Economy

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 below graph shows: Osborne has kept to his spending plans, which cut departmental totals by 2.

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 relieved to know that the EU financial services brief is in such expert hands.

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.

What’s the point of Ed Miliband? Does the Opposition leader have any purpose in life other than to provide ritual entertainment for the Tory wrecking crew at PMQs? Having spent the New Year listening to lethal attacks from his dearest supporters, Mr Miliband has now seen his leadership shrivel to a pair of policy statements which rival each other in desperation and barminess. The first, outlined by Liam Byrne this morning, is a fantasy tax on banking, ‘to create 100,000 jobs’. The second is Labour’s new position on the government’s austerity programme. This would baffle the dippiest and trippiest resident of Alice in Wonderland. We hate the cuts. We back the cuts. We oppose the cuts. We endorse the cuts. We accept the cuts.

In the news bulletin after Ed Miliband’s interview on the Andrew Marr show, the headline was about Miliband saying he does listen to criticism of his leadership. It rather summed up Miliband’s problem at the moment: he can’t get beyond all the chatter about his leadership. In terms of the substance, Miliband’s explanation of Labour’s new economic position showed just how difficult it is going to be to explain it to the public. Miliband argued, as Balls did on Saturday, that the cuts are currently going ‘too far, too fast’ but that he can’t promise to reverse them. As one Tory said to me yesterday, Labour is saying that the cuts are the problem but we might have to adopt them.

Even as Ed Balls embraces the need for austerity today, he takes a very different position to the coalition on why it’s necessary. The government has always blamed the need for cuts on the ‘awful economic inheritance’ bequeathed it by Labour. Balls, on the other hand, puts the blame squarely at George Osborne’s door. In his Fabian Society speech, he said: ‘George Osborne’s economic mistakes mean more difficult decisions on tax, spending and pay.’ His argument is that, by cutting ‘too far and too fast’, the coalition has caused the economy to stagnate and thereby created the need for more austerity. Labour has, of course, long been trying to shift the blame for the cuts away from themselves and onto the coalition.