James Forsyth

There were two possible strategic approaches Labour could have taken to the PBR. One option was to surprise everyone by actually making cuts. They then could have said, "we've made all the cuts we can. Anything else would really hurt frontline services". This would have put them in position to challenge the Tories as to what they would cut to reduce the deficit faster. The other was to be really populist. They could have carried on spending, bashed the bankers, soaked the rich, and hope that they could get away without a crisis in the markets until the election. Instead, they’ve fallen between two stools.

At Tory conference a bunch of candidates got together for supper. The conversation turned, as it so often does on these occasions, to who might be the next leader. One candidate was advancing the case for Boris with some gusto, until another interrupted saying, ‘can you imagine Boris representing Britain at the Security Council.’ The table agreed that they couldn’t and so the conversation moved on. Certainly, this perceived lack of seriousness will be Boris’s biggest problem in going further than Mayor of London. Cameron had a point when he said that Boris was stuck in a buffoonish rut from which he would find it hard to escape. But if Boris can win re-election he will have enough of time to establish a record which demonstrates a certain level of competence.

Back in July, Lord Mandelson added defence to health and education as an area of spending that Labour would protect from cuts. But looking at page 97 of the Green Book, defence is conspicuously absent from the list of areas of public spending that are protected in 2011-2012 and 2012-2013. The only areas mentioned are NHS spending, schools, sure start, policing and overseas aid. As some of these are only receiving funding increases in line with inflation, it seems reasonable to assume that everything else - including defence - is likely to be cut in real terms.    (There is a commitment to spend up to £2.5 billion from the reserve on the mission in Afghanistan in 2009-10. But this will not add to the baseline of the MOD budget.

The number of polls showing the Tories below forty percent are causing some heartburn for the Tory leadership. When the first poll came out showing the Tory lead down, there was a feeling that this wasn’t all bad, that it would help remind the party that the election isn’t in the bag. But there is now mounting concern at Tory slippage, this is being reinforced by the fact that the party’s own research shows the same trends. Today’s leader in The Times, a paper which is normally editorially supportive of the leadership, was another unhelpful development.

On Thursday night Michael Gove announced that a Conservative government would pay off the student loans of those with good science degrees from quality universities. The move, paid for by cutting out a level of bureaucracy in teacher development, would help address the shortage of science and maths specialist in state schools. It was a smart piece of policy that even Ed Balls didn’t attack. But the Telegraph reports carping amongst various unions that the scheme does not go far enough. The NUT says that, “It is a real mistake to think that they can designate small number of universities as being better than the others.” This quote sums up so much of what is wrong with the British edcucational establisment.

Gordon Brown’s much heralded tripartite regulatory system failed the first time it was faced with a financial crisis, proof that taking away regulatory powers from the Bank of England was a massive mistake. Now, Ben Bernanke — who is trying to secure a second term as Fed Chairman and keep the Fed’s regulatory powers intact — is citing the Brown model as what not to do, telling the Senate banking committee: "[O]ver the past few years the government of Britain removed from the Bank of England most of its supervisory authorities.

The conventional wisdom in Westminster is that the election will be on May 6th. But a few shadow Cabinet members have told me that they think Brown will actually go in March, an idea that they have been pushing for a while. Their argument is that this quarter’s GDP figures will be quite good, boosted by the Christmas rush, and Brown would want to go to the country before, another more disappointing set of numbers came out. Second, Brown will want to avoid people seeing the effects of the new tax arranegements which will come into force in April. Finally, if the election was on May 6th, the first week of the campaign would be lost to the school holidays.