Treasury

Two versions of Osborne’s benefits speech

The Times’ Sam Coates picked up on a couple of discrepancies between the text of George Osborne’s Morrisons speech sent out by CCHQ, and the one published by the Treasury. Here’s the CCHQ text: ‘In 2010 alone, payments to working age families cost £75 billion. That means about one in every seven pounds of tax that working people like you pay was going on working age benefits.’ But the Treasury version reads: ‘In 2010 alone, payments to working age families cost £90 billion. That means about one in every six pounds of tax that working people like you pay was going on working age benefits.’ Osborne actually delivered the Treasury

Why Britain lost its AAA rating

Even the pessimistic analysts had given Britain until September to lose its AAA rating. That it has happened now, before the Budget, shows just how fast things are moving. Moody’s has tonight downgraded Britan from AAA to AA1 and has also told us why. Don’t expect economic hell to break loose as a result: these ratings tend to follow, rather than lead, the markets. But this is politically devastating for George Osborne, given that he has asked us to judge him by the preservation of this rating (and made it a manifesto pledge). So what went wrong? 1. The markets now doubt that Osborne has a credible debt strategy. The

Mr Micawber Goes to the Treasury

John Rentoul draws attention to a new ComRes poll that goes some way towards explaining George Osborne’s predicament when it comes to managing government finances. Put simply, the public is not interested in public spending cuts. On the contrary, British voters want to see public spending increase. Sure, they might agree that, all things being equal and in the broader scheme of matters, it might be a good idea if the government balanced the books but all things are rarely equal and as soon as you get into the narrow, particular view of these matters it becomes clear that, actually, the only departmental budget voters want to decimate is that

Mark Carney: I want a debate on inflation target

If Mark Carney had any reservations about his move to Threadneedle Street later this year, he might now add to his list regular sessions with the Treasury Select Committee. His three-and-a-half hour hearing included a quiz from Committee member David Ruffley on his ability to explain capital ratios and other terms, questions on how many mistakes he’d be happy for staff to make, whether he wanted to rename the Bank’s Court, and whether he’d judge his success on the return of growth to the economy during his tenure. The MPs also started their session with a bit of a grump about his £874,000 pay package, although as James Barty argued

Backbenchers want a cost of living Budget

Aside from Ed Balls’ attack on George Osborne for going ‘on the piste’ in Davos, Treasury question time in the Commons today was interesting not for what Labour did or didn’t have to say, but for some of the pushes from the Tory backbench on helping those on low incomes. Sometimes it’s the pattern of the questions that matters more than the individual answers. Many of the questions were pitches for the Budget, which also gave ministers the opportunity to not really answer them. Robert Halfon asked about reintroducing the 10p income tax rate, to which Greg Clark said he noted the MP’s bid for the Budget, adding: ‘But he

Prime Minister and Chancellor ‘stayed submerged’ on bankers’ bonuses

The irrepressible Lord Oakeshott is making mischief again: he’s using Sir Mervyn King’s comments about Goldman Sachs bonuses today to attack David Cameron and George Osborne. He’s just told Coffee House the following: ‘The Governor speaks for all on Goldman’s greed. He shows leadership where the Prime Minister and Chancellor stayed submerged. Starbucks are an also ran in the tax avoidance stakes compared to world champions like Goldmans.’ Then he took another covert shot at the Treasury by referring – not by name – to the appointment of former Goldman employee Mark Carney as the next Bank of England Governor: ‘Big banks like Goldman can’t have it both ways. If

We’ve shown forecasts are unreliable, jokes OBR chief

‘We’ve done quite a good job at demonstrating the limitations of economic forecasting,’ half-joked Office for Budget Responsibility Chairman Robert Chote at the start of his Treasury Select Committee appearance this morning. And he spent a lot of his answers emphasising those limitations, while robustly defending himself against charges that the OBR is just making it up. His challenge was to explain to sceptical MPs why we should pay attention to the OBR’s new forecasts, given that their previous ones have missed by so much. For the OBR’s economic forecasts — rather than its forecasts for the public finances — Chote admitted that ‘we don’t have access to any information

Comings and goings at Number 11 Downing Street

Few politicians have put as much thought in to the team around them as George Osborne. He is a collector of talented people. Unlike most Tories, he has gone outside of CCHQ and parliament for nearly every senior appointment he’s made. But I understand that after Christmas he’ll be losing one of the most important members of his operation, Poppy Mitchell-Rose. Mitchell-Rose has acted as Osborne’s fixer and gatekeeper since he first became shadow Chancellor. On the long—and sometimes bumpy—road from opposition to government, she has been a calm sherpa who has dealt with a host of problems before they have even arisen. But she is now moving to Washington,

Fraser Nelson

Will Osborne have the luck of the Irish with his 4G auction?

Could George Osborne be in line for a genuine windfall? The Chancellor is getting quite good at conjuring fake ones (Post Office pensions, raiding £35 billion from the Bank of England) but he has yet to sell the 4G licenses. This could be more significant than next month’s mini-Budget. The stunning success of Ireland’s 4G auction (here) suggests that the UK auction may yield a lot more than is currently expected. A decade ago, governments world over pocketed massive windfalls auctioning the 3G licenses to mobile operators. This time Ofcom has put a reserve of £1.3 billion. But the Irish government expected to get just €170 million from its licenses.

Briefing: Another fuel duty freeze?

It looks like George Osborne will put the planned fuel duty rise on hold again, in order to avoid another Tory rebellion and potential government defeat in the Commons. This battle has its origins in a Labour Budget: that of 2009, in which Alistair Darling introduced a fuel duty escalator whereby fuel duty would increase by inflation-plus-a-penny every April from 2010 to 2013. In his 2011 Budget, Osborne announced that he was abolishing the escalator and instead cutting fuel duty by 1p per litre. From January 2012 onwards, the escalator was to be replaced by a ‘fair fuel stabiliser’, under which the duty rises by inflation-plus-a-penny when oil prices are

Burstow goes rogue to attack Treasury

Hell hath no fury like a government minister sacked (as proven by our anonymous ‘Dumped by Dave’ piece this week). Another former minister, Paul Burstow, lost his job because Nick Clegg was miffed at the way the Lib Dem had failed to flag up the dangers in the Health and Social Care Bill. He’d already formed a habit of briefing against his own department when he was in office, so it’s no great shock that Burstow has decided to dish the dirt on the Treasury in the Telegraph today, claiming it is responsible for blocking reform of the social care system. He writes: ‘Of course, if fixing this was easy

Lib Dems play whac-a-mole on welfare cuts

The Liberal Democrats are playing a game of whac-a-mole on welfare at the moment: each time they think they’ve blocked one cut they don’t like, another one pops up. Last night a mole they’d already whacked a year ago appeared again: decoupling benefits from inflation. The Newsnight scoop is that Whitehall is considering ending inflation-linked rises for many benefit payments – although the word is that this would not include payments to those with disabilities. This would be part of efforts to cut a further £10 billion from the welfare bill, which the Lib Dems oppose overall. Last winter the Lib Dems blocked a similar move from the Treasury, which

Iain Duncan Smith versus Jeremy Heywood

There’s war in Whitehall. The Sunday Times devotes its p2 lead (£) to the fact that Sir Jeremy Heywood, the Cabinet Secretary, is ‘sceptical’ of the Universal Credit, the key to Iain Duncan Smith’s revolutionary welfare reforms. The newspaper has gathered its intelligence by reading the leading article of this week’s Spectator, and repeats our point that civil servants will interpret Heywood’s reservations as a ‘go-slow order’. Here is what our leader column says: ‘Treasury officials have been against Duncan Smith from the start, due to the threat which Universal Credit posed to their beloved tax credits. Ambition in itself is looked down upon by ministers who deride ‘IDS’s grand projet’. Sir Jeremy

Why George Osborne will miss his debt target

Much is being made today of reports that George Osborne will drop his fiscal target in his autumn statement on 5 December. Isabel reported earlier that, faced with breaking his own rule, Osborne will abandon it rather than implement more cuts to meet it. All the fuss seems to stem from a note by Citi Reasearch last Friday. You can read the whole thing here, but here’s a summary. Like Gordon Brown, Osborne has two fiscal rules. Neither says anything about eliminating the deficit, or even halving it. The first — called the ‘fiscal mandate’ — is ‘to balance the cyclically-adjusted current budget by the end of a rolling, five-year

I Think Paul Krugman is Mistaken – Spectator Blogs

The great sage – once described to me by someone who attended a (highly) derivative speech he made on the Scottish economy as Woody Allen with statistics and no jokes – blogs that George Osborne is “Britain’s Paul Ryan”. Remarkably, this seems unfair on both Mr Osborne and Mr Ryan. Anyway, Krugman writes: Osborne’s big idea was that Britain should turn to fiscal austerity now now now, even though the economy remained deeply depressed; it would all work out, he insisted, because the confidence fairy would come to the rescue. Never mind those whining Keynesians who said that premature austerity would send Britain into a double-dip recession. Strange to say,

Treasury: We did not leak the Budget

It’s easy to forget that the Budget took place five long months ago when it is still being unpicked and argued over now. The Treasury Select Committee published the  responses from the government and the Office for Budget Responsibility to its report on that Budget today, and it includes a curious denial from the Treasury. Andrew Tyrie and his colleagues on the committee had criticised the amount of pre-briefing and leaking of the budget that took place in the weeks before George Osborne stood up in the Commons, arguing that ‘coalition government is not a justification for budget leaks’. This is what the Treasury said in response: No Treasury officials,

Who will rid us of this turbulent Treasury? – Spectator Blogs

In Michael Lewis’s The Big Short, one of the few Wall Street analysts to bet against the US housing market explains his decision to short Merrill Lynch: We have a simple thesis. There is going to be a calamity, and whenever there is a calamity, Merrill is there. Sure enough, Merrill was there when the housing market crashed. Merrill was so there, in fact, that it ceased to exist as an independent company. The smart guys weren’t as smart as they thought they were. I think of that anecdote every time it becomes clear that HM Treasury has been interfering in affairs that are, properly speaking, none of its business.

The post-GDP sleeve-rolling begins

David Cameron is using the Olympics today to strike a more upbeat tone after yesterday’s GDP gloom. The Prime Minister is speaking at 10am at a global investment conference to pitch for business from 180 chief executives from around the world. Cameron will tell the conference that he is ‘determined that Britain will be on of the great success stories’ in rebuilding its economy, and will say: ‘There will be no more passionate supporter of Team GB than me. But I’ve got a job to do this summer. And a big part of that job is to get behind British business… and do everything I can to help secure the

Who Will Rid Cameron of His Part-Time Chancellor?

I commend Fraser’s most recent post on our part-time Chancellor of the Exchequer. But even my flabber was gasted (or my gast flabbered) by this paragraph: Being Chancellor in a recession is a very tough job. Osborne’s predecessors are amazed at the time he has to spend politicking across departments. I’m told that he is heading the campaign to defeat Salmond in a Scottish referendum, taking on yet another job to add to his other one of chief strategist. Emphasis added. There is no reason to doubt Fraser’s information and assuming, as I do, he is correct one must wonder if Mr Osborne finds being Chancellor of the Exchequer –

George Osborne, Poker Player

May God protect me from my friends. That, I suggest, should be George Osborne’s reaction to Ben Brogan’s Telegraph column this morning. As best I can tell, it’s supposed to be a supportive piece, reflecting on the Chancellor’s efforts to rediscover his mojo in the aftermath of his justifiably poorly-received budget. If so, then, with friends like these…  Consider Brogan’s opening salvo: Optimism comes easily to George Osborne. In the face of adversity he chooses to smile with the confidence of a politician who relishes a challenge. There is something of the high-stakes poker player about the Chancellor, a keen student of the Lyndon Johnson Texas school of hard-nosed politics.