to Farming Today* earlier, in which they interviewed the Eastern Europeans that we import en masse to do jobs that Brits used to do. Having done the job myself in my younger days (I come from a part of the world where the October break is called the ‘tattie holidays’ so kids can dig potatoes), I can attest that it’s bloody hard work for a paltry reward. But it pays no less than the minimum wage. Without immigration, we’d be

Wednesday

David Blackburn

McFadden talks sense

Pat McFadden, the sullen-looking Shadow Business Secretary, has given an important speech to the Fabian Society. He said: ‘Fight the cuts is a tempting slogan in opposition, and there are indeed some that must be fought. But if that is all we are saying the conclusion will be drawn that we are wishing the problem away.’ He is the first shadow minister to recognise that Labour’s current approach is counter-productive, and Ed Balls’ philosophy is suicidal. He notes: ‘In fact, that is the position the Tories and the Lib Dems would prefer us to adopt. They want Labour to retreat to its comfort zone and allow them to say that

Tuesday

Peter Hoskin

Are the OBR’s growth forecasts too optimistic?

Much ado about the Office for Budget Responsibility’s growth predictions in the Treasury Select Committee earlier, especially as an OBR official admitted that the cuts and tax hikes in the Budget could conceivably tip us into a double-dip recession. So are the OBR’s official forecasts too optimistic, as some are now claiming? Only time will tell, but we can get a decent sense of things by comparing them with the independent forecasts that the Treasury collect here. And this is the result: In other words, the OBR growth forecasts stick pretty closely to the average independent forecast, although they are a touch more optimistic. Admittedly, these independent forecasts were collected

David Blackburn

Hard going for the government

A tough morning for the government at the hands of Tyrie, Fallon and rest of the Treasury Select Committee. Sir Alan Budd apologised for his naivety, Robert Chote described the Budget as ‘regressive’ in the main and the banking levy has been criticised on the grounds that is de-stabilising banks’ capital bases, which will affect lending. The government would prefer silence on these issues but the damage was far from total. Budd was an interim figure and the spat that has developed around him is largely political – there is no question that Budd was ‘nobbled’. Robert Chote deserves his reputation but he is not infallible. And Treasury Chief Economic

Saturday

David Blackburn

Send for Chote

And so it continues. The FT reports that Sir Alan Budd has denied that George Osborne cooked the OBR’s job loss forecasts. ‘It was genuinely a forecasting correction with no ministerial interference,’ he said, blandly. The correction was the result of the OBR’s use of a narrow definition of public sector workforce than is employed by other statisticians. That is not abnormal: statisticians are a law unto themselves. But, as the saying goes, it doesn’t look good. The OBR’s figures supported the government and the story is beginning to emit of a whiff of mendacity. Once more, George Osborne is in a mess of his own making. His political instincts veer

Friday

Peter Hoskin

Osborne must make the workings of the OBR even more transparent

Forget the hubbub about Gove’s schools list, the most damaging story for the government this week could well be on the cover of today’s FT.  Alex Barker does a great job of summarising it here. But the central point is that the Office for Budget Responsibility changed its forecasting methods just before the Budget, with the effect of reducing how many public sector jobs would be lost due to the government’s measures. This isn’t damning on its own: statisticians constantly tweak their forecasting methods. But when you consider that the OBR’s new methods incorporated policies which haven’t even been announced yet (including one which pre-empts the findings of John Hutton’s