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.

What with the snow, it's been a testing couple of days for Transport for London.  But the interview with the organisation's head, Peter Hendy, in today's Standard paints a encouraging picture.  I was particularly struck by this passage: "It doesn't help either that TfL, which employs 28,000 people, has just announced swingeing job cuts of up to 1,800 staff. 'People have said it's because of the recession but these cuts have nothing to do with the credit crunch,' [Hendy] says. 'In fact, the latest figures show that journeys taken on the Tube and bus are up one per cent and three per cent respectively on the previous year.

Given the worries that many in the private sector have over both their financial and job security, the 'pay gap' figures highlighted by Francis Maude could well provoke a bit of anger.  Here's how the Mail reports them: State workers now earn an average £62 a week more than their private sector counterparts  -  a 50 per cent increase in the differential since 2004. ... It comes at a time when public sector employment is rising while private workers are losing their jobs at a rate of more than 1,000 a day. ... In 2004, estimated median public sector earnings  -  those in the middle range of pay  -  were £452 a week, figures from the Office for National Statistics show.

Competent performance from George Osborne just now, setting out the Tories' "new banking settlement" by which - among other things - the Bank of England would have greater powers to "call time on excessive debt".  It sounds promising enough.  But, as usual with regulatory systems, the proof of this particular pudding will come with the eating.  Only a Tory government will let us know how it works in practice. Aside from that, Osborne dwelt on the familiar touchstones - welfare reform, schools reform, an Office for Budget Responsibility etc.  Although it seems to me that the Tories are now taking greater pains to set out just how difficult things will remain for the next government.

So here I am at a conference put on today by my former colleagues at Reform.  It's all about 'A new economic agenda', and the speakers include George Osborne, Vince Cable, John McFall, Tony McNulty and Will Hutton.  First, though, Ken Clarke, who's just delivered a 15-minute address on competitiveness.  It demonstrated, perfectly, why Cameron's brought the Big Beast back.  He seems to have an easy understanding of the issues; gets his points across in simple, lingo-free English; and - rare for a politician - he raises a few laughs too. Two passages worth pulling out from Clarke's address. The first on Sterling: "Rapid movements in exchange rates are always disastrous ... There are upsides but, on this occasion, we've got most of the downside.

Just in case the GOP needs another reminder to broaden its coalition if wants to make headway in 2012, here's a new study from Gallup.  It finds that just 5 states - representing 2 percent of the population - can be classed as Republican (i.e. a significant plurality of adults there identify themselves as Republicans).  Against that, there are 35 Democratic states and 10 "competitive" ones.

Matthew Parris on top form in today's Times: Fact: unsourced rumours circulated in the media last weekend that Lord Mandelson had rescued the Government by smoothing ruffled feathers in India after the Foreign Secretary, David Miliband, “mishandled” his visit there. Surmise: The source of these rumours was Peter Mandelson. Fact: Miliband has entertained ambitions for the Labour leadership. Surmise: Mandelson wants to finish off Miliband's hopes. Fact: It has been reported that Mandelson believes Gordon Brown is rubbish. Surmise: His Lordship has somebody else in mind as leader. I'm serious. Labour's Christmas sugar-rush of optimism that all might not be lost is fading. The polls are tipping back down. Next will come despair. After despair comes mutiny.

As numerous Labour MPs have been saying recently, Brown needs to start doing something different if Labour are to reverse the Tories' momentum in the the polls.  But, interviewed in the latest New Statesman, Alistair Darling indicates that Labour High Command are happy to stick by the old, tried-and-tested methods which are no longer getting them anywhere: Darling believes that the battle lines at the ­election will be clear: a simple choice between Labour investment versus Tory cuts. "The Tories seem to be going back to where they were in the early 1980s - saying the government's role is pretty limited. They have set themselves significant cuts in public spending. I think that's incredibly short-sighted." From Labour's perspective, there are two main problems with this.

If you want to know how anti-competitive a third runway at Heathrow could be, then check out this article in today's Times.  It highlights a study by the Campaign for Better Transport which claims that - thanks to the Government's climate change target - Heathrow expansion would mean every other airport in Britain having to abandon their own expansion plans.  I wonder whether  Gordon Brown's factored that in when he boasts about how many jobs would be "created" by a third runway at Heathrow?  Somehow, I doubt it...

This article in today's FT is an intriguing addendum to my post yesterday about Labour accepting the "headless chicken" charge.  It points out that Gordon Brown has now been "warned by Labour ministers and MPs to stop churning out initiatives to tackle the recession".  And then goes on to describe an "anxious" parliamentary meeting of Labour MPs on Monday night, where one backbencher lamented Brown's "blizzard" of initiatives. Increasingly, it seems like Labour fear the "headless chicken" attack more than the Tories fear the "do nothing" counter.  The political tides certainly favour the Tories here - the "do nothing" tag was always disingenuous, and would become less effective as Team Cameron developed its response to the economic crisis.