Economy

Poor Vince Cable. He just can't help but brim with joy about the economy. He's often spotted skipping across Parliament square to the Business department, humming 'Oh, Happy Day!' under his breath at the latest set of GDP figures. George Osborne and Cable's Tory colleagues are always having to tell Vince to calm down a bit: he doesn't want to seem too complacent about the clouds lifting from the economy. But even such a joyful Lib Dem as Dr Cable must have been a little dispirited to read that everyone has written his speech this morning up as an attempt to undermine George Osborne. 'I think George Osborne's comments the other day were spot on!

David Cameron’s statement to the Commons on the G20 wasn’t as lyrical as his response to Russia’s ‘small island jibe’. But it was a reminder of the needle that now exists between Cameron and Miliband. In previous times, these statements—which are far less tense affairs than PMQs—have seen a bit of badinage between the two front benches. But that has now gone. The statement was dominated by Syria, which Cameron called the ‘refugee crisis of our time’. When Cameron talks about his defeat in the Commons on Syria, he speaks very quickly, with no pauses between the words. It’s as if he wants to get talking about it over as quickly as possible.

The coalition government is preparing a new case for HS2. Concerned that public and political support for the project is slipping away, there’ll be a major effort to renew enthusiasm for it. In this new case, there’ll be far less emphasis on speed and far more emphasis on how HS2 is needed because the existing railway lines are full up. This marks a recognition inside government that the savings on the journey time to Birmingham, which are less than half an hour, are too small to act as a public justification for the project. Expect to see this new argument reflected in the Transport Secretary Patrick McLoughlin’s speech on Wednesday. I suspect that HS2 will retain the support of all three front benches in this parliament.

Labour has decided that the cost of living is the best way to attack the Tories while it tries to fathom what its own policies are. This is a rich seam to mine, and the party wants to ask voters whether they are really any better off than they were five years ago. But Ed Miliband and his team may be reckoning without the energetic attack dog mood that the Tories are in at the moment. They are keen to fight Labour on this turf, too, rather than giving any ground. So confident are the Conservatives that rather than defend their record, they are also going on the defensive, launching Cost of Labour, a new website which estimates, based on personal circumstances, how much a Labour government would cost you. Like all CCHQ initiatives of late, it includes an all-important email field.

I have never quite understood Ed Miliband's appeal. He always reminds me of Cuthbert Cringeworthy from The Bash Street Kids. I find it hard to imagine him becoming Prime Minister. Something just feels wrong about that. I'm not alone in wondering about this. Brian Wilson, the former energy minister, wrote yesterday that Miliband still has a kind of credibility problem. People just don't think he's quite ready for the top job. They may not be able to say exactly why they're unimpressed by Miliband; they just know they are. Not so fast my friend, responds John McTernan today. Ignore all the chattering and blethering about Labour's slide in the polls and focus on the core picture: Miliband is still likely to be leader of the largest party after the next election. Everything is fine.

Last December, after one of the most brutal PMQs this Parliament has seen, David Cameron was walking through the corridors of the Palace of Westminster to address a 1922 Committee meeting. Ed Miliband had subjected the Prime Minister to a real savaging, and Labour backbenchers had loyally joined in, raising a constituent's suicide and describing Cameron's government as ‘grandeur for the few, the workhouse for the many'. It had been a bleak session. Heading for Committee Room 14, the Prime Minister bumped into a junior minister, who was keen to reassure him that everything would come out in the wash. He told Cameron that 'they can go for the emotional attack, and we can always come back at them with statistics'.

Would Labour destabilise Britain’s fragile economic recovery? The Tories are keen to convince the nation that Labour would, ahead of Miliband's expected offensive on the state of the economy and the cost of living. Positive growth forecasts, increasing construction and export figures  all add to the perception that the economy is on the up; but, as I discussed earlier this week, the mood in the country is still cautious and many people are struggling to make ends meet. Treasury minister Sajid Javid tackles this problem in the Telegraph today.

It is beginning to dawn on Westminster just how much shale Britain has. The Bowland Basin — which runs from Nottingham and Scarborough in the east to Wrexham and Blackpool in the west — will deliver, on a cautious estimate of how much of it can be recovered, the equivalent of 90 years of North Sea gas production. This country is six to seven years away from seeing the full economic benefits of shale. But they will be substantial — the next election will be a good one to win. However, there are still opponents of shale. The hyper-local ones have received considerable coverage recently, see David Blackburn’s very good piece about drilling for oil in Sussex. But there are also those trying to use the European Union to put the brakes on shale.

Matt Hancock is both a competent economist (read his account of the Great Recession) and a keen political strategist. Where possible he has used his position as minister for skills to position the coalition on the compassionate side of the employment argument; for example, with his considered support for the minimum wage. Yesterday, in an article for ConservativeHome, he pre-empted Labour’s attempt to shift economic focus to the cost of living, now that hopes of a recovery are building. He made two basic points: 1). Labour’s record on the cost of living is abysmal – wages did not keep pace with growth during the boom. He says that gross disposable income fell by 1.1 per cent per head between 2003-08.

Fresh polling (£) from The Times and YouGov today says that the Tories still have much work to do to convince voters that they will directly benefit from an improving national economy. The good news for the Conservatives is that confidence in the economy is up. Nearly a third of those polled think that they will be ‘satisfied’ with the economy this time next year. This is a eleven-point jump from the last time the question was asked in June — and a steady trend upwards over the last year: But only 16 per cent think that their personal finances will get better over the next 12 months. On pay, 58 per cent of those working full-time and part time (more than eight hours a week) believe their pay will go up by less than inflation, or go down.

Grant Shapps’ latest broadside against Labour shows how keen the Tories are to frame the next election not as a referendum on their performance in government but as a choice between them and Labour. Shapps wants voters to think about the fact that the alternative to David Cameron as Prime Minister is ‘Miliband and Balls’ driving up Downing Street before they cast their ballots. The Tory Chairman’s speech, due to be delivered at Policy Exchange this morning, also shows where the Tories think Labour are vulnerable. Tellingly, he talks about ‘Miliband and Balls’ rather than just Miliband; the Tories believe that Balls’ presence is a reminder to voters of the links between the current Labour leadership and the Brown era.

In the last few months, the Tories have--quite deliberately—behaved like an aggressive opposition. They’ve sought to constantly attack Labour, trying to force them onto the back foot. Even with David Cameron and George Osborne away on holiday, the Tories are determined to keep doing this. On Wednesday, Grant Shapps will launch the Tories’ summer offensive against Labour. He, in the kind of language more commonly used to promote summer horror films than a political agenda, will invite voters ‘to imagine a world where Ed Balls and Ed Miliband end up back in Downing Street.’ This is all part of the Tories’ efforts to link Miliband to Gordon Brown and memories of the last Labour government.