Economy

It's twenty years, to the day, since the UK joined the European Exchange Rate Mechanism – a decision that would, of course, culminate in our withdrawal on Black Wednesday, 16 September, 1992. Subsequent years of strong growth placed those events in a fresh context, but here's The Spectator's take from 1990: The dangers of stageism, The Spectator, 13 October 1990 Give the European federalists and inch, and they will take a kilometre. Commenting on Britain's entry into the Exchange Rate Mechanism of the EMS, Sir Leon Brittan claimed that 'Britain has begun an inevitable move towards joining a full European Monetary System, including a single currency'. And the Guardian, which now outstrips even the Independent in Euro-enthusiasm, pronounced as follows: 'Be clear.

Pressure brings out the best in David Cameron and right now he’s coasting. He gave, as Pete and Fraser have said, a subdued speech. The content was there but his delivery was calm, except on two occasions when he spoke rather than read the autocue. He attempted to sell the Big Society (third time and no luckier). Then he said, with conviction, ‘I don’t believe in laissez faire.’ Those six words are pure Tory Reform Group, pure Iain Macleod, pure One Nation. He evoked that traditional form of Torysim with a firm description of how his government seeks to empower people as responsible groups not just free individuals.

When Sir Alan Budd was head of the Office for Budget Responsibility, there was an insistent argument in opposition circles that the independent body was biased in favour of the coalition. Much of this cented around the OBR's growth predictions. How on Earth, came the question, can growth hit 2.3 percent next year and 2.8 percent the year after? Isn't that a bit optimistic in view of all the warnings about a double dip? Won't the cuts stifle growth? And so on and so on. A few months ago, I produced a graph which showed that, when compared to a range of independent forecasts, the OBR's growth predictions weren't really optimistic at all.

We all know that the state grew enormously under thirteen years of Labour government. The most obvious manifestation of this was public spending – an increase of 60 percent in real terms took Britain from having one of the lowest levels of government spending in the OECD in 2000 (36.6 percent of GDP) to having one of the highest in 2010 (52.5 percent of GDP). But while reducing spending is clearly the most pressing issue facing the coalition government, we should not overlook another area where the state has grown dramatically: regulation. The British Chambers of Commerce’s ‘Burdens Barometer’ estimates that net cost of major regulations passed since 1998 is £88.

After one of the many sections in Ed Balls’ speech on the economy, there was a telling moment as Ed Miliband clapped half-heartedly with a thoughtful look on his face. One could almost see him trying to work out with whether he agreed enough with what Balls was saying to make him shadow Chancellor. There are dangers in both him making Balls’ shadow Chancellor and not. If he does make Balls shadow Chancellor, then it be a Neil Kinnock and John Smith situation all over again: the leader will have ceded control over economic policy. But if he doesn’t, then he’ll have an aggrieved Balls on his hands and considering all the other problems the new leader has to deal with, he might not want to add this to the list of them.

Admittedly, this is but an item of marginalia in the notebook of British politics – but I'd appreciate CoffeeHousers' views on it nonetheless. I'm talking about the Tories' efforts to squeeze an apology out of Labour for the state of the public finances. This is something that they've been trying to do since the election, but the strategy has been reheated in the aftermath of Ed Miliband's election. As Sayeeda Warsi put it on Saturday, "what I noticed in his acceptance speech was that there was … no apology for the role that he had played in the current economic mess." Other Tory folk have called for that to be put right. I'm inclined to take a dim view of this.

Politics Home has published an important poll, showing the staggering level of support for Vince Cable’s conference speech. The government will be pleased that its political attack on the financial services industry’s continued excess at time of austerity is cutting through; on the other hand, this could be seen as support for Cable’s emotive rhetoric. Worse still, the poll suggests that traditional Tory voters are the only group for whom Nick Clegg is more impressive than Cable. The business secretary has to be kept in government – the coalition can't afford to have a charismatic wreaking havoc from the backbenches. Support for Vince Cable conference speech Who are the impressive Liberal Democrat politicians?

What are we to make of the fact that No.10 gave the thumbs-up to Vince Cable’s bizarre anti-capitalist rhetoric today? “Capitalism takes no prisoners and it kills competition where it can,” he fumed – and you can argue that, technically, he is paraphrasing Adam Smith. But he has been in politics long enough to know what signal his speech sent out (and the reaction it would trigger). Mood music counts for a lot in politics, and in business. And the mood music from this government sounds like a bunch of politicians happy to tax the bejesus out of the high-paid - regarding them as ATM machines to be raided, rather than wealth creators to be welcomed. It's time to ask what harm all this posturing is doing.