Alistair Darling turns hard man but Vince Cable gets all the laughs | Larry Elliott | Comment is free | The Guardian‏

Key:
"Osborne went for the populist approach. Voters knew from their own experience that the "sooner you deal with a debt problem, the better", the shadow chancellor said. "We need to cut wasteful government spending instead of increasing national insurance taxes on hardworking people," he added. That may go down well on the doorsteps in the coming weeks, but it is economic nonsense. If the government cuts spending when households are tightening their belts, it simply leads to lower demand and a longer, deeper recession, as Darling, in one of his better interventions, pointed out."

"If the government cuts spending when households are tightening their belts, it simply leads to lower demand and a longer, deeper recession, as Darling, in one of his better interventions, pointed out.""
Exactly. It's so important and we can't get away from that

Budget Day 2010: Darling lines up a stamp duty bribe | Mail Online‏

"But the day did not exactly start auspiciously - with Mr Darling heckled by an angry building about tax just hours before he stepped up the dispatch box."

The Mail's usual high standards

Alistair Darling: we will cut deeper than Margaret Thatcher | Politics | The Guardian‏

I'm sure Gordy will be pissed off at Darling's openness, but I think Darling has done the right thing with this admission.
Those of us on the left may not be very happy about the coming cuts, but they are necessary so there's no point moaning about them. I'm sure Tribune readers will be up in arms, but I personally think those who refuse to accept the need for these measures are living in a fantasy world, though one far closer to reality than the Tory front bench. Or anyone who believes that any of the main parties are being honest about this need their head looking at.
On departmental budgets, I'd like to see no ring-fencing, but rather an X% cut across the board.

The budget: Putting Darling to the test | Editorial | Comment is free | The Guardian‏

So Darling is restrained and relatively truthful, while Ozzy's loud shouty soundbites are found wanting, or "empty" being as that's his own favourite phrase at the moment. Yeah, like your head you silly little tart.
Anyway, once again Darling is shown to be a top bloke and just the sort of politician this country needs. Now, if only we could oust Brown we really DO have a chancellor worthy of being Prime Minister....

BBC - Nick Robinson's Newslog: Intriguing political role reversal?‏

"stand by for Alistair Darling to claim that it is he who is being careful, cautious and candid whilst his opponent is making "reckless" promises.

In reply, Osborne is likely to argue that he and the Tories can be trusted to get more for less from government after years of Labour tax, waste and spending."

It seems we never get out of these basic archetypes. Politicians on both sides use the same tried and tired lines over and again.

The Tories are being a good opposition, not sure they're a government in waiting. The difference being that Cameron and Ozzy are claiming to be able to do everything: cut the deficit, cut taxes, not cut services, cut services, shrink the state.
I've highlighted before that Cameron keeps saying he won't cut X, Y, or Z service, but needs to be up front and honest about what they are going to cut. But both sides think people will be scared and go silly if they are open and honest, and they might just be right

BBC News - Budget analysis dominates news pages‏

From the coverage reported here it's safe to say Darling has taken a proper battering today from the silly papers, while I bought the FT to get a more economic view which is cautiously supportive but would like some detail on how they're going to fix the mess the country is in. I think they, like me, are frustrated by the party politics dominating, while the silly papers have embraced cheap party politics wholeheartedly

Budget 2010 truth check | UK news | guardian.co.uk‏

Much more of politics should be subject to these sorts of checks.
Darling comes out of it much better than Cameron

Budget 2010: From Robin Hood to Alistair in Wonderland | Michael White | Politics | guardian.co.uk‏

Michael white does some cracking work here, made my laugh with his line about the Telegraph.

Now, Darling's growth forecasts are coming under some criticism, but they have done a lot since he's been chancellor and, other than the one time he agreed to do as Gordy told him, he's been largely right. He said the economy would be back to a low level of shaky growth by now. So let's not write him off too quickly.

"The Guardian's Larry Elliott, who wrote a book about the candy-floss financial economy long before the crash, is cross that Labour over-emphasised the City at the expense of manufacturing - he wrote about Birmingham's dwindling clout yesterday - but is glad that this error is now being addressed."
That's a very important thing too - could be key to Labour's future.

"did he [Peter Mandelson] learn to understand interventionist economic strategies watching EU governments close up, I wonder?"
Indeed. Let's hope he's properly seen the light.

"Where most weighty commentary agrees to be disappointed - Financial Times and Times included - is in the chancellor's failure to spell out more convincingly where he is going to cut excess public spending if he is re-elected. It's not good enough to say the NHS will save £400m by tackling staff sickness rates, admirable though that ambition is."
Agreed. All politicians are scared shitless of saying what people don't want to hear. And with some reason. The recent poll showing that a majority of people were against tax rises, spending cuts and a high deficit all at the same time shows how fickle people can be. But maybe the politicians should be brave. We can hope.

"But Anatole Kaletsky of the Times, who is always worth reading, writes that all three main parties were feeble on the key point yesterday - Darling, Cameron and Clegg - but that Darling was least bad. He had a credible vision for encouraging resumed growth - the key to everything, much more so than those cuts that obsess the Tories and their tax-exile media allies"
Very interesting, and I'm inclined to agree (see another post on that)

Budget 2010: Darling finally gets the picture - even if it may turn out to be wrong - Times Online‏

"The Tory and Lib Dem leaders, by contrast, raged furiously against a host of invisible demons supposedly invoked by Gordon Brown - national bankruptcy, elitism, relegation in imaginary football leagues. Six weeks before an election whose outcome may well be a Conservative-Lib Dem pact, the lack of economic judgment displayed by both of the opposition leaders was worrying."

From the Times no less. And I agree. Very odd.


"Growth is by far the most important determinant of all fiscal planning and the Budget's assumptions, contrary to the Tory and Lib Dem complaints, were actually quite modest. "Having given us the lowest decade for growth since World War Two, Labour are now forecasting the highest," jeered Mr Cameron. But that is exactly what any sensible Chancellor in the present circumstances should do.
Historical experience and economic theory both suggest that the deepest recessions are followed by the strongest recoveries. When the economy starts an expansion phase with enormous amounts of excess capacity and under-utilised labour, as it does today, then very rapid growth is compatible with low inflation."
But Cameron does so love a sound bite, in large part because he prefers to avoid substance for fear of alienating anyone.

"In principle, therefore, the Treasury's decision to base its fiscal forecasts on an assumption of 3 per cent growth next year and 3.25 per cent in the three years thereafter is actually quite conservative." And Darling has been proved right before in the face of much criticism.

"In the four years after the last two recessions, growth averaged 3.4 per cent and 3.7 per cent respectively. And if the growth predicted by the Treasury materialises, then the planned reduction in government borrowing, from 12 per cent of GDP this year to 4 per cent in 2014-15 should be achievable and the government debt-to-GDP ratio will stabilise at around 78 per cent, a perfectly reasonable level, leaving government finances in Britain slightly stronger than in Germany, France or America and much better than in Italy or Japan."
I'm very surprised this got by Murdoch, it's like reading Tribune.


"To respond to disappointingly low growth by raising taxes and slashing spending would be economically suicidal, setting Britain on the path to Greek-style debt deflation and almost certainly increasing the government deficit, as Mr Darling quite rightly warned. But Mr Cameron declared: "Every family knows that when your debts mount up you need to start paying them off or things only get worse." From a man quite likely to be the First Lord of the Treasury in two months' time, this pre-Keynesian economic illiteracy was troubling, even if intended only as political knockabout."
Soundbites again.


Speaking of Tribune,
I read an excellent analysis of the Irish approach to the economic fuck up by Michael Burke, formerly of Citigroup (or similar).
It's pointed out in numbers simple enough that I could broadly understand that cutting off a recovery is going to make things worse, and that you end up spending far more by trying to spend less.
The great significance of this is not only from an abstract academic point of view, but because that's what Ozzy is calling for and may do. If that's the case we're all fucked.

BBC News - Is Darling planning a 'sensible' Budget?‏

"It is hardly an inspirational, rallying cry on the eve of an election - "Let's be sensible.""
More's the pity.


"So instead Mr Darling will point to the better than expected borrowing figures, the gradual fall in unemployment and the first tentative signs of recovery - to argue that the government is slowly but surely turning the economy around."
All good. I'd like to see that put back into paying off the debts.


"but, with an election just weeks away, Mr Darling will be under massive pressure from the man next door to let his "Mr Sensible" mask slip just a little."
He should tell the man next door to fuck off. Gordy would probably be out of a job by now if he'd succeeded in replacing Darling with Balls.


"The temptation will be to use the money to win some decent headlines about helping the young unemployed or supporting business.


But there is a strand of thinking in Labour circles that it may be more politically astute to use the spare money to pay off more of the deficit. The thinking being that this would wrong-foot the Tories and undermine their claim that the government wasn't serious about dealing with the deficit."
I'll have some of that please.

Neighbours from hell | Larry Elliott | Comment is free | guardian.co.uk‏

Have to say that I'm very much on Darling's side on this. Gordy was in the wrong over all that. I'd probably say I trust Darling over Gordy on the economy, as it tends to Gordy's hubris and electioneering that sheds a wrong light on economic matters, while Darling plays everything as straight as can be. He's shown he's a worthy occupant of No. 11, and far better than Ed Balls who is a genius but far too young for a top job like that

As usual, Darling plays it straight | Michael White | Politics | guardian.co.uk‏

Darling is top, no two ways about it.
"In effect he called a weakened prime minister's bluff and a good thing too, so far as we can tell because Brown's reluctance to acknowledge the scale of the recession or its implications for tax-and-spend policies has been part of the 2007-10 problem"

Very much agreed. I'd rather Darling was in charge of the Treasury. He's my kind of politician, bland and boring but does the right thing. Darling for Overlord of everything!

Branson backs 2010 spending cuts‏

Aye, it's a tough one. To cut now and risk sending the economy into a downward spiral, or wait in the hope of tackling the hole in the public finances before the international money markets go nuts.
Now, the rating agencies are a significant part of the reason we're in this mess, but none the less they still have significant power and influence. As a result governments must dance to their tune. But cuts now would bring the economy into recession, possibly a very severe one. Maybe even worse than the current/most recent one. The cumulative effect would be devastating. On the other hand, wait may get the economy going enough to reduce the hole by growth in part, thus taking significant pressure off the need to cut everything. But if cuts need to be made, they need to be made. And there probably will be some. I trust Gordy and Darling with the economy, Darling slightly more.
Cameron and Osborne worry me.

Alistair Darling denies benefit rise pre-election 'con'‏

It's dangerously easy to be an opposition politician.
Previously, Osborne was attacking the tax rises, today the spending cuts. Despite him calling for both these things.
Both are viable options at the best of times, but the problems at the moment mean both are pretty much inevitable. Osborne is a very smart political operator, of that there is no doubt. But does he know the first thing about economics?

Alastair Darling on new banking

I'm a huge fan of Alastair Darling, I think the bloke is top. He's has just the right balance of ideology and managerialism for me, and a good dry sense of humour.
In his day job, he looks after our economy. And does a bloody good job actually.
His piece here he gives his account of what happened, what didn't, and why.

This is key: "Lehmans' collapse plunged several UK banks into trouble. But that one of our major high street banks could be allowed to collapse would have been unthinkable. Life savings could have been wiped out and the economy would have come to a halt, with cashpoints seizing up and business credit drying up. It would have been irresponsible for us to stand by."

Firstly, my mum supports propping up the banks as letting such important institutions go to the wall would have terrible consequences for far too many people. I agree with her on that.
There is also the issue of how so much banking is based on air, as one bank collapsing took so many others (people and banks) to the edge.

On Fiscal and monetary stimulus: (paraphrase) we woz right, Tories woz (and are) wrong. He's correct about that.

On reform: "We must reform global financial markets so that they can better serve society. Internationally, that means obliging banks to build up bigger reserves in the good times. There must be rules on how global financial companies can be wound up quickly, using a "living will", and without having to turn to the taxpayer."

Quite right. No institution should be too big to fail, certainly not in private hands. It is unacceptable that profits are privatised but losses socialised (publicised is the wrong word).

I am critical of the New Labour approach to competition though:
"A strong, stable financial system also depends on effective competition, essential to make sure consumers have choice and no one faces excessive fees and charges."
A 'competitive' market has lead to excessive charges and fees, there needs to be far greater regulation and intervention to protect consumers, especially those most vulnerable.

on the availability of credit:
"If there is one lesson to be learnt from this crisis, it is that credit must never be allowed to dry up because of reliance on a small number of banks. In the same way that big companies can access funding directly from capital markets, by issuing bonds or commercial paper, I want to start creating a different financial model in the future, in which small companies get funding from sources other than banks. Our goal is to make finance the servant, not the master, of the real economy."

very interesting, and something I support as it's going down the micro-finance route, which has the power to do great good and re-connect the borrower with the lender, which i feel is a good thing.

In conclusion, Ali D rocks

Easier SME access to borrowing

The proposals too loosen rules and allow SMEs to borrow money directly
"

Small businesses will be able to borrow money from City pension funds and insurance companies – rather than having to rely on banks – under plans being drawn up by Alistair Darling.

The chancellor believes Britain's banks are starving small businesses of cash, and will announce a package of measures in his autumn pre-Budget report that will see City resources channelled to expanding firms.

Under the scheme, small businesses would be able to approach City institutions which would be approved to lend by the government.

In an article in today's Observer, the chancellor says: "I want to start creating a different financial model in the future, in which small companies get funding from sources other than banks. Our goal is to make finance the servant, not the master, of the real economy."

Amid tentative signs that the worst of the recession may be over, the chancellor is concerned that a nascent recovery could be smothered if a small number of over-cautious lenders fail to back small and medium-sized businesses. According to Treasury figures, small firms receive 92% of their funding from the four largest banks."


it could be quite a radical step, and it shows that there are still ideas coming out of this government. And it just confirms that Alastair Darling is ace

Labour and Tory plans for spending and the election

Jonathan Freedland argues that the election battles lines are drawn, with 'the many' and 'the few' having their champions decked out in their colours.
Cameron, he argues, has jumped on the band-wagon of MPs expenses to say how much he'll slash everything which helps politicians and ID cards, ID cards, ID cards.

"Proof of that came when reporters asked Cameron to offer more substantial cuts to the national budget than demanding honourable members pay full price for their custard creams. "ID cards", came the answer. Good for him. The identity card scheme is indeed a waste of money and should be scrapped. What else? "ID cards." And? "ID cards." Three times he offered up the same lamb for sacrifice. Which suggests that, for all the macho promises of frankness, he can't think of any other cuts – or none he's willing to admit in public."

Freedland argues that focusing on the size of the debt is a red herring, which i agree with. The size of the current debt is not something that needs a 'slash and burn' approach to sort, it should be gently wound down over time.

investment in young people and keeping people in jobs is worth while and will reep rewards in the future.

perhaps the most telling is the comparison between Labour's desire to keep inheritance tax and tax credits at the current level, while the Tories would reduce these:

"Labour will wield the axe with an eye on protecting the neediest. But look at the Tories. For all his talk of belt-tightening, Cameron has not promised to revoke his proposed change to inheritance tax – raising the threshold to £1m, thereby helping 3,000 of the richest estates each year. Yet tax credits, which boost the incomes of the lowest paid, are firmly in the Tories' sights. There are grounds here for Labour to replay one of its oldest tunes: that they are for the many, while the Tories are for the few."

the (economic) cure

I do like Ali Darling, I think the boy is top.

"keeping people in work, getting credit flowing and getting public spending on to a sustainable footing in the medium term"
good stuff. Keeping people in work would be my number one priortiy, and the medium-term approach is a good one, examplifed by
"the budget set out a clear plan for stable public finances by halving the deficit within four years"
i like that alot. it was right to borrow to invest to keep us going, and having a plan to get the money back (inc from banks) in the medium term is good thinking.

top bloke is Darling. Shame Brown has been meddling with him rather than running number 10. Honestly, he spent ten years trying to get from 11 Downing St to 10, then can't get his head around it because he's stuck in 11! GAH!!

Reasons to be cheerful

Rather than doing a big long rant about how crap the Tories are, temping though it is, I like to occasionally look to the brighter side of things.
Steve Richards has spoken of the moment of calm between expenses and the election outcome, and how the economic measures (fiscal stimulus etc.) might just have done the job.
House prices are rising, Labour's hit bottom, the economy is steadying as a result of government action, government bonds are flying off the shelves like hot cakes, Cameron is still largely singing from Labour's hymn sheet,

On the Tories: "So far only a few Conservatives MPs have expressed in private their anger that Cameron claimed the maximum allowance to help pay for his country home while he has told others who claimed less that they had acted in ways that were unacceptable"

The Tories economic plans would mean serious disaster for some people, often those least likely to vote Tory, with their opposition to Northern Rock being taken over, fiscal stimulus, borrowing.... Sorry, Tory-bashing again.

Rant

Bloody hell.
First, Alistair Darling. I'm a fan. I think he's a level-headed, chilled and dependable minister. I've got great faith in Darling, despite Brown's meddling in the treasury.
To see him being hounded out is pretty sad, as he's doing a pretty good job all told.

I'm a fan of Ed Balls, so I wouldn't really mind him taking over. But not when Darling is doing ok, and he's a bit young.
On Today this morning they reported the Daily Mail calling him a 'a middle-class-hating Socialist zealot'. What a load of bollocks.

Then Cameron was on Today talking about expenses. He was asked what he plans for 'reasonable' expenses were, how he would define them. He said that it was what a reasonable person would believe reasonable, and would be no more committal than that. What bollocks, talk about having no conviction. He is talking some good talk about reform and some good things, but then he goes and lets himself down by not backing up his grand words, typical of the man