OK, we’ll bite. The Telegraph’s Jeremy Warner has a column with a headline which tends towards alarmist:
Negative interest rates put world on course for biggest mass default in history
Some fascinating economic research by Ipsos Mori, published today, shows that George Osborne is the least popular chancellor in nearly a decade, with net approval ratings of -33. Nobody has had such bad ratings since Ken Clarke in the early 1990s.
At first sign this is unsurprising: this is the first recession we’ve had since the early 1990s (if you take 2008-now as one recession). But actually when you plot the popularity of chancellor’s against economic growth, the two are surprisingly unconnected.
Plotting chancellors’ approval ratings since 1976 tells us a few things: Read more
Welcome to our rolling coverage of the Autumn Statement.
George Osborne has missed his fiscal targets and cut corporation tax.
We’ll bring you all the day’s developments live. By Tom Burgis and Ben Fenton.
15.45: We’re winding up the blog now, but you can follow events as they unfold through constantly updating stories on the front page of FT.com
15.31: A representation of the “flamethrower of uncertainty” can be found in the documentation of the OBR. It is also known as a “fan chart”. I doubt George Osborne is a fan of it, though.
15.24: Chote speaks of the “flamethrower of uncertainty”- a favourite phrase, unsettlingly enough, of the OBR, which is a chart showing forecasts in a wide range that makes the chart lines look like a firebreathing dragon.
15.18: Chote says that the variation in the possible range in the forecast of net debt figures for the UK is a large number, but is “dwarfed by the scale of uncertainties” on the issuance of debt. I think that’s the second time he has said that in his address.
15.12: The Spectator is running a rather scary chart showing the lost output of the current “seven-year slump” in the UK.
15.07: Robert Chote, director of the Office for Budget Responsibility, is live now, going through his department’s figures that underpinned the bad news Mr Osborne has just had to deliver.
15.05: Gavyn Davies has blogged for the FT with his view on the autumn statement while the FT’s Lucy Warwick-Ching has collated some very interesting instant reaction from personal finance experts.
14.49: Hannah Kuchler on the FT’s UK desk has been keeping an eye on business reaction to the autumn statement.
The CBI, the employer’s organisation, urged the government to stick to its guns on deficit reduction to retain international credibility, saying it was no surprise that austerity would last longer than expected.
John Cridland, director-general, welcomed investment in infrastructure and support for exports, but said the proof was in the delivery. He said:
“Businesses need to see the Chancellor’s words translated into building sites on the ground.”
But the British Chambers of Commerce was less positive, declaring the statement not good enough for a country meant to be in a state of “economic war”.
The government is just “tinkering around the edges”, John Longworth, the BCC’s director general said, adding: “The Budget next March must make truly radical and large-scale choices that support long-term growth and wealth creation. That means reconsidering the ‘sacred cows’ of the political class, including overseas aid and the gargantuan scale of the welfare state. Only a wholesale re-prioritisation of resources, to unlock private sector finance, investment and jobs, will be enough to win the ‘economic war’ we are facing. The danger is that our political class is sleepwalking with its eyes open.”
14.40: Lionel Barber, the FT’s editor, just passed by the live news desk so we asked him what he thought of the autumn statement.
The Chancellor is in a hole, but the good news is that he’s stopped digging. The FT supports the government’s fiscal stance, but is there more to be done on monetary policy to boost growth? That’s the question.
14.26 Who says the British don’t like doing things the French way? Might we surmise from this tweet from the BBC’s Robert Peston’s interview with Danny Alexander, Osborne’s Lib Dem No2, that the UK’s crediworthiness might be going to way of its Gallic cousins’?
Others are more chipper:
Welcome to our live coverage of Paul Tucker’s testimony to MPs probing the Libor scandal. The deputy governor of the Bank of England faces questions about his actions at the height of the financial crisis. By Tom Burgis and Ben Fenton in London with contributions from FT correspondents. All times are London time.
19.00 That’s that for our live blog. There are three main points from Tucker’s testimony.
By Kiran Stacey at Westminster and Gordon Smith, Michael Hunter, Darren Dodd, Tom Burgis and Ben Fenton on the FT news desk.
All times are GMT.
16.45 So, that is about it for the live blog. The main FT coverage can be found in the usual place.
We thought we would leave you with a small image of what life in the Financial Times London newsroom is like on Budget Day. Below, you can see Chris Giles, economics editor, briefing the rest of us on what it all means. This picture was taken less than two minutes after the Chancellor sat down at 13.29.
So, from the FT live news desk, enjoy digesting the ramifications of the 2012 Budget, whether you are an outraged pensioner, a relieved 1-percenter or the Chancellor of the Exchequer. FT Live Blogs will be back just as soon as something big enough breaks. Goodnight.
16.25 John Authers and Martin Wolf parse the 2012 Budget
16.06 The top trending phrase on Twitter in the UK at present is #grannytax.
And one of the main users of Twitter, Lord Prescott, has his say on the Budget.
16.01 The FT’s Christopher Cook tweets:
15.57 This was a budget, opines the FT’s Philip Stephens
that was in part “about George Osborne’s ambitions to establish
himself as David Cameron’s heir apparent”.
The chancellor talked about a Budget to put Britain back to work, but
the measure most likely to stick in the public mind was the cut from
50 per cent to 45 per cent in the top rate of income tax. It marked a
tilt to the tax-cutting right that he hopes will build his support on
the Thatcherite wing of the Tory party.
15.52 Podcast time.
15.48 Our colleagues over at FT Alphaville have been going through the
Budget documents and have found the official issuance plans for the
Osborne super-long bond.
The question, it seems, is not how long the bond should be, but how
It was no surprise that Ed Miliband led on the economy today, on the day that GDP figures showed a drop in output in the last quarter of last year.
The Labour leader’s questioning was more effective than usual. He has a new line that looks like it could pay off:
He and his chancellor are the byword for smug, self-satisfied complacency.
It certainly gives us all some relief from the previous ubiquitous epithet Labour applied to the prime minister and his party of “out of touch”. Read more
Vince Cable will not be outflanked by George Osborne. Osborne said on Tuesday that banks needed to show restraint when paying bonuses – an unusually anti-City message for a Tory chancellor.
But Cable today has gone one further, urging investors not to focus only on banks, but to make sure that no big company allows its executives to be paid too much. We will have more on this in tomorrow’s FT, but here is the letter he has sent to top investors and FTSE100 chairmen: Read more
The FT reports this morning that payday lenders (or legal loan sharks as they are also known) have been flooding into the country looking to take advantage of hard-up recession-hit borrowers and the UK’s lax lending laws. Borrowing at rates of up to 5,000 per cent, customers can find their debts escalating at a startling pace.
Even though many other countries have interest rate caps, the UK has never gone down that route. The government has always said it is wary of implementing such a cap in case it pushes poor people into the hands of illegal loan sharks instead.
Unless there is a last minute U-turn in Whitehall tonight, one of the ways which George Osborne will pay for the various jobs and infrastructure schemes in Tuesday’s growth review will be to squeeze tax credits.
This is a result of protracted bargaining – Osborne wanted to freeze benefits, but the combined efforts of the Lib Dems and Iain Duncan Smith put a stop to that. Eventually the compromise was made that credits would come under the axeman’s blade instead.
So who suffers if these are frozen or cut? Read more
It was an intriguing PMQs today. As I have previously noted, Ed Miliband has begun to find his feet on the economy, and once again used this as his main attack line.
As he has done at previous sessions he chose an obscure policy that has achieved little so far (this time the “business growth fund”, which was set up using money from the Merlin agreement), and used it to embarrass the PM.
As has happened before, Cameron didn’t know what the policy was (in fact at the end, he started talking about the Regional Growth Fund – a different fund altogether). So when asked how many businesses the fund had invested in, he was unable to answer. Read more
Is George Osborne planning to scrap the 50p income tax rate? Yes.
But not today, nor tomorrow. Not this month, or next. Not even before Christmas. The move may not even take place next year.
The rate – which applies to those earning £150,000 – has always been classified as “temporary” by the coalition.
In recent weeks the Tories and Lib Dems have played up their differences over the issue. In fact neither think the 50p rate should be removed just now; the internal debate is whether to go for 2012 or 2013.
Danny Alexander insisted last Sunday that scrapping the rate was not a priority – and that lifting the income tax threshold to £10,000 should come first. Tory outriders such as Boris Johnson and Lord Lamont called for it to be axed; but even Lamont said this should happen in 2013. Johnson, meanwhile, is unfettered by the responsibilities of national coalition government. Read more
Top stuff here from Bloomberg’s Rob Hutton (@robdothutton).
Since the coalition government took over, and particularly since George Osborne laid out exactly which cuts he would make, confidence of UK consumers in the economy has nosedived.
Alan Johnson was guilty of modest political opportunism this morning when seemingly questioning Philip Hammond’s position in the light of the extreme weather conditions. The shadow chancellor hinted that the transport secretary should resign.
It reminded me of the occasion that Boris Johnson appeared in front of the transport select committee (in May 2009) to defend charges that he had failed to protect London from the wintry elements.
It seems to testify to the theory that Boris is at his most witty when under pressure:
Q197 Graham Stringer: You are telling me what gritting went on, but that was not the question I asked. The question I asked was what action you took, with your overall responsibility for transport in Greater London, over the five days when we knew, the whole country knew, there was going to be a heavy downfall of snow which was likely to cause disruption. I would like to know what actions you took.
Mr Johnson: As Chair of Transport for London, I am happy to say that I had general oversight and I presided over, with my Commissioner for Transport, a massive programme of gritting. If you ask me whether I personally went around trying to repel each snowflake as it tried to settle over London, then obviously I would have to give you a negative answer. You do ascribe phenomenal powers to me – quite rightly, I think, as I think it is high time that we thought about a revision of the powers-to have authority over basic meteorology, but it is not within my competence to get up into a helicopter and encourage the snow to stay away. What I think you need to focus on, if I may be so bold, Chairman -
We reported yesterday that David Cameron had joined Nick Clegg in warning of new action against banks which did not show bonus restraint.
David Cameron warned banks on Friday that they faced higher taxes if they continued to pay “unjustified” bonuses, adding to a growing political and regulatory pressure on the City before the industry’s bonus season early next year.The prime minister, speaking after a European Union summit in Brussels, said that the public found such payments “galling”, adding: “Every decision the banks make like that makes it more difficult to keep a tax regime that they might favour.” Read more
This may come as a surprise to those who read Nick Clegg’s comments today about the need to crack down on bankers’ bonuses. (And David Cameron’s veiled threats today of a higher tax on banks that don’t comply).
Yet last week coalition MEPs were sent a document on how Britain has been seeking to water down a EU rule intended to restrict bonuses in the future.
The EU last Friday laid out its new rules meaning that no senior banker should get more than 20 per cent of their bonus in cash upfront.
The EU wants bankers to defer half of their bonus, of which at least 60 per cent will have to be paid in shares or other financial instruments.
The British (via FSA policy set out in the summer) had argued that banks should be allowed to give all of the cash element upfront while mostly deferring the shares element. That would have meant bankers getting 40 per cent of their bonus in cash upfront – double what the EU wanted.
The document argued that Britain “led the way” in implementing G20 principles and that the EU should not go any further.
It was an entirely valid point of view to take; but there is a distinct irony in the idea of the British government proposing weaker restrictions than the rest of the EU while posing as banker-bashers.
The document is a bit long but here you go:
CEBS Guidance on Remuneration Provisions in the Capital Requirements Directive
Upfront Cash and Retention Conditions
My colleague Fiona Harvey revealed in October that plans for a green investment bank could be watered down under pressure from the Treasury.
A commission set up by George Osborne to look at the issue – led by Bob Wigley, the former European head of Merrill Lynch – had called for the bank to have powers to raise finance from the private sector, for instance by issuing bonds, green Isas, raising loans and other measures. But this was opposed by Treasury officials, according to Fiona:
They would prefer the bank to operate as a simpler fund, dispensing grants and loans in conjunction with the private sector but without the powers to generate its own self-sustaining financing mechanisms.
And in today’s Guardian Chris Huhne confirms that the bank will start life in the more limited form.
It was a relief to Ed Miliband that his defeated elder brother took a step back from frontline politics after losing the Labour leadership race in September. But David Miliband has remained, like Banquo at the feast, a visible presence on the backbenches from where he could – at some theoretical later date – still return to wreak revenge.
A survey in yesterday’s Sunday Times makes troubling reading for Ed. It suggests that 12 per cent of the public think Ed would be the better Labour leader, far below the 37 per cent for David. That is a very similar finding to surveys published during the summer.
Meanwhile pollsters found that 40 per cent of the public do not rate Ed Miliband’s leadership skills, compared to 27 per cent who do.
Back then Ed’s allies shrugged off those polls. Within a few months, they argued, people would have seen Ed in action and would have warmed to him. (David’s position as foreign secretary had given him a higher profile).
That shift in public opinion does not seem to have happened, however, although Labour as a party is now consistently ahead in the polls. The unknown unknown is where Labour would be polling if it had a more charismatic and decisive leader.
David is keeping his powder dry in terms of any remaining Labour ambitions. This morning he was quoted in his local newspaper saying:
“I’ve got to admit I wish the leadership campaign had gone differently, but who knows what will happen in the future?…I think Ed’s done well. It’s a very difficult job being the leader of the
The Liberal Democrat position on student fees has been bungled in countless ways. But there must be one error of judgement that is more important than the rest — call it the original sin. Here are my top three contenders:
1. Nick Clegg ducking the chance to reform the policy in 2009
Most senior Lib Dems knew they had a policy to scrap tuition fees that was unrealistic and unaffordable. Secret work was done to come up with an alternative that maintained a critical stance but cost a lot less. The result was a more progressive form of tuition fees — something like the proposals today. When this was put to the Lib Dem MPs and the federal policy group, it went down terribly. Some MPs thought it was futile to attempt to scrap a vote-winning policy when any change would be blocked by the Lib Dem conference. Apparently one of the most persuasive arguments was that the Lib Dems were not going to win the election, so why do the responsible thing? Clegg eventually ducked the confrontation with his party at the 2009 annual conference. How he must be regretting it now. Read more
Baroness Thatcher said of Lord Young: “Other people brought me problems. David brought me solutions.” Read more
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