UK economy

Jim Pickard

The Romans used to predict the future by examining the entrails of dead animals. These days we use opinion polls, often with similarly haphazard results.

Even some of the most robust Westminster commentators are refusing to make firm bets about how the landscape will look after next May’s general election. It will be the closest fought, most unpredictable, most exciting battle for a generation. Read more

He has been criticised in the past for offending women, gays and the Irish. Now Tony Abbott, Australia’s prime minister, stands accused of insulting the people of Scotland and interfering in the country’s independence referendum on September 18, writes Jamie SmythRead more

Janan Ganesh

Today, George Osborne had the rare pleasure of announcing economic news that is better – not worse – than was expected when he last held a major fiscal event. The Autumn Statement declared that growth, employment and the public finances are all heading in the right direction. Even some bad news from the past, such as the double-dip recession earlier in the parliament, was revised out of existence.

But the chancellor’s political challenge was to combine all this optimism with unwavering commitment to austerity, the cause that defines him and the government. Veering off this theme to join the opposition Labour party in a skirmish over living standards this autumn has left the Tories looking like slaves to the news cycle. Read more

John Aglionby

George Osborne has presented his Autumn Statement. Its highlights included a large increase in the economic growth forecast, a predicted budget surplus in 2018, a hike in the state pension age and free school meals for all infants.

By John Aglionby and Emily Cadman with contributions from FT colleagues

 

Kiran Stacey

Mark Carney has been given a pretty weighty task as he starts his tenure as governor of the Bank of England. In recent weeks, almost every time the chancellor or one of his aides has been asked about the prospects for growth, he has mentioned Carney and his track record of boosting the economy through unusual monetary policy tools.

Already we may have started to see signs of this, with Carney’s highly unusual first statement in which he said expectations of interest rates in 2015 were “unwarranted” – in effect a guarantee of long-term low rates.

But Lord Mandelson, Labour’s former business secretary, and a prominent pro-European, wants Carney to pay attention to what is happening on the other side of the channel too. Read more

Kiran Stacey

HS2 protest signThe planned high speed rail project from London to the midlands and the north is starting to look very uncertain indeed.

After the news last week that the estimated costs have spiked by £10bn since the beginning of the year, we then revealed in the FT that the government’s cost/benefit analysis assumed that no one would work on a train, increasing the apparent benefit of getting to your destination more quickly. Another chunk was taken out of the expected returns.

Now it seems that, having proposed the scheme in the first place, Labour is also getting cold feet. Lord Mandelson, the former business secretary who does not usually have much truck for nimbyism, launched a bitter attack on the project in this morning’s FT. He writes: Read more

Kiran Stacey

Job CentreThe government has set great store by its £5bn plan to get people who have been unemployed for a long time back into work. David Cameron has called it “the biggest and boldest programme since the great depression”.

Expensive though the scheme sounds, it is actually much cheaper than its predecessor, Labour’s Future Jobs Fund. The problem is, it isn’t working.

Figures out today show the programme has improved since last year, when providers were way off hitting their minimum performance targets – but not enough. Read more

Kiran Stacey

Philip HammondPhilip Hammond appeared on the Today programme this morning defending his position after being accused of dragging his heels on the spending review.

The defence secretary has not yet submitted his draft plans for how he could cut 5 per cent of his budget in 2015-16 (half of that asked of other departments), but he told the BBC he was not a “hold out” adding that he hopes to have an “adult conversation” about where the axe should fall.

But in case anyone was in any doubt of how willing he is to stand up to the Treasury, he added this:

We should be very clear that there is a difference between efficiency savings, which may be difficult to achieve but are painless in terms of the impact on the front line, and output cuts, which are of a very different order and require proper and mature consideration across government about the impact that they will have on our military capabilities.

 Read more

Kiran Stacey

Danny AlexanderEarlier this year, Danny Alexander told the FT he was going to use the levers of government to get companies to pay their fair share of tax. Specifically, he was going to stop companies from winning big Whitehall contracts if they haven’t complied with tax rules. He told us at the time:

If you work for the government, whether you’re an individual employee or a company that has got a contract with the government, you need to be behaving properly with regard to tax rules.

His comments came after an FT investigation showed some of the world’s biggest IT companies that provide services to the government, use ingenious and somewhat aggressive tactics to avoid paying UK corporation tax. Read more

NHS protests

By Sarah Neville

Comments to the FT from one of the most important figures in the NHS this morning ask the most fundamental question that can be asked about the NHS: in an era of austerity can a universal free health service survive?

Malcolm Grant, chairman of NHS England, told us that he thinks a future government will have to consider more widespread user charges in the health service unless the economy picks up.

Grant made clear that he would not support any departure from the defining principle of a free-at-the-point-of-use NHS. But that doesn’t matter – these are macro-economic decisions for government that fall beyond his remit. Read more

Kiran Stacey

Job Centre

I was interested to read the piece by Alex Massie in this morning’s Scotsman, in which he argued:

Scots may take an even tougher line on welfare than voters elsewhere in the UK… Visit any working-class pub in Scotland and you will hear opinions that make IDS seem like Polly Toynbee.

If this is true, it makes the SNP position problematic. The party has consistently opposed the coalition’s welfare cuts, and when Johann Lamont, Labour’s Scottish leader, suggested axing certain universal benefits, such as free prescriptions, the SNP called it her “speech of madness”.

So what does the polling suggest? A fairly comprehensive look shows us two things: 1) Scottish voters are less hostile to the welfare system than elsewhere in the UK; but 2) they remain in favour of benefit cuts. Read more

Kiran Stacey

Danny AlexanderTalking to a senior Liberal Democrat the other day, talk turned to which of their MPs are at risk at the next election. This person reckoned the party could feasibly hold on to between 43 and 50 seats, which would be a major triumph given the meltdown many have been predicting for the last few months.

One seat this person insisted was safe was that of Danny Alexander. Why, I asked – because Inverness voters like having a political heavyweight (before you criticise, he is a member of the quad) as their MP? To a certain extent, they replied. Because the voters there are died-in-the-wool Lib Dems? Not especially, they said. Why then? Because Inverness has done very well out of Danny Alexander.

On several occasions since Alexander became Treasury chief secretary, there have been small but significant giveaways that help, among other places, Inverness in particular. Read more