George osborne

While welcoming George Osborne’s emphasis this week on raising employment, I have some caveats about his target – to have the highest employment rate in the G7. This isn’t hugely challenging. Those in employment currently amount to 71.2 per cent of the UK population of working age, well ahead of Italy (55.5 per cent), France (64.1 per cent) and even the USA (67.4 per cent). Germany, at 73.5 per cent, is the current table-topper and the one Mr Osborne aims to overtake. Aggregates like this, though, are dodgy to interpret and are affected by differences in age cohort size and other factors.

George Osborne's commitment today that the Conservatives will fight for full employment in Britain is another way for the Chancellor to make an iconic gesture towards 'blue collar' voters who might still feel left behind by Britain's recovery (he can find a useful guide on other things to do in the pages of today's Sun). The first was a rise in the minimum wage, long fought over by Conservatives as a measure which could damage employment, but embraced by the Chancellor as a way of showing that the recovery is for the many, not just the few. Today's commitment in the Chancellor's speech - which was initially billed as Osborne describing Britain as 'starting to walk tall in the world - was an attempt to show that walking tall can include those at the bottom as well.

After Nick Watt's stunning scoop this morning on an unnamed minister saying that an independent Scotland could keep the pound after all, George Osborne and Danny Alexander have released this joint statement: 'A currency union will not work because it would not be in Scotland’s interests and would not be in the UK’s interests. Scotland would have no control over mortgage rates, and would be binding its hands on tax and funding for vital public services. The Scottish Government are proposing to divorce the rest of the UK but want to keep the joint bank account and credit card. The UK would not put its taxpayers at risk of bailing out a foreign country and its banks. Parliament wouldn’t pass it, and the people wouldn’t accept it.

Today's inflation figures bring more good news for the government. CPI inflation is now down at 1.7 per cent, the lowest rate in four years and below the Bank of England's target – so making it less  likely that interest rates will rise before the next election. Inflation as measured by RPI is 2.7 per cent, down from last month's 2.6 per cent. With Osborne's pensioner bonds, which will offer 4 per cent return, the Tories can now have their interest rate cake and eat it. Adding to the buoyant mood in coalition circles is that Labour still hasn't worked out its critique of the Budget. I'm told that Labour have not yet informed the government whips which Budget resolutions they intend to vote against. Normally, this information would have been relayed last night.

Last week’s budget has transformed the political landscape. The welfare cap, new savings and pensions freedoms and ‘NISA’s, have all been much commented on. So too other micro measures, like the very welcome continued investment in science and innovation for the innovation economy, and support for exports. But I think the events of Wednesday went far beyond entrenching the defining key fiscal reforms of ‘Osbornomics’. It laid down the dividing lines on which we will fight, and can win, the next election. And as we saw in the Chamber on Budget day it has brilliantly exposed the growing tensions between Ed Balls and Milliband, who couldn’t agree how to respond. This is a slow-fuse torpedo Budget which has holed Labour amidships.