Another misleading 'poll' headline

What is it with newspapers giving totally misleading headlines following an opinion poll? I've blogged about this before.

Today we've seen the Telegraph lead on its front page with the headline: "Credit crunch slashes Tory poll lead." The Telegraph uses the pollster YouGov. The impression the headline gives is that the Conservative lead has indeed dramatically fallen. However, this has not happened.

The poll results are:

Conservatives - 42%

Labour - 33%

Lib Dems - 15%

According to the Telegraph, this represents a narrowing of the Tory lead from 14 points to 'just' 9 points, with the Tories down 3 and Labour up 2.

However, this is because the Telegraph contrasted the results not with the last YouGov poll but with the last Telegraph YouGov poll (4 October). All newspapers do this with their poll results.

It is totally misleading!

Had the Telegraph contrasted the latest YouGov results with the last YouGov poll it would be the Mirror YouGov poll (20 October) and the headline would have been completely different because the changes were Conservatives - no change; and Labour - minus 1. So the headline should have been: "Tories increase lead back to double figures" or "Tory lead holds steady" or even "Labour advance halted." It most certainly should NOT be "Credit crunch slashes Tory poll lead"!!!

Another annoying thing the newspapers do with polling, while I'm getting this off my chest, is not even accept the last polling result of their sister newspaper. For example, both the Independent and the Independent on Sunday (IoS) use ComRes. One would have thought that when comparing the latest ComRes Poll with the last one, the Independent and IoS would refer to each other's polls - after all their owners are the same even if they have different editors. Don't be stupid, that would eliminate the ability to have grotesque headlines that distort the political reality.

It's about time this was sorted out!

Osborne's plan - 'fiscal responsibility'

George Osborne has just given an excellent speech at the LSE on the economy. The theme of the speech was 'Conservative fiscal responsibility'. It was a speech that comprehensively demolished Brown and Darling's plans for a Keynesian spending splurge and then proceeded to clearly, and reassuringly, outline the steps he would take if in office.

It was so good to see Osborne have the intellectual confidence to take the fight to Labour and show their 1970s throwback policies are intellectually bankrupt. Margaret Thatcher did so in the 1980s and was so successful that Blair and Brown had to accept her economic thinking - rhetorically if not always in practice. But as Osborne pointed out in his speech, Brown has now given up on the rhetoric of sound public finances.

Osborne rightly said that Keynesian demand management had comprehensively failed in the 1970s. He said that big spending projects would not be finished in time to give any benefit and said the government had a lousy track record of completing big capital expenditure projects on time and on budget e.g. the schools building programme. He also invoked the experience of Japan. Between 1992 and 2002, Japan tried the Keynesian approach. The result after those 10 years was a debt burden which had increased by 56% and an economy which had only grown by 9%. What is more, the country was left with lots of white elephants after the ill-fated spending splurge.

The shadow Chancellor invoked former Chancellor Nigel Lawson in explaining his thinking on economic management. Lawson had said in his 1984 Mais Lecture that it is the job of monetary policy, not fiscal policy, to manage demand. The responsibility of fiscal policy is sound public finances. Hear Hear!

This had been the accepted economic strategy of successful economies for two decades. Even Brown said in his 1997 Labour Conference Speech that he had learned the mistakes of the past that governments could not spend there way out of recession. It is a shame the Prime Minister is returning to his old Labour, socialist roots!

Talking of Lawson, he popped up Wednesday at a House of Lords economic seminar and made the point that interest rates must be slashed but the Treasury should refrain from cutting taxes or increasing spending in the face of the coming recession.

Back to Osborne... he said that borrowing of course increased during a recession as the automatic stabilisers kicked in. It is the cost of recession... Brown's recession. It is an overdraft, not a plan for recovery. Cameron made this point the other day and Brown deliberately used the point out of context at PMQs, repeatedly saying that Cameron was in favour of borrowing and thus spending when Osborne was not, thus trying to suggest Tory economic policy was in disarray. Pathetic if that's all our Prime Minister can come up with!!!

Returning to his twin themes of "Conservative fiscal responsibility" and "fixing the roof when the sun was shining" Osborne said that the year before the 1990s recession, the Conservative government had a small surplus of 0.2% of GDP. However, a year before this recession, the Labour government had a deficit of 2.6% of GDP. Brown comprehensively failed to put contingency plans in place for a downturn, as the IFS said when Brown handed over the reins of the Treasury to Darling.

Osborne made the point that increasing spending is not cost free. It makes it harder for the Bank of England's Monetary Policy Committee (MPC) to cut interest rates as it leads to inflation. Increased spending funded by increased borrowing also ultimately leads to increased taxes or cuts in public spending so that the debt can be paid back. Fiscal loosening and increasing the size of Britain's deficit will not work to help a recession and more than that it will undermine the subsequent recovery by destabilising the system.

The shadow Chancellor then set out the Conservative's alternative plan to get the country out of recession which can be summed up as 'fiscal responsibility'. Cameron referred to this in his Conference speech when he said he was a 'fiscal conservative'. I have been critical of Conservative economic policy recently because i was concerned that the Conservatives had nothing to say about the economy other than that it was all Brown's fault. I argued that this was not enough especially as the other parties were offering alternatives - Labour spending and Lib Dem tax cuts - from what i saw as the do-nothing status quo advocated by the Tories.

I don't mind admitting that Osborne's speech today and Lawson's comments Wednesday have reassured me that current Conservative policy is not a do-nothing strategy as i unfairly characterised it. It is strategy that will put the country on the soundest possible footing and recognises that government action for its own sake is not what is required. A strategy of 'fiscal responsibility recognises the realities we face and seeks to put them right in a way that is best not only for the present but also for Britain's long term recovery and does nothing to jeopardise either. It is a responsible and sustainable approach which will not burden future generations with mountain's of debt. I was frustrated with the Conservative's Party's inability to articulate what it would do differently and had argued that the Tories should offer tax cuts to help the economy. However, Lord Lawson, a pro-tax cutter himself, argues that "by having big cyclical tax cuts now you would weakening your weapons for the future." Consequently, the fiscally responsible approach outlined by Osborne has won me round.

Osborne said that his approach would be 1) Let monetary policy work; 2) Do not make the Bank of England's task harder - by this he means by increasing spending which would heighten inflationary pressures thus making it more difficult to cut interest rates; 3) Timely, responsible, targeted fiscal measures to help families and companies through the difficulties of recession; 4) a new fiscal framework (the government has abandoned its fiscal rules and has not replaced them) which will see a balanced budget by the end of the economic cycle policed by an independent Office for Budgetary Responsibility; 5) Prepare economy for recovery by addressing the structural and geographical imbalance in the British economy. UK's growth (75%) was far too narrowly confined to just three sectors - housing, finance, and retail - which has meant Britain is especially vulnerable in a downturn.

For too long the parties have appeared too similar. No longer. The economy has finally provided clear dividing lines between Labour and the Conservatives.

As Osborne said: "So there's the choice in British politics: irresponsible borrowing now and higher taxes later under Labour; or the responsible Conservative plan. Let the Bank of England cut interest rates now and lay the ground for lower taxes later."

UPDATE: Angela Eagle is just on the BBC claiming Osborne is planning on cutting spending. Hello? Did you listen to the speech? What a pathetic response from the Exchequer Secretary to the Treasury. Is that all she can do - fall back on tired stereotypes. And why did the BBC interviewer not slap her down?

Donate and save a life

I've just signed up to become a UK Transplant Donor. I had seen an article that triggered my move and I thought why not blog about it. After all, when we're all pushing up the daisies, what use will we have for our own organs? Moreover, you may one day depend on someone else's generosity...

Today more than 9,000 people in the UK need an organ transplant that could save or dramatically improve their life. Most are waiting for a kidney, others for a heart, lung or liver transplant. But less than 3,000 transplants are carried out each year.

You no longer need to hold a donor card. What is important is that you register and get on the NHS Organ Donor Register. To sign up, click here.

Only 25% of the UK population have signed the register. Do some good and sign up today.

VAT and Brown doing favours for chums

The Chancellor announced today that he will waive VAT on the sale of the new X-Factor Help For Heroes single (cover version of Mariah Carey's Hero by the X-Factor finalists), by making an exceptional one-off charitable donation equivalent to the sum of the VAT receipts collected on sales of the single.

This is good news of course. Help For Heroes provides vital care for men and women wounded in the line of service.

I know Brown waived VAT for the 2004 Band Aid single (worthwhile cause) and is doing the same for Help for Heroes (again, another worthwile cause), but why is the government still forcing charities to pay VAT in the first place?

And why has Help for Heroes come in for special treatment when others are passed by? Is it because Gordon wants to look popular (thus only 'rewards' charities with huge appeal) or does it have anything to do with the fact that Brown is chums with Piers Morgan who's also currently advising him?!!!

Weren't the fiscal rules meant to be forever?

Last night Alistair Darling killed off Gordon Brown's much trumpeted fiscal rules in his Mais lecture (though failed to outline what will go in their place). The Chancellor said last night: “To apply the fiscal rules in a rigid manner today would be perverse.” The basic argument of the government now is that times have changed and therefore so should the fiscal rules. Darling made this point yesterday also: "It is natural that the conduct of policy should evolve. Just as markets change, so should policy."

Hang on a minute... as George Osborne has noted, wasn't the whole point of the fiscal rules that they were designed explicitly to take account of the economic cycle?

Didn't Gordon say:

"The new ambition for our country is long-term economic strength and stability based on an unshakeable commitment to prudent monetary and fiscal rules." (Financial Statement - 17 March 1998)

"Our fiscal rules are set not for a year or even two years, but for the entire economic cycle... at all times—now and in the future—we will never compromise our commitment to meet our fiscal rules and disciplines" (Budget Statement - 17 April 2002)

"Our monetary and fiscal foundation, which is based on the independence of the Bank of England, imposes a symmetrical target for inflation, requires debt at low levels, holds to tough fiscal rules over the economic cycle and is thus designed not just for times of high growth, but for a global contraction with all its attendant difficulties." (Pre-Budget Report - 27 November 2002)

"As with monetary policy, so our fiscal policy is designed to help sustain growth at every stage in the economic cycle. Our fiscal rules are set for the long term and based on deliberately cautious assumptions, including for revenues... Our commitment to meeting these fiscal rules is not just for this year and this economic cycle, but for the long term... " (Pre-Budget Report - 27 November 2002)

"I have said that our fiscal framework is designed not only so that we make the right decisions when the world economy is growing, but so that it is robust so that at all times we meet our fiscal rules. An alternative approach has been put: that, instead of our holding firm to this long-term course, this stage of the economic cycle would be the time to cut spending and borrowing. I have examined such an approach. It would lead directly to depressed demand, rising unemployment, and the old familiar boom-and-bust approach." (Pre-Budget Report - 27 November 2002)

"Looking forward, while vigilant to the global economic cycle, the challenge is to strengthen the British model for stability, and our objective must be to lock in that stability—not just for a year or two, or for an economic cycle, but for a generation." (Financial Statement - 17 March 2004)

Gordon on the fiscal rules' importance to govt's economic competence:

He described the rules as “the basis on which I think the public has seen this government as competent." (2003)

Gordon's not so psychic powers:

"There were many who opposed our decision to make the Bank of England independent, others who opposed the tough controls on borrowing and spending, and many also who opposed our new fiscal rules and disciplines. There were some in this House who predicted that our policies would bring recession." (Budget Statement - 7 March 2001)

"Those in this House who have forecast recession and those who have called our public spending plans unaffordable have been consistently wrong." (Financial Statement - 16 March 2005)

Gordon's Budgets and fiscal rules:

The number of times he has repeatedly referred to his fiscal rules in Budget Statements indicates the importance he attached to them... before they collapsed and had to be abolished.

2007 Budget - 9 mentions
2006 Budget - 16 mentions
2005 Budget - 6 mentions
2004 Budget - 19 mentions
2003 Budget - 8 mentions
2002 Budget - 8 mentions
2001 Budget - 8 mentions
2000 Budget - 10 mentions
1999 Budget - 6 mentions

My my Gordon. You really must be careful what you say in the future! Such careless talk will cost your political career!!!

Judging Brown by his own words, the death of the fiscal rules is nothing short of a total humiliation for him and signals the end to any claim Brown may still have for sound economic management and economic competence!

Treasury Questions - time to change it

I was watching Treasury Questions earlier - the once a month Thursday session during which Osborne and Cable (and other MPs) get to 'grill' Darling about the state of the economy - and i thought it is high time the format was changed.

David Cameron gets to grill the Prime Minister once a week and has six questions to do so. George Osborne, on the other hand, gets to hold Darling to account just once a month and gets just two questions. Pathetic.

Surely it's time to make Treasury Questions once a week and give the Shadow Chancellor six questions so he can properly hold the Chancellor of the Exchequer to account? This is especially pertinent given the recession and the billions of pounds the government is spending on our behalf!

PMQs - Brown haunted by his own economic legacy

I actually attended PMQs at the House of Commons for the first time today which was good fun. From where you sit you can only properly see one half of the Chamber and have to lean over quite far to see Nick Clegg in action.

As I watched the Commons fill-up ahead of PMQs I saw David Miliband enter and plop himself onto the frontbench like a school boy. He then proceeded to pull both his extraordinarily freakish long socks up to almost his knee. Odd bloke.

David Cameron picked up where he left last week asking whether the Prime Minister would finally now admit that he was wrong to have said he had abolished boom and bust given all the poor economic data. Surprise surprise the PM also picked up where he left off from last week and did not answer the question.

Cameron then shifted to Brown's economic fiscal rules. The Leader of the Opposition wanted the PM to admit that these were now dead despite Brown saying repeatedly over the last 10 years that they were vital to ensure economic stability. Gordon Brown admit anything? Of course, not. So Cameron fired back saying that Brown had previously said that the fiscal rules were for all economic cycles. A good line as Brown now claims they can be 'changed' because circumstances have changed. Cameron then reminded the Commons what the fiscal rules were. Labour MPs didn't like this one bit. Cameron said they were happy to hear about them when Brown used to lecture the House but obviously not now that they were being killed off. If Brown was not going to admit mistakes and be honest then Cameron effectively said he would declare the fiscal rules dead for him. He said the Golden Rule was dead because the government was not borrowing for investment but was now borrowing to pay unemployment benefit. Cameron then said the Sustainable Investment Rule was also now dead because the government would go over its own 40% threshold with its planned increases in borrowing and spending.Cameron said the fiscal rules had not delivered responsibility in the good years and now we're in the bad years they had collapsed. He said the PM didn't have a plan, just an overdraft.

Cameron then moved on to the issue of whether governments should try and spend themselves out of recession. Brown had, up to this point, held his own against Cameron - despite not answering a single question. But i thought from about halfway through their exchange he started showing signs of anger - Cameron clearly getting to him - and he began to lose his way. He tried to say the Conservative policy was in disarray by trying to use a Cameron quote about the need to borrow out of context and link to an article Osborne had written today saying the Tories would not borrow and spend. The problem for the PM was that he kept on using the Cameron quote and it made him look like he had run out of ideas for ways to attack the Tories. Cameron came back with a quote from Brown when he was Chancellor in 1997. The mention of 1997 had the Labour benches shouting at Cameron. Cameron, as quick witted as ever, fired back unscripted: "Oh, is this the new fiscal rule: nothing said 10 years ago is allowed to be mentioned." It got a big laugh in the Chamber and Gallery. Cameron's Brown quote was from the 1997 Labour Party Conference and it hit home. Brown had said government's should not spend their ways out of recession - exactly what he is now telling us needs to be done. Brown's comback was a tired one. He said borrowing was the right approach and then just repeated what he has said many times that the Tories do not have any policies.

As for the exchange between Nick Clegg and Gordon Brown, the Lib Dem leader made the case for tax cuts for the most needy and called on Brown to close the financial loopholes which wealthy individuals and companies exploit to avoid paying the full amount of tax. Brown said he was helping families but could not do so if he followed the Lib Dems and cut spending. Clegg retorted by accusing the Prime Minister of being unable to tell the difference between redistributing taxes and cutting them. Brown was dismissive once again of the Lib Dems and has taken to just saying their economic policy is not credible because they seek to fund their tax cuts through cuts in public spending. It is a brave economic stance taken by Clegg but he is exposed, especially as Cameron has decided to hold the centre ground and not follow suit with the offer of tax cuts - clearly because he does not want to expose himself to these type of attacks from the PM, though there may be safety in numbers.

PMQs Ratings

Gordon Brown - 6/10 - Held his own to begin with but the potency of his attacks declined and he lost his way towards the end repeating himself. Also, loses points for not answering questions put to him.

David Cameron - 8/10 - Is offering a decent critique of Brown's economic legacy making sure it will haunt him for years to come. Good points on fiscal rules and spending and showed quickness of mind.

Nick Clegg - 7/10 - Good question on offering tax cuts showing smaller state would be better than Brown's big state solution though as always difficult to make an impact with just two questions.

The end of the government's economic credibility

Today Alistair Darling will announce the death of Gordon Brown's much trumpeted economic fiscal rules.

Brown had said in June 1998 that, under the guidelines of its ‘Code for Fiscal Stability’, it would keep to two strict fiscal ‘rules’. These were the golden rule - over the economic cycle, the government would borrow only to invest and not to fund current spending; and the sustainable investment rule - over the economic cycle, the ratio of net public sector debt to GDP would be set at a "stable and prudent" level (remember prudent? Brown doesn't), defined by the Chancellor as no more than 40 percent of GDP. Since coming to office in May 1997, the government consistently stated that it would adhere to these ‘rules’ which it said were designed to “help to achieve the central economic objective of high and stable levels of growth and employment.”

For years economists have been sceptical about whether Brown met his rules accusing him of shifting the goal posts by playing with the dates of the economic cycle. Nonetheless, on the face of it they were being adhered to.

But now with Darling about to signal the death of the fiscal rules, the Chancellor will also be signalling the death of the government’s economic credibility!

Osborne won't be investigated

I said the 'Osborne donation-that-never-was' story was a non-story and that is what has transpired, a full week after the media frenzy.

The media clearly thought that it had a decent story what with powerful individuals having a public spat and the question marks it placed over George Osborne’s judgement.

However, substantively there was very little to the story. It is because of this that I referred to it as a non-story. Nobody had done anything wrong. No law had been broken. Osborne neither solicited funds nor accepted them. Even the aspect of the story about whether the Russian billionaire was being encouraged to donate via one of his own British based companies was a non-story as this practice is not illegal. The media was guilty - not for the first time - of making a mountain out of a molehill. The shear size of the coverage was disproportionate and personality focused.

However, the authorities that matter have decided correctly that there is no case for Osborne to answer.

Last Thursday the Electoral Commission said it would not be launching an investigation and today John Lyon, the Parliamentary Standards Commissioner, has said through a spokesman that he will not be investigating Osborne despite having received a complaint.

Like I said last week... "move along, nothing to see here!"

Who would the British NOT vote for?

UK Polling Report has posted about a ComRes survey for Theos looking at what types of leader British people would not vote for.

The results (and my comments):

Ethnicity

• 5% of British voters said they would not vote for a black leader, who was an otherwise qualified candidate.

Results are the same in the USA. Interesting to see whether it would only be 5% in an election.

Age

• 43% of people said they would not vote for someone who was 72 years of age.

As Anthony Wells over at UK Polling Report points out, this could be so high relative to some of the other questions because people do not see the same social stigma in being prejudiced against age.

I was not surprised at this. We seem to be an increasingly ageist society where youth triumphs over age. Our political parties seem to have responded to this long-term trend by going for youthful leaders in their early 40s - the Tories and Lib Dems anyway. And i'd expect Labour to follow suit after the next general election.

Sexuality

• 23% of people said they would not vote for who was gay or lesbian.

Seems we are still quite homophobic with almost a quarter not willing to support a gay or lesbian leader who was otherwise qualified for the job. It is striking that the battle against racism seems to be proving more succesful than the battle against homophobia. Much more work to be done here and i think it needs to start early with children in school to help eradicate homophobic playground jibes.

Religion

• 23% of people said they would not vote for an otherwise qualified candidate for a leader who was Muslim.
• 7% of people said they would not vote for a Christian leader.
• 20% of voters said they would not vote for an otherwise well-qualified candidate who was an atheist.

Came as no surprise that a quarter said they wouldn't vote for a Muslim leader given the bad press Islam has received the last few years.

Interesting that 7% wouldn't vote for a Christian - would be good to see the breakdown of this figure. Who wouldn't vote - probably people from other religions (if so what is the breakdown?) and atheists perhaps?

The fifth of people who wouldn't vote for an atheist came as a genuine surprise. I expected this to be in single figures given that i've always viewed Britain as quite a secular society. Doesn't bode particularly well for Nick Clegg who has said he is an atheist whereas his two opponents have both said they believe in God (to varying degrees).

Morality

• 7% of British voters would not vote for a divorcee.

With our high divorce rates? The 7% is either the religious contingent or just plain hypocrites!

Gender

• 7% of voters said they would not vote for a female leader - interestingly this was evenly split between men and women.

7% seems to be the percentage of the social conservatives within the UK. Surprised this is this high, especially as we have already had a female Prime Minister (though perhaps Maggie put 7% of the country's Lefties off ever voting for a woman).

Some interesting and depressing results i'm sure all would agree.

Should schools teach sex education?

Absolutely.

Currently there are hardly any requirements for state schools in England to teach sex education. There are no dedicated lessons and what little is taught is done through science classes. There is not even a legal requirement for schools to teach about contraception, pregnancy, and sexually transmitted infections (STIs). This is an absolute disgrace!

Why do I pose the question?

Because the government is finally making sex and relationship education compulsory for all 5-16 year olds. And they should be applauded.

The story has hit the headlines because schools will now start teaching kids as young as 5 but much of the concern is pure scaremongering as the issue of sexual intercourse, for example, will not be discussed with children until the age of 11.

This is necessary because somethings needs to be done to halt the epidemic of teenage pregnancies - the highest in Europe - which is a national scandal and the spread of STIs.

Some argue that it should be the job of parents to teach about sex and that teaching pupils about sex will encourage kids to experiment. These arguments are ridiculous and need to be debunked. First, parents are clearly not doing a good enough job in teaching about the consequences of sex, given the appalling high rates of teenage pregnancy and increase in STIs. Second, the idea that by talking about sex kids will then participate more is ludicrous. It is not the act of sex that kids seem unknowledgeable about - it is the consequences of the act.

By having a responsible sex education programme, children will know the facts, will be able to make informed decisions and damaging myths about sex that dominate in playgrounds up and down the country will be corrected.

My memories of sex education are limited because my classmates and i were not taught much. We were taught very little at all about STIs, for example. The only dedicated sex education lesson i remember was taken by the school nurse. She asked for other names for the word 'condom'. My mate shouted out: "rubber jonny," to which she replied: "oh, i haven't heard that one for a while." Enough said!

Joker Darling

I have just heard Alistair Darling say in an interview with BBC News:

"We need to live within our means, and we'll do that."

Surely he was having a laugh and his serious delivery was his attempt at deadpan humour?

This is, after all, from a Labour government which is responsible for the biggest budget deficit since the Second World War and annual borrowing which is so high that only Egypt, Pakistan and Hungary are borrowing more.

Darling must be moonlighting as a comedian (we knew that anyway, what with those eyebrows...)

Brown's Recession

The ONS has said today that Britain has experienced its first quarter of negative economic growth since 1992. The economy has contracted by 0.5%. This contraction follows 63 quarters of consecutive economic growth and one quarter of zero growth. The size of the contraction was worse than most economists expected and they now believe will be entering a period of prolonged recession rather than just a technical recession - i.e. two quarters of economic growth. Another piece of bad news is that the value of the Pound has been plunging. It is now trading at 1.55 to the US Dollar. Back in May it was 2 Dollars to the Pound. It is further evidence of our weakening economy which comes off the back of last week's news that unemployment has seen its steepest rise for 17 years.

So, who is to blame?

If you listen to our Dear Leader, Gordon Brown, it is all the result of global economic forces, particularly America. (Can one imagine Tony Blair, John Major or Margaret Thatcher pinning all of Britain's problems on its closest ally?)

Of course it is true the world’s economies have battled a set of roughly simultaneous shocks, but it is also true that these differ in their scope and reach. There has been a commodities shock (now rescinding) that hit all economies more or less equally through sharp rises in food and energy prices; a credit shock global in reach but uneven in its impact, with the effects greatest in the US and UK and least marked in Japan and the emerging world (the Eurozone lying somewhere in between); and a housing shock, with residential prices crashing in a number of economies including the US, UK, Spain and Ireland.

However, Brown is vulnerable, particularly on the issue of the housing shock because the government did nothing to dampen down the housing boom and if anything enjoyed reaping the benefits of the feel good factor as people saw the value of their homes grow ever greater. This is despite claiming in his first Budget as Chancellor in 1997 that: "I will not allow house prices to get out of control and put at risk the sustainability of the recovery.” Furthermore, Brown has justifiably come in for criticism for encouraging a ‘boom’ on the back of the highest household debt in the G7 (UK family debt is an astonishing 178 percent of household income). Brown also failed to warn against excessive borrowing like Vince Cable did; failed to do enough to encourage savings which can help families and individuals during an economic downturn; and created the tripartite system of financial regulation which failed to prevent the disaster of Northern Rock and subsequent banking collapse.

Brown looks ridiculous when he continues to contend that Britain is best placed to come through the economic downturn. You will not find a single economist who agrees with this widely over-optimistic appraisal of Britain's situation. The OECD has noted that Britain is particularly vulnerable because of its dependency on the housing and construction markets. The credit squeeze appears to be most potent when it is combined with falling house prices and strained household balance sheets – as in the US and (with some differences) the UK. However, whereas the UK shares America’s sectoral weaknesses – a housing and financial sector bust – it does not have the strengths of a larger economy or US-style productivity growth to rescue its economic performance. The fear for the UK is that, looking forward, tight credit conditions combined with Britain’s high levels of debt and rapidly falling house prices are likely to prove more troubling than in many other countries.

Brown's reputation for sound economic management is vulnerable on multiple fronts, and rightly so. His management of the public finances has steadily got worse since 2001; he has failed to put money aside during the good years to spend in the bad; he has over-inflated his achievements while taking credit for the achievements of others; he has been guilty of enormous hubris claiming to have abolished "boom and bust;" and he has sought to take credit for the good times while trying to distance himself from the bad.

This last point is important. We heard Brown say for a decade that Britain's strong economic growth was down to him. It had nothing to do with global economic factors. It had nothing to do, for example, with the industrial growth of China and India which led to a dramatic fall in the cost of imports and thus benefited national economies throughout the world in terms of low inflation and providing favourable conditions for low interest rates. In turn, this has led to inexpensive borrowing which helped fuel economic growth in Britain and around the world.

But now, the British economy has gone from boom to bust. Does Brown hold his hands up and say: "As i boasted that the good years were entirely down to me; i must also hold my hands up and take the blame." Of course not! Instead, he's completely flipped his argument. Now, Britain's poor economic performance has nothing to do with Brown's handling of the economy but is entirely down to global economic factors, particularly the poor economic management of the United States' government. Get real Gordon! You can't have it both ways!!!

In one respect the boom years were down to the actions, or should i say, voluntary inaction of Gordon Brown, though this is credit he will not want, but does deserve. The failure to control the housing boom, to keep a check on unsustainable government and household borrowing, and to regulate the banks correctly should all be on the political gravestone of one James Gordon Brown! They all contributed to what we now know as the 'Age of Irresponsibility' and an unsustainable boom that was destined for bust.

Sell your vote on ebay!

Well, that's what one guy tried to do. Max Sanders, a college student from Minnesota, thought it would be a laugh to sell his vote in the upcoming Presidential election on the auction site with a minimum bet of $10.

Unfortunately this prank or example of entrepreneurship (depending how you look at it) is illegal under 1893 Minnesota law. Apparently the law was used to prosecute quite a few people during the Prohibition era when people were selling their votes for booze! Not a bad exchange...

Anyway, ebay has taken the listing down (spoil sports) and Minnesota government officials (who obviously have too much time on their hands) are looking into prosecuting the poor chap who could face a maximum penalty of up to five years in prison and a $10,000 fine.

I bet Mr Sanders thought he was on to a winner - pocket the money and vote for who he wanted to vote for anyway!

PMQs - Debt and boom 'n' bust

The Commons was loud and boisterous today at PMQs. The Osborne donation-that-never-was story seemed to hang over the House with Labour MPs particularly rowdy as one would expect.

David Cameron decided to make public debt and Brown's hubristic claims to have abolished boom and bust centre stage. Cameron said Britain had the biggest budget deficit in the developed world and wanted to know if Brown regretted not building up a surplus like other countries had done during the good times. In a couple of good lines, Cameron said Brown couldn't lecture the banks on borrowing because he had borrowed so much himself and couldn't lecture the banks on transparency because he had hidden so much of Britain's debt off balance sheet.

The PM seems more comfortable and confident of late and that was apparent in his performance at the dispatch box. Yet he has lost none of his infuriating ability to quote Cameron out of context, avoid answering direct questions and blatantly lie with statistics. Brown lied once again about the state of the public finances saying Britain's national debt was only 37 percent (sorry Prime Minister, it's at least 43.6 percent) and low compared with other countries. This meant he could borrow more and spend more which was right for the economy during difficult times.

Brown made Cameron's fleeting bipartisan support a theme of PMQs returning to it several times. He wants the country to see Cameron as someone who is putting partisan political interests over what is best for the country. I wonder if Cameron and the Tory hierarchy regret ever making such a big deal about bipartisanship. It does not really work in the British Parliamentary system. Cameron's offer of support at his party conference may have got the tone right but substantively his words were empty because Brown does not need the support of the opposition parties to pass legislation. What is more, they should have known that Brown is the greatest factional politician there is who does not have a bipartisan bone in his body (anyone remember ERM and Black Wednesday?) Furthermore, it is ironic that at the same time he calls for cross party support, Brown seems to be becoming ever more political.

Cameron said that the PM did have cross-party support for the recapitalisation of the banks but that did not mean he had to support the rest of the government's economic policy - past, present or future. Cameron then moved on to Brown's hubristic claim to have abolished boom and bust.

The Prime Minister tried to squirm his way out of this one. He told Cameron that he had already said that he agreed with the Governor of the Bank of England (i.e. that Britain was in recession). That was not answering the question. Brown then asked was Cameron suggesting that the government should not have saved the banks? Clearly Cameron was suggesting no such thing. He then reprimanded Cameron for talking down the economy, saying Cameron himself had said that opposition leaders should not do such a thing. I think Brown is more worried that Cameron is talking down his economic legacy - what remains of it anyway!

Cameron hit back asking why Brown couldn't answer a direct question for once in his life. Again he asked whether Brown would admit he did not abolish boom and bust. And again Brown refused to answer the question. Instead he sought to explain once again that Britain's economic problems are all from those horrible foreigners. Cameron thought he'd have another futile stab at the question. He said Brown had taken the credit during the boom but was avoiding the responsibility in the bust. Again, PM have you abolished boom and bust? Again, no answer, just we will not return to 15% interest rates. Brown said what was important was judgement and Cameron and George Osborne (I wonder why Brown mentioned him?) had not shown any. He said the government would continue doing what was best for the country, with or without the opposition's support. Cameron then came to his last question. He declared that we were now in a bust and tried for the last time to get the PM to admit he hadn't abolished boom and bust. For shear perseverance you've got to give it to Cameron. Alas, still no answer from Brown who was making a mockery of PMQs by this stage. Instead he said the Tories had no policy proposals and no constructive solutions to offer.

Cameron needs to keep throwing these type of punches at Brown. He needs to show the PM is a man who is directly culpable and yet cannot admit his mistakes, resorting to outright lies to defend himself. Brown cannot be allowed to get away with his shameful management of the economy.

As for the minor battle between Nick Clegg and the PM, the Lib Dem leader asked about government help for pensioners in fuel poverty. The PM did not answer the question - that would have come as no surprise to Cameron. But he did get a good jibe in at Clegg's expense saying the state pension was more than £30 a week which won him a few laughs. Clegg then, in a prepared remark, accused the PM of being "all at sea" thus enabling him to also have a dig at Osborne by saying "if not on a luxury yacht." Clegg then said low and middle income families were being hit very hard indeed. Would the PM reverse the unfair system so those who use less energy pay lower prices? Will he do that yes or no? The PM said he welcomed positive suggestions but that Clegg would be in a better position to be heard had the Lib Dems not committed to £20 billion of tax cuts funded by cuts in public spending.

Finally, right at the end of PMQs, the Beast of Bolsover, the veteran Labour MP Dennis Skinner stood up and brought the Osborne story to PMQs. He asked the PM to give rock solid assurance that he would never ever meet a Russian billionaire. Skinner added "we'll leave that to sleazy party opposite." The highly partisan Brown replied that it was a very serious matter indeed and he hoped it would be investigated by authorities. Not very Prime Ministerial, but as Nick Robinson pointed out, it will ensure the story runs again as the PM has now commented on it. Andrew Neil on the Daily Politics made an interesting point. He said the Speaker was complicit in calling Skinner as it was not necessary to call him at all, especially at the end. The move has hurt Michael Martin's wafer thin credibility. He should avoid being so partisan too!

PMQs Ratings

Brown - 6 (Confident, but lied - again - and avoided answering questions - again)

Cameron - 7 (Good attacks but still failing to land the knock out blow)

Clegg - 6 (Steady, though not dazzling)

The Osborne-Mandelson-Russian-Rothschild-Superyacht story

The Osborne donation-that-never-was story has been whipping political journalists into a frenzy.

My view is that it is pretty much a non-story and one big yawn.

The media are clearly bored – obviously the last day or two have been slow news days. They are making a mountain out of a molehill.

Mandelson seems to be getting revenge on Osborne.

Rothschild seems very upset that Osborne had released details of a private dinner - breaking the old boys code - and has made his displeasure public, no doubt egged on by Lord Mandy - time to grow up, it's called politics.

The BBC, particularly Robert Peston, seem to be waging a vendetta on Osborne.

There has been a ping pong of versions of events between a politician and a hedge fund manager - who to believe? At least the politician has published a full version of events.

At most, Osborne has shown an error of judgement getting on bored the superyacht.

But nobody has done anything wrong. No law has been broken. Osborne neither solicited funds nor accepted them. The story seems to now revolve around whether the Russian billionaire was being encouraged to donate via one of his own British based companies and for the paltry sum of £50 grand. £50,000!!! Absolute peanuts. Why would such a small amount have been asked for? Moreover, the practice is not even illegal. What a non-story!!!

For those who want to read more, check out Iain's Dale's post on the subject.

Other than that this is definitely a case of 'Nothing to see here, move along…' Zzzzzzzzzzzzzzzzzz

Obama to win but Republicans back in 2012

I've been sent news and a helpful report about a CentreForum event that took place at the Bloomberg's London office entitled: “America Votes: Implications for the US and the World.” The two speakers were Dr Stefan Halper, University of Cambridge, and Sir Robert Worcester, founder of MORI.

Both men said, unsurprisingly, they expected Senator Obama to become the next President of the United States.

They said it is too late for Senator McCain to change strategy and shift tact. There are no more debates left. However, they said if McCain is to have any hope of winning he will need to convince the one in five floating voters who are either white, young educated women or older white people to vote for him. He has no chance of winning round Black or Hispanic voters. However, his current attacks on Obama’s character are turning off the women voters he needs to attract.

They said if he fails to win round the floating voters the only hope for McCain would be a terrorist attack (unlikely, though not impossible) or a major Obama gaffe (again unlikely, given Obama’s cool, cautious character).

Some have suggested the so-called ‘Bradley Effect’ could come into play. They said they thought the Bradley effect would be unlikely to determine the outcome of this election. They said if it were to be prevalent it would be in the ‘red’ states (i.e. Republican states) and only affect the polling results by 2 percent nationwide at most. However, if the election was very close then it could of course have an impact if it did indeed materialise this election.

The choice of Sarah Palin by McCain as his running mate was strongly criticised as a strategic and tactical mistake. He had only met her once before and due to the lack of time left for him to choose his running mate, scrutiny of her suitability was minimal. She fitted the profile the Republicans were looking for: woman with kids, pro-life, pro-guns, and folksy charm to appeal to the Western states. However, she was all this for the first two weeks but then her credibility began to unravel in the television studios. In addition, she comes from Alaska which does not have many Electoral College votes and the state always votes Republican anyway. McCain would have been better choosing someone from a swing state. Furthermore, McCain was badly advised if he thought that pro-life Palin would be able to win over the disaffected but pro-choice Hilary Clinton female Democrats. McCain’s choice of Palin has damaged his credibility in terms of judgement.

Even though they thought Obama would become President, the panel said Obama is likely to disappoint the rest of the world, particularly Europeans. He will not be the radical departure from the Bush years they think he will be and the enormous expectations people have for Obama can only lead to disappointment. If he does have a single radical idea in his head, and the panel was hugely sceptical that he does, he ought to try and implement it immediately before Congress and the rest of the world ends his honeymoon period. For Obama’s part, he is likely to become very frustrated with the rest of the world, especially the Europeans. He has made Afghanistan (and Pakistan) key to his foreign policy but he is unlikely to find any joy in persuading European governments to put more troops on the ground and in conflict situations.

Predictions

Sir Robert Worcester – Obama will win; Gordon Brown will be the best friend of the new President, whoever he is; 2012 – expect a Republican recovery, expectations are far too high for Obama; and the Republican candidate for 2012 will be General Petraeus.

Dr Stefan Halper – Obama to win; and with a Democratic Congress very likely, Obama will find it really difficult to win a second term in office. Americans do not like one party in control of both Houses of Congress and the Presidency.

British Politics

The panel also briefly touched on UK politics. Sir Robert said Cameron had grown enormously in stature these past three years. However, he said Cameron’s biggest mistake has been ignoring the fact that all leaders should have a kitchen cabinet within their organisation which fully utilises all a party’s experience. He said people like John Gummer and Ken Clarke should be brought into Cameron’s inner circle and expected they would be closer to an election.

ICM gives Brown no bounce

The latest ICM poll has been released and shows Brown has got no benefit from his so-called 'Superman heroics'.

Tories are unchanged on 42 percent and Labour are also unchanged on 30 percent. The only movers are the Lib Dems, up 4 points to 21 percent.

This will be hugely disappointing for Brown. He has had the best media coverage for months and months and yet still he is 12 points behind and no more advanced than after the Conservative Party Conference.

It is possible that Cameron's speech on Friday in which he took the gloves off and put the blame on Brown for the country's economic woes and got him some much needed media attention may have cancelled out Brown's 'Flash Gordon - Saviour of the Universe' routine.

All-in-all I would expect Cameron to be pretty pleased with how his lead is holding up.

Voters have clearly decided Prime Minister Brown is not for them!

Brown lies again

Brown has just told the Commons that Britain's national debt stands at 37.6 percent of GDP - thus 'allowing' him to borrow, borrow, borrow and spend, spend, spend!

Brown is playing with figures. He used IMF figures, however, Britain's own Office for National Statistics (ONS) says our debt actually stands at 43.6 percent. Brown only quotes IMF figures because they don't include Northern Rock which the NAO ruled against Brown by saying it must be included. Britain's national debt is even higher if PFI is brought on balance sheet.

Labour and Keynesianism

Labour is to return to Keynesian economics apparently according to weekend briefings - it is to spend the country out of a recession.

However, as the Adam Smith Institute notes, Labour only seems to have understood one half of what John Maynard Keynes advocated.

It is true that he said governments should increase spending in a downturn to help stimulate demand in the economy. However, he also used to advocate saving money in the good years so that money could be spent in the bad.

Gordon Brown's economics involves high public borrowing and spending in the good and bad years.

The result? The highest debt in the world and obscene burdens to be borne by future generations.

UPDATE: Andrew Neil has an excellent post about the marginal effects Keynesian economics has had historically with helping revive an economy during a downturn and cut unemployment. It failed when FDR tried it and most recently when the Japanese have tried it in the 1990s. It will fail again when Labour tries to increase spending and bring forward its big capital investment projects. What this country needs is tax cuts!

Time for tax cuts

Nick Robinson has a good post today arguing that David Cameron has a problem with the economy; that is, he does not have much to say. Robinson argues:

• He can’t say that he predicted the banking crisis because he didn’t;
• He can’t say he has a better answer because he has backed the government’s recapitalisation;
• He seems to have ruled out tax cuts saying that the “cupboard is bare” and as a “fiscal conservative” he won’t borrow money to fund a tax cut; and
• He won’t spend his way out of trouble arguing that it is not a cost free answer.

What Cameron has been able to offer has been measures to give small businesses help such as a 6-month VAT holiday and a short-term 1% National Insurance cut. These may be worthy and all will help, but they are hardly sufficient in themselves to pull us out of a recession.

Cameron has said that Government has made two key errors – 1) profligate borrowing and spending during the good years and 2) removing the regulatory powers of the Bank of England. However, Cameron’s previous pledge to match Labour’s spending levels (it seemed clever at the time as it negated Brown’s ‘Tory tax cuts’ attacks) undermines his argument that Labour spent and borrowed too much as does the lack of serious and sustained warnings from him about government debt levels.

Before the financial crisis and economic downturn, Cameron’s economic policy was “Spending the proceeds of growth” – a mixture of tax cuts and government spending/investment – which is clearly no good anymore given there is no growth. Cameron has yet to offer an alternative economic policy.

Cameron’s argument that the Conservatives wouldn’t have got us into this problem is not enough on its own. The media do not seem interested in his “we wouldn’t start from here” argument as they seem far more interested in what remedies he has for the future – as do voters.

Labour have made it clear that they will head off to the Left with their Keynesian stimulus package – i.e. they are going to try and borrow and spend their way out of trouble like all Labour governments do. The Lib Dems have shifted to the Right unexpectedly with pledges to cut taxes. And what are the Tories doing? They are tinkering at the edges with small initiatives while essentially saying the economic realities they face precludes them from offering a strong lead in any direction. This is what Cameron is doing by trying to link his lack of options to Labour’s decade of economic mismanagement. But this is not what the other parties are saying and doing.

Cameron seems determined to cling to the centre, matching Labour’s current spending plans while avoiding any specific pledges to cut taxes. This just won’t do anymore. The situation has changed and that means new ideas are needed. He cannot continue playing safe indefinitely. Fiscal levers need to be pulled and Cameron needs to make up his mind and pull one of them properly. His choices are more and more spending or tax cuts.

This is back to the future territory. The Conservatives need to re-fight and win the arguments of the 1980s all over again. How has it come to this that the Tories have let Labour turn ever higher public spending and ever higher public debt (the highest in the world) into a positive? How have the Tories let Gordon Brown spin public spending as ‘investment’? How have the Tories let Labour smear tax cuts? The answer unfortunately has to be successive weak and misguided leadership.

The Conservatives need to have the intellectual confidence to win this ideological battle.

Cameron should be bold and courageous and offer tax cuts. The political climate has changed. Nick Robinson says this is a trap Brown is laying so that he can once again use his favourite ‘Labour investment versus Tory cuts’ attack. So be it. Cameron should take him on and make the case for tax cuts.

For too long Tory leaders have been silent. It is not as if he would be sticking his neck out anyway as the Lib Dems have led the way and this should make it easier for him. Also the Tory supporting newspapers of the 1980s and early 1990s will return to the fold. The Murdoch papers and Daily Mail in particular would relish the battles of the 80s again.

To fund his tax cut Cameron should either cut public spending (unlikely in a recession and will play into Brown’s hands) or borrow money. He should do the latter. Labour and Gordon Brown no longer have a foot to stand on. They cannot claim Cameron is offering unfunded tax cuts Cameron when its own spending commitments are unfunded paid for by more and more borrowing. Cameron should also inject some economic realism into the debate. He should tell the voters some hard truths and link them relentlessly to Brown’s handling of the economy. He should also attack Brown’s spending, destroying the spin of ‘investment’, and hammer home the message of a wasteful, bloated state. Brown should not be allowed to just create unproductive public sector jobs. In a time of a recession, Britain does not need more bureaucrats! Finally, Cameron needs to stop Brown’s argument that a big state is the solution from taking hold. We have had Brown’s big state for 11 years and all his spending, regulation, tax increases and red tape have not stopped us from entering recession but have helped lead us here!

And if Cameron does not offer tax cuts and continues with his cautious strategy? He could still win at the next general election. He still holds a 8-9 point lead in the opinion polls and the “time for a change” sentiment among the electorate remains strong. Furthermore, the Item Club says we’re now in recession and won’t come out until 2010. Consequently, the economic recovery is unlikely to be in time to save Gordon from the wrath of voters upset with becoming unemployed, having their houses repossessed and their living standards fall. But there is still a small chance Brown could win, especially if Cameron lets him frame the terms of the debate around more public spending and a bigger state. Finally, remember 1992 – John Major won despite being in a recession.

Cameron should be bold, not cautious. He should take the fight to Brown!!!

Tories 'only' 9 points clear

The latest ComRes poll, and first of many this weekend, shows that the Tories' lead has been cut to just 9 points.

Depending on which angle one looks at it, it can be construed differently:

• Tories did have a 20 point lead in the summer. Now it is in single digits.
• This puts us in hung parliament territory.
• However, Tories are still on 40 percent.
• Even after Brown doing his 'Superman' herorics (or should that be Robin?) Labour are still 9 points behind.

The narrative to come will depend on the rest of this weekend's polls and the polls from the next couple of weeks.

Superman? More like Robin...

It appears that Gordon Brown AKA Superman, Saviour of the Universe, the "man with the plan" (according to Harriet Harman), etc was nothing of the sort.

There we were, led to believe that it was our Dear Leader who had 'saved' us from financial ruin when in fact the "man with the plan" was Alistair Darling, the Chancellor all along.

An article in today's Times reveals:

"The Times can reveal today that the Chancellor believed that recapitalisation was the “only show in town” some time before Gordon Brown and that the Prime Minister signed up only after the intervention of his ministerial fixer and enforcer, Baroness Vadera.

Today Mr Brown is happy to take the plaudits but eight days ago it looked just as likely that he would be content for history to remember the bailout as “Darling’s plan”. In a conference call with Mr Brown, Mr Darling agreed that it was time to get tough. Briefing reporters in the International Monetary Fund’s headquarters, he said: “It is terribly important that governments don’t just talk about what needs to be done but they actually get on and do it.”

So, McCavity Brown was happy to have the plan associated with Darling in case it failed. What a surprise. Brown is nothing if not courageous.

But most importantly what this Times article shows is that analogies made between Brown and Superman are all wrong.

If anything, Brown is no more than a boy in tights - Robin to Alistair Darling's Batman!

Cartoon: He's not the Messiah...

Brown gets two new spin doctors!

How many does Brown need?

The Prime Minister that claimed to want to move past the constant spinning of his predecessor is no longer content to just spend more taxpayers money on spin than Blair, but now has two political spin doctors where Blair managed with just one.

This is perhaps understandable given that Brown is hopeless with presentation, especially giving interviews. The poor bloke needs all the help he can get.

Damian McBride - McPoison to his enemies such as Lord Mandy the Dandy - has been replaced with John Woodcock (ex SpAd for John Hutton at the Department for Business) and Michael Dugher (currently a special adviser for Geoff Hoon at Transport).

The news was broken by Rosa Prince earlier.

Justin Forsyth, who had temporarily filled the void left by McBride who assumed a backroom strategic role, has now also returned to his backroom role in international development.

Andrew Sparrow says exact details of their "job share" have yet to be finalised, but there's going to be an increased emphasis on spinning the regional media.

It will be interesting to see how this works out for the PM. The working relationship between the three will need to work well without egos intruding. How will responsibilities be divided? Who will the media turn to for briefings - both equally? One can easily see how an unhealthy rivalry could develop between Woodcock and Dugher with both wanting to be seen as top dog internally (i.e. with PM) and externally (with the Lobby).

Problems could lie ahead...

Hallelujah! Cameron takes the gloves off!

Slavish support for the government is over! Praise the Lord!

Cameron told the City of London today that Brown's handling of the British economy had been a "complete and utter failure." He said he would "never pull my punches in explaining how this government has brought Britain down."

Cameron has finally taken the gloves off. He said the economy was broken and that Labour couldn't fix it "not least because they cannot own up to any mistakes." He said Brown had made "irresponsible" decisions that had led to a period of "irresponsible capitalism." Brown had "spent and borrowed without restraint," which Cameron called "intentional" negligence, and boasted that he "could abolish boom and bust and that the good times would last forever." Returning to a theme of his conference speech, Cameron said: "Over the past decade, we have seen a total breakdown of economic responsibility."

It was an excellent speech! Just what was required. The Conservatives have been worried that political point scoring would not be looked upon kindly by the electorate during the current economic difficulties. But as Nick Robinson has pointed out, the Conservatives have had enough of allowing Brown his time in the limelight, seizing the initiative playing 'superman'.

The loathsome Yvette Cooper, Chief Secretary to the Treasury, has accused Cameron of adopting bipartisanship as a "short term gimmick" and criticised him for playing "juvenille political games."

Of course it's in Labour's interest that it has a benign opposition that slavishly supports the government. But it is not in Britain's interest!

Oppositions have a duty to support the government during a crisis. This they have done - possibly for too long. It must also be remembered that Cameron, as Leader of the Opposition, also has a duty to tell the public about the abject failure of this tax 'n' spend Labour government!

Cameron has to change the PM's narrative that the economic downturn is purely down to global factors. Luckily for him, Brown's tenure in office has given him ample ammunition to use against our Dear Leader!

As a final point, let us not forget how Labour and Gordon Brown behaved at the time of Black Wednesday - the previous financial crisis. Labour had supported joining the ERM yet that did not stop Brown making opportunistic political capital out of an economic policy he in fact supported!!!

If Cooper wants to talk about political games, fine - Labour doesn't have a leg to stand on!!!

Tories can now reform Barnett Formula

The papers today have been full of stories about how Scotland needs the Union more than ever; how it owes the Union (and particularly English taxpayers) a debt of loyalty after RBS and HBOS have been bailed-out; and how the SNP's dreams of independence have gone.

It is difficult to disagree with any of this.

Ironically, Alex Salmond had been holding Iceland up as a model for an independent Scotland, saying Scotland could be part of a north Atlantic "arc of prosperity."

However, what this all means is that the Barnett Formula which allocates UK funding to Scotland - in other words an unfair net transfer from the English to the Scots - is ripe for reform.

Lord Barnett, the former Labour minister who devised the formula in the 1970s, has said that it was only supposed to be a temporary measure. Fast-forward several decades and we still have it.

Why? Because Labour does not have the will nor inclination to change it. If they changed the formula the SNP would cry foul and Labour MPs would no doubt lose their seats. Throw into the mix that Brown and Darling are Scottish, the chances of Labour ever changing a formula that is manifestly unfair to the English I would say are non-existent.

BUT... the Tories could do it when they return to power! They only have one MP in Scotland and are unlikely to return there in great numbers. Before the financial crisis the Conservatives would have been wary of changing the Barnett Formula in case it pushed the Scots towards Salmond and his independence agenda. Being the pro-Union party this would have been a disaster.

But now the Scots have to take it. They can't risk going it alone. RBS and HBOS have been given guarantees of £100 billion which is equal to Scotland's annual economic output. Scotalnd would not have been able to rescue its financial services industry and would have gone the way of Iceland - bankrupt!

They do say every cloud has a silver lining...