Public want Cable as Chancellor

An interesting new survey just out from Politics Home who have found that Vince Cable has emerged as the public's preferred choice to become the next chancellor.

Thirty one per cent polled said that Cable was the best candidate for the job whilst Ken Clarke was favoured by 16 per cent to return as chancellor.

Lagging well down the pecking order,George Osborne with 12 per cent and current Chancellor Alastair Darling.

The forces of hell

It's not going away is it?

Last Sunday's Observer carried a largely ignored piece about the way that Gordon Brown's mafia had ganged up on his chancellor after Alistair Darling had told the country to effectively batton down the hatches as we went into recession.

A message that the man who told us we were best prepared for the impending economic gloom clearly didn't want us to here.

Darling accused Number 10 of unleashing the 'forces of hell' against him in an interview last night forcing Brown to go on the offensive this morning denying that he would ever do anything to undermine his Chancellor.

However it was no secret that Brown wanted his sidekick Ed Balls in that position.He was thwarted back in 2007 and again last year when senior members of his cabinet refused steadfast to put Balls in one of the three grand positions.

Strange also that it is Balls who is in front of the media this morning insisting he did not recognise claims there is a poisonous atmosphere at No 10.

But back to the Chancellor's claims.Speaking to Sky he said that after his prediction back in 2008 No 10 aides briefed journalists that he had harmed the economy and should be sacked. The finger being squarely pointed at a certain Damien McBride as hinted in the Rawnsley extracts

The big winner is Darling

By the opinion of most pundits,this week's attempted coup has strengthened the hand of Alistair Darling in the defecit stakes.

Hence his interview with this morning's Times in which the Chancellor says

that severe spending restraints are “non-negotiable” if he is to bring down the £178 billion budget deficit.

According to the paper using language about cuts that would have been unthinkable a few weeks ago.

Mr Darling admits that when he met Mr Brown late on Wednesday afternoon they talked about the Budget. His interview suggests that he was happy with the outcome — yesterday the Cabinet had its first meeting since the “botched putsch” and not one minister mentioned

We are being distracted from the real issues

Employers are becoming alarmed that measures to fight the recession are being neglected as Westminster’s focus turns inwards.

writes Jean Eaglesham in the FT this morning.

It is a very important point and more so that it seems that our political leaders are more concerned with constitutional change than tackling the economy

Gordon Brown, David Cameron and Nick Clegg have been forced to prioritise plans to overhaul the Commons and discipline errant MPs, forcing economic and public policy on to the backburner.

says the paper and perhaps more worryingly is that we may have a new Chancellor by the end of the week.

The papers are full of rumours that Ed Balls will take over from Alistair Darling who now finds himself embroiled in expenses controversy.

That would be a tragedy.Darling for me has done a good job despite extremely difficult times and his boss looking over his shoulder.

Balls lacks respect in the party and more importantly in the business community.To sacrifice his Chancellor for purely political motive would be a disastrous move by the Prime Minister

Fresh doubts on ID cards

There will be much debate over where major cost savings can be implemented,the favourites at the moment being Trident and the government's identity card scheme.

The Daily Mail.no doubt secretly wishing fuels the idea that the second option may be on the table this morning as it reports that

Labour's ID card policy was in fresh disarray last night after Chancellor Alistair Darling failed to back the £5billion project.
Mr Darling put the scheme in doubt by signalling the Government may just introduce biometric passports instead.
The Chancellor added that the Government would have to question every 'single item' of public expenditure to save billions for the taxpayer.

Be bold Chancellor

At least that is what one economist wants.

Amid all today's reports about what the Chancellor has or hasn't got to cut,Tony Dolphin Senior Economist at the ippr advices the following.

He should announce a £1,000 increase in the personal tax allowance and increases in benefits and child tax credits to ensure that the Government achieves its goal of halving the number of children in relatively low-income households by 2010-11. This will cost about £10 billion a year.
He should announce tough limits on the growth of public spending from 2010-11, while making it clear that extra resources will continue to be made available for priority areas such as education, health and childcare. Major projects, such as the replacement of Trident submarines, will have to be cancelled.
He should reaffirm the moral case for progressive taxation to finance public spending. He should increase the top rate of tax to 50 per cent for taxable incomes of more than £150,000. At the same time, to ensure the rich pay their fair share of taxes, there should be a major clampdown on tax avoidance, tax reliefs and tax havens.
He should announce plans to examine the feasibility of a tax on carbon emissions and a land value tax.

Austerity on the way-look to Ireland

Staying on the subject of budgets, the Mail warns that Alistair Darling is preparing an austerity budget in two weeks time.

With drastically reduced Government revenues in the recession, the Chancellor may have to raise fresh taxes and cut back public spending.

reports the paper adding that

Treasury officials say Britain is in a 'V' shaped recession in which the downturn is unusually steep and no one knows where the bottom is.

Maybe it mightg be prudent to turn to Ireland which yesterday brought in its own austerity budget as an indicator of what the future might bring.

The country's second budget in six months saw large rises in taxes and severly slashed spending as the country fights to contain a burgeoning budget defecit as it forecasts an 8 per cent drop in growth this year

Guido make one good point tough comaring the two countrys.

Irish politicians rightly feel they need to share the pain - pensions for serving politicians are to be discontinued and allowable expenses cut by 10% across the board. The Irish President Mary McAleese has already announced that she will be taking a 10% pay cut in light of the current budgetary troubles. The finance Minister Brian Lenihan and his ministerial colleagues took a 10% wage cut last year. The opposition leader has instructed his party’s parliamentarians to take a 5% cut. The governor of the Irish Central Bank and Financial Services Authority has volunteered to also surrender 10% of pay. The state broadcaster RTÉ’s top six executives are taking a “significant reduction” in pay.

whereas ????????/

Time to bed down for another 18 months

One wonders whether Alistair Darling's interview in the Sunday Times is the first step in Labour's climb down over the recession.

Having smoothed the way following a successfil G20 it plans to ease the country into realising that we wil have to bed down for maybe a couple of years of grind.

The paper says that

The economy’s dive over the past six months had been steeper than the Treasury had expected, he said, making it inevitable that he would be forced to revise his forecast significantly. Britain’s gross domestic product slid by 1.6% in the final three months of last year, its biggest drop since the recession of the early 1980s.

As the article says

it is the first time Darling has publicly admitted that the government’s estimates were wrong, setting the scene for a difficult budget,

Between a rock and hard place

That is Fraser Nelson's analysis of the position of the Chancellor in his News of the World column thus morning.

He has two problems. A collapse of tax revenues—and a Prime Minister who wants him to spend even MORE.

However according to Fraser he is fighting his corner.Amidst rumours this week of splits between the treeasury and No 10

Darling’s message to No10 is simple: “Sorry, there’s no money.” Brown replies: “Well, tell the Bank of England to print some then.”

And the Chancellor is worried,

He knows just as there’s no such thing as a free lunch, there’s no such thing as free money.

Darling admits errors in policy

Is the Telegraph correct when it says it has finally got a senior minister to admit that the governemnt has made mistakes over the economy?

Mary Riddle's interview seems to suggest that is the case.

It is the first significant admission of responsibility from a senior government figure for the current economic crisis, partly blamed on ministers allowing the financial markets to run out of control for much of the past decade.

Alistair Darling said that

“There are a lot of lessons to be learnt by regulators, governments, all of us

,adding

“The key thing that went wrong was that a culture was allowed to develop over the last 15 years or so where the relationship between what people did and what they got went way out of alignment, especially at the top end.

Will Darling delay the budget?

Alistair Darling during his appearance on Andrew Marr on Sunday morning appeared to intimate that he was in no rush to set the date for the budget.

His rational was that the pre budget statement contained enough fiscal maesures to tide the country over for the foreseeable future.

Some though suspect that something more sinister is afoot.

Notably that it was force the government's policies under the scrutinty of the Commons, something that was initially at least avoided before Xmas.

Over at First Post this morning,they also see the motive behind such a move

Whenever the Budget is presented, it will reveal a nightmare combination of soaring costs for unemployment benefit and falling receipts from a collapse in corporate taxes as more businesses go to the wall. Darling's hopes of returning to growth by the end of the year have been blown apart by the economic crisis. Like Micawber, Darling is hoping that "something will turn up" if he delays for a month.

adding that a

would also enable Darling to indulge in some creative accounting:

So perhaps then a June budet after the European elections?

A calm and content Chancellor

For a man tackling what he prophetically, if at the time controversially, described last year as the worst economic slump for 60 years, Alistair Darling is in remarkably tranquil mood. Jacketless and sitting back on the sofa in his Treasury office this week, the Chancellor is focused, bullish, sharp – and distinctly unrattled.

says Donald Macintyre as he interview the Chancellor in this week's addition of the New Statesman

It's a worth a read if only because it indeed shows a more confident chancellor whose seems to have recovered from the stumblings that surrounded his Guardian interview back in the summer.Of cause his warnings at that time,although critised as being too gloomy were proved to be spot on

The famously calm Chancellor has emerged as something of an unlikely hero of the whirlwind of economic events of the past year

Is Stuart Rose the bringing of more bad tidings?

If you believe Robert Peston and most people do at the moment,Marks and Spencer's sales figures this morning are quite worrying.

The group which was forced to announce that it was cutting jobs yesterday ahead of this morning's statement reported like to like sales down 7.1 per cent in the thirteen weeks to 27th Dec.

For Peston though

it's probably the trend to unadjusted, overall sales that's more disturbing. For the group as a whole, these were 1.2% lower, thanks to a particularly strong performance outside the UK and on the internet.
But here's the ghastly bit: overall UK sales were down 3.4%, including the benefit of Marks' well-publicised and unprecedented promotional days.
Clothing was the worst performer, with sales 6.5% lower. Food was just 1.1% down - which represents a modest recovery.

and adds that

Also, the profit margin of Britain's largest clothing retailer was significantly lower, because Marks has been forced to slash prices.

The comments of its chief executive Stuart Rose are also worth listening to because he forecasts that the recession will last well into 2010.

Something that the chancellor hinted out in his interview with the FT.

It would be foolish to ignore the remarks of Rose,someone that has his fingers on the pulse but what will this do to the government's finances?

Darling realistic but optimistic

Alistair Darling was mocked after his interview with the Guardian during the summer recess in which he made dire warnings about this being the worst recession for 60 years.

Well he may now be correct and this morning gives an exclusive interview to the Independent which is well worth a read

"There is a way to go yet. There will be a few bumps on the way and we are going to have to negotiate our way through that difficult time. The world has been hit by two great shocks at the same time – the credit crisis, the more enduring and difficult one – and a very large spike in energy prices."

is his synopsis of the situation facing us which ties in very much with what Mervyn King was saying yesterday but he remains optimistic

We have had 10 years of very solid growth in this country. We reduced the debt we inherited and spent money where it was needed on schools, hospitals and transport. We also go into this period with interest rates the lowest since the year after I was born [1954]. Inflation is coming back down."

And he insists that his fiscal stimulus is the correct thing to do

You should support the economy at the present time. It would be utter madness to start taking money out of the economy at the moment. That would make a difficult position even worse,"

Sorry who are you?

The FT has managed to secure a script of the meeting between Alsitair Darling and his Icelandic counterpart Árni Mathiesen

Árni M Mathiesen: Hello

Alistair Darling: Hello

ÁMM: This is Arni Mathiesen, Minister of Finance.

AD: Hello, we met a few months ago, weeks ago.

ÁMM: No, we actually never met. You met the Minister of Trade.

AD: Alright, sorry.

ÁMM: No problem.

All hail Darling the decisive one

According to a report in the Times this morning it is Alistair Darling and not Gordon Brown that we shoild be hailing as the saviour of Western capitalism.

According to the paper

Arriving at the British residency in Massachusetts Avenue Mr Darling was shown a draft communiqué. The Chancellor — who has tried to maintain an impression of calm control throughout the crisis — lost his cool. Instead of a clear plan of action, he was handed a three-page document containing the usual mix of platitudinous diplomatic fudge and vague aspiration

and the paper can reveal 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”.

Ditch Darling for Cable

Now here is an idea for Gordon Brown via First Post's the mole.

What will Gordon Brown do if the bank bail-out doesn't work? One answer being put forward in Blairite circles yesterday is that the Prime Minister will dump his ultra-loyal Chancellor Alistair Darling - and bring in Vince Cable as a part of a deal with the Liberal Democrats. It may sound extraordinary, but the Mole heard it more than once yesterday

Not a bad idea.Cable has consistently showed himself to be infront in front of the game throughout the length of this financial crisis going right back to the Northern Rock episode.He is a good communicator

And as the Mole says

The Lib Dem Treasury spokesman's stock at Westminster is sky-high. Like some biblical prophet, Cable has long been warning of the financial crisis that has now engulfed the British economy. He was, for instance, one of the first to come up with the idea of nationalising Northern Rock

The Darling controversy runs on and on

The Alsitair Darling incident seems to be rumbling on and on.

Benedict Brogan who appears to have the inside knowledge in all this says

Whatever the headlines say this morning, I gather relations between Alistair Darling and Gordon Brown remain remarkably good. They've been together too long to do anything more than shrug their way out of this latest disaster. Talk of rows and explosions since the Guardian hit the streets on Friday night are wide of the mark

Whilst Paul Waugh previews an interview given by Ed Balls to Channel 4 in which he rebuttes that he is in any way positioning himself for No 11.

Neighbours but a fallout will end in disaster for Labour

I have taken to Jackie Ashley in recent weeks and her column in Monday's Guatdian is always worth a read.
Today as with many commentators it is the weekend's spate between the neighbours in Downing Street culminating in Darling having to back track on his relaxed Scottish island interview.

For Ashley,the Chancellor was talking the truth,the problem being that No 10 has reacted in totally the wrong way.

for No 10 to order the chancellor to eat his words on TV (though, in fact, he declined to do that - he just pushed them around his plate) is to turn a private disagreement about tactics into a public political crisis. When that's followed up with briefings by Brownite MPs about the need to put someone else into the Treasury in Darling's place, it starts to look as if the government is cracking up.

Yes to an extent you can understand the reaction on a week when the Prime Minister was going to carry out yet another relaunch.After being told that we were best placed to deal with the recession,our Chancloor tells us that might not be the case after all.

Brown she says

needs to be very careful. To humiliate and then sack his chancellor - someone who regards him as a close friend and who has been very loyal to him - would be to invite ministerial meltdown. Darling is very stubborn and at least as proud as Brown. I would be surprised if he agreed to help launch the recovery package without some agreement that he would not then be axed soon after. If he can be treated badly, anyone can be. This is not the way to rally a cabinet.

If this morning's Times is anything to go buy then the decision may have already been taken

The Chancellor’s assertions at the weekend that government changes were unlikely were described in categorical terms as “wrong”. Whitehall insiders told The Times that a controversial interview, in which he claimed that Britain could be heading into the worst economic conditions for 60 years, may have harmed his position.

Meanwhile the fallout is hitting sterling.The pound is at currently a two year low against the dollar reflecting the weekend's comments.
Brown needs to act quickly if once again we are not going to see another blundered message

The sheep that may haunt Gordon

Over at Boulton and Co,the savaged sheep theory is being put forward.

Those older readers will recognise the phrase.It concerned Geoffrey Howe's savaging of Mrs Thatcher after he has resigned from the cabinet,events which eventually led to her downfall.

Joey Jones reckons that Gordon Brown may have to watch his back when he presents his so called economic plan next week.The person that he thinks may be doing the savaging is Alistair Darling.

Pushed aside over the forthcoming announcements

He is being put in a particularly awkward position.
The Chancellor's role right now is somewhat demeaning. He must bankroll a costly Save Gordon campaign .You never know... someone with Darling's experience and acumen might conclude he is being required to break the bank to remedy self-inflicted wounds and paper over the cracks of an unsound political position

.