George osborne

Today’s papers carry news that British nuclear submarines are going to be replaced: a strong indication that the government will replace Trident with a like-for-like deterrent in 2016, contrary to the wishes of the Liberal Democrats. Philip Hammond appeared on the Sunday Politics earlier today to answer questions from Andrew Neil on Trident and manpower cuts to the army. Hammond said that the Trident decision has not been taken. The government is, he said, simply ensuring that Britain can implement whatever decision is taken. On army cuts, he said, ‘We [Britain] will still be able to make a major contribution to a cross-alliance operation.

What we saw at the Mansion House last night gave us some hints of where British economic policy will go if the Eurozone start to fragment. For the moment, Osborne is persisting in getting the Bank of England to do the heavy lifting using monetary policy rather than attempting a fiscal stimulus. The first line of defence is what one source described to me as ‘highly active monetary policy.’ The fact that the chancellor has persuaded the notoriously prickly Bank Governor to offer loans against weaker security is a definite success for him and a sign that he’s developed a far better relationship with King than either Brown or Darling.

George Osborne will formally unveil the government’s banking reforms in a speech at Mansion House later this evening. The reforms are in line with the recommendations of Sir John Vickers’s Independent Banking Commission (ICB), as laid out by the Treasury, which published this White Paper earlier today. For those who’ve forgotten, Vickers suggested splitting retail and investment banking through a Glass-Steagall-type ‘ring-fence’ mechanism that would protect retail, SME deposits and overdrafts while commanding that the ring-fenced part of the bank is not dependent on other departments for liquidity.

Why was David Cameron so lukewarm in his endorsement of HS2 at PMQs today? (In response to a question about the project's future, he offered, 'I believe we should go ahead with HS2', which is rather than different to asserting that it will go ahead.) The project is – as one Tory minister has told The Spectator – ‘effectively dead’. Ross Clark has investigated why in the cover story of tomorrow’s issue. Here’s what he found: 1). George Osborne has turned against it. The chancellor and Tories’ strategic brain was once HS2’s biggest cheerleader, but experience of office has made him realise that Britain’s limited airport capacity is a bigger threat to economic growth.

Gordon Brown, Sir John Major, Ed Miliband, Harriet Harman, Alex Salmond, Nick Clegg, George Osborne and David Cameron will appear before the Leveson Inquiry next week, for what will be the inquiry's last week of evidence. All eyes, of course, will be on Cameron, who is due to appear on Thursday. He will be embarrassed once again by his past proximity to disgraced News International executives, and his handling of the News Corp BskyB takeover. He previewed his likely answers on BSkyB in an interview with Andrew Marr last week. He said that his intention was for Vince Cable to marshal the bid, but that was scuppered by Cable’s preposterous comments about ‘declaring war’ on the Murdochs, made to Telegraph journalists posing as concerned floozies.

Before David Cameron’s trip to Berlin later today, George Osborne appeared on the Today Programme to emphasise that in the event of a Eurozone banking union, Britain would require safeguards.   Given the importance of finance to this country, Cameron and Osborne can’t accept anything that creates a two-tier single market for financial services. The Tory leadership is also acutely aware that it was this issue that led to Cameron vetoing a proposed treaty last year. It would be politically dangerous for Cameron to do anything that could be characterised as undermining his own veto.   One option being floated by some Tory Eurosceptics is a British veto on financial services.

There is a cracking scoop in today’s Mail on Sunday. An anonymous Tory backbench MP has excoriated George Osborne’s performance as Chancellor. The MP repeats many of the arguments made by Fraser on Thursday, as the latest lines of the Budget were excised. Osborne is, apparently lazy, uninterested in economics and hubristic. The MP implies that Osborne’s mind is not sufficient to pull this off as chancellor. He writes: ''[Nigel] Lawson used to say that he had to work 18 hours a day and virtually gave up alcohol just to keep on top of things when he was Chancellor. And he had a formidable intellect to start with.

It’s tempting to see comedy in the government’s 30th U-Turn, but there’s a more serious side to this. It fits a pattern: act first, think later. The lack of special advisers in government is part of the problem. Even in the Labour days, I argued for more and better political appointees to help a reforming government get its agenda through. But the problem this time was George Osborne’s chillaxing approach to being Chancellor, coupled to what seems to be a casual disregard for detail. This approach was embodied in his decision to join Cameron on White House jolly the week before delivering his shambolic Budget. It makes you wonder if his growth strategy (or what purports to be his growth strategy) has had enough thought put into it.