Qualified to Lead the Economy and Keep IMF from the Door

So Ken Clarke with his Law degree thinks that leaving the economy in the hands of Doctor Vince Cable (that PhD is in economics) and former lecturer at Glasgow University and the London School of Economics will lead to the IMF having to bail out the UK. At least that seemed to be implied as the Tories continued to say that only by giving them the keys to Downing Street as a block set will that be avoided.

I'm sure Clarke doesn't think that Alistair Darling a fellow lawyer is better qualified that the former Shell Chief Economist. So that must leave the modern historian George Osborne as the best economic mind to deal with an economic crisis.

It's ludicrous to think that voting for more LIb Dems will lead to a destabilised economy. Indeed one thing we have been saying is that we should get all the parties together to work out an economic plan to get us out of this. Looking at the manifestos of both Labour and the Conservatives one thing that is lacking is that clear plan.

Here's one that George and Ken may want to consider five tests before we start to cut the deficit and indeed possibly before the Tories might end up having to fall back on the IMF.

• the rate of growth
• the level of unemployment
• credit conditions
• the extent of spare capacity in the economy
• the cost of Government borrowing

I'm sure both Clarke and Osborne will come across those ideas when they actually get back to scrutinising the Liberal Democrat manifesto* rather than scaremongering and spreading fear. It is the spreading of fear from the Tories that is actually causing the bankers to panic rather than a promise of hope to work through this economic strive together whatever the outcome on May 6th.

However, I guess the Tories are too short sighted to see things that way.

* Scottish version also available.

Vince on Top in Debate

"The Labour government led us into this mess. They have done severe damage to pensions and savings, they have wasted a vast amount of money on over-centralised public services.

"The Tories presided over two big recessions in office, they wasted most of the North Sea oil revenue, they sold off the family silver on the cheap. Now they want to have another turn to get their noses in the trough and reward their rich backers.

"The Liberal Democrats are different. We got this crisis basically right. We are not beholden to either the super rich or militant unions."

Vince Cable's closing statement in last night's Ask the Chancellors debate on Channel 4. The Guardian says that Vince drew first blood as the election truly kicked off, The Independent says he came out on top of the opening battle.

Even the readers are saying the Vince was head and shoulders above in the Guardian's poll. And the host Channel 4 are reporting that it was Vince that impressed the audience.

Last night it was easy for the supporters of all three parties to be partisan, but watching the neutrals it was clear that Vince was the one that was impressing the people that needed to be impressed, not the party faithful but those yet to decide where they will place their X.

Of course the big two parties are brushing it off, George Osborne in his closing remarks saying "there won't be a Lib Dem government" but if the Lib Dems continue to convince people we are the actual change, we are the ones who finger is on the pulse, you can never tell.

Myopia of the Long-Sighted Fool

by Peter Brookes in The Times 25 March 2010

There are three things about Alistair Darling's budget statement that point out just how ineffectual he is in the role of chancellor on the shifting tide of current economic situation. The first is his setting of the personal income tax allowance, the second his long range growth forecasts, the third is the unexpected larger return on taxing bankers bonuses.

"I have no further announcements on VAT, on income tax or on national insurance rates."

Normally by that point of the statement the chancellor has announced changes to the personal allowance at which tax is started to be paid. Apparently the decision to freeze the personal tax allowance at £6475 came when the retail price index dipped below zero in September. At the time the retail cost index which actually has a more direct relevance to the lowest paid was still over 1%. RPI has rising steadily since then to 3.1% now. Instead of taking a mean, or median month over the last 12 months to make the adjustment to the personal allowance the chancellor took the best performing month and used that as a benchmark, or rather as a way to penalise the lowest paid with an extra £48 tax a year. Many of them are not enjoying the luxury of the 1.5% this year that the MPs have received, in fact that is double my increase over the last 2 years.

"This year, as I said in last year’s Budget speech and last year’s pre-Budget report, I expect the economy to grow by between 1 and 1½ per cent. I have decided to revise slightly downwards my forecast for 2011 to bring it into line with those of the Bank of England, to growth of between 3 and 3½ per cent."

The second is what is often pointed out as being Alistair Darling's over optimistic growth forecasts. The independent sources tend come to a figure which seems reasonable, though even the IMF have been over optimistic, yet the chancellor has been prone to double that. Has he realised the error of his ways by scaling back his prediction for next year. Well he hasn't scaled it back by the amount he was wrong and is still well above the scaled back level that the IMF have predicted. Below is the Bank of England's predictions and even they add the caveat that there is only a one in ten prospect of hitting the darkest segment.

"At the time of the pre-Budget report I put in place a one-off 50 per cent tax on the excessive bonuses of bankers....I can tell the House that that tax has raised £2 billion—more than twice as much as was forecast. That is money paid by the banks, and those receiving bonuses will, of course, also have to pay income tax at the highest rate."

The unexpected doubling of the return than what Darling was expecting on bankers bonuses being taxed at 50%. Err, duh. Lets do the maths.

Alistair predicts X returns from taxing Y bonuses at 50%

Therefore 2X=Y

Alistair receives 2X returned from taxing bonuses at 50% therefore bonuses =2Y. Bankers take home after taxation Y in bonuses. So the net effect is negligible to the bankers but and extra bit out of the banks money, when they could be using more of that to pay back the bail outs.

Dooh Nibor Tax Breaks

I have long been arguing for Labour to stop using the regressive taxes such as national insurance and VAT to get their pound of flesh especially from the poor and deal with progressive taxes. Well today Alistair Darling did that but what has he done. It is another example of Dooh Nibor* taxation like the doubling of the 10% tax rate. It may not be as bad but it is another move in that direction. The personal allowance has not gone up from £6,475, this at a time when the Chancellor capped all public sector pay to a 1% increase, inflation is running at about 3%.

Pensions have been removed from index linking and now so has the personal tax allowance. The worse off are going to suffer more yet again. Yes they may well get a pay rise bit more of it is taxable and therefore their tax burden increases once again. Add on to this the fuel increase 3% in stages. I can see the bus fares increasing in stages at each increase and yet again by a higher percentage than the actual add on to the costs.

Under the Lib Dems the income tax personal allowance would rise to £10,000 pounds. The poor would be better off not worse as Labour have left them in this final budget before the general election. Yes it is costed Jeff counter balanced with making the tax system fairer, closing far more loopholes that Darling did earlier but as you say Labour have launched an attack on the poor.

As for the increase tax on cider, as David Heath has just said in the commons, it takes year to grow a harvest capable of producing cider. The sudden increase may well affect the artisan ciders rather than the high alcohol mass produced drinks that are a source of binge drinking. Heath suggested a production volume exception or a alcohol level to incur the 10% increase as alternatives rather than the flat rate suggested. But hey, flat rates are the Labour way.

* Robin Hood in reverse taking from the poor etc.

Building Blocks for a Recovery?

Today is probably going to be different from any of the other pre-election budgets I've heard since the 1980s. There isn't the leeway that is normally allowed to make it a give-away budget to all and sundry.

However, the effects of this budget may also be short lived, both the Conservatives and the Liberal Democrats are promising an emergency budget in the event of them winning the General Election and it is not even clear if what the Chancellor sets out now would be what a Labour Government wants to stick to if it is returned to power.

So what are the main themes that are being speculated about. The Guardian tells us Darling is looking to close tax loopholes, though not tellingly some of the ones that Labour themselves helped open up that Vince Cable has highlighted. The Times tells us that nuclear power and wind will be at the heart of a green economic recovery, but what about other renewables and indeed what about Vestas the UK's only wind turbine manufacturing plant when it shut down about this time last year that was hardly a 'prudent' failure last year to echo Lib Dem recovery plans now.

The little man above is made of 44 blocks of Lego, I think he is more capable of steering Britain out of this recession that was deepened by Gordon Brown's budgeting while chancellor. Not that I think George Osborne is any better. Will Labour build out of a future to make it fairer to the ordinary tax payer? I doubt it their record speaks for itself, they'll use VAT and National Insurance to raise revenue like they have done for 13 years, making the poorest pay proportionately higher taxation than the richest who can employ accountants to get them around payment of so much.

While Labour are looking at off-shore loopholes the Liberal Democrats have also pointed out some of the loopholes created by Labour and the Conservatives before them that also need addressed. Plus we'll be lifting the threshold to make the minimum wage almost a tax free full time wage.

The budget today may in the words of Holywood go straight to DVD, it will be replaced by the blockbuster to come as the real deal, the one that really will take us through the next 12 months. Whether that has Lib Dem input or indeed leadership is up to the people.

Fasten Your Seatbelts: Economy Facing Turbulence

Just when Labour thought they had pulled off a feather soft landing it appears that the UK economy is still up in the air and is still facing turbulence

A number of indicators are suggesting that the possibility of a double dip is even stronger that was initially feared. The oh, so small recovery in December, may end up being also oh, so short lived. So what are the figures that are causing concern.

• A £4.3bn deficit in public sector borrowing - first time on record Treasury ahs not recorded a January surplus
• 1.8 per cent drop in sales volume from December to January - three times worse than expectations worse month since June 2008.
• Sale on household goods down 13.4% fastest drop since 1988
• Fuel sales down 11.1% as a result of the poor weather.

Of course VAT going up in January may well have meant that the recovery in December was spurred by people buying stuff before the price went up. Looking at the household good which are often a January sale stalwart this may well have been the case. The possibility may have been that the recovery in December may only have been a blip ahead of the Governments own tax proposals taking effect. It might just be that the recovery hadn't really started, but people were making the most of the last month of 15% VAT, while this was still a stimulus.

If we were in an airplane no doubt the chief steward would come on the tannoy telling us to refasten our seatbelts as we will be experiencing turbulence ahead. Sixty of the wise passengers, who have a fair idea how to fly this plane have passed a note to the chief steward, a man called Darling, agreeing with his decision to delay Government spending cuts until 2011. The concern it that there may be a change of aircrew mid flight, that may not heed their memo and head straight into the storm.

The potential replacement crew's chief Steward, George Osborne, is saying that it is a lack of a logged flight plan to get us out of this mess that is losing the confidence of the passengers and indeed others who may be looking to invest in the airline. A former close follower of that band of sixty with more air hours than George when it comes to such decision, Vince Cable, has said that yes there needs to be a clear plan to deal with the deficit, but also considers that when to make to begin to make those cuts should be determined on the strength of the economy in a years time. Indeed he is itching to get on that tannoy to say:

"We've got to look at what is happening in the real economy and not be based on political dogma."

The replacement crew seem to have been on an easier that is sufficient simulator, to get ready to take over, and still seem to be blinkered by that rather than what is going on around them. Possibly spending too much time in first class and not enough checking what is going on in coach.

It's Friday...Have a Cadbury Break

Don't worry my usual 5pm clips are on their way. But seeing as the news this week has been dominated by Britiain's premier chocolate manfacturer I thought you'd like these for your elevenses (after all the Stephen Glenn position has it's own hour).

Modern Classic



School Boy Memories



That first sex symbol



Frank Muir making it up as he goes along



But then there is also this.

Night of the Long Songs

Which of the songsters will be the undoing of Brown. Rumours that a big hitter in the cabinet is close to resigning in a move to destabilise the Prime Minister.

Will it be:

• Barry Mannilow's Mandy
• Doris Day Move Over (for) Darling
• The Rolling Stones Jumping Jack Straw

It comes after Lord Mandelson told the London Evening Standard:

"We are not a sectarian party. We are not a heartlands-only party."

This was in response to schools secretary Ed Balls suggesting a targeting strategy in Labour heartlands. Mandelson went on to reject such an idea saying:

"We are not going to win the election on that basis."

It really would appear that the noble Lord's word after the 2001 election that he is a fighter not a quitter still ring true. It appears that the former spin doctor is out to win. As the kingmaker behind Blair it is possible that he may have someone else in mind to take the important role centre stage.

Watch this space.

Is Iain Dale Hinting At Cameron's "Fairness"?

Of course you probably wouldn't be a Lib Dem blogger, or a regular reader of Lib Dem blogs and escaped the news of David Cameron's love bomb New Year Message.

We there is an interesting possible proviso of what may lie ahead in Iain Dale's blog. In his ten predictions for 2010 he predicts that:

"VAT will go up to 20% at some point this year"

Now that is an interesting statement for someone who has recently looked at becoming a Conservative candidate. There are only three possible occasions that VAT could be raised next year, after it goes up on January 1st that is.

The first would be in the budget. The second would be if an incoming Conservative Chancellor wants to radically change things just after a splash and dash budget into General Election failure by Labour. The third would be in the Autumn Pre-Budget Report as Darling did last month.

So does this mean that the Tories are planning to lift the level of the regressive* VAT to 20%. Cameron is talking about fairness. The Lib Dems are promising to lift the income tax threshold closer to the level of the national minimum wage than any of the other main parties is prepared to go. The Lib Dems also recognise that VAT hurts most those on the lowest incomes. The raise in VAT would be vintage conservatism. Its very nature of being the same on all goods means that their wealthy donors don't feel that they are being hard done by.

But historically look at who has made the increases in VAT.

In Geoffrey Howe's first budget for Margaret Thatcher in 1979 the Tories almost doubled the standard rate from 8% to 15%, even the higher rate before then was only 12.5%. The only other Chancellor to take VAT to new heights was John Major in his 1991 budget taking it the 17.5% level. The Major increase was to help fund for a cut in that other regressive tax the Poll Tax, robbing Peter to pay Paul. Darling's cut in 2008 was only a temporary measure one which he felt would act as a stimulus.

Cameron as I said yesterday likes to think that we are more in common, but I don't think there is anything in common about how to raise the Government's finances in a fair way, which is kind of a major issue.

Embarrassing Update: No sooner do I post about the difference's between Lib Dems and Conservative than Sara Bedford points out one of our MP is following in an Anatidae nature.



* Yeah that was even my initial reaction as I live blogged the pre-budget report.

Brown Outlook for Wenceslas

Inspired by Morten Morland's Cartoon in today's Times see above.

PM Gordon Brown looked out
On the feast of Stephen
But debt still lay round about
Deep and harsh unbeaten
Grimmly shone G. Brown that night
For the cuts were cruel
When his chanc'lor came in sight
Failing to lift the mood

"Hither, Darling stand by me
If thou know'st it, telling
Yonder voter, who is he?
And what his voting intention?"
"Sire, he votes across the fence
No party can count on.
Last time he felt Iraq make sense
Now he's not so certain."

"Raise the VAT with Auld Lang Syne
He'll be too drunk to bother
Thou and I will see him whine
But not let finance whither."
Darling's budget forth it went
Forth it went together
Through economy's wild lament
And the bitter voter

"Sire, the mood is darker now
The voters' mood is stranger
Fails my heart, I know not how,
We can go no longer."
"Read the polling, my good page
Cam'ron's doing badly
Losing the odd percentage
Tory lead less widely."

In his master's steps he trod
With glasses rose tinted
Everyone else thought it odd
After what the pre-budget hinted
Therefore, socialist men, be sure
Wealth or rank possessing
Ye who now will fleece the poor
On election day be stressing

Is Brown Really the Electioneering Budget Maker?

Maybe we should let the Chancellor off when we say he created a pre-election budget. It appears the title for that role goes to the man who claimed he had done away with 'boom and bust'. Yes it appears that Darling's predecessor the Prime Minister put a stop to some of the tax increases that he had intended to eat into the deficit before the general election.

There is also speculation that Brown is in denial about the depth of cuts that will be needed to claw back the borrowing that the Government has undertaken to keep the ship afloat. This is why although health, policing and education budgets will rise as announce, spending across Whitehall will actually in the words of the Chancellor remain flat. There is no cut in Government spending in actual terms, just that some departments will feel the pinch.

Mind you the decision was to go with National Insurance rises not VAT. In essence this did allow for some protection of the poorest paid, although they will suffer from the restoration of the 17.5% VAT rate. But why the avoidance of raising more through income tax? There is a little extra being raised here through freezing of the allowance for the upper band, but this is one progressive tax, that the Government have most control over. They can set the bands, and allowances as they see fit and the rates. Of course they have already removed the 10% rate to the detriment of the poorest paid.

But to do so would have been to affect the headline tax that everyone knows about. Labour have continued to tinker around with the other less high profile tax questions VAT and NI they have managed to make people pay a 32% (12% NI 20% IT) tax rate on their taxable income and that is before they get to spend it. The tax burden is still going up on the poorest paid despite efforts to protect within NI because of the regressive nature of VAT.

Pre-Budget Report Live Blogging

So the Chancellor is going to raise corporation tax by 1% but no longer hold off on returning VAT to 17.5%. Therefore this recressive tax which proportionally hits the poorsest more is going to have a bigger impact that on corporations, thus far.

Anyone under 24 is to be guaranteed work or training after 6 months out of work. And all 16 to 17 year old's guaratnee to be extended for another year.

State pension is to go up 2.5% so that will pretty much be swallowed up by VAT.

But hey we'll be borrowing a whole £3bn more this year than HE anticipated. That is £178bn instead of £175bn. Of course being only £3bn off is better than a lot of the doomssayers also thought we'd turn out. But still that is £1.5bn net more to be paid back under Darlings four-year-plan to cut it in half.

Boiler scrappage scheme has been confirmed and tax breaks announced for YIMBYs* in the form of a tax break for feeding any additional wind or solar power back into the national grid.

After Labour have removed the 10% income tax rate, they are now to give just such a break to corporations that take part in research or development. Maybe I should become a limited company and so a little bit more R&D in my job then.

The biggie has arrived any bankers monus over £25,000 is to be taxed at a one off rate of 50%.

Inheritance tax threshold is not a priority so will not rise from £325,000 to £350,000 just now.

The Chancellor likes to say that half of the additional reveunue raised on bonuses and inheritance will come from the top 2% of earners. He claims it is about fairness? Is it just me or did I miss a similar break down on the VAT increase he announced earlier? Might that be that that increase wasn't about fairness? Much in the same way that the abolition of the 10p tax rate proved to be.

There is to be £5bn of efficiency savings, scaling back in major IT projects (does that mean ID card database?) , reforming legal aid and outsourcing prison management.

National insurance contributions are to be raised by a further 0.5% but those earning less than £20,000 will be protected.

*Yes in My Back Yard.

Darling Takes Centre Stage

Today's the day that the Chancellor makes his pre-budget statement and in the six months since his budget it would appear that he has failed to get his predictions right. Industrial output failed to grow in October, which is considerably worse than Darling expected in April. Indeed gloomy manufacturers are not expecting output to increase in future months, therefore putting Darling behind the optimistic curve he tried to portray in the Budget.

The Chancellor has already said he will be protecting spending on front line health and policing, as well as education. So it is widely expected that spending cuts will occur elsewhere, as much as 15% is expected in some departments. Ironically when the Labour Government was branding David Cameron Mister 10% when he first talked about having to make cuts in public sector budgets.

There is also the awaited introduction of the Super Tax being imposed on big city bonuses to help finance the loans the Government has made to that sector, whether this is an one off or a longer term imposition exerts expect the Chancellor to announce later.

However, it is speculated that if Darling wanted to hold off until after the election to impose his plans it may be too late as Britain is in serious threat of losing its Triple-A Credit rating. It seems that he is going to have to act with the scalpel before the Prime Minister is able to go to the country.

We Don't Need Another Overpromising Chancellor

Don't get me wrong I'm all for an aspiring Chancellor seeking economic advice from Economists, after all my degree is in economics so I know the importance of gauging other's opinions. Also I did say earlier this week that George Osborne,

"Like any mediocre student...went to the library and looked up what the master [Vince Cable] had written, taken some key points out of it, tried to pass it off as his own work, but fell short as the whole thing doesn't fit right together."

So the fact that he had also read and used figures from a National Institute of Economic and Social Research paper in preparation for his big keynote speech would be good news. Shouldn't it? Well no apparently he misunderstood that as well to the tune of £3bn or a period of 5 years out.

The previous chancellor promised he's done away with boom and bust. We now say, 'huh?'. Our current chancellor Alistair Darling has mispromised recovery and misrepresented respected economic sources in his budgets. A fact that Darling failed to understand his own incompetencies when he condemned Osborne by saying he:

"has overclaimed comes as no surprise at all. He has shown a shocking lack of judgment through this crisis. His erroneous claims on what he would raise from his pension cuts are just another example."

We don't need another chancellor who is that fictional with the fact, but that is how it is shaping up. At the start of the week of Conservative Party conference we were promised by Dave on the Andrew Marr show that they would be straight talking, and we certainly got austerity, doom, gloom and reality biting home. But have we been oversold the hope? Has Osbourne really promised 5 years quicker to deal with something than is achievable?

If he has he has taken the decision that it fits into the election cycle pattern rather than reality. Not everything is achievable in the 4-5 years that most UK Governments are elected into, that is a reality that we need to wake up to. Politicians can't promise the world and expect to deliver it in one term, if that is not doable.

Osbourne tried to wiggle out of the £3bn difference in claiming that he was accounting for inflation to come up with his 10 year hence figure. However, the NIESR said:

"There is no way of knowing how much it will save except in today's money.. The general principle behind raising the retiring age to 66 is sound. Indeed there is a good case for a rise earlier than the Conservatives are proposing. As we understand it, the full benefits of the package that the Conservatives are proposing will not be realised until after 2020. In 2016 it will only raise £4bn, rising to £10bn in 2023, with the full effect coming in 14 years' time."

So not £10bn in today's money (£13bn with 'inflation') by 2020 as George promised and tried to argue away.

What they can promise is to sort out the system to make the improvement possible. The current chancellor in his last budget overpromised on the recovery the country would rebound with, as figures since have proven. The man who may be next has misrepresented and overpromised another think tank.

We don't want, need nor deserve chancellors who look at economic advise a guideline figure and then try and improve on that. What we do need is someone in charge of our economy who understands economics the principles and mechanics behind what advise is given, not someone playing bridge or poker and merely upping the bidding. Vince Cable shines in that respect above both Darling and Osborne, he knows the issues, understands the theory and reasons the best and doable solutions. If you want straight talking he's the man.

It's a Matter of Trust

Peter Riddell in today's Times looks at a Populus Poll on the most trusted politicians. Top of the list comes Lib Dem Shadow Chancellor Vince Cable who is more trusted by Tory voters than William Hague, George Osbourne or Boris Johnson. He also scores over 53.4 on the scale of 0-100 of trust with Labour voters too.

The only other leading politician to score over 50 with the supporters of another party is Lib Dem leader Nick Clegg, who is also the third most trusted non-Labour politician behind Cable and Johnson, only just 0.1 behind the London Mayor. Overall the rankings have Cable ahead of, David Cameon, Hague, Clegg, Johnson, Osbourne Gordon Brown, Tony Blair, Alistair Darling, Michael Gove, Harriet Harman, Peter Mandelson.

One thing this Populus poll does show is that the Lib Dems are being trusted on the big issues of the day like how to handle the economy across party divides. Of the three potential people to help the UK emerge from recession after the election and deal with the debt Brown and Darling have gotten us into Cable is the man the people would like to see at the helm. Seeing as he scored 6.8 points higher than Osbourne from his own supporters why are the press talking about the Tories as being the best party to take Britain forward? The country seem to not really trust that idea?

Politicians Letting Down West Lothian Workers

The CEO of West Lothian Chamber of Commerce has slated local and national politicians in light of the recent announcement that Bausch & Lomb's plant shutting down in Livingston. He said:

"It is disappointing that during recent years Alistair Darling, Iain Gray, Jim Devine, Margaret Hodge and Michael Connarty all had opportunities to influence changes that might have helped businesses like Bausch & Lomb to stay in West Lothian.

"The consequence of their inaction is that Ireland is now perceived internationally as a more attractive business location."

He is furious that the politicians haven't done enough to protect the regions eligibility under the Regional Selective Assistance programme (RSA). The area had maintained RSA status until last year, i.e. just before the world was thrown into recession, when European officals decided to reduce the number of Scottish areas eligible. Firms in such areas can claim up to 35% grants towards investment. It should be noted that Bausch & Lomb's other European plant in Waterford does now benefit from RSA status that the Livingston plant no longer does. Chamber President Duncan M Walker said:

"The factory is closing not because they're failing to produce innovative products, it's because the location in Ireland has RSA – Bausch & Lomb can get more activity while reducing costs. If we'd had more support from the people David McDougall mentioned, we might have retained the status which would mean Bausch & Lomb might have stayed."

Five years ago the company had won the Scottish Engineering Award for its work with "world-class technologies". As company Chairman Gerald M Ostrov said the closure was "by no means a reflection on our employees' professionalism, dedication, or efforts", but rather a purely financial decision.

Is it possible that Westminster and Holyrood could have done more to help maintain these highly trained, technical and skill jobs stay in the region? The writing was already on the wall even when the RSA was in place with firms like Motorola and NEC and others that formed the once renowned Silicon Glen pulling out to focus on other production plants. The area had been suffering even before the latest economic difficulties. The various industrial campuses around Livingston could become somewhat more of a ghost town if companies cannot be persuaded to stay in the area.

Master of the House?

I'd just like to draw your attention to this brilliant casting of 'One More Day' from Les Miserables by Political Dissuasion.

Footnote: I would have tagged more of the cast list but Blogger wouldn't let me, look for yourself.

Are Labour Heading for Meltdown in the East of Scotland?

When STV voting was brought in the 2007 Scottish council elections it largely brought about an end of the Labour fiefdoms in the Central Belt at local level. However, the domination of their MPs was only broken from North Berwick to Falkirk by John Barrett for the Lib Dems in Edinburgh West. Is that about to change with almost all of their 11 MPs in the region implicated in some way or other in the expenses scandal?

The former leader of Edinburgh City Council Donald Anderson who stood unsuccessfully for Holyrood in Edinburgh South last time says he is worried. The Labour hierarchy is preparing for the possibility of losing 8 of their 11 seats which in 2005 would largely have been considered safe. The majority would in fact of been expected to survive a 10 percent swing but things are looking so grim that only the Prime Minister may have a safe haven.

The Chancellor Alistair Darling is not immune in his Edinburgh South West seat with his not tax deductible tax advise being tax deducted as well as his flipping. Nigel Griffiths was already precarious in Edinburgh South with his 405 majority from 2005. The West Lothian and Falkirk mob of Connarty, Devine and Joyce are all battling to quell public outcry about the way they have seen to be claiming expenses, in the case of Devine on goods already claimed for when Connarty bought them new.

For Whom The Bell Tolls

After taking a week off work, during which time I also decided to take a wee rest from blogging, I see that today's papers sound the bell twice (at least) on the death throes of Labour. As the great-nephew of the undertaker who buried my paternal grandmother I think I may be well placed to look at this impending death.

First with the European Election looming* there is the bad news for Darling that just is the IMF predictions against him but also those of the European Commission. Following on from his shock prediction of the UK shrinking by only 0.9% by the end of the year (after a late autumnal harvest so we are told) the Commission has adjusted its EU growth prediction downwards from -2% to -4%. Their prediction for the UK would equate to a 3.5% contraction not the 0.9% boldly proclaimed from the ballot box last month. However, there is a little good news for Darling next year. Where he expects a 1.25% growth the Commission is also sees it in the black, though only by 0.1%. In other words despite what the Chancellor expects we'll not be heading out by the end of 2009 but just starting to peek out by the end of 2010.

Elsewhere in the Scotsman another nail appears to have been brewing in Scottish Labour since the death of Donald Dewar. In an extract printed from Hamish Macdonell's forthcoming book Uncharted Territory: The Story of Scottish Devolution 1999-2009 he points out that the anointing in 2000 of the successor to the initial First Minister was carried out at the wake in Kelvingrove Art Galleries when he says:

"with the Scottish Labour Party leaderless for more than a week, it was inevitable that the gathering would be used for political purposes too.

"By that time it had become clear that McConnell would be McLeish's only real challenger.McConnell worked the room as subtly as he could, in the circumstances, as did McLeish.

"The prime minister did not stay for long but the short time he was there was hugely significant.

"Word reached McLeish that the prime minister wanted to speak to him, and his wife Julie, before he left.

"McLeish was ushered forward, with Julie just behind. Blair shook McLeish by the right hand, put the other hand on his shoulder and spoke a few words before disappearing.

"McLeish's aides beamed. McConnell was at the other end of the room and the prime minister was gone. It was clear that, in that moment, the prime minister had anointed his choice as Scottish Labour leader and the man he favoured as Scotland's second first minister."

With the current squaring up of Blairites and Brownites on the national stage there is for Labour no arm from a kingmaker to be extended, but then the King though dead is just not yet been placed in a coffin. With Kinnock bigging up the BNP as there is nothing to big up in his own party that could fight off their worries, and with the head of the two camps still at logger heads where is the John Smith like steady hand and head. I for one don't see it.

Man the lifeboats and hoist the red flag!


*Register to vote by May 19th if you haven't already (that is my sub -agenty bit done for today).

The 3.5% Growth Myth 2: The IMF Deception

The below is exactly what Alistair Darling said about economic growth in his Budget speech yesterday. I make no apologies for quoting it at length as the whole point I wish to draw out of it is one of contextualisation. I've added parenthesis to draw out the key elements.

"Mr Deputy Speaker, the UK went into this global recession with employment at an all-time high, inflation, public debt and interest rates at low levels. But no country can insulate itself from this worldwide downturn. The position here, as in every country, deteriorated in the autumn. In the last few months, world trade fell at the sharpest rate since 1945. As an open economy, the world's sixth biggest exporter of goods and the second largest exporter of services, we are affected by the collapse in demand in other countries. The unexpected severity of the recession has led the IMF to
downgrade its own forecasts for the world economy three times since
October. We, as well as other countries as diverse as Japan and France, India
and the US, have reduced our growth estimates.

"Mr Deputy Speaker, the UK economy contracted by 1.6 per cent in the last
quarter of 2008. For the first quarter of this year, I expect the economy will again contract by a similar amount. And my forecast for GDP growth for the year as a whole will be –3 ½ per cent – in line with other independent forecasts. But
because of our underlying strength, the measures we are taking, domestically and internationally, I expect to see growth resume towards the end of the year.

"The IMF forecasts published today confirm the problems that all countries will face this year. But they also show that the British economy will suffer less than Germany, less than Japan, less than Italy, and less than the euro area as a whole this year. The British economy is diverse, flexible and resilient – which is why we can be confident in recovery. Next year, because of the pick up in world demand, the continuing benefit of lower prices, and the substantial recovery measures put in place, I am forecasting growth of 1 ¼ per cent in 2010.

"In future, the sources of our growth will be more varied – and we need to ensure we play to our country's strengths. It will increasingly come from an expansion in investment by businesses in the industries of the future, such as low-carbon, advanced manufacturing and communications. These industries,
together, are as important to the British economy as the financial services
sector. That is why it has been so important that we have increased investment in Britain's science base by 88 per cent in real terms over the last ten years.
Growth will also be driven by the opportunities to export as the global economy doubles in size in the next two decades. From 2011, I am forecasting that the economy will continue to recover, with growth of 3 ½ per cent from then on."

He repeatedly refers the IMF predictions from their report for yesterday, it adds gravitas does it not? You think that he is drawing from a wealth of experience to make his predictions for the future. What did the IMF figures say 2009 -4.1% and 2019 -0.4%. The only bit of fact that Darling does extract from the IMF figures is that the 2009 figure is better than the Eurozone -4.2%, Japan -6.2%, and Germany of -5.6%. Of course he fails to mention USA who take all the blame for this recession only dipping by 2.8% and Canada most closely aligned at -2.5%.

So therefore who are these other independent forecasts that he speaks off. Having reviewed all of yesterdays papers the most optimistic forecast I was for 2010 was +0.5%, the Times had 0.3% but suggested Darling would say 1%. Where oh where has he squeezed the extra 0.25% out of what was even deemed an optimistic prediction yesterday.

Maybe be he has discovered the golden fleece, or sold the Downing Street cat to a stranger in the street from some beans which are are growing very well in the garden of Number 11. Fee fi fo fum I smell the lie of an Darling tongue.