George osborne

The growing need for a policy response to the ‘new inflation’

There’s been much debate on these pages about the political implications of higher inflation. Ironically, this morning’s news of record food prices could relieve the pressure on the Bank of England Governor. His argument for caution when it comes to a rate rise is based on the claim that UK inflation is now being driven by events beyond the MPC’s control. Today’s figures reinforce that case, showing that global commodity prices remain a key driver of the rising cost of living in Britain’s households. The same argument doesn’t really work for the Chancellor, whose remit isn’t just to keep headline inflation down, but also to help households cope with the

The austerity hasn’t started yet

Another month, and another all-time record for state spending in Britain. The government splurged £1.8 billion a day in April — of which £332 million a day was borrowed. Up goes the national debt. All of which leaves us with the question: where is this austerity that George Osborne keeps talking about? He’s been in No.11 a year now, and each month state spending has been — on average — 4.9 per cent higher than the same month under Gordon Brown. He seems to be taking the St Augustine approach to fiscal conservatism: Lord, give me spending restraint. But not yet. The below graph shows state spending, per month. The

Stop Gordon Brown

Gordon Brown’s friends have launched a shameless effort to compel the government into nominating him for the IMF post. The government would be mad if they did. Mad. This is not about petty score-settling, as yesterday’s Evening Standard would have it. This is about qualifications to lead, and the former Prime Minister, despite his intellect, does not have those skills. He led the country to ruin and remains in denial about it: he saved the world, don’t cha know. The UK should be smarter about using talent from across the House, but there are limits. And it is a bit rich for the ex-PM’s friends to argue that David Cameron

Brown hasn’t contacted Cameron or Osborne about IMF job

‘Brown makes pitch for IMF job with plea to rich nations to meet education pledges’ reads the headline on page 3 of The Guardian today. This is all part of a growing body of evidence that Gordon Brown really does think he is in with a chance of succeeding Dominique Strauss-Kahn. Certainly, the usual suspects are out and about talking up his chances. Realistically, Brown is not going to get the job. But if Brown really does want to have a go, it is bizarre that he’s not tried to contact either David Cameron or George Osborne to reassure them about how he’d behave if he got the job; Danny

Cameroons livid with Ken

It is hard to overstate the fury with Ken Clarke in the Cameroon circle today. One well-informed Tory source just told me, ‘they [Cameron and Osborne] just can’t wait to see the back of him’ before pondering whether Clarke was now just too old for frontline politics. Another bemoaned that Clarke had managed both to deepen the party’s problems with women and further undermine its reputation as the party of law and order. While one more couldn’t believe how on a day when unemployment fell, two men were charged with the murder of Stephen Lawrence and the Queen and PM were marking a new era in Anglo-Irish relations, the coalition

Inflation bites back

  Good job we didn’t unravel the bunting after last month’s inflation figures. Because today we discover that CPI inflation rose again in April, by 0.5 percentage points, to 4.5 per cent — its highest level since October 2008. That drop in March does look like a blip after all. Even with RPI inflation continuing to fall (by 0.1 percentage points), we seem to have returned to a grim, upwards trajectory. Most forecasters predict that inflation will keep on rising for the rest of this year, outstripping wage growth along the way. The squeeze on living standards continues: We have dwelt on the political problems this creates for Osborne before,

The battle over the 4th carbon budget

At the weekend, it appeared that Chris Huhne had won his battle with Vince Cable and George Osborne over whether or not the government should sign up to the 4th carbon budget. This budget covers 2023 to 2027 and is all part of a plan to cut carbon emissions by 80 percent by 2050 compared to the level in 1990; they have currently been reduced by 26.5 percent from the 1990 level. But it now appears that the greens in government might have been premature in declaring victory. First, the next set of cuts in UK carbon emissions is dependent on the European Union agreeing to embark on an equally

Osborne pledges more and more transparency

The Post-Bureaucratic Age — mostly just plain and simple transparency, to you and me — barely got a mention once the Tories alighted on the Big Society, of which it is a component. But the thinking behind it never went away, as George Osborne’s speech to the Google Zeitgeist conference testifies today. It may be unusual to hear an address from the Chancellor in which he doesn’t mention the deficit, not even once. But, in talking about publishing details of government spending and contracts online, this is natural territory for him. The thinking behind much of the transparency agenda is simply to cut down waste and extravagance in the public

The Coffee House A-Z of the Coalition: G-M

Here are letters G to M in our alphabetical guide to the Coalition’s first year. A-F were covered here. G is for Gaffes The coalition, happily, has not endured anything like a Gillian Duffy moment. But there has been a decent smattering of embarrassments and gaffes. Below is a brief selection, but CoffeeHousers can nominate others in the comments section: https://www.youtube.com/watch?v=0nOhqo-47P8 H is for Hidden talents A brief mention for those ministers who have exceeded expectations, or who have been quietly effective in their roles. Foremost among them has to be Theresa May, the Home Secretary. She underwhelmed in Opposition, particularly when in charge of the Tories’ welfare brief, but

The Coffee House A-Z of the Coalition: A-F

The coalition is 1 today. Unfortunately, we can’t serve jelly and ice cream over the internet — but we can write an A-Z to mark the first year of Cameron and Clegg’s union. Below is the first part of that, covering the letters A to F. But, first, a little piece of political nostalgia for CoffeeHousers. A year ago today, this happened: And now for the A-Z… A is for Andrew Lansley Rap John Healey, make way for MC NxtGen. The Loughborough rapper may not be part of Her Majesty’s Most Loyal Opposition, but his three-minute denunciation of the coalition’s health reforms — video above — did the job better

Another European mess for the coalition to deal with

Financial meltdown. As Ben Brogan says this morning, it tends to concentrate the mind. And so it is with the coalition, after days of infighting and spiteful diversion. The meltdown is not our own, of course, but that of the Greeks. And although much will be said by Conservative and Liberal Democrat politicians about how “there, but for the grace of George Osborne,” etc., the real issue for them is simply this: how much are we in for? If Greece requires another bail-out, how much British money might be involved? Osborne himself – speaking across the news channels yesterday – has set out out a firm line. “We certainly don’t

Why Clegg will get his way on NHS reform

On Andrew Marr this morning, Nick Clegg made clear that changes to the NHS bill are his new priority. He said that there would be ‘substantial’ changes to it and declared that ‘no bill is better than a bad bill.’ I suspect that Clegg will get what he wants on the NHS bill. When I spoke to one senior Clegg ally after the AV vote, I was told that Number 10 is ‘conceding everything to us in that area.’ My source went on to say that because of the Tories’ traditional weakness on the the NHS, the Tories ‘are mortally afraid of a row over the NHS with us on

Is Chris Huhne proving coalitions don’t work?

This country’s not used to coalitions. So when we got one we were sceptical. When it worked, we remained sceptical. When it worked really well, taking decisions that a majority Labour government dared not take, we began to come around to the idea. Most people seemed to accept that they could live with a coalition; that it had a certain utility. Now, we don’t know what to think following the spat between George Osborne and Chris Huhne. Is this proof that the coalition cannot work or merely an example of the way coalitions work? There are certainly worse examples of inter-coalition war in countries that often have coalition governments. German

The significance of today’s Cabinet bust-up

On the Today Programme this morning, David Cameron stressed that for all the tensions about the AV referendum, ministers were still capable of sitting round a table and working together. But within a couple of hours of saying this, Chris Huhne had destroyed this argument by using Cabinet to continue his attack about the tactics of the No campaign.   When the Energy Secretary is demanding that the Prime Minister and the Chancellor justify their behaviour to him it is impossible to pretend that it is business as usual. It is now indisputable that the fallout from the AV referendum campaign is having an impact on the functioning of the

James Forsyth

Huhne lays into Cameron and Osborne at Cabinet

At Cabinet this morning, I am told that Chris Huhne directly challenged David Cameron and George Osborne about the claims that the No campaign have been making. He asked them both in turn, if they were going to — or could — defend them. Osborne responded by telling Huhne that his behaviour was inappropriate and that Cabinet wasn’t the place for such disputes. The fact that this row broke out in Cabinet shows just how badly relations within the coalition have been damaged bv the AV campaign. That Huhne is leading the anti-Tory charge even within Cabinet will also stoke the rumours about what the Energy Secretary is planning to

Why David Blanchflower has it wrong

Gordon Brown may have gone, but advocates of his calamitous policies remain. David Blanchflower, the chief exponent of borrowing more, has a piece in The Guardian today which is worth examining. Written with his trademark chutzpah, it’s a very clear exposition of the Labour argument — along with its flaws. Here are some extracts, and my comments: “In his budget speech last month, Chancellor George Osborne suggested that he was hoping for ‘an economy where the growth happens across the country and across all sectors. That is our ambition”. Sadly, to judge by Wednesday’s GDP figures, growth under this coalition remains just an ambition, a mere illusion.” And why would

Cameron’s new cuts narrative

Aside from the “Calm down, dear” drama, there was something else worth noting from today’s PMQs: David Cameron trying for a calmer debate on the deficit. He admitted that his government is not really being that much more aggressive than Gordon Brown would have been. They’re cutting £8 for every £7 that Brown and Darling proposed for 2011-12, he said. It’s a line that Nick Clegg road-tested in his speech to the IPPR last week, and it represents a new and welcome strategy. To date, the rhetorical differences have been stark. The Tories have said: we’re the big bold cutters, Labour are deficit deniers. Labour has replied: your cuts are

James Forsyth

What the GDP figures mean politically

The coalition can breathe a little easier today. The economy returned to growth in the first quarter of this year, avoiding a double-dip recession. It expanded by 0.5 percent which is in the middle of City economists’ forecasts but below the OBR’s prediction of 0.8 percent. Recoveries are generally choppy and particularly so when coming out of a debt-induced recession.  Labour, though, will see these numbers as a further chance to claim that cuts have sucked the confidence out of the economy and that Britain is just bumping along the bottom. This, obviously, isn’t the whole picture. The deficit reduction plan has, crucially, kept the cost of borrowing low and

Economy grows by 0.5 per cent in the first quarter of 2011

So, we’re not back in recession, and growth of 0.5 per cent in the first quarter of this year is in line with what many forecasters were predicting, but… It is hardly indomitable stuff. As Duncan Weldon explained in a useful post yesterday – in which he rightly picked me up on a loosely worded post of my own (since, cheekily, edited) – 0.5 per cent merely compensates for the shrinkage experienced thanks to the snow last year. Across the last two quarters, economic growth has effectively plateaued. It’s as we were, Q3 2010. The politics of the situation is fissile, even if we are stuck in the murky area

Why I’m sceptical of all the early election talk 

Something has undoubtedly changed in the coalition in the past fortnight. Even those at the centre, who have been most loyal to the concept of coalition, are now happy to complain about the other side and its behaviour. But I’m still sceptical of all the early election speculation which has been sparked by Jackie Ashley’s very clever Guardian column. The main reason why I don’t think it will happen is the Cameron brand. Ever since David Cameron became leader of the Conservative party, the top of the party has believed that the protection of the Cameron brand is essential to electoral success. Cameron has too much personally invested in showing