Peter Hoskin

Niall Ferguson's article in today's FT may concentrate on the case of US banks, but it contains much food for thought for UK policymakers.  Here are a few key paragraphs: "The US could end up running a deficit of more than 10 per cent of gross domestic product this year (adding the cost of the stimulus package to the Congressional Budget Office’s optimistic 8.3 per cent forecast). Today’s born-again Keynesians seem to have forgotten that their prescription of a deficit-financed fiscal stimulus stood the best chance of working in a more or less closed economy. But this is a globalised world, where unco-ordinated profligacy by national governments is more likely to generate bond market and currency market volatility than a return to growth.

Right, I've been determined to avoid posting about the snow, but this FT article is just too eye-catching to go unnoted.  It reports that today's snowfall, and the increased absenteeism it's precipitated, has cost the economy around £1 billion.  Hardly ideal during a recession, and things could get worse.  Here's a quote from Stephen Alambritis of the Federation of Small Businesses: "If this goes on for a few days or even a week that could sink into the recession and make it longer than it would have been. This has knocked back the spring feel good factor, which we hoped would kick start the economy." For once, Brown may be in luck.  The Met Office's severe weather warnings don't last beyond tomorrow...

With Brown on the ropes, the battle to become Labour's next (post-election) leader is in full swing.  And, according to Patrick Hennessy's article in the Sunday Telegraph, it could be throwing up some odd alliances.  Here's how Hennessy describes the recent tussle over Heathrow: "Objecting to the third runway is a handy way of appealing to Labour's left, who will be important in any contest. Mr Miliband came up against his former brother-in-arms Mr Balls. The Schools Secretary, who had no departmental interest in Heathrow, used the same meeting for a brutal assault on Mr Miliband's stance. It was a telling moment. Mr Balls, 41, did so knowing he had the support of Lord Mandelson.

A snippet from the Times report on Brown's "building programme" for council houses: Mr Brown has the support of Margaret Beckett, the Housing Minister, in pushing through new regulations, according to government sources, but Alistair Darling, the Chancellor, is said to be resisting proposals that could add billions of pounds to public debt. If you remember, there were numerous reports of tension between PM and Chancellor over debt 'round PBR time.  Of course, nothing may come of it - and it certainly hasn't done much to restrain our eye-watering levels of public debt - but the idea that Darling is in some way a roadblock to Brown's plans will surely fuel the 'Cable for Chancellor' speculation.

Sunder Katwala, General Secretary of the Fabian Society, makes the case for a pre-election Lib-Lab coaltion in this week's New Statesman.  His central points are that it could save Labour from electoral wipeout and would enable the two parties to outflank the Tories on "progressive" policy.  This paragraph pretty much sums it up: "The coalition would not mean guaranteed re-election but - going into it with a majority of over 150 - it would have more than a decent shot.

Earlier, from the IFS Green Budget launch, I wrote of how long it's going to take for future governments to pay off Brown's debt binge.  Above is the graph, from the Green Budget, which illustrates the point.  As you can see, it will take until around  2032 for us to get back to the 40% debt-GDP ratio that (officially) prevailed under Brown's fiscal rules - and that's assuming that governments between now and then embark on a fiscal tightening programme of spending cuts and tax hikes.  Even with more severe fiscal tightening, it's going to take until around 2025.  One thing this fails to account for, though, is how much debt Brown's hidden off balance-sheet.  The real prospect facing future governments may well be far more horrific.

Just how far-reaching could the Lords-for-hire scandal turn out to be?  Pretty far, if the latest reports are anything to go by.  This morning's Mail revealed that 1-in-5 Lords act as consultants or advisers to "outside interests".  And now the Standard discloses that Jack Straw has received money from one of the peers at the centre of the row - in one case, as a "personal gift".  Of course, we should reserve judgement until after any proper inquiry, but the Straw connection will almost certainly cause a few headaches on Downing Street.  Given Labour's faltering poll position, they'll be worried by any indication - however slight or tangential - that the Government itself is embroiled in this scandal.