Phil Taylor

Yesterday the Sunday Times carried reports of an interview with Chancellor Alistair Darling admitting that he and his Treasury officials had got it wrong over the length and severity of the recession and that he will be forced to tear up his economic predictions. The Today programme this morning bought confirmation, if any was needed, that the assumptions made in last year’s Pre-Budget Report (PBR) were indeed too optimistic. Although the PBR signalled a fiscal tightening (ie less spending or more taxing year on year) of about £38 billion a year the Institute of Fiscal Studies (IFS) reckons we “need about the same again”. The IFS’s paper published today spells out how another £40 billion will need to be taken out.

I was pleased to hear Shadow Chancellor George Osborne later on the Today programme, click here and move the slider to 7:42, say:

Well I haven’t ruled out further tax rises although I will work hard to avoid them because I think where the bulk of the strain needs to be borne is on spending restraint.

Don’t forget that although the PBR talked about both employer’s and employee’s National Insurance going up by 0.5% and a new top rate of tax at 45%, both after the next election naturally, this only amounted to about one fifth of the tightening required, four fifths came from Labour’s cuts which the government has done its utmost to avoid talking about. Indeed Gordon Brown’s overturning of his own fiscal planning regime by cancelling the summer’s planned comprehensive spending review demonstrates just how bloody public spending is going to get. As Andrew Rawnsley in the Observer said two weeks ago:

A comprehensive spending review was due this summer. Gordon Brown has quietly told Alistair Darling to scrap it. To publish forward-spending figures now would be to advertise the terrible state of the public finances in neon lights and stick a “Kick Me Here” sign to the backsides of both the chancellor and the prime minister. It would also unleash the bloodiest Whitehall spending negotiations in a generation. Below the radar, the Treasury is already trying to do some mild slashing and burning, seeking “efficiency savings” of £5bn from departmental budgets. Some of the spending ministers are squealing about that even though it is peanuts in the context of the awesome size of the problem.

Public spending is going to get very difficult very soon. Whoever takes over after the next election is going to have to make some truly eye-watering spending decisions. Make no mistake that it is in large part the fault of one man – Gordon Brown.

My public speaking is much better than it was when I became a councillor but it still has a long, long way to go before I get anywhere near Daniel Hannan, Euro MP and Telegraph columnist. Today he totally roasted Gordon Brown for three and a half minutes during his visit to the European Parliament. I don’t know what protocol or procedure they were following but I guess that the Prime Minister is bitterly regretting allowing himself to be ambushed like this. I don’t suppose it will get on the BBC though – we’ll see.

http://www.conservatives.com/%7E/media/Flash/Flash%20Applications/videoPlayer_small.ashx

Last Thursday I went to the Royal United Services Institute at 61 Whitehall to hear David Cameron do his debt crisis thing. I had been hoping, idly it seems, for some red meat. The essence of what Cameron said, see speech here, was that some hard choices will have to be made but fiscal responsibility needs a social conscience, or it is nothing.

Cameron is trying to blunt any possible Labour attacks that the Conservatives will “revert to type” once in government and that they will slash and burn their way through the public services.

Cameron is wise indeed to be wary. Whoever is returned after the next election will have to make some truly eye-watering changes to public spending. We are talking in the order of £100 billion here. Read “Bankrupt Britain” if you think I am exaggerating. Cameron knows this and so does Gordon Brown.

Gordon Brown invented Comprehensive Spending Reviews when he was chancellor in order to take a long term view and make spending decisions every two to three years. In the Observer today Andrew Rawnsley reports that:

A comprehensive spending review was due this summer. Gordon Brown has quietly told Alistair Darling to scrap it.

So the father of the Comprehensive Spending Review is quietly putting it to death so that he doesn’t have to face facts.

Maybe our politics over the next 18 months will be a poker game where Brown bluffs that we can carry on as we were once the storm has abated and whilst Cameron bluffs that merely controlling the expansion of the state will be enough to bring Government debt under control. I hope not. After the next election one of these men will have to come clean and admit that the public sector is going to have to be significantly curtailed. I hope that Cameron does it sooner rather than later.

Today the Mail on Sunday has a huge piece on MP’s expenses and on Tony McNulty in particular. McNulty always comes across quite well in the media which is why he is often wheeled out. His media-friendliness doesn’t mean that he can tell right from wrong though. He has been found out claiming housing allowances for the house where his parents live. He says he stopped making these claims in January before he was found out. He is quoted as saying:

I have always felt some discomfort in claiming the money, to be frank. I decided that it’s simply time that I stopped – partly because mortgage interest rates have gone down and partly because I can do without it.

So let’s get this right: McNulty can’t be bothered to claim anymore because the amount he can claim is so trifling with falling interest rates and he is so comfortable the sums seem insignificant. Apparently he has not stopped claiming because it is just plain wrong. What a complete arse.