Economy

Sunday

Peter Hoskin

The government's Hester problem intensifies

First there was Fred Goodwin, now there’s Stephen Hester. The chief executive of RBS is fast becoming the bête noire of the British banking system, thanks to his roughly £1 million share bonus which, we learn in the Sunday Times (£) this morning, may be topped up with an extra £8 million over the next few years. Little wonder that Iain Duncan Smith admitted on the Marr show earlier that there may be a severe public backlash, and that the government could suffer from it. He suggested that it would be better, for all concerned, were Hester just to forego the million. It’s one of those debates where it’s easy

Saturday

James Forsyth

Alexander identifies Labour's problem

Douglas Alexander may sometimes hide the meaning of what he says under a layer of jargon but he remains one of the more interesting political strategists on the Labour side. Alexander, a Brown long-marcher turned Blairite, saw before many of his colleagues the need for Labour to level with the public on cuts. He privately thought that Gordon Brown’s attempt to fight the last election on a reprise of the investment versus cuts strategy of ’01 and ’05 was a mistake. So, it is no surprise that Alexander, now shadow Foreign Secretary, is trying to use the opportunity created by Ed Balls’ acceptance of the need for a public sector

Friday

James Forsyth

When one euro is worth more than another

Faisal Islam has a very interesting report from Davos on how at least one bank no longer believes that a euro from Ireland, say, is worth the same as one from Holland or Germany. He writes that: ‘A leading European bank has begun to account for euros differentially, by nation state. That is to say, they are differentiating a risk to euros that originate in a potentially defaulting country from that of a euro-cert. They, in effect, have invented the concept of a German, Greek and Irish euro. Now we accept that government debts from these nations are different. The idea that a bank treats cash differentially, is an incredible

Fraser Nelson

Osborne needs to come up with radical growth policies, and soon

When it comes to defending the free market, and making the case for fiscal sanity, there’s scarcely anyone better than David Cameron. He was on superb form in Davos yesterday, giving much-needed blunt advice to the continentals. ‘Eurozone countries must do everything possible to get to grips with their own debts,’ he said. And he’s right. The snag, as I say in my Daily Telegraph column today, is that Cameron’s definition of getting to grips with debt involves increasing it more than Labour planned to, more than France, Germany, Italy or Portugal. On the first sign of trouble, his government gave up on its deficit reduction timetable – it will now

Thursday

Jonathan Jones

Clegg echoes Obama's message

Nick Clegg, this morning, advocating closing loopholes for the rich to pay for raising the income tax threshold: ‘Right now, because of loopholes and shelters in the tax code, a quarter of all millionaires pay lower tax rates than millions of middle-class households. Right now, Warren Buffett pays a lower tax rate than his secretary.’ Oh, all right, that wasn’t Clegg. That was Barack Obama, in his State of the Union address on Tuesday night. But it’s remarkably similar to what Clegg just said in his speech at the Resolution Foundation this morning. On his account, the government ought to be ‘calling time on our out-of-whack tax system,’ as well as the ‘scandal of

Wednesday

Jonathan Jones

The recession: four years and counting

It is now four years since recession hit the UK. It took just over three years for GDP to return to pre-recession levels in the much milder downturns of the ‘70s and the ‘90s. Even after the Great Depression of the 30s, the economy had fully recovered by this point. By contrast, economic output in 2011 Q4 was still 3.8 per cent down on 2008 Q1. And it’s going to take a while longer to get back. The OBR’s projections suggest the economy won’t have fully recovered until the end of 2013. Other forecasts are gloomier still. But even if we do manage it by then, it’ll have taken us

Lloyd Evans

Miliband delivers for once, but Cameron’s left unharmed

Incredible events in the chamber today. An absolute sensation at PMQS. For the first time since last summer, Ed Miliband got through the session without triggering talk of a leadership crisis. There was gloomy news aplenty to dwell on. Debts soaring; growth flat-lining; dole queues snaking back through blighted high streets and bankrupt business parks. The Labour leader chose to wallop Cameron with a well-prepared attack on the NHS. Quoting the prime minister’s vow, ‘to take our nurses and doctors with us’, he asked why the government had stopped listening. The prime minister’s reply was frivolous and desperate. He giggled and smirked like a teenager at the despatch box and

James Forsyth

Both leaders left smiling after PMQs

Today was one of those PMQs when you sensed that both sides were fairly happy with how it had gone. Ed Miliband turned in one of his stronger performances, cleverly splitting his questions and so allowing himself to have a go at both the economy and the coalition’s troubled NHS reforms. Cameron, for his part, got through what was always going to be a difficult session for him after this morning’s negative growth numbers.   Strikingly, there were four planted Tory questions on the benefits cap. The Tories know that Labour’s vote against it compounds one of their biggest vulnerabilities, the sense they are the party for people on benefits

James Forsyth

Europe gives Osborne the context he needs

The political implications of today’s growth numbers are complex. On one level, a contraction in the economy should provide Miliband and Balls with an opportunity to make their economic case against the government. Indeed, Balls is already out with a statement calling the GDP figures a ‘damning indictment of David Cameron and George Osborne’s failed economic plan’. I suspect that Miliband is also looking forward to PMQs rather more than normal.   But on the other hand, as long as Cameron and Osborne enjoy a big lead on the economy — 18 points in the last ICM survey — bad economic news will reinforce voters’ tendency to stick close to

Peter Hoskin

Bad news doesn't have to be surprising

I’m still of the mind that Westminster fusses too much about these quarterly growth figures, particularly when parts of the country have been in economic decline for decades. But there’s no doubting that they have the capacity to shift the political mood, both here and around the country. There is something disheartening about the idea that the economy returned to shrinkage in the final quarter of last year (even if today’s preliminary figure of -0.2 per cent might be revised upwards, or downwards, in due course). You can expect Ed Miliband to make much of it in this afternoon’s PMQs. The politics of the situation are not stacked entirely against

Peter Hoskin

Obama delivers his pitch for a second term

A Romney-seeking missile. That was what much of Barack Obama’s State of the Union Address amounted to last night. He didn’t mention the Republican presidential challenger by name, of course. That would have been too obvious. But he did dwell on those sorts of issues around taxation and jobs — including his ‘Buffett Rule’, by which, we learn, millionaires should pay at least a 30 per cent tax rate — that have been causing Romney trouble. To underline the point that ‘a billionaire [should] pay at least as much as his secretary in taxes’, Warren Buffett’s secretary was even among the Obamas’ guests for the evening. Obama’s ploy, when presenting

Tuesday

Fraser Nelson

Osborne owes Darling an apology

Britain’s national debt rose to over £1 trillion last month, and will never return below this threshold. George Osborne is increasing net debt by 61.5 per cent in real terms over this parliament, more than the 59.9 per cent which Labour proposed when it fought the last election. Here’s how the OBR’s current projections for debt contrast with what Darling proposed in his last Budget: At the time, Osborne said Labour’s debt plan was reckless and unsustainable. I think he owes Alistair Darling a generous apology. Then, Darling said he’d halve the deficit over four years. Too slow, said Osborne. Now, he’s taking five years to do it – as the

Jonathan Jones

UK government debt hits £1 trillion

New figures out today show the UK’s public sector net debt at just over £1 trillion for the first time ever. In the first 19 months since it took over, the coalition added £225 billion to the £779 billion debt it inherited. And it’s projected to rack up another £390 billion by the next election.

Monday

James Forsyth

A Chris Huhne prediction that didn’t come true

Chris Huhne attacked David Cameron for the EU veto in Cabinet back in December. At the time, one Cabinet minister told me that part of Huhne’s critique was that Cameron had scuppered the chances of a Liberal Democrat MEP, Sharon Bowles, being reelected as chair of the European Parliament’s Economic and Monetary Affairs Committee, which deals with financial services.   But Bowles has been reelected. In a Lib Dem press release welcoming this, Nick Clegg declares that: ‘As party leader, I am proud that we have a leading Liberal Democrat in such a prominent and powerful position on the international scene. As UK Deputy Prime Minister, I am delighted and

Fraser Nelson

Sorry, Tristram — but capitalism is just what the British public does

Tristram Hunt, the historian and Labour MP, has written a brilliant rebuttal to my piece in the Telegraph last week, in which I said that capitalism is hardwired in Britain’s DNA. Socialism, he says, is also hardwired into our country’s mindset. Writing for Comment Is Free, he says: ‘There is another story of Britishness a long way from the template of Cameron and the Spectator. It is a tradition of redistribution, intervention and socialism equally as compelling as Adam Smith’s “invisible hand” (which, one should remember, was a satirical attack on laissez-faire morality, drawn from Shakespeare’s Macbeth)… [the] British strand of social criticism continued into the 19th century with the

Friday

Melanie McDonagh

What today's immigration numbers tell us

During the leaders debates before the last general election, David Cameron declared that he wanted to make immigration a non-issue and he would go about it by reducing immigration numbers from hundreds of thousands a year to tens of thousands a year. He hasn’t succeeded in the second objective — more than half a million people arrived here in 2010, only 30 per cent of whom were from the EU — and he most certainly hasn’t succeeded in the first. At least if the reaction to today’s revelations about immigrants on benefits is anything to go by. Chris Grayling, minister for employment, and Damian Green, immigration minister, wrote an article

Fraser Nelson

Cameron's capitalism

Ever since Ed Miliband’s ‘predatory capitalism’ speech at the Labour Party conference, the future of capitalism has been a subject that has much occupied our MPs. Clegg made his speech on Monday, and Cameron delivered his yesterday. I have had plenty to say about the coalition government’s inadequate economic policy, and its inability to stoke growth. But Cameron’s speech was impressive, and it’s worth going into in some detail. I look at it in my Telegraph column today. Much rot is spoken about capitalism. It is not an ideology, there is no rule book you can tweak: it is simply the name given to the system where people trade with

Thursday

James Forsyth

How Cameron sees the economy

Today’s speech by David Cameron is one of those ones that give you a real insight into how he sees the world. Cameron said that he wanted to see an ‘insurgent economy, where we support the new, the innovative and the bold’. He talked about the need to ‘encourage the adventurous spirits who challenge the status quo and declared that he admires ‘more than almost anything the bravery of those who turn their back on the security of a regular wage to follow their dreams and start a company’. This reveals something important both about Cameron personally and how he sees the economy. The people that Cameron respects are not

Peter Hoskin

Miliband's proximity problem

Ed Miliband is on unusually assertive form this morning. His observation in the FT that ‘my speech to Labour’s annual conference was not — I think it is fair to say — universally well-received’ is not, I think, intended self-deprecatingly, but rather self-congratulatory, as though he were the only politician calling for a ‘responsible capitalism’ at the time. And he’s repeated that suggestion elsewhere: in a short statement for Which?, and in a Labour briefing document — entitled Who is he trying to kid? — that has been filtered around the crowd at David Cameron’s speech. Ed is trying to crash Dave’s party, and bring it crashing down. Like I