Economy

Should David Cameron just call the IMF immediately? Like, on Monday? This argument has been doing the rounds in Tory circles and tomorrow's Spectator has an important contribution from Niall Ferguson. He advises that Cameron takes a two-pronged approach. Prong one is to 'axe ruthlessly' and prong two is to call the IMF. He says: 'There is a very real danger that [things] could now spiral, Greek style, out of all control if foreign confidence in sterling slumps and long-term interest rates rise. Mr Cameron needs to do two things right away. He must instruct George Osborne to wield the axe ruthlessly with the aim of returning to a balanced budget over a credible eight- to ten-year timeframe.

By rights, Gordon Brown should fear this debate on the economy more than any other. Here are ten questions I would like to hear him answer:   1. You told Gillian Duffy yesterday that you have a "deficit plan to cut the debt in half over four years." This was a lie, wasn't it? Our debt is £771bn now. Your deficit plan ­- ie, to run huge deficits for years - will actually double it to £1,406 billion within four years according to the Treasury. The debt for which Mrs Duffy and other taxpayers are liable would double under your plans ­- yet you told her it would halve. How can you tell a lie of that magnitude, to the very sort of women whose taxes you intend to use to service this extra debt? 2.

Every politician will be thinking "there but for the grace of God..." today - but the Gillian Duffy incident is not just a gaffe. It is bad for Gordon Brown and Labour on very many levels. Here are ten of them.   1. The image of the Politburo pulling away in the Jag, slagging off the proles. This confirms the idea of an elite, who sneer at voters in private but try to charm them in public. And the idea that politicians (of all parties) say one thing on camera, and another when they think no one is listening. 2. The is not just a gaffe, but the PM on tape insulting the voters. It's the worst thing you can do in an election campaign (ie Obama¹s "cling to guns and religion" remark). Far worse than if Brown were, say, caught swearing, Nixon-style.

Given that Labour has put out a hilarious plea to discuss “issues” rather than personality (or lack thereof), I would like to rise to this challenge to discuss an excellent point raised by David Cameron on Friday: that the state spending/GDP ratio is far too high in many parts of the UK and needs to be lowered. Stating this utterly uncontroversial fact landed him in a bit of trouble, I suspect because of lack of understanding of the issues. So, in the spirit of Labour’s plea, here are some facts. Cameron told Paxo that: “In Northern Ireland, it is quite clear – and almost every party accepts this – that the size of the state has got too big. We need a bigger private sector.

Today’s new economic data gives a handy piece of ammo to the Conservatives.  It is untrue that, as Gordon Brown says, this recession was somehow milder than others. The economy contracted by 6.3 percent this time – it was 3.8 percent in the 1980s recession and just 2.4 percent in the early 1990s recession. I feel confident that the Conservatives will get this point across clearly, next time that Brown boasts that this recession has been somehow milder, thanks to his decision to “intervene” (ie, double our national debt).

George Osborne put in a fiery and impressive performance in the Chancellor’s debate today, firing off some memorable one-liners as well as unveiling a letter from the former head of the anti-avoidance group at the Treasury questioning the sums on which the Lib Dems’ tax plans depend. Indeed, since the Lib Dems surged, Osborne has found another level to his public performances. Today’s debate win followed a good spot by Osborne on the Politics Show on Sunday.   One striking thing about the debate was how it was Darling who signaled the assault on Cable when he started querying Vince’s numbers. It’ll be fascinating to see if Brown takes any similar swipe at Clegg tomorrow; his interview in the Indyhttp://www.independent.co.

Who would have thunk it? Inflation has again “surprised” on the upside – 3.4 per cent against a 2.0 percent target. Why so high? Even the return of 17.5 percent VAT does not justify this bounce. Might it have something to do with all those bank notes which were being printed by the Bank of England? Might interest rates be going up now to control this inflation – and, if so, what impact would this have on a UK economy which is already the most indebted of any major economy in history? The March figures show Britain has, by some margin, the highest inflation of any major European economy: it’s way higher than that of France (1.7 percent) Spain (1.5 percent) Italy (1.4 percent) or Germany (1.2 percent). And in America, 1.1 percent.