Economy

Tomorrow's Word of the Day is 'Big'.  That is to say: the Tories are holding a Big Event, on the theme of the Big Society, and they've got all their Big Hitters out for the occasion.  In all, there'll be presentations from eleven shadow Cabinet members, followed by a speech from David Cameron.  You don't often see such a concentration of Tory firepower outside of conference season. What's clear, then, is that the Tories regard tomorrow as an important day for their election campaign.  And so they should.  Their Big Society agenda – aka, decentralisation – spans across some of their most encouraging policy ideas.

Gordon Brown and David Cameron have just been facing each other in the Commons chamber. Brown was notionally reporting back on the European summit meeting, but in relaity Brown and Cameron were setting the stage for the Chancellor’s debate tonight. Cameron claimed that there was a new dividing line in British politics, the Tories for ‘efficency and aspiration’ and Labour for ‘waste and taxes.’ Brown claimed that the Tories were indulging in panic measures and that their plans announced today would ‘withdraw the support that is necessary for the economy to have a sustained recovery.’ Brown might have some Keynesian economists on his side when he says this.

After reading Brown's claims in the Guardian today, this Kill A Minister mechanism in his speech today rather jumped out at me: "I will set out a clear and public annual contract for each new Cabinet Minister, detailing what I expect them and their department to deliver to the British people, and that their continued appointment is dependent on their delivery just as it would be in a business or any other organisation." I mean, you can just imagine what Alistair Darling's first "contract" would look like: You, the Chancellor, will undertake to deliver the following to the British people: i) Economic growth of 5 percent in 2010-11 ii) A sufficient level of investment in our schools, hospitals and families, to be determined by Number 10.

I’m at a loss. How can a government that will raise the national debt to £1.4 trillion be trusted to run the economy? The Daily Politics/Com Res poll shows that Labour is more trusted on the economy than the Tories; it indicts George Osborne’s political performance. As Fraser noted, Osborne blew an unprecedented opportunity on yesterday's Today programme. The danger inherent in a £1.4 trillion national debt is not a difficult argument to make. Tax hikes, inflation and soaring interest rates will be the progeny of Brown’s continued borrowing binge. Yet Osborne confined his attack to valid but esoteric points about credit ratings and a list of acronyms. Ken Clarke would not have made such an elementary political mistake.

Alistair Darling was terribly proud of the Government's record in his Budget speech today.  But he again dodged the question of how he'll get the deficit under control.  Ruth Lea has called this his "do little" Budget. With the country still facing hundreds of billions in borrowing, the few billion being saved are virtually neglible.  There are huge downside risks for those borrowing forecasts as we get onto the more contentious growth projections from 2011-12 onwards, which are way above City expectations.  And everything will get much worse if borrowing costs rise - Mike Denham has explored the frightening possibilities in a blog for the TPA. We had a proud boast that Britain has "the fastest deficit reduction plan of any G7 country", a massive Brownie.

The public remains infatuated with Vince Cable. A Politics Home poll reveals that 31 percent want Cable to be chancellor. It’s a crushing endorsement: Don’t Know is his nearest rival on 24 percent, followed by Ken Clarke on 16 percent. Cable’s reputation rests on his sagacious airs and an apparent contempt for party politics. His eminence is baffling. Fleet-footed fox-trotter he may be; economic guru he is not. Andrew Neil's interview shattered Cable’s invincibility. The Sage of Twickenham admitted to changing his mind over the HBOS Lloyds merger and his constantly shifting position on cuts was exposed. Add to that the ill-thought out Mansions Tax and Cable begins to look leaden. The Tories and Labour should emphasise Cable’s intellectual shortcomings.

George Osborne must have changed breakfast cereals, or something, because he's suddenly a different man.  After the Tories muddied their economic message to the point of abstraction a few weeks ago, there's now a new clarity and directness about the shadow chancellor's languange.  Exhibit A was his article in the FT last week.  And Exhibit B comes in the form of his article for the Sunday Telegraph today. It sets out five deceptions that we can expect from the Budget this week, and are all punchy and persuasive in equal measures.  But it's the first which, as I said on Friday, is the most important: "The Chancellor might be so brazen as to claim he has a 'windfall' because it turns out he has to borrow a few billion pounds less than he forecast in the autumn.

George Boateng, Alan Milburn and Andrew Smith have written a letter to George Osborne, calling him to task over the contradictions in his policy. 'It is not clear to us whether these mixed messages are a deliberate attempt to obscure your plans or a symptom of a confused approach to policy but either way the public deserves better.' Fair enough. Osborne's policy has become more concrete in recent weeks, but much remains still to do. Peversely, I think they've given too much detail, and have been found out because they haven't seen the nation's books.The reduction in the amount of cuts that are planned is a case in point. But talk about hypocrisy: take a look at Labour's economic policy in the run-up to the budget. They are certainly clear on cuts: there aren't going to be any.