From our UK edition
CoffeeHousers may remember an odd New York Times editorial recently where they tried to blame the evaporation of British economic growth on austerity. Perhaps the newspapers’s famed fact-checkers had taken the day off, because the slightest piece of research would have exposed the premises of the piece as bunkum. This morning, the ONS has produced monthly public finance figures, showing current spending is still rising in Britain.
From our UK edition
It's been a year since the Coalition's Comprehensive Spending Review, but the public is in no mood to celebrate its anniversary. As the economy has failed to recover – GDP was no higher in June this year than at the time of the Review – sentiment has turned against the government. The latest YouGov polling shows that just one-in-three think the government is handling the economy well, against 58 per cent who say "badly". At the time of the Spending Review, the public was split evenly on this question. Similarly, just 33 per cent think the government's spending cuts are good for the economy, while half say they're bad. But people do think the cuts are necessary – by a two-to-one margin.
From our UK edition
Did you realise that today is the first anniversary of the government's Spending Review? Neither did I until the politicians started making a fuss about it, starting with Vince Cable on the TV last night. We'll post video footage of the Business Secretary's performance when we can, but this write-up here just about covers it. He made a few earcatching remarks — among them that "we didn't know that there would be a major crisis in our export markets and that energy prices would shoot up" — but one has captured the headlines more than any other. Asked whether he could promise that we wouldn't experience a double-dip recession, Cable replied: "I can't do that. We know conditions are very difficult but the government is doing the best it can to protect people.
From our UK edition
A particularly fractious PMQs today. Ed Miliband started by asking questions about Liam Fox which, frankly, seemed rather out of date given that Fox has already resigned. Cameron swatted them away fairly easy, mocking Miliband with the line "if you’re going to jump on a bandwagon make sure it is still moving". But when Miliband came back on the economy, Cameron was far less sure footed. The Labour leader had one of those great PMQs facts: despite the government having issued 22 press releases about the regional growth fund in the last 16 months only two firms have received any money for it. A visibly irritated Cameron then said that all Miliband "wants to do is talk down the economy" which drew hoots of derision from the Labour side.
From our UK edition
Yesterday, Lord Wolfson — the new Tory peer and CEO of Next — made an extraordinary offer: £250,000 of his own money to whoever comes up with the best plan to break up the Euro. It's the second biggest prize in economics, after the Nobel, and a great and patriotic idea from Wolfson, an original and forceful thinker with plenty real world experience from whom I hope we'll hear more. Inspired by this, we at Coffee House would like to make our own offer: a bottle of Pol Roger, our house champagne, to whoever can explain George Osborne's growth strategy. The chancellor needs some help on this front, with some unkind souls suggesting he has no strategy. This is not about suggesting a policy to Osborne — we may have a second competition for that one.
From our UK edition
For all the attention that is being focused in Westminster on the publication of the Cabinet Secretary’s report into the links between Adam Werritty and Liam Fox tomorrow, the real story is the countdown to Cannes. It is now three weeks since George Osborne declared that the eurozone countries had three weeks to save the Euro. So far, they haven’t done anywhere near enough. There’s also little sign that this weekend’s summit will see them make much progress. The Germans are already busy playing down expectations. From a British perspective, the intriguing question is: what does the coalition do if the eurozone continues to show no sign of getting its act together?
From our UK edition
If George Osborne is serious about growth, a relatively easy decision awaits him: to stimulate the economy by spending more on housebuilding. David Cameron knows there's a problem, and during Tory conference announced a "Tory Housing Revolution" to tackle the failing housing market, and plans to boost Right to Buy and release more land for house building that will deliver 200,000 new homes and create 400,000 jobs. All welcome, suggesting the government has recognised the role that housing can play in creating growth. But if the Treasury is looking to stimulate demand in the short term, there's still much more that could be done. Investment in housing can happen fast.
From our UK edition
Labour may have a narrow leads in the polls, but they continue to lag behind the Tories on the public's number one issue: the economy. Today's ComRes poll finds that just 18 per cent trust Eds Miliband and Balls "to make the right decisions about the economy", compared to 30 per cent for Cameron and Osborne. Worse, the two Eds don't even have the confidence of the majority of Labour voters: only 48 per cent trust them on the economy. YouGov also find Labour behind when it comes to the economy. 30 per cent think the Conservatives would handle it best, while just 26 per cent think Labour would. And that's despite the fact that 58 per cent of the public think the Coalition is managing the economy badly.
From our UK edition
So, CoffeeHousers, are Eds Balls and Miliband a gruesome twosome or the most sparkling partnership since Torvill and Dean? I ask only because they're really pushing the double-act shtick today. There's their first-ever joint interview in the Evening Standard, for instance, in which they reminisce about the Shadow Chancellor's 30th Birthday party, among other things. And then there was their joint appearance to officially launch Labour's 'plan for growth' campaign this afternoon. They were talking policy, but there was also a strong emphasis on their personal relationship: eye contact, anecdotes, that sort of thing. Blair and Brown we are not, they seemed to be saying. As for the policy, if you heard Ed Balls' speech to the Labour party conference, then you've heard it before.
From our UK edition
Today’s youth unemployment figures are simply appalling. It’s now 21 per cent amongst the under-25s, above the peak of 18 per cent seen under the 1990s recession. For the first time since then, Britain’s youth joblessness is worse than the European average. This is a tragedy, and not one we should accept as being a grimly inevitable aspect of the recession. Ed Miliband said in PMQs that a million young people are on the dole: a statistic everyone should get angry about. And we can think of what has gone wrong. The above graph shows how Britain has nothing left to boast about in unemployment. Blair used to love heading to Brussels and saying the real 'social model' was lower regulation which meant higher employment. What’s changed over the last 20 years?
From our UK edition
This morning, Fraser published a piece criticising the Institute for Fiscal Studies’ definition of poverty. Here is a counterpunch from Julia Unwin, Chief Executive of the Joseph Rowntree Foundation, which is the organisation that funds the IFS. This article is the latest post in our Right to Reply series. Do we really need another debate about the usefulness of a poverty measure? Of course, no definition is perfect. One of the hardy perennials of the poverty debate is the question of measurement. I wonder what it says about us as a country: why do we spend so much effort thinking about definitions of poverty, and so little responding to the reality? All measures of poverty have their uses — and, yes, their flaws.
From our UK edition
‘400,000 children will fall into relative poverty by 2015, says IFS’ we read on The Guardian’s front page today — yes, one of the most pernicious ideas of recent years is back. It’s the definition of ‘poverty’ as being figures on a spreadsheet, households deemed to fall beneath an arbitrary threshold. It’s almost entirely meaningless, and diverts energy and resources away from a real fight against poverty. I really do believe that, as ideas go, this one has damaged Britain more than almost any other over the last two decades — and it’s high time it was confronted.
From our UK edition
Here's the latest in our Another Voice series of posts, which give prominence to viewpoints outside the normal Coffee House fold: You can't help but notice that the UK economy isn't doing too well. Part of this is down to international developments, sure. But part – as Mervyn King said in "http://www.bankofengland.co.uk/monetarypolicy/pdf/govletter111006.pdf">his letterto George Osborne last week – is the result of "fiscal consolidation", aka spending cuts. The IMF's assessment, published a few days ago, shows both why debt has risen (lower tax revenues) and what is happening now (sharp contraction): And there's much more contraction to come: So why keep on contracting if it is affecting economic growth?
From our UK edition
Remember when Alistair Darling said that we faced the worst financial crisis for sixty years? Now Mervyn King has trumped that piece of doom-mongery by telling Channel 4 last night that "This is undoubtedly the biggest financial crisis the world economy has ever faced" (see video above, three minutes in). The Governor of the Bank of England saying that this is the worst crisis ever? On the day that he rushed another £75 billion into the economy? As mood music goes, it is a particularly dreadful symphony. It is also the sort of situation that Ed Balls will relish, especially with the Pre-Budget Report approaching. And it is true: George Osborne is in a tight spot, both politically and economically.
From our UK edition
So the Bank of England has pulled the lever on a second round of Quantitative Easing. Apparently sluggish economic growth, plus more ominous signs from the eurozone, have persuaded the central bank it can’t wait any longer to print more money. But given the evidence from QE1 - only a small boost to GDP accompanied by extra inflation - it's a big gamble. Mervyn King & the rest of the Monetary Policy Committee clearly believe that more money in the system is what’s needed to kick-start growth. But even they admit that QE1 didn’t live up to expectations, so why should QE2?
From our UK edition
Here's the latest in our Another Voice series of posts, which give prominence to viewpoints outside the normal Coffee House fold. This time it's the IPPR's Associate Director, Will Straw, with his five-point take on the fringe events of Tory conference, and the lessons that might be learned from them: 1. The Tories know that winning a working majority in 2015 is no easy task. The most popular fringe event according to Fringelist.com was ConservativeHome’s event on ‘How the Conservatives can win the next election.' Reflecting his remarks from the panel, YouGov’s Stephan Shakespeare wrote yesterday that, “today's electoral maths makes an overall a majority a mountain to climb”.
From our UK edition
Not a lot is the short answer. Many commentators argue that the speech failed to match the gravity of this moment in time; that it was safe; that it was not prime ministerial. Steve Richards believes that Cameron was timid, choosing to reassure rather than challenge. He writes: ‘Yesterday in his address David Cameron did Ed Miliband an unlikely favour. He made Miliband's seem deeper and substantial. The Labour leader's address last week was poorly structured and delivered, yet compared with Cameron's it had an argument and was at least an attempt to address the scale of tumultuous change sweeping across Britain.
From our UK edition
There were three big themes to David Cameron’s speech. The first was that decline is not inevitable, an attempt to tackle the mood of pessimism that is gripping the nation. The second was an attempt to reassert the Conservatives’ compassionate credentials, hence the emphasis on how the Liberal Democrats would have cut the NHS and the section explaining why conservatives should support gay marriage. The third was leadership, Cameron’s biggest advantage over the other party leaders. The attack on the idea of Britain’s decline being inevitable was powerful in places. But because Cameron has a non-ideological approach to growth it is hard for him to make a stirring argument about how the economy can be revived.
From our UK edition
Leadership, leadership, leadership. You couldn't miss it. Leadership wasn't just the clearest theme of David Cameron's speech to the Tory conference just now, but also one of its most common words. By my count, it popped up around 30 times. "I'm proud to lead this party," he said in the very first paragraph. "It is leadership we need," he continued. The aim, I'm sure, was to paint an even stronger contrast between David Cameron the Prime Minister and Ed Miliband the Sub-Prime Ministerial. But Cameron wasn't just talking about his own leadership. As he put it himself, "success will come: with the right ideas, the right approach, the right leadership. Leadership from government: to set out the direction we must take, and the choices we must make.
From our UK edition
As flat as flat champagne — that’s the verdict on this year’s Tory conference, which is ironic given that the two year ban on champagne was lifted this year. Bruce Anderson argues that the dour atmosphere is intentional. These are serious times for sombre politics, not the frivolity occasioned by a conference at a seaside resort. David Cameron’s first objective, Bruce says, is to reassure the country and present himself as a leader for a crisis. Cameron’s conference speech has been widely trailed by most news outlets this morning. Tim Montgomerie has a comprehensive overview of the speech. Cameron’s first challenge is to emote: these are "anxious times” for ordinary people, he will say.