George osborne

As Fraser observed at the weekend, Alistair Darling has a point: it is not as bad as was feared. The new Office for Budget Responsibility agrees, reducing estimated public borrowing to £155bn 2010/11. Still, it’s hardly a picnic is it? And I wonder what response Darling will get if he presses Cameron and Osborne for an apology. His growth forecasts have been downgraded to 2.6 percent and the structural deficit is greater than he admitted to – Paul Mason reckons it’s about £5bn more than was forecast. Osborne’s hands are tied by these figures; his calculations will be based on them. There is, of course, the possibility that the OBR's predictions are no more accurate than the Treasury’s soothsayings.

As Ben Brogan notes, there was a clean symmetry to David Cameron’s speech this morning: the crisis was Labour’s fault; therefore, Labour is to blame for the painful measures needed to restore stability. As Cameron put it: ‘I think people understand by now that the debt crisis is the legacy of the last government. But exactly the same applies to the action we will take to deal with it.’ Cameron made constant reference to the actions of the ‘previous government’. As a foretaste of what the Independent Office for Budget Responsibility will expose, Cameron alleged that Alistair Darling withheld estimates that Britain will be repaying £70bn per annum in debt interest by 2015.

What is Vince Cable up to? He is on manoeuvres, keeps making attempted power grabs from George Osborne. Barely a week passes without him rattling the cage to which Cameron and Clegg have confined him  - that is, the unwieldy and yet fairly powerless Department for Business, Innovation & Skills. For all its bulk, the department doesn’t really do anything. It has the universities brief, which is important, but it is certainly not an economics department as Cable was pretending last week. “It is a bit like the German economics ministry and the finance ministry,” he claimed. “Two departments, working in parallel.” As if.

George Osborne’s Asia trip has now been rounded off with a meeting of the G20 finance ministers in South Korea and he is now heading back to Britain and his Budget preparations. The trip must be marked up as a success for Osborne. In its communiqué, the meeting implicitly endorsed Osborne’s two major moves since becoming Chancellor, cuts this year and the setting up of the Office of Budgetary Responsibility:  ‘We welcome the recent announcements by some countries to reduce their deficits in 2010 and strengthen their fiscal frameworks and institutions’ No one can doubt that the Tories have comprehensively won the argument for in-year cuts.

Today is the first PMQs of the new term. Given the Coalition, the whole thing will be a bit different from what we’re used to. The leader of the opposition will, as before, have six questions. But no other MP will have more than one question.   There’ll be a couple of little things I’ll be keeping a particularly close eye on. During the opening of the Queen Speech debate last week, the front bench was so crowded that Nick Clegg was not really visible on the TV. Instead, Cameron appeared to be flanked by two Tories. It’ll be interesting to see if this leads to a slightly different seating arrangement today. I’ll also be watching to see if Clegg whispers advice to Cameron during it.

Sunshine might have won the day but today was also the start of the age of austerity, as George Osborne and David Laws laid out £6.243bn of cuts. Despite the fact that they were cutting ‘wasteful’ and ‘low priority spending’, both men were keen to insulate themselves against the Labour attack that the coalition is cutting for ideological reason. Osborne said that ‘controlling spending is not an end it itself.’ While Laws stressed that the Coalition would ‘cut with care.’ Within its first fortnight in office, the government has found savings with commendable celerity. But the fact that the whole package was agreed on at 11.

There's an entire gaggle of noteworthy interviews in the papers this morning, but let's start with David Laws in the FT. It's generally quite hard to draw substantive conclusions about the actual interviewee in political interviews, but I'm sure you wouldn't come away from this one thinking anything but that Laws is a good man to have in the Treasury right now. Here, anyway, are five observations about what he actually said:  1. Sharing the blame. If people in Tory circles feel that there's one major consolation to working with the Lib Dems, then it's that they can share the blame over spending cut.

I've just read through George Osborne's speech to the CBI annual dinner last night, and there's much in there about free markets and tax cuts that will encourage Tory supporters.  But one passsage seemed a little strange to me: "And on the subject of coalitions, let me be absolutely frank. As a member of the negotiating team, we did consider whether we could try to bluff our way into a minority government. But it was David Cameron’s bold vision and Nick Clegg’s great foresight which saw, before anyone else, that that option would be the greatest compromise of all. A weak, unstable government, risking defeat night after night in Parliament.

Is the new government marching across scorched earth?  They certainly claim so, and now they seem to have the civil service backing them up.  Speaking to the Beeb this afternoon, Jonathan Baume, the leader of a civil service union, said that senior civil servants had written "letters of direction" to Labour ministers in concern at the spending decisions they took in the final months of their government.  As Baume put it: "It's not a decision that is taken very often to ask for such a letter of direction, which is why it is regarded something of a nuclear option. So when it happens it tends to be a big spending decision, where the civil service believes this is not the right thing to do." Good to know, even if only in retrospect.

George Osborne and David Laws’ press conference this morning gave some hints about the chances of the coalition making it. The Treasury is where, I suspect, this coalition will succeed or fail. If the two parties can keep it together on how to reduce the deficit and how fast to do it, then I expect that they’ll be able to deal with the other issues that are thrown at them. Encouragingly from this perspective, Osborne and Laws seemed comfortable sharing a platform; there were no attempts to score points off each other. It appeared to be a harmonious double-act. But Osborne didn’t refer as many questions to Laws as he did to Phillip Hammond, his trusted and super-able deputy in opposition, back in the day.

The cover of today's Sunday Times spells out what we all suspected anyway: that the Labour government left behind acre upon acre of scorched earth for the Tories to contend with.  There's the £13 billion contract for tanker aircraft, the £1.2 billion "e-borders" IT project, a £420 million spend on schools, and so on – most of them put in place just before the election.  As James said earlier, Sir Alan Budd's audit of the public finances is likely to show that things are much worse than the last Budget dared admit. All this throws open the wider question of our debt position.  Even by Labour's measures, our national debt is likely to rise once all the hidden spending and exaggerated tax receipts are taken into account.