Treasury

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.

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

No government likes to u-turn, and particularly not on a Budget measure. So, tonight’s changes to the VAT regime proposed by the Budget for Cornish pasties and static caravans are embarrassing for the coalition. It is also worth noting that they have come after they have taken most of the political heat they were likely to take for the changes, including in the House of Commons where there were decent-sized rebellions on both issues. One of the lessons that I suspect that politicians, and particularly the coalition, will learn from this episode is: don’t try and deal with the anomalies in the VAT system. Voters, for obvious and understandable reasons,

23rd April, 2012 — mark it down in your calendars, CoffeeHousers. For, after weeks of froth and fury about tax, today’s the day when the government focused on spending cuts again. In a speech to the Institute for Fiscal Studies, Danny Alexander has announced what are, in theory, a couple of new restraints on spending. First, government departments will have to share information about their spending with the Treasury on a monthly basis, and let Osborne & Co. pore over it. And, second, they will also have to find extra capacity in their existing budgets for unforeseen expenditure, rather than just relying on the Treasury’s central reserve. Alexander described these

It’s roughly seven months until George Osborne’s Autumn Statement, so no better time to consider which political issues will come to the boil ahead of it. Fuel costs, I’m sure, will be one if them; because they never really go away, and the 3p rise in fuel duty will have just been implemented in August. But I’d say the safest bet is the finances of the elderly. If the furore over the frozen income tax allowance for pensioners didn’t put that voting bloc at the forefront of Osborne’s mind, then the demographics behind UKIP’s poll jump will surely do the trick. He will be under severe pressure to act. Actually,

George Osborne’s two fiscal rules have been around since his very first Budget, delivered almost two years ago, so they’re hardly news. But they do underpin much of what he’s done since, including last week’s statement, so they’re also worth knowing about. Fraser touched on ome of the detail in a post last weekend, but here’s a supplementary guide for CoffeeHousers: 1) The deficit rule. This is the one that seems to cause the most confusion, perhaps because it has often been simplified — wrongly — as something like ‘eliminate the deficit by the end of this Parliament’. Fact is, the ‘end of this Parliament’ doesn’t come into it. And as for ‘eliminating

Will George Osborne’s refusal to look again at high levels of state spending become the greatest risk to Britain’s economic stability? There have been plenty of rude comments about the Chancellor’s supposed tactical ineptitude in the weekend press, but he has still managed to keep on borrowing and have almost no one notice. Osborne’s iron commitment is to spending, and a programme of cuts which total just under 1 per cent a year. His commitment to deficit reduction is flexible, as his three Budgets have demonstrated: Osborne spent the election campaign berating Labour for its lack of ambition in halving the deficit in four years. He’s now doing it in

Ed Balls committed Labour to voting against the reduction in the 50p rate at his post-Budget briefing. But he wouldn’t say whether or not Labour would pledge to restore it in their manifesto; sticking to the classic opposition line that all decisions on tax will be made in the manifesto and not before. Balls, though, was on typically pugilistic form; few politicians relish a scrap as much as he does. The Labour leadership clearly view the abolition of the 50p rate as a major political opening for them. Balls went out of his way to attack the HMRC report that Osborne used to justify the move. He mockingly declared that