Treasury

George Osborne vs eurocrats

Improving the supply of new housing, adjusting the Help to Buy scheme if necessary, revaluing council tax bands and accepting that universal credit won’t solve all of Britain’ welfare ills: all ideas batted around in domestic political debate in this country by politicians and commentators who manage to secure a reasonable hearing each time they suggest them. But the problem with this latest list is that it comes from the European Commission: poorly supported by last week’s European elections and not preaching from a position of runaway economic success. The EC has published recommendations for each EU member state which are ‘designed to strengthen their growth potential, increase competitiveness and

Chris Leslie: Labour cannot afford to reverse the Coalition’s cuts

Chris Leslie’s speech today is intended to show that Labour is very fiscally responsible. It’s a noble task, and one the party knows it needs to hammer away at as much as it does on the cost-of-living, otherwise voters may not see that Labour is the trustworthy solution to the problem the party is highlighting. That said, the meat of this speech is very technical, and given it was delivered to the Institute of Chartered Accountants, perhaps not quite aimed at swing voters. Leslie is shouldering a big burden here, because the main thrust of his speech is that his party could not get elected in 2015 and promise unicorns

Scottish Independence: The Cost of Living Like This

Yippee! The number-crunching boffins are at war again. The UK and Scottish governments have today released rival forecasts for life in an independent Scotland. It will not surprise you that the UK government’s projections run towards the pessimistic side of the ledger while their opponents in Edinburgh take a sunnier view of Scotland’s future economic circumstances and performance. Fancy that! The Scottish government suggests there might be £5bn windfall from independence; the UK government reckons each Scot receives a ‘Union dividend’ worth something like £1,400 a year.  They can’t both be right. In fact the probability is they are both wrong. That is, Scotland’s fiscal and economic position would be

George Osborne: Britain is coming back (alright)

Treasury Questions today was rather formulaic. George Osborne spent a little while congratulating himself on today’s growth figures (only to be cut off by Bercow, who complained his answer was ‘far too long’), and loyal Tory MPs congratulated him too. Many of them chanted the phrase ‘long-term economic plan’. Some Labour MPs helped out by saying it too, which Osborne thanked them for. He has his own new phrase, which sounds a bit like a Backstreet Boys single: ‘Britain is coming back’. ‘Britain is coming back, alright,’ he (nearly) told MPs, before demanding that Labour congratulate him on the GDP figures. When it came to Ed Balls’ turn, he dispensed

Today’s borrowing figures are bad for the Tories, but they’re not good for Labour either

Today’s borrowing figures are, on the surface, not good for the Tories. The surplus on the public finances in January 2014 was lower than for the same month in 2013, at £4.7 billion compared to last year’s £6.0 billion figure (although it’s worth pointing out that the difference could get even smaller with subsequent revisions). That disappointing figure means that over the year, Osborne has borrowed just £4 billion than at the same point last year:- These figures give Labour the opportunity to remind voters that George Osborne has failed to meet his own targets. But there is an easy way to spin this, which is that there is still

What is Alex Salmond’s plan for the currency now?

Alex Salmond is now a man without a plan. He is offering Scots a future of uncertainty and instability. Threats of a debt default leaving Scotland and Scots with a bad credit rating. No idea which currency we would be transitioning to. By contrast if Scots want to know the benefit of remaining in the UK, they need only reach into their pockets and pull out a pound coin. We have one of the most trusted, secure currencies in the world. We have the financial back up of being part of one of the biggest economies in the world. The pound means more jobs, smaller mortgage repayments, cheaper credit card

George Osborne’s speech on whether Scotland could keep the pound – full text

In a speech in Edinburgh today, the Chancellor launched an attack on the ‘yes’ campaign’s intention to keep the pound as the currency of an independent Scotland. Here’s what he said:- In just over 7 months people in Scotland will decide whether or not to walk away from the United Kingdom. The stakes couldn’t be higher, or the choice clearer. The certainty and security of being part of the UK or the uncertainty and risk of going it alone. At the very heart of this choice is the pound in your pocket. Why? Because the currency we use is about so much more than notes and coins. It’s about the value of our savings. Our power to

Today’s GDP figures are useful ammunition for the Conservatives

That the UK economy grew by 0.7 per cent in the final three months of 2013, leading to the fastest growth annually since the financial crisis, is obviously very good news for the Coalition. The quarter-by-quarter figures have zig-zagged, but the overall growth for 2013 is 1.9 per cent over the year, which is the most important figure. These GDP figures from the ONS, published this morning, enable David Cameron to say that this is further evidence of the Coalition’s ‘long-term economic plan’ succeeding, and use the new Tory buzzword,‘security’. And though the economy is still 1.3 per cent below its pre-recession peak (see the graph below), George Osborne can

Explaining the IDS vs Osborne split on welfare

‘Do you know what they used to call us?’ asked Theresa May ten years ago. ‘The nasty party.’ No one used that phrase, but ‘they’ had a point. The Conservatives seemed to be a group of efficient mercenaries, useful for fighting the economic war that broke out in the 1970s. But in the good times they seemed robotic, Spock-like and heartless. The message was: if you work, we’re with you. If you shirk, you’re the enemy. This was summed up by Peter Lilley’s infamous ‘Little List’ skit, above. ANd again in George Osborne’s 2012 Tory conference speech, where he invited his audience to imagine the anger of a worker passing

The Spectator’s Notes: George Osborne’s personal recovery

Now that the economic statistics are looking better, people are beginning to rediscover the once-fashionable thought that George Osborne is a great strategist. Things are coming together before the 2015 election in a way which makes life uncomfortable for Labour. I am not sure that ‘strategist’ is the right word, but I do think Mr Osborne deserves praise for something else. If you compare this government with the last, you will see that it is not dysfunctional in its internal relations. The coalition has constant frictions, but these are, as it were, built into the system. After nearly four years, there is no serious split or even known personal hatred

Charles Moore

The top level of government isn’t riddled with personal hatred – thanks to Osborne

Now that the economic statistics are looking better, people are beginning to rediscover the once-fashionable thought that George Osborne is a great strategist. Things are coming together before the 2015 election in a way which makes life uncomfortable for Labour. I am not sure that ‘strategist’ is the right word, but I do think Mr Osborne deserves praise for something else. If you compare this government with the last, you will see that it is not dysfunctional in its internal relations. The coalition has constant frictions, but these are, as it were, built into the system. After nearly four years, there is no serious split or even known personal hatred

How corporation tax cuts are helping wages

Yesterday’s autumn statement included the results of the Treasury’s study of the dynamic impacts of the cuts to Corporation Tax, which George Osborne is down from 28 per cent to 20 per cent. This study used the new HMRC Computable General Equilibrium model – as Fraser reported on Wednesday – and the results are impressive. The cuts will increase investment by 2.5-4.5% (£3.6-£6.2 billion in today’s prices). They will increase GDP by 0.6-0.8% (equivalent to £9.6-£12.2 billion). Given the share that we can expect to go to labour, that equates to an increase in wages of £405-£515 a household. As a result of higher profits, wages and consumption, we can

George Osborne has seen the light on tax cuts. Now he needs to implement some more

George Osborne has not been a complete disappointment as Chancellor. He has, it is depressing to note, ended up giving Britain a leisurely ten years to get back in the black while the national debt soars. He has a worrying enthusiasm for finding new ways of hawking underpriced debt to business and homebuyers. But the British recovery is now gathering pace, Britain has more jobs than ever, and if you trawl the small print of his Budget statements, you can find a number of things that Osborne is getting right. He has stuck to his plan to shed hundreds of thousands of public sector jobs. And what Ed Balls dismissed

Isabel Hardman

Ed Balls: OBR forecasts show cost of living will continue to haunt Tories

Ed Balls has not had a good day. He has just given his post-autumn statement briefing, at which he argued that Labour had set the agenda for this statement with Ed Miliband’s energy price freeze pledge. He’s right, but as James explained in his blog, while Labour set the terms of debate for the autumn, the Tories have just set the agenda for the winter. The autumn was about the cost of living and energy prices, now the winter will be about credibility. This of course assumes that the Conservatives follow up a good day today with an aggressive campaign over the next few weeks. That has not always been

How our company was nearly bullied to death by a desperate RBS

‘So RBS say we are in breach of our loan agreement?’ asks the chairman, looking at me over his glasses in that way he has. We have arrived at that moment when we cease to be ignorant of the finely crafted double-speak involved in dealing with RBS. How, in skilled hands, a loan agreement can become a loan removal agreement; how an ‘arrangement fee’ can become an ex-gratia donation to the bank as things are disarranged; and don’t get me going on the ‘commitment fee’. We paid all these costs and thought them worthwhile for a seven-year €40 million facility from a reputable lender, and it was cheaper than equity

Mr and Mrs Treasury

Congratulations to Mr and Mrs Treasury. HMT has today announced the appointment of Sharon White, the current Director General over at Horseguards, as Second Permanent Secretary. Who she? Well, she’s none other than the wife of Robert Chote, the chief of the Office of Budget Responsibility. The OBR was set up in 2010 by George Osborne to provide independent analysis and advice on Treasury policy. It is meant to be completely independent, so no pillow talk please.

Our rulers don’t seem to care that the National Lottery fleeces the poor

Now the latest on the Politicians Keeping In Touch front. It’s funny how it’s the wives who take the brunt of the endeavour. It was Samantha Cameron yesterday who had to parade at the Tory party conference in a teal £42 polyester dress from Asos.com…no question, then, of Mr Cameron being asked to take a turn in an M&S suit. Alas, Mrs C did what every sensible person does who has to wear something from Asos or Florence and Fred (and may I say, given their modest cut when it comes to fabric only skinnies can carry this off) and replaced their belt with one of her own. It was a

Treasury questions: George Osborne takes aim at Labour’s record in opposition

Listen to Osborne and Balls’ exchange at Treasury questions here:- listen to ‘Osborne at Treasury Questions: ‘We’re enjoying this’’ on Audioboo ‘I hope this is not our last encounter across this despatch box,’ George Osborne said rather slyly to Ed Balls this morning at Treasury questions. ‘Because we are enjoying it.’ The Tories were in a good mood, because they’ve decided that they can now start to talk about the economic clouds lifting, and this means that they can say that everything Labour has ever said is wrong, wrong, wrong. ‘Cheer up Ed!’ Sajid Javid shouted cheerily at the shadow Chancellor as another Tory MP used their question to say

Focusing on borrowing means mutually-assured humiliation for Labour and the Tories

Strangely, both sides at Treasury questions today wanted to talk about something that does their own party no favours at all to mention. The Labour whips had sent their loyal backbenchers out in force to ask about Friday’s borrowing figures, while George Osborne and Conservative colleagues were very happy indeed to talk about how much the Opposition would have to borrow, too. Labour wanted to tell off the government for borrowing more. The government wanted to remind Labour that it would borrow even more. When it comes to performing elaborate and quite painful-looking contortions, Ed Balls is a master, but even he must realise that telling off another party for borrowing

The chancellor survived the IMF report, but there’s another challenge ahead

George Osborne has got through the IMF’s report on the UK economy. It is far from a ringing endorsement of his approach but, as Isabel notes, its criticisms are couched in such opaque language that I doubt they’ll have much political impact. I also suspect that the Treasury is not unhappy about being told that it needs to get on with returning RBS and Lloyds to the private sector. Selling even a tranche of these bank shares before 2015 would be politically powerful, aiding the Tories in their attempt to argue that they’ve been clearing up the mess that Labour left behind. The next challenge for the Treasury is the