Treasury

In economic terms, the role of the Comprehensive Spending Review is a fairly straightforward one: to set Departmental Expenditure Limits for every government department, and outline some of the policy measures that will be undertaken to keep spending within those limits.   Fraser Nelson has already ably summarised the real impact that the spending review will have on public expenditure, so I won’t go into that here. Suffice it to say that, yes, the cuts are significant but, no, they aren’t nearly as severe as the BBC would have us believe.    But just as interesting as the cold, hard numbers themselves is what they will tell us about the

George Osborne likes to spend his weekends at Dorneywood, the chancellor’s official residence near Slough, but I doubt this one will be  particularly enjoyable. He will be burning the midnight oil as he prepares next Wednesday’s spending review. No doubt he will also be taking calls from ministerial colleagues, muttering dark threats about aircraft carriers, the arts, sport, the roads budget, overseas consulates – you name it. And just when the numbers all add up he will probably have to start all over again after discovering that No10 has  promised to save some wind turbines because Steve Hilton bumped into somebody at a drinks party.   Meanwhile, we can expect

Today was a reminder of the tax change that would give Tory re-election chances a massive boost, raising the threshold at which the higher rate kicks in. Indeed, electorally dealing with this is far more important than the abolition of the 50p rate and has been made more so by the decision to link the withdrawal of child benefit to the higher rate. During Gordon Brown’s time at the Treasury, the number of people paying the higher rate almost doubled – principally because of fiscal drag, Brown didn’t link the threshold to earnings. This means there are a whole slew of people paying higher rate tax who are comfortably off

There are still conflicting reports, but Michael Crick and The Times intimate that a deal has been struck: IDS has beaten the recalcitrant Treasury over his £9bn universal benefit reform, with David Cameron’s express help. As Frank Field put it on Sky News, IDS’ plan is ‘good for the country, good for the taxpayer and good for those dependent on welfare.’ Field gave no clue as to the final outcome of this battle, but victory for IDS would be a crucial moment in public service reform. If Crick and the Times are right then this is obviously fantastic news ahead of the Tory conference, where I feel David Cameron should

The proclamations of economists and economic bodies shouldn’t be taken as the be-all-and-end-all of fiscal policy – for every one claiming that a decision is right, you can find another insisting that it is wrong. But the coalition will still be pleased by the influential International Monetary Fund’s latest report, here. It begins: “The UK economy is on the mend. Economic recovery is underway, unemployment has stabilized, and financial sector health has improved. The government’s strong and credible multi-year fiscal deficit reduction plan is essential to ensure debt sustainability. The plan greatly reduces the risk of a costly loss of confidence in public finances and supports a balanced recovery. Fiscal

One of the biggest problems facing the coaltion has been presentational: how to sell the cuts? In the absence of a coherent, vigourous message, the Balls school of economic thought has been allowed to grease onto the scene – to the extent that some polls have three-quarters of respondents rejecting the government’s deficit reduction plan. But now, at last, signs that the coalition is getting into gear. It’s a process which began last week, when Matthew Hancock – a new Tory MP and former adviser to George Osborne – highlighted falling interest rates in Parliament (column 606, here); a point he has been pushing around Westminster ever since. And today