Category Archives: Economy

‘UK gloom risks clouding real picture’

THAT’S not my headline, incidentally, but the FT’s.

Any politician who dares suggest that the country isn’t doomed (particularly if he or she’s a minister) gets pilloried for a fool. But since I am not a minister, and since I’m used to being pilloried, can I recommend this article, which paints a fairly balanced, though still depressing, picture of our economic prospects. 

Nevertheless, it contains this interesting, previously overlooked morsel:

Economists expect household disposable income to grow this year at 1.4 per cent, twice last year’s level and almost 50 times faster than in 2007.

Although investors demand higher yields on government debt than in Germany, they are more willing to hold UK government and corporate paper than they were in October. The trade position is improving and with oil prices falling, a fiscal stimulus and substantial state support for banking, Britain is about to enjoy the most powerful fillip the economy has seen.

I accept the argument made in a previous thread that it’s not always fair to accuse someone of “talking down the economy” just because he points out an unwelcome fact. Similarly, it’s absurd that anyone who suggests the UK is not going bankrupt and that we will, at some point, emerge from the other side of the downturn, is an out-of-touch, demented loon.

25 Comments

Filed under Economy, Media

What’s sauce for the goose…

WATCHING Newsnight this evening it became clear that in the next few weeks, President Obama will embark on (a) a rescue plan for America’s banks, and (b) a massive stimulus package for the economy.

Since America’s economic problems are similar to our own, and the prospective remedies similar to those already carried out here, can we expect David Cameron to welcome the American rescue package(s) with the same derisive scorn with which he greeted Britain’s?

Perhaps not the most auspicious start to a relationship with a president Do-Nothing is pathetically desperate to emulate. But it would certainly confirm Obama’s initial, instinctive view of him as “a lightweight”.

17 Comments

Filed under Barack Obama, David Cameron, Economy, United States

Beware the economy bullies

THERE’S almost a bullying tone to some of the voices raised in criticism of the government’s economic policies. Anyone who dares to suggest that the current crisis is not of our making gets the proverbial Chinese burn behind the bike shed and has his dinner money stolen.

So Sir Alan Budd, former adviser to Tory chancellors Norman Lamont and Ken Clarke, might want to get his mum to pick him up from school for the next couple of days. According to Paul Waugh of The Evening Standard, Sir Alan told Radio 4:

On the issue of whether the nation is on the edge of “bankruptcy”, he said:

“Expressions like the country going bankrupt aren’t really suitable to be used in these circumstances. There are problems out there but they’re not to do with bankruptcy.”

This contrasts slightly with D Cameron (who worked alongside Sir Alan when he was with Lamont) just a week ago, declaring “We’ve got to stop this Government before they bankrupt our economy and bankrupt our children’s future”.

Here’s Sir Alan on the fall in sterling:

“I don’t think a fall in the currency in itself is a serious matter, this is a price that is determined in free markets. Let people take their views of the future value of Sterling, some will get it right and some will get it wrong. This doesn’t prevent the Government from being able to finance its deficit and it is able to do that at the moment at very low interest rates”

And on the public finances in general:

“I don’t think public finances are a problem at the moment. They are not nearly as healthy as one would wish but I don’t think we need worry about the public finances, what we do need to worry about are the commercial finances and the operation of the banking system.”

I don’t deny that recent polls suggest Labour is losing the economic argument. That doesn’t mean the critics are right or that the public won’t give us the benefit of the doubt when polling day comes around.

I remain firmly of the view that, had we been inflicted with a Conservative government in the last decade, not only would we be facing exactly the same economic difficulties as today, but that we would be doing so without the new hospitals and schools which were so needed in 1997 and which Do-Nothing still insists were not.

35 Comments

Filed under Blogging, David Cameron, Economy

All hail, Alex the Great Seer!

HAT-TIP to Alan (Cockers) Cochrane of The Daily Telegraph for highlighting a quote from the Richt Honourable Alex Salmond MP, MSP, First Minister of Scotland which, at the time, held none of the significance or irony it now does:

The Scottish banks are amongst the most stable financial institutions in the world.

He’s an economist, you know…

25 Comments

Filed under Alex Salmond, Economy, Scottish Government

I wonder how Jeff Randall votes?

Jeff RandallIMAGINE the reaction from the foaming hordes if, talking about the state of the economy in 1991, a BBC presenter had said: “What would I do if I were the government? Resign.”

But it’s 2009, not 1991, and Jeff Randall doesn’t work for the BBC, he works for Sky News. Of course, few of my own commenters seem to accept that, legally, Sky News is under the same obligation as any other broadcaster to maintain neutrality and objectivity.

So it seems strange that Randall makes this politically-biased claim in the advert running regularly on Sky at the moment. I suppose he’s got to do something to attract attention away from Robert Peston. And Randall was, until recently, editor at large of the Telegraph. Never having seen his actual programme, I accept it’s possible he is entirely objective and fair.

His advert, however, clearly isn’t.

25 Comments

Filed under Economy, Media

The truth about Labour and the middle classes

PETER Hitchens is an odd chap, isn’t he?

He uses language that is unavoidable for a tabloid columnist: extreme, uncompromising and shocking in equal measure. Did I mention “plain daft”?

His latest rant is on Labour’s alleged hatred of the middle classes. The governent’s determination to fight poverty is merely an excuse, claims Hitchens, to destroy the middle classes. Oh dear.

It’s true that Labour is, and always has been, committed to fighting poverty. That’s one of the reasons I joined up 24 years ago. It’s also true that if you’re going to fight poverty, you’re probably going to target those most likely to be affected by poverty: in other words, those families at the bottom end of the income scale (I know that sounds too obvious for words, but Hitchens seems to believe that any resources not spent on those who already enjoy middle class lifestyles is, by definition, wasted money).

But Labour’s focus on abolishing child poverty is not, as he (deliberately) patronisingly claims, for the “aah” factor. It is simply because children who are offered the same opportunities as their wealthier contemporaries are far more likely to lead productive lives as adults and be better parents. It’s called breaking the cycle of poverty, Peter. Why am I not surprised you’re against that?

It’s true that there was a time when the Labour Party believed in leveling down economically, when high taxes were  seen as A Good Thing in themselves, regardless of how the revenue would be spent. The electorate, however, had other ideas and the Labour Party of Michael Foot was kept away from the levers of power.

Hitchens fails to grasp the truth of Tony Blair’s achievement in the creation of New Labour: Blair convinced the party that it was not only okay for people to aspire – to want a bigger home, to want their kids to go to a better school, to want a better (or even a second!) car, to want better and more frequent holidays, to want to earn more – but that it was positively desirable.

Far from hating the middle class, the government wants to expand it – not by redefining it, but by raising our poorer citizens up, by getting them off benefit and into work, by helping them to realise their ambitions, to aspire.

In other words, to encourage everyone – or as many as feasibly possible – to become middle class themselves.

Mrs Thatcher realised, long before her party did, that giving working class people an economic stake in society was not only electorally profitable – it was morally right. Tony Blair and Gordon Brown learned that lesson. However, unlike the Conservatives, Labour believes that those economic and cultural opportunities should be afforded to everyone, even the poorest in society.

Maybe Hitchens believes a “full up” sign should be placed on the door of middle class-dom?

20 Comments

Filed under Economy, Media

Missing the main events

A MAJOR advantage to being a blogging MP, as opposed to being simply a blogger, is that I’m in a position to offer unique insights from the perspective of the House of Commons.

So for instance, you may well have expected me to talk about the drama in the chamber today when John McDonnell tried to make off with the mace in protest at the absence of a vote on Heathrow’s third runway.

Except I can’t, because I wasn’t there. 

This always happens to me. Once, during Treasury questions a few years ago, I was sitting next to Dennis Skinner. I left the chamber briefly to make a phone call and as I walked back in, I passed Dennis, who was leaving. He didn’t look particularly fazed or upset, so I thought nothing more of it. It was only later I discovered that a few seconds after leaving the chamber to make my call, Dennis had stood up to accuse “Boy” George Osborne of drug use! He had just been named and suspended from the Commons when I passed him.

And then there was Otis Ferry’s invasion of the chamber during the debate on the ban on fox hunting. I was in the tearoom when that happened and only realised something was up when “Sitting suspended” was displayed on the annunciator.

I was there in 2004, however, when those entirely sane and responsible individuals of Father4Justice* launched their missiles of purple dust from the public gallery of the Commons during Prime Minister’s Questions. As I saw the dust descend on the crowded benches, I stood up from my position on the front bench (the front bench that’s actually a back bench, if you follow me) just below the gangway. Sky News, as my big brother Kenny gleefully told me later, showed the same piece of hundreds of times thereafter, apparently showing the Honourable Member for Glasgow Cathcart (as my constituency was then called) jumping up to save his own skin. In fact, I was wearing a brand new suit and was worried about it being stained…

But I wasn’t there today, sadly. As he said himself on TV afterwards, John is not at all a flamboyant MP and he did what he did out of frustration and on behalf of his constituents. He’s paid the price with a five-day suspension. But support for a third runway has been his party’s policy since before the last general election. And however strongly some of his constituents feel against these plans, many, many more, I suspect, owe their jobs, directly or indirectly to Heathrow and might not feel as disappointed today as John clearly does.

* written under legal advice

21 Comments

Filed under Economy, Environment, Parliament