The best George Osborne picture you can imagine to accompany today's IMF news

Hats off to all involved at The New Statesman

Do you remember, last September...

On the day, to quote the Guardian... 

The International Monetary Fund has downgraded its forecast for UK growth next year by more than any other developed nation, as it warned that the world economy is weakening.

The Washington based organisation predicted on Monday that growth in the UK will be just 1.4% in 2013 compared with a previous forecast of 2%. This year the situation will be even worse and a previous forecast for 0.8% growth this year has all but evaporated.

The IMF said in its latest World Economic Outlook that GDP across the UK – which is currently in recession – will increase by just 0.2% in 2012, beating Italy and Spain, but behind France and Germany.

...It's worth  remembering what Vince Cable said last september about the year ahead (again from the Guardian)...

Vince Cable the Liberal Democrat business secretary, called on Friday for an urgent New Deal-style stimulus package involving funded tax cuts and a major capital investment programme including tolls for a roadbuilding programme.

Insisting his proposals amounted to a radical Keynesian package – using language and ideology not shared with the chancellor, George Osborne – he said that in the face of a stagnating economy ministers had to "pull all the levers available to government. We are not powerless."

In an interview on the eve of the Liberal Democrats' party conference in Birmingham, Cable urged the Bank of England to start another round of quantitative easing "quite soon". "I am going as far as I can legitimately go in saying this is a problem."

It was perfectly sensible economics, he said, to allow spending to rise in the wake of higher unemployment and lower revenues. He added: "The danger of not acting is that you get a vicious downward spiral." Cable also tried to change the terms of the public debate on the economy, saying absolute distinctions between plan A and a plan B were "proving very unhelpful". He suggested plan A plus, but said it was better to move on to new language

Makes you think, doesn't it..

#vincefor chancellor

PS On seeing the Golden Dozen this week, I see I was not the only (nor indeed the first) person to recommend that a Vince for Chancellor/Lords reform deal should be on the cards.  Hats off Mr Flowers.

"The Michael Gove Free School', North Kingston

An open letter to Nick Clegg

Dear Nick

I have seen it reported that in your speech to the Social Liberal Forum yesterday, you stated that you had stopped Michael Gove opening Free schools 'everywhere'. I am sure you meant this sincerely and that it is your belief. But I have to tell you, that it is not what is happening on the ground.

At a public meeting last Thursday in North Kingston, organised by Zac Goldsmith but also attended by Lib Dem and Tory Councillors and the new Head of Children's Services for Kingston, parents were told that the only realistic funding available for the  desperately needed new secondary school required for the area would be if it was a Free School. The money previously promised in the Building Schools for the Future programme had of course been removed, and any other central funds (the Basic Needs programme) were being targeted at primary schools and for repair and refurbishment projects, not new build.

Parents at the meeting repeatedly asked what other alternatives there were to going down the Free School route, and equally repeatedly were told there were realistically none.

The meeting concluded with one Lib Dem councillor, through gritted teeth, telling the meeting that she would do whatever she needed to get this school built - and that if she ended up having to call it 'The Michael Gove Free School' then so be it.

I tell you this, not because I don't think there are going to be many fine Free Schools built - I am sure there are. But the notion being put out by the Conservatives that this is about parental choice is a fallacy. It was made very clear in our public meeting that the choice was 'take it or leave it'.

No one could have left that meeting under any impression other than soon, there will indeed by Free Schools 'everywhere' - because that's all that's on offer.

With best wishes

Richard Morris

Results of my 'Which Tory for Chancellor?" poll are out...

The question was 'if not Vince and it can only be a Conservative,  then which Tory would you LIKE to be Chancellor?'

It was never close.

Amusingly for most of the voting Theresa May had no votes at all - but got 2% in the end.

Equally amusingly, Chloe Smith got more votes than Theresa or Gideon.

I was surprised Philip Hammond (6%) didn't do better, as he was Shadow Chief Secretary for so long before the General Election.

And  again perhaps it is a touch surprising that the second and third slots were taken by two of the more right wing members of the Conservatives, in Willetts and Hague.

But ahead by a country mile with 45% of the vote was the 'sixth Lib Dem', Ken Clarke.

With a cabinet reshuffle on the cards - he should probably be very worried. The Lib Dems love him Mr Cameron.

Oh Dear, I've upset Neil Monnery AND I'm an idiot.

One of the perils of blogging and social media is you occasionally bash something out without thinking about it properly, and the next thing you know, someone's written a blogpost that gets to  the top of the Golden Dozen pointing out you're an idiot.

*sighs*

So first, here's the offending RT and tweet I sent last week that so annoyed Neil.

These have not gone down well with Neil ( and not just because of my spelling mistakes) who makes some excellent points. So let me clarify..

I agree that the Financial Services sector is of vital importance to the UK economy. It is the largest individual sector in the economy (interestingly, the second largest is my own, the creative services industry) and in addition we are world class at it.

I would like it to stay that way and I have no desire for talented individuals who are creating large amounts of wealth for the country - I believe City firms paid around £60 billion in Corporation Tax last year - to be forced out.

That would be nuts.

But I don't think the City is perfect. I think it needs large scale reform, as outlined by Vince Cable in several places in the last week. I wish the Libor Parliamentary Inquiry was a full Judicial inquiry and indeed already it seems rather flawed.

I have heard that 58% of all money used for Quantitative Easing has finished, not being loaned to businesses, but on the balance sheets of the banks themselves. 

And 10 days ago Andrew Neil tweeted this...

..which suggests to me that something has gone a tad skew whiff on the whole area of executive pay - which what was behind my tweet. Indeed I can call an expert witness on this very point: er, Ladies and Gentlemen I give you Mr Bob Diamond..

Last year Bob Diamond introduced a 'no jerk' rule at Barclays, whereby anyone who didn't fit in with the culture would be fired, no matter how much they earned. Which, as David Mitchell put it, begs this question..

"The Barclays bank boss has suggested that his executives are easily replaceable. If that's true, why do they get paid so much?"

So in summary.

I am all for financial services

There are many good people working there who do this country a great service

But there's a lot wrong in the system

Some bankers get paid too much. 

And they're not irreplaceable.

Hope that's clear.

Dear David Cameron. Want to stay PM? Read this post.

As we all know, David Cameron is, this weekend, a considerably weaker Prime Minister than last - as Jonathan Calder puts it the new John Major of British politics - thanks to his inability to deliver on Lords Reform. He has two main problems - firstly, he has to find a way of reasserting control over his party. And secondly - he has to find a way of keeping us 'on side' and supporting the government he leads.

To do the second, the rumblings are that he can't deliver much on Lords Reform - I've heard that the basic proposal is to replace the 92 hereditary peers with 92 elected ones, and that's it. This very minor step comes nowhere near to meeting his obligations in the coalition agreement. So if that's it, he'll have to top up any renegotiated deal with something very attractive...

Mark Pack has made some sensible suggestions of where such a deal might begin, looking at party funding reform, and wholesale redrafting of the draft communications bill. But may I venture that I have a bigger idea...

There's a cabinet reshuffle on the horizon. 

And as Stephen Tall reminds us , there is one single issue that the coalition puts above all others. The economy.

So the best gesture Cameron could make would be to put us in charge of that major issue, and make Vince Cable Chancellor.

One better gesture could he make to emphasise the value he puts in the Lib Dems? Is there actually a better man for the job in the cabinet? Wouldn't the country applaud him as well?

And strangely, politically, moving Osborne out of No.11 is not as hard as it sounds. There are already rumblings amongst Tory MPs - many of whom were the rebels on Lords Reform - that they want Osborne moved after his nightmare budget. He is still (oddly) seen as the master political strategist in the party - so could easily be moved to Party Chairman, with a brief to start working towards the 2015 general election. Warsi can clearly be ditched, there seems no great affection for her in the Tory Parliamentary party. And I'm not sure Osborne would object too much. He knows he is politically weakened after the budget disasters, and what better way of restating his own future leadership credentials than spending the next three years engaging with the grass roots and the parliamentary party, developing (probably fairly unpleasant) right wing policy to present in 2015.

So Mr Cameron thats the deal - a figleaf of Lords Reform, plus Vince as Chancellor, in exchange for not blocking every piece of legisaltion for the next three years that might have given you any chance of getting your rebels onside.

I still would prefer proper Lords Reform - but if you can't deliver it, I'd take this as second best.

What do you say?

Want Lords Reform? We're going to have to get Labour to do a deal.

David Cameron is bemused and becalmed, unable to get 100 or so Tory MPs to support the governments position on Lords Reform. So he's decided to have one final go, try and get a 'tiny' number of elected Peers agreed (I hear this morning the plan is to replace the 92 hereditary peers with elected ones), and if he can't do it, give up.


At first, senior Lib Dems appeared to be happy to accept this news. Nick was described last night as 'sanguine' about this position, despite apparently being unaware that this was what Cameron was going to say to the 1922 committee before he said it. Tim Farron is quoted by ITV (with my quote appended) as saying..

This would be just nuts - so nuts it can't be true. I am sure we're doing all we can to make this work. The coalition agreement is clear that the plan is to form a wholly or majority elected Upper House. We are also meant to be reducing the numbers - not just replacing 90  or so peers directly. The Conservatives should be told this proposal is unacceptable, and that, as Nick first put it on Tuesday, 'a deal is a deal'.

Now, while the government can't muster a majority to support the current bill thanks to Cameron's inability to lead his party, Labour did support the bill. Yes, I know they were then totally two faced about the timetable motion - and Sadiq Khan may well be the world's most irritating man. But he was clear in Newsnight on Tuesday that he was open to offers.

So let's go make them. Don't let the Tories have the lead - this is a Lib Dem led bill, sponsored by the DPM. Make those offers behind closed doors at first. And if they won't
play ball, make them openly,  publicly force them to say what they want or shame them into making their two facedness clear.

If it's a referendum, so be it. This has no fears for me. Length of terms, re election etc - put it all on the table.

'Why give Labour the power?' the cries go up, 'they're not in government'.

My answer is - because they have the power. We may not like it - but
it's the truth.

I urge you. Be flexible, be open, be quick. We can win this.

Let's lead the charge