Now Murphy joins the battle

First it was Lord Glason,now shadow defence secretary Jim Murphy has questioned the party's relentless attack on spending cuts without its own solution.

This morning's Guardian quotes Murphy as saying that the party must reject 'shallow and temporary' populism.

Once again this could well be an attack not on the leader but on his shadow Chancellor.

Murphy is talking specifically about defence cuts telling the paper that he agrees with £5bn of the government's planned cuts in defence.

However the inference is there for all to see.

As Glen Ogazla has just written at Boulton and Co

Although he does not attack Ed Miliband's leadership (he was, you may remember, David Miliband's campaign manager during the Labour leadership election), Jim Murphy highlights the great problem for Ed Miliband so far: He is not getting through and not being seen as a Prime Minister in waiting.

Whilst
Peter Hoskin at Coffee hails the fact that Murphy goes beyond this simple rhetoric, becoming the first shadow minister to give some of those ‘details’ that Balls mentioned.

Whatever the behind the scenes manoeuvrings,it appears that the party may be finally getting its act into gear over its opposition to the coalition's deficit reduction strategy.

Credible fiscal alternatives rather than blazon rhetoric will win the voters to the cause

Clegg calls for consensus on the deficit

Nick Clegg has called for a cross-party Council of Financial Stability to agree the timetable and scale of deficit reduction.

Spaeking at the London Stock Exchange the Lib Dem leader said that

Government-as-usual will not, cannot, command the legitimacy to make the big decisions before us. The scale of the changes required is so great it will require a different way of taking decisions too.

He described the standard model of imposing cuts from on high as a recipe for Greek-style social and industrial strife.

The Council would include all the major parties, the Governor of the Bank of England, and the Head of the Financial Services Authority.

Abandon ship

Should we be getting worried?

This morning's figures on borrowing showed that the government has borrowed £4.3 billion in January, which was a lot higher than forecast.Analysts were initially forecasting a surplus of £2.8 billion and compares to a £5.3billion surplus in January 2009.

The main reason for the increase is falling tax receipts and it is the worst figure eveer for a January which is usually a surplus month as people complete tax returns and hand over money to the treasury.

We can't go on like this shouts Philip Hammond who adds that

The Prime Minister must now heed the advice of leading economists and business leaders and set out a credible plan to get the deficit under control, starting this year to put Britain back on her feet. The longer he delays, the more the recovery and our credit rating will be put at risk."

More worryingly government bond prices fell, as concerns grew about the credibility of Labour's plans to curtail a record budget deficit forecast to top 12 percent of gross domestic product this year.

We are now on course to run a higher deficit than the Greeks.

On top of that more bad economic news as mortgage lending dropped by nearly a third to £9.1 billion in January, that's 21 per cent down on this time last year.It is now at its lowest level since 2000.

A lesson In Greek

Maybe we shold be looking at the way that the Greek government is tackling its spiralling national debt?

Yesterday,Prime Minister George Papandreou has announced tough austerity measures to tackle a growing problem in the country,currently 13 per cent of GDP whereas the Euro Zone limit is 3 per cent.

Measures will include a blanket freeze on civil servants' salaries, and a raising of fuel taxes as well as other ways of broadening the tax base.

The government would extend a public sector wage freeze to those making below 2,000 euros a month for this year, excluding seniority pay hikes. Those making below that mark had previously been promised above inflation pay rises.

Cameron and Osborne manoevering for a sterling crisis

Benedict Brogan suggests that the Tories may be initiating a sterling crisis at least that is what the earnstwhile Robert Peston thinks.

Peston cites McKinsey’s “Debt and Deleveraging” report, which has crunched through all available data on British debt compared to other countries and concludes that when you tot it all up our real debt to GDP ratio is a whopping 466pc; only Japan is worse, on 471pc. Signs of Tory hesitation on spending cuts could make it that much more difficult and expensive for the Government to sell gilts, just when the Bank is supposed to be turning off the QE taps. Why do that, unless…he wanted deliberately to provoke a crisis that could tip the balance against Gordon Brown during the election.

Cuts,cuts,cuts but who will start first

Spending is the order of the day so far in the world of politic as Lord Mandelson accused the Tories of "confusion and disarray" over their spending plans,meanwhile they return fire saying that Labour's plans were in chaos.

"The challenge for the Conservative Party is to be clear about its immediate plans: how much is it planning to take out of this year's spending? So far all we see is confusion and disarray,"said the business secretary outlining that whoever wins the next election will be forced down the road of spending cuts.

The only difference between the two parties being that Labour will wait until there are stable signs of recovery in the economy.

There were signs of wobble at the weekend from the Tory camp with David Cameron saying there would be no "swingeing cuts" in 2010.

Their shadow chief treasury secretary meanwhile has reaffirmed that the Tories will tackle the deficit,telling the BBC that cuts will begin after the election and the deficit will be under control by 2014

Cut or spend? A political football

As the unofficial election campaign continues the race is on to name the date that fiscal cuts begin and Shadow Chancellor George Osbourne was off the mark yesterday at the LSE.

Announcing that spending on tax credits and child trust funds for better-off families would be cut immediately if the Tories won the general election,he told the audience

“The message could not be clearer – if you find yourself on the wrong road, you take the first available exit instead of carrying on.

This is going to be one of the elections issues,the Tories trying to demonstrate immediate fiscal prudence with Labour arguing for small steps in line with economic recovery.

The dangers of the Tory line are clear in plunging a fragile economy back into recession,whilst Labour's plans to raise spending by £31bn in the 2010-11 financial year, also seem unduly risky.

But the issue has to be faced.As the Economist says today,whilst everyone says the deficit is the big issue of the campaign,no one wants to talk about it much.

Nick Clegg attempts to in the FT

It is very clear that, as in the US, current levels of borrowing cannot continue without putting Britain’s credit standing at risk. We should not forget that at present, government borrowing is being artificially sustained through quantitative easing whereby, in effect, it buys its own debt. That is why I regard bringing stability back to public finances as the first big building block of our plan to re balance the economy and build it up again on firmer foundations than before.

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