Economy

Saturday

Martin Vander Weyer

Any Other Business | 4 December 2010

From our UK edition

What Ireland lacks now are statesmen who can make the case that recovery is possible The screen at Manchester airport tells me I’m about to board an Aer Lingus flight to Dublin, but there’s a Lufthansa plane at the gate. ‘Blimey,’ I mutter, ‘this bailout’s moving fast.’ I’m looking at the wrong gate, however, and it’s an Aer Lingus stewardess who becomes the first of many people during my 36-hour visit to wish me ‘the best of luck’. Luck looms large in the Irish psyche and it’s what they long for right now — an oil find would help, I hear one passenger remark — plus a bit less attention from world markets and media.

Thursday

Matthew Sinclair

Putting a stop to taxpayer funded environmentalism

From our UK edition

It’s that time of year again, time for the world to pay attention to climate change policy for a few weeks.  Most of the year, schemes like the EU Emissions Trading System and the Renewables Obligation just wallow in dysfunction and quietly cost us a fortune, adding to our electricity bills in particular.  Manufacturers pay attention, and higher energy costs threaten to drive industrial jobs abroad, and the poor and elderly feel the effects, even if they don’t know why their bills are rising.  But the only people who really have the staff and the organisational clout to pursue this issue all year round are the environmental campaigns.   Many of them, like Friends of the Earth, have multi-million pound budgets and dozens of staff.

Wednesday

Daniel Korski

The Guardian’s Wiki-spin

From our UK edition

In today's Wikileaks revelations, it is Mervyn King's turn to be pushed through the mill. Did he act politically when pushing for a deficit reduction plan? Was he critical of David Cameron and George Osborne or just pointing out the obvious: that the Tory leaders had not held power before and - shock horror - were keen to get elected? The Guardian's reading of the cables suggests that the government's Batman and Robin (to keep with US diplomatic style) were unprepared for the task ahead. But re-read the key passages and it is clear that Cameron and Osborne were no different from any other opposition leaders - reliant on a small staff, and unprepared for the special pleading they would face as they entered government and tried to cut the deficit.

Lloyd Evans

Nothing Miliband says can rain on Mr Confident’s parade

From our UK edition

Back from Zurich, where he’s been helping FIFA determine the winner of the world’s greatest bribery festival, Cameron was in hearty form at PMQs today. He faced Ed Miliband who looks increasingly like the life and soul of the funeral. His party is riding high in the polls – but only when he’s away. As soon as he pops his head back around the door a groan of misery goes up and his rating collapses. Earlier this week the OBR gave an upbeat assessment of the economy so Ed sent his bad-news beavers to sift through it for signs of toxicity. They couldn’t find much. Jobless totals are to rise. But only a bit. The economy will grow reluctantly. But not that reluctantly. We’re faring worse than some of our rivals, and better than others.

Tuesday

David Blackburn

Palin versus Romney

From our UK edition

The GOP is ambling towards the start of the 2012 nominations race. Two probable candidates are busy pitching their media tents. Sarah Palin is on a coast to coast tour, flogging her latest book; she has also been cheering on her daughter on Dancing with the Stars and she recently gutted a halibut on her Alaskan reality TV show. It’s all action and personality from the Mamma Grissly. By contrast, the cerebral Mitt Romney has agreed to appear on…Jay Leno’s Tonight Show. Leno makes Parky look almost vital. As one Democrat strategist observed: “On the hipness scale, this is far from Bristol Palin on ‘Dancing with the Stars.’ It’s more like Richard Nixon on ‘Laugh In’.

Monday

Fraser Nelson

Tax cuts: a Swedish recession remedy

From our UK edition

I travelled in from frozen Stockholm this morning. My colleague Mary Wakefield set out from County Durham. No prizes for guessing whose journey took more time due to snow. When my £38 norewgian.com flight arrived at Gatwick, the captain said: “Sorry, we’re going to be delayed. They can’t seem to find people to open the gate, they say they are short staffed.” The Swedes on the flight burst out laughing: welcome to Britain. Mary’s £107 train was two hours late arriving to the station, and spent a further two hours stuck in the snow. That the Swedes do better at us in the snow is no great surprise, but it’s odd to see them do better at supply-side economics.

James Forsyth

Osborne airs the Tories’ election message

From our UK edition

George Osborne’s autumn statement previewed what I suspect will be the coalition, or at least the Conservatives, re-election message. ‘This government has taken Britain out of the financial danger zone and set our economy on the path to recovery.’   Today’s OBR forecast was a boon for the Chancellor. It suggests that there won’t be a double-dip recession, as his critics suggested there would be. The improved economic numbers allowed him to come to the House and declare that the deficit reduction ‘plan is working’, and that already the coalition has saved the country £19 billion in debt interest. Alan Johnson was his usual self in response.

David Blackburn

Osborne saves his glad tidings for another day

From our UK edition

Courtesy of Paul Waugh and the Standard, the OBR projects there to be a £6bn budget surplus by 2015-16. There was no fanfare to herald this in George Osborne’s statement, which was a litany of dirge-like thanksgiving for catastrophe averted. The Treasury is now describing the figure as being 'within the margin of error’, which is fluent Sir Humphrey-speak. The Standard’s discovery is another example of the government deliberately hiding good economic news - in what Fraser terms Osborne's Paul Daniels Act. Now why, I wonder, would a self-confessed tactical obsessive, who just happens to be the Chancellor of the Exchequer, be doing that?

David Blackburn

Setting the scene for Osborne’s speech

From our UK edition

George Osborne will make a brief statement to the house this afternoon, responding to the Office for Budget Responsibility’s revised growth forecasts. Reuters reports: ‘As expected, the Office for Budget Responsibility raised its 2010 growth forecast to 1.8 percent from its 1.2 percent June forecast to factor in a surprisingly strong performance in the middle of the year.’ The upgrade fuels Osborne’s positive narrative: the coalition pulled Britain from the abyss and international confidence in Britain's economy is growing. These forecasts vindicate the government’s ‘cut with care’ strategy. Concrete savings are now being made and they enable the Chancellor to announce that public sector net borrowing will fall.

Sunday

David Blackburn

Some early statistical vindication for IDS

From our UK edition

The Observer has news that will warm the government’s hearts. Ernst and Young have conducted a report that suggests 100,000 public sector jobs will be saved thanks to the savings made by welfare reform. The report’s other finding, a crucial one, is that the Treasury will be raking in £11bn by 2014-15. So then, a statistical vindication for IDS’ reforms, the economic side of them at least. It also gives the government some defensive hardware ahead of tomorrow’s Chancellor’s autumn statement. Not that it really needs it. On the back of Britain’s strong economic performance in the third quarter, the Office for Budget Responsibility is expected to raise its 2010 growth forecast from 1.2 percent to 1.7 percent.

Friday

Gavin Kelly

The Big Squeeze

From our UK edition

The media pack is often blind to an impending political car-crash.  For instance, very few in Westminster, or the media, noticed the scrapping of the 10p tax band until the screech of twisting steel turned heads. The same is happening now in relation to living standards. The media and political establishment are yet to wake up to the fact that working families in Britain are about to become poorer (though hat-tip to Allister Heath for being quick off the mark on this front). The gathering wisdom is that, with the recession now behind us, household budgets will start to recover.  We have just published a new report – Squeezed Britain  – that paints a darker picture.

Thursday

James Forsyth

Why Spain matters to Britain

From our UK edition

So far Ireland and Greece have been bailed out with relative ease. If Portugal required external assistance, Europe could run to that too. But bailing out Spain would be another matter entirely. As The New York Times points out today, the Spanish economy is twice as big as the Irish, Greek and Portuguese ones combined. Spain’s situation is not yet critical. But as the NYT piece sets out very clearly, there are some extremely worrying signs. The gap between Spanish and German gilt yields is now at the biggest point it has been since the introduction of the euro. Spanish banks are also heavily exposed to Portuguese debt.

Wednesday

Daniel Korski

Britain should have a Freedom Minister

From our UK edition

Has liberal democracy lifted people out of poverty? To a casual observer, the answer is unequivocally yes. One part of the world - the industrialised democratic northern half - is both richer, and healthier than the (historically undemocratic) South or East. Coincidence?   The West's success may be a function of north Europe's temperate climate, cultural mores shaped on the windswept British isles and European plains, the competition spurred by centuries of warfare, the invention of modern banking, the head-start provided by inventors, colonial conquests and possibly even the ideas and ecclesiastical hierarchy of the Judeo-Christian faith. But many other regions had similar in-puts. Perhaps the West was just blessed by better leaders, thinkers and entrepreneurs.

Lloyd Evans

The corpse of Black Wednesday has been exhumed, and the demon exorcised 

From our UK edition

Cameron clearly doesn’t rate Ed Miliband. That may be a mistake in the long run but it worked fine today. The opposition leader returned to PMQs after a fortnight’s paternity leave and Cameron welcomed him with some warm ceremonial waffle about the new baby. Then came a joke. ‘I know what it’s like,’ said Cameron, ‘the noise; the mess; the chaos; trying to get the children to shut up,’ [Beat], ‘I’m sure he’s glad to have had two weeks away from it.’ This densely worded, carefully crafted, neatly timed quip had obviously been rehearsed at the Tory gag-conference this morning. The fact that Cameron had time to polish it suggests that he anticipated no trouble from Miliband today.

David Blackburn

Obama stands firm on Korea

From our UK edition

There is no diplomacy with maniacs. North Korea has been the grip of one or another lunatic for 60 years; with the succession still unsettled, Pyongyang is now a salon for the insane. The escalation of posturing, violence and the nuclear programme is a brazenly mad strategy to bribe other countries in exchange for good behaviour; it’s piratical. The world’s geopolitics may be changing, but the US President remains supreme among leaders. Yesterday, Iain Martin argued that Barack Obama had to make a strong and unequivocal statement about the situation, at least to encourage China to reprimand its errant ally. The President did so.

Tuesday

Daniel Korski

The end of the Wall Street world

From our UK edition

Over the last decade, Wall Street has become an important foreign policy actor in its own right, almost as important as the lobbyists on K-Street and the White House on Pensylvania Avenue. The ebb and flow of capital has been a decisive international force in determining the fate of nations - most recently illustrated in the cases of Greece and Ireland. As an aide to President Clinton once said: in a second life he would like to come back as the bond market. But Wall Street has influenced foreign policy in a deeper way too: by changing the way that successive US administrations see the world. Not by focusing on the bottom-line. International relations cannot be reduced to cost/benefit analyses.

Daniel Korski

The mad hermit strikes

From our UK edition

North Korea has again put itself at the centre of international relations. As the US pushed for a start to six-party talks, Pyongyang lifted the veil on a hitherto secret uranium-enrichment facility and launched an artillery barrage on a South Korean island,  injuring four soldiers, and damaging several buildings. The South Korean military scrambled fighter jets and returned fire and the situations remains tense. Conflict with nuclear-armed North Korea has intensified in recent years. North Korea launched nuclear and missile tests last year and sank a South Korean warship in March this year, killing 46 sailors. But the first ground-to-ground assault across the DMZ represents a new escalation in the decades-long, but usually non-violent conflict.

David Blackburn

Another coalition compromise, this time on immigration

From our UK edition

Agreement has been reached on the troublesome immigration cap. The BBC reports that skilled non-EU migration will be limited to 43,000. This is just a 13 percent reduction from this year’s cap and there are numerous exemptions to be made; notably, inter-company transfers will not be included when workers earn more than £40,000 per annum. This is a considerable moment for the coalition because the cap was thought unworkable. The Conservatives have their cap, a pep pill for the embattled Home Secretary.  But this is also a victory for Vince, who is being feted by businessmen across the airwaves this morning. Cable and May have also been praised by Migration Watch’s Andrew Green for formulating policy to tackle Britain’s net migration.

Monday

David Blackburn

Cowen will seek a dissolution next year

From our UK edition

There has been much consternation and intrigue swirling around both Dublin and Westminster this afternoon about the near-collapse of the governing coalition in Ireland. The Greens, who support Brian Cowen’s Fianna Fáil-led government, pulled out; seeking a dissolution in the hope that it might save their skins from the fate that is likely (though not certain) to befall Fianna Fáil. If the government had collapsed, then IMF would have postponed the bailout. At least now Cowen can formulate a monetary plan, hopefully under the oversight of Ireland's international creditors, to free the country from its current extremis.

David Blackburn

Ireland’s crisis is the fault of Fianna Fáil, not just the euro

From our UK edition

In all likelihood, George Osborne will rise this afternoon to groans if not jeers. Britain looks set to lend Ireland £7bn as part of multilateral and bilateral bailouts. Many, particularly the Eurosceptic right, question our involvement, given our straitened financial circumstances and the apparent fact that Britain is sustaining the eurozone’s monetary and debt union, and will have to borrow to do so.     George Osborne has been adamant throughout: Ireland is too important to Britain’s recovery to risk collapse – British and Irish banks are closely linked, debts and borrowing are often co-dependent, trade is very profitable. That the bailout should strengthen the euro is a natural consequence of Ireland being a member of the euro.