Treasury

In interview with the Sunday Telegraph today, George Osborne stresses that the banks have got to start lending again – and he’s right to do so. The easy availability of cheap credit may have done much to get us into this mess, but now we face a converse problem. As a recent Bank of England report shows, net lending from the banks to businesses remains negative – or, in other words, more is being paid back than given out – and the situation is getting worse. With small and medium businesses so reliant on credit to get themselves off the ground, this doesn’t augur well for a powerful recovery. But

Iain Duncan Smith is on a roll, and the roll continues with his interview on Straight Talk with Andrew Neil this weekend. Supporters of welfare reform will hear plenty to encourage them, even if only on a rhetorical level. Duncan Smith discuses how the fiscal climate makes this a “once in a generation opportunity and chance to change [welfare] now,” and how Beveridge’s original intentions have been subverted by a system which traps people out of work. But the most reassuring segment, by far, is this: “I, well, certainly, you know, I’ll be honest with you, there was certainly a discussion about that, everything was in the discussion, but my

Rachel Sylvester is on top form in the Times today, and I’d urge CoffeeHousers to delve behind the paywall (or borrow someone’s copy of the paper) to read her column.  Its central point?  That ministers are discovering ingenious ways to exploit and undermine the ringfenced health and international development budgets.  The Home Office is saying that drug rehab programmes should fall under health spending.  The Foreign Office is trying to pass off some of their spending as development, and so on.  And, crucially, the Treasury seems to be going along with it: “The Treasury seems to be tacitly endorsing this approach, with officials emphasising that departmental boundaries are artificial.” As

Picking up David Laws’ axe at the Treasury was never going to be easy – but all credit to Danny Alexander, who seems to be managing it with some degree of gusto.  After those extra savings he announced a few weeks ago, the Chief Sec has now written to ministers asking them to identify cuts of up to 40 percent in their budgets.  I repeat: 40 percent.  That’s higher than the highest roundabout figure I heard before the election (30 percent, from civil servants as it happens).  And it tops the 33 percent that the IFS suggested might be necessary last week.  Quite a few ministers will be quaking at

Much ado about the Guardian’s scoop this evening: a leaked Treasury document which forecasts that up to 1.3 million jobs could be lost as a result of the spending cuts in the Budget.  Or, to put it in the words of the document itself: “100-120,000 public sector jobs and 120-140,000 private sector jobs assumed to be lost per annum for five years through cuts.” You can expect Labour to get stuck into these numbers, and the fact that they were previously hidden from public view, with no uncertain relish.  Ed Balls has already described them as “chilling”.  But it’s worth making a couple of points, by way of context: i)

By her usual standards, Harriet Harman was quite effective in her response to George Osborne’s Budget earlier.  She was clear, direct and had a few gags at Vince Cable’s expense.  And she also benefitted from what, on the surface, was a strong central attack: the Office for Budget Responsibility, she said, has downgraded its jobs forecasts on the back of the Budget.  And so, she followed, this is a Budget which destroys jobs. But there were a few things that Harman wasn’t letting on.  First, as Jim Pickard points out at the FT, the OBR forecasts haven’t shifted by all that much from their previous incarnation.  And, second, they are

The Big Society is a great idea. But its problem has always been that it lacks definition; voters and even some Tory MPs aren’t quite sure what it means. But an idea being floated today gives you a sense of its practical and political potential. It is being suggested that the community right to buy, the idea that the community should have first refusal on any asset being sold off, should be applied to the port of Dover. The last government wanted to privatise the port but the new MP for Dover, a Tory called Charlie Elphicke has proposed that a community trust be allowed to buy the port and

To address the deficit, George Osborne will probably have to raise taxes. This is a grim truth to which most people are reconciled. But raising taxes and raising revenue are two different things. If the Chancellor is serious about closing that deficit, then he would doubtless be interested in the idea that a Capital Gains Tax raise from 18 per cent to 50 per cent might be a chimera tax. That is to say, one which raises no money at all. Worse, in fact, the odds are that tax revenues will fall and the deficit will be made worse by this tax rise. The international evidence is absolutely clear. As