Uk politics

Wednesday

Jonathan Jones

How big are the cuts so far?

‘Osborne’s austerity is killing the recovery.’ It’s a familiar refrain, one that we hear every time there’s bad economic news. And, sure enough, today’s terrible GDP stats have sparked yet another rendition. Take this, for example, from the TUC’s Brendan Barber: ‘The government’s austerity strategy is failing so spectacularly that is has wiped out the recovery completely.’ But very rarely is that austerity quantified. Just how big are these cuts that have supposedly crippled the British economy? Well, according to the latest ONS figures, total managed expenditure stayed roughly flat in the coalition’s first year, before being cut by just 1.8 per cent in real terms (£12.6 billion) in 2011-12. But this

Isabel Hardman Isabel Hardman

The work experience Chancellor

Lord Oakeshott has just sparked some outrage by arguing on the World at One that George Osborne, who he described as a ‘Chancellor on work experience’ should be replaced by Vince Cable. He said: ‘I do think that George Osborne, he’s got no business experience, he’s never worked outside politics, and you know, he’s doing surprisingly well for a Chancellor on work experience, but really in a torrid time like this I think we do need the absolute best people available.’ A now-backbench Lib Dem peer announcing he would like to see a Lib Dem leading the Treasury team isn’t exactly the most surprising revelation. But what was interesting was

James Forsyth James Forsyth

Olympic strike averted

The PCS decision to call off the strike scheduled for tomorrow lessens the chances of a logistical nightmare of a start to the Olympics. It also means that the government’s challenge to the strike won’t be heard in court. Both sides are claiming victory in the dispute. Government sources are claiming that the union has backed down in the face of public opposition to an Olympic strike and the union is saying that it has won a promise that a certain number of new posts will be created. But the mere fact that this strike almost happened on such a low turnout will strengthen the hand of those in government

James Forsyth James Forsyth

GDP figures show the economy needs fundamental reform

Today’s GDP figures are far worse than expected. They mean that the economy has now shrunk for three consecutive quarters. The figures have destroyed the optimism created by the fact that employment and tax revenues are rising. Politically, these figures are undoubtedly a blow to the coalition. Labour is out trying to pin the blame for the continuing recession on the government’s economic policy. The Treasury is countering that the figures confirm that ‘the country has deep rooted economic problems’. In a sign, though, of how serious the GDP fall is, the government is conspicuously avoiding suggesting any external reasons for it — such as the Eurozone crisis, the weather

Jonathan Jones

GDP down 0.7% in Q2

The ONS’s first estimate of GDP in Q2 of 2012 shows a 0.7 per cent fall on Q1. It’s worth remembering that this is just a preliminary estimate and subject to revision later, but that’s a very big drop — the largest since the beginning of 2009 — driven largely by a big 5.2 per cent contraction in the construction sector. The ONS does point out that the extra Jubilee bank holiday will have hurt the economy, as will the record rainfall in April and June — but don’t expect Osborne to highlight this, for fear of a repeat of the ridicule he experienced for pointing to snow and the royal wedding

Isabel Hardman Isabel Hardman

The blue vs yellow fight to make green policy

Ed Davey has managed to win his first major battle as Energy Secretary – against the might of the Treasury, no less. James blogged earlier in the week that the battle between Lib Dem and Tory on cutting subsidies for onshore wind generation would be a test of how well the coalition is actually working, and this morning’s report in the Financial Times that George Osborne and Davey have managed to find a compromise is an illustration of that partnership in action. The newspaper reports that the dispute became so heated that Nick Clegg and David Cameron intervened to hammer down a final agreement. In the blue corner, Osborne was concerned not just by

Tuesday

Isabel Hardman

Back to tax basics

David Gauke was only elected in 2005, but it’s impossible that he can’t remember the Back to Basics campaign, and how well that moral campaign worked out for the Conservative Party. Its 1993 launch precipitated revelations of all kinds of non-traditional behaviour in the party, from affairs to cash for questions. Had the Exchequer Secretary who bears the outstanding achievement of being named Tax Personality of the Year thought about the damningly long list of revelations that the Major government had to endure, he might have thought twice before declaring that it was ‘morally wrong’ to pay your plumber or cleaner cash-in-hand. The problem with Gauke’s moralising was so obvious

Jonathan Jones

Measuring well-being: a tough but important job

‘If you treasure it, measure it.’ So Gus O’Donnell said when addressing the All Party Parliamentary Group on Wellbeing Economics in November. Well, the government has decided it treasures our well-being, and so is determined to measure it. It’s an incredibly tricky task — as I’ve noted before — but it’s a significant step forward that the Office for National Statistics has at least begun to try, and has finally started collecting a wealth of well-being data. In April, the ONS began asking people four questions to measure their subjective well-being on a scale of one to ten: Overall, how satisfied are you with your life nowadays? Overall, to what extent do you feel

Shiraz Maher

Tony Blair’s legacy on tackling extremism

It may be unpopular to say, but there is reason to be charitable to Tony Blair and his latest warnings about Islamist extremism. The former Prime Minister gave afascinating interview to Charles Moore in yesterday’s Telegraph where, inter alia, he talks about the challenge of militant Islam. ‘The West is asleep on this issue,’ he tells Moore. Blair has been more vocal and unequivocal on the issue than almost any other politician in recent years. He notes that the success of his Africa Governance Initiative faces ‘this threat above all others’. Failed states in the Horn of Africa have accentuated this, while one of the unintended consequences of the Libyan revolution

Isabel Hardman Isabel Hardman

1,200 extra troops to calm Olympic concerns

Ministers held their daily Cobra meeting this morning to check the progress of the Olympic preparations, with just three days before the opening ceremony. Following the meeting, Jeremy Hunt released a statement – about 15 minutes after the Crown Prosecution Service announced the latest charges in its phone hacking investigation – which started by describing how London 2012 ‘remains very much on track’. The statement continued to describe the arrival of the athletes, praise for the organisation of the Games from International Olympic Committee president Jacques Rogge, and the rising numbers of staff provided by beleaguered security firm G4S. Anyone who wasn’t immersed in the phone hacking charges might still

Monday

Isabel Hardman

Why Miliband doesn’t need to agree with Nick

Ed Miliband’s comments in the Independent today were clearly based on the assumption that Nick Clegg will not be around if and when it comes to negotiating a possible Lib-Lab coalition in 2015. Vince Cable has already thrown his fedora into the ring to be the next Liberal Democrat leader, and Miliband backed the calls for a change of chief in his interview today. ‘I would find it difficult to work with him,’ he said, when asked about Clegg. Clegg cannot go from being Deputy Prime Minister in one government to Deputy Prime Minister in the next: it would look ridiculous. A coalition with Labour would also not suit Clegg’s own political

James Forsyth James Forsyth

The coalition trial of strength

The coalition is most fragile when both party leaders feel that they have a point to prove to their own side. We are, post the Lords reform rebellion, in one of those moments. Nick Clegg has to show the Liberal Democrats that he’s no push-over, that he’ll exact something from the Tories for the death of Lords reform. In the last few days the Clegg circle have been suggesting that not only will there be no boundary changes if there is no Lords reform but that the deputy Prime Minister also has fresh resolve to fight the green agenda’s corner in government. For his part, the Prime Minister is trying

Jonathan Jones

Briefing: HSBC, money laundering and Lord Green

What’s HSBC done wrong? Put simply, HSBC was not rigorous enough in preventing money laundering through its banks. Last week, the United States Senate’s Permanent Subcommittee on Investigations released a damning report finding that HSBC had ‘exposed the US financial system to a wide array of money laundering, drug trafficking, and terrorist financing risks due to poor anti-money laundering controls’. In particular, the committee criticised the way HSBC treated its Mexican arm. HSBC Mexico, the report says ‘operated in Mexico, a country under siege from drug crime, violence and money laundering; it had high risk clients, such as Mexican casas de cambios [bureaux de change] and US money service businesses; and it offered high

Isabel Hardman Isabel Hardman

The caveats to nil Zil lane usage for ministers

How many ministers will be using the Zil – sorry, Games – Lanes during the Olympics? The Prime Minister’s official spokesman said this morning that the lanes would be used on a flexible basis, and that ministers would stick to public transport. ‘The approach is that where possible they will use public transport,’ he said, but he added that ‘operational or security reasons’ might mean ministers are forced to use the lanes. ‘Operational’ and ‘security’ offer a conveniently wide range of situations in which someone might have cause to hop in the ministerial car and zoom down a clear road,  including the tube being too rammed with tourists for a

Matthew Sinclair

The Treasury sides with the consumer over climate policy

Tim Yeo is now posing as a friend of the consumer. Launching the latest report from the Energy and Climate Change Committee this morning, he attacked the Treasury for ‘refusing to back new contracts to deliver investment in nuclear, wind, wave and carbon capture and storage’. The report argues that could ‘impose unnecessary costs on consumers’. The basic logic of his claim is this: investments are more expensive when they are riskier. Investors expect to be compensated for the risks being taken with their money. If the Government offers guarantees that reduce the amount of risk energy companies run by investing in expensive sources of energy like offshore wind, then those firms

Isabel Hardman Isabel Hardman

The new rebel PPS

Tim Montgomerie has some excellent intelligence on ConHome this morning that Francis Maude is about to gain a new PPS. The Cabinet Office Minister’s former aide was Angie Bray, who was sacked after voting against the government at the second reading of the House of Lords Reform Bill. But Maude’s replacement PPS, Stuart Andrew, is also a rebel. He was one of the 81 who defied the three-line whip in the autumn to vote for a backbench motion calling for a referendum on Britain’s relationship with the European Union. As Tim points out on his blog, this is a sign that rebels might still have a hope of a job in the

Isabel Hardman Isabel Hardman

The UK Border Agency’s Bermuda Triangle

Bringing the UK Border Agency to heel has been one of the mammoth tasks facing ministers since the coalition formed. Ministers have recently been rather keen to suggest that backlogs in claims and migrants disappearing without a trace were coming under control – Immigration Minister Damian Green said at the start of this month that ‘we have gripped it and dealt with’ the problem of people overstaying their visa, for instance. But lest senior staff at the UK Border Agency were starting to pat themselves on the back for a good job well done, the Home Affairs Select Committee has released a damning report this morning which says performance is

Friday

Isabel Hardman

More smoke from the Libor fire

A new cache of emails released today by the Bank of England reveal its deputy governor Paul Tucker was warned that it was ‘plausible’ that Libor rates were being ‘influenced by commercial incentives’. Tucker insisted in his appearance before the Treasury Select Committee that he and colleagues ‘thought it was a malfunctioning market, not a dishonest one’. But an email sent by an unnamed official to Mr Tucker on 22 May 2008 points to a possible manipulation of Libor. It contains notes of a meeting which say: ‘There is a long-standing perception that Libor by virtue of the manner in which it is set is open to distortion: panel banks have no obligation to

James Forsyth James Forsyth

Letwin fails to consult about the consultation on consultations

Oliver Letwin’s decision to launch a consultation on reducing the amount of time that government has to spend on consultations has sparked controversy in Whitehall. Sticklers for procedure are complaining, in a way that only Sir Humphrey himself could do justice to, that other ministers hadn’t been consulted about the decision to launch a consultation on shortening consultations. Now, this is all quite trivial. But it does reveal just how bureaucratic modern-day government has become. This problem has been exacerbated by the Equalities Act and the rise of judicial reviews. Indeed, I understand that there is now a board of civil servants whose job is to review the equality impact assessments being

Jonathan Jones

Public finance statistics point to a miserable autumn statement

Today’s round of public finance statistics bring mixed news for the government. The headlines have focused on the fact that borrowing last month — at £14.4 billion — was £0.5 billion higher than in June 2011. But considering that the monthly borrowing figures end up being revised by an average of £1.7 billion (usually downwards), we shouldn’t get too fixated on a difference of a few hundred million. What is perhaps more worrying is the trend in the financial year so far. Superficially, the numbers look pretty good: a total of £14.9 billion in borrowing since April, compared to £38.4 billion in the same three months of last year. But this year’s