Economy

Clear your diary, invite the relatives over, and huddle around a computer: Gordon Brown will be delivering his New Year’s message – via podcast, on the Downing St website – this evening. Just in case you’ve got other things to be doing, this article in the Telegraph gives you a good taste of what to expect. In summary: dividing lines and optimism. There’s plenty on how the Tories are planning for “a decade of austerity and unfairness” – in contrast to our glorious PM, who predicts falling unemployment, more new businesses and prosperity for all. Indeed, the snippets that the Telegraph carries indicate just how eager Brown is to deploy a green shoots strategy.

It's the most straightforward dividing line the Tories could draw: "Tories good, Labour bad".  But it's still striking to see it deployed quite so bluntly as in George Osborne's Telegraph article this morning.  His point is that four more years of Labour will lead us to ruin, whereas a Conservative government would pull us out of the mire.  Here are some snippets: "Down the path of least resistance lie economic decline, higher interest rates, high unemployment, and more social breakdown. This is the path down which a cynical and exhausted Labour Government tempts us. But there is another path that leads to lasting recovery, rising prosperity, social responsibility and a new way of doing things. ... If Labour get in again, that won't happen.

David Cameron’s interview with Tim Shipman suggests that the Tory leader is about to undergo a course correction. The Tories have, rightly, begun to be frank with the public about the cuts that will need to be made and have, again rightly, refused to rule out a short-term rise in VAT. But the ‘we’re all in this together’ rhetoric has only been applied to the tough measures that are needed now not the prosperity that might follow in years to come. If Cameron is to start showing the public more of his vision of where he wants to take Britain then that is to be welcomed. But he also needs the rest of his top team to communicate to the public what the consequences of carrying on spending massively more than the country earns would be.

I make my second foray into the climate debate with trepidation. But visiting Denmark a few days before COP 15, it is impossible to escape the subject. Whether I speak to friends, family or strangers on the bus, everyone has a view and wants to share it. TV coverage of the forthcoming climate talks is relentless and there is even a separate passport queue for COP participants at Copenhagen’s stylish airport.   The latest “story” to emerge has pitted the new Climate Change Minister, the former commentator Lykke Friis against the Speaker of Parliament, Thor Pedersen. Though they are both from the same centre-right/liberal party, Mr.

Is the British economy turning Japanese? Since asking the question last year on Coffee House, the evidence has been piling up – and it makes for a cover story in this week's magazine (which I have written with Mark Bathgate). The similarities are as follows: 1. Japan’s bust followed years of debt-fuelled growth which vain politicians saw as prosperity. 2. When the bust came, Japan’s government kept on spending. They did so in the name of Keynsian stimulus, thinking this would in itself kick start a recovery. All it achieved was to sink Japan deeper into debt. 3. Crucially, Japan didn’t do full disclosure on the collapsed banks. To fix the banks was, they figured, painful root canal surgery that this recession-struck country could do without. 4.

The two top dogs at the Treasury Select Committee, John McFall and Michael Fallon, give remarkably different reactions to the news that ministers withheld details of emergency loans to RBS and Lloyds for over a year. McFall argues that secrecy was necessary to avoid a run on the banks; Fallon expresses outrage that Lloyds’ shareholders were not privy to all information when considering the disastrous purchase of HBOS, urged on them by the Prime Minister.   Both have their points. Blind panic is the defining recollection of those autumnal days. If the situation had been exacerbated by full disclosure of the mess RBS and Lloyds were in then God alone knows what pandemonium would have ensued.

So the dividing line persists.  Today, both Gordon Brown and David Cameron will talk about "going for growth" at the CBI's annual conference.  But it all, more or less, comes down to the same, dreary "investment vs cuts" line that we've heard countless times before.  According to the Times, Brown is going to say that growth is the best way of tackling the deficit, rather than those nasty Tory cuts.  And, what's more, "he hopes investment from China will drive the recovery". Of course, growth will have a role to play in reducing the deficit.  A vibrant economy will have a better chance of tackling record deficits and debt levels than a sinking one.  But to indicate that extensive cuts will not be necessary is disingenuous in the extreme.

Ever the contrarian, Michael Portillo makes a case that you don't hear from many on the right in his interview with Andrew Neil on Straight Talk this weekend.  George Osborne has given "a fair amout of detail" about the Tories' debt-reduction plans, he says, but that could be the wrong approach: "I wouldn’t seek probably to give very much more detail ....  You know, I was with Margaret Thatcher when she came in to Government in 1979, we faced a big public spending problem.  It was terrible.  It was a hard slog but she didn’t cut public spending.  I was Chief Secretary between ’92 and ’94 – big public spending problem – I was trying to cut public spending; I did not succeed in cutting public spending.