Fraser Nelson

The Economist has some fun with Scotland this week, running a cover suggesting my motherland would go bust if it was independent. The map has lots of gags: the Outer Hebrides is renamed ‘Outer Cash’, ‘Edinborrow’ twinned with Athens etc. But it suffers from one central defect: the thesis is nonsense. Saying that Scotland would go bust without English subsidy is the clichéd unionist attack line, which has lost force over the decades because it is demonstrably untrue.

George Galloway’s victory last night is a reminder of a wider problem in British politics: the low regard in which all main political parties are held. By-elections can throw up quirky victories, usually ironed out in the general election. There won’t be an army of Galloway’s marching on parliament at the next election. It’s like Glasgow East: a classic Labour safe seat-cum-‘rotten borough’ taken for granted (and ignored) for so long that the ruling party’s apparatus had atrophied. Like John Mason in Glasgow East, Galloway won’t last long.    But the same phenomenon which took Galloway to victory last night, and humbled the main parties, is also at work in Scotland.

Are pensioners doing their bit for the recovery? The agenda of ‘intergenerational fairness’ has arisen in response to the idea that they are not, and ought to be taxed more. Daniel Knowles has made the case, in our cover story this week. Carol Sarler responds to him. In the leader, we reveal some data hitherto undisclosed: the way the oldies are responding to the recession. They're working as never before — the below graph shows (stripping out foreign-born workers) the change over the past decade: Between 2001 and 2011, all the employment increase for UK-born people was from pension-aged workers, while working-age employment dropped. This challenges the idea of the over-65s as a burden on the rest of society.

Will George Osborne’s refusal to look again at high levels of state spending become the greatest risk to Britain’s economic stability? There have been plenty of rude comments about the Chancellor’s supposed tactical ineptitude in the weekend press, but he has still managed to keep on borrowing and have almost no one notice. Osborne’s iron commitment is to spending, and a programme of cuts which total just under 1 per cent a year. His commitment to deficit reduction is flexible, as his three Budgets have demonstrated: Osborne spent the election campaign berating Labour for its lack of ambition in halving the deficit in four years. He’s now doing it in five, but no one points this out. Quite a result.

I’m presenting Week in Westminster at 11am on Radio Four today, and get to choose four topics for discussion. My political nodes were, of course, amputated for the purposes of this production. Here are the topics I chose: 1. Young vs Old. Osborne stepped on a landmine on Thursday: he didn’t expect his pension tax (minor, as Charles Moore argues in the Telegraph) to cause such a reaction. But I suspect he hadn’t realised the depth of feeling in this emerging clash of the generations. Osborne’s idea for freezing pensioners’ tax threshold was lauded on Twitter but lambasted in (most of) the press.

There’s much to applaud in this budget, but as ever we in Coffee House are focusing on things jumping out from the small print. Here are a few things I’ve noticed so far. 1. Don’t mention QE. In his Pre-Budget Report, Osborne was candid about his economic policy: ‘fiscal conservatism, but monetary activism’. That is to say, fiddling about on the margins with taxes, while the Bank of England — 100 per cent owned by the Treasury — is midway through the largest QE experiment ever attempted in the developed world. It is impossible to understand Osborne’s economic policy, his Budget and those it affects without also considering the effects of QE — the inflation, the low interest rates and the game-changing implications.

Nassim Taleb, the Lebanese-American academic whom we interviewed in The Spectator last month, is the subject of a Radio Four profile by The Economist's Janan Ganesh that was first aired last Monday but will also be on Radio 4 at 21:30 this evening. David Willetts is interviewed, saying that Taleb's work underlines the folly of long-term forecasts because ‘the big events that shape the world today are those which no one predicted four or five years ago’. The discovery of Shale gas, for example, could utterly change Britain’s energy requirements. Taleb’s heroes are Burke and Popper: his emphasis is on the need for humility, on how hard it is for any government to know what’s going on in society.