A big win for the National Union of Ministers: Osborne is demanding £2.5 billion of extra cuts but is protecting May, Hammond and Pickles. The rest of the unprotected Cabinet will have to deal with a 1% cut in resource budgets. The money will be spent on capital spending. Criticise George in public and your department gets ringfenced, everyone else must suffer in silence…

UPDATE: A Whitehall wonk gets in touch to insist Hammond is merely being allowed to roll-over his budget underspend for this year, and while May and Pickles’s grants is protected they will still have to find 1% savings from the rest of their budgets. Their entire budgets will be unprotected in 2014-15.

Team Osborne are kicking back at this morning’s Greenpeace fracking stunt. Occupying his constituency office seems to have backfired somewhat; a Treasury source tells Guido: “we are happy for Greenpeace to draw attention to the fact that George is fighting for cheaper energy bills for all”. Something of an own goal…

Across the street from George Osborne’s constituency office is a village green on a roundabout where teams of Greenpeace activists have constructed a huge mock-up fracking operation – presumably to show the Chancellor how safe the process can be. The drivers of the 4x4s passing the stunt will be reminded just how much shale energy will save in fuel costs. Tatton is set to become the Dallas of England sitting as it does atop reserves which will provide cheap energy for the UK’s future as we dash for gas…

Give yourself a pat on the back…

 Via Standard

Ayn Rand deserves some credit today…

“A is A.”

George needs to find a billion pounds fast – what would you do…

Unemployment fell by 14,000 last month to 2.5 million, down 0.1% on the previous quarter to 7.8%. Number of people claiming jobseeker’s allowance fell by 12,500 to 1.54 million. Employment is up by half a million on the year. A nice distraction from the 4G shortfall that makes the Autumn Statement figures even more controversial.

An absolutely damning assessment of Dave and George’s broken promises from the Taxpayers’ Alliance this morning. “No plans to increase VAT”, VAT increased to 20%. “The next Conservative government will increase the inheritance tax threshold to £1 million”, inheritance tax limit frozen. What ever happened to the Conservatives?

George Osborne is under fire from all sides this morning. He can expect more of the same until the Budget on March 20, it is going to be a very long six weeks for the Chancellor.  

One usually loyal Tory MP raged to Guido yesterday about the new social care plans paid for by breaking the inheritance tax promise: “This is a ridiculous, socialist idea. God know what they are doing… We haven’t even begun to address to the problems facing our economy and we’re going to create another NHS – and this from a Conservative government.”

Lord Forsyth, once sympathetic to the Chancellor, describes yesterday’s Tory death tax as “very disappointing”, accusing him of breaking promises and admitting “it’s hard to see how this squares with the Prime Minister’s declared intention to support the striving classes”. David Davis goes further, seeing the move as “dismaying” and noting the irony of him abandoning his flagship policy for a Gordon Brown stealth tax. Douglas Carswell’s continuing comparisons of Osborne and the Prime Mentalist still hurt.

The commentariat is just as damning. Stephen Glover of the Mail attacks it as “a betrayal of Tory values that shatters the hopes of ordinary families”, Peter Hoskin at ConHome notes that he is becoming  ”a locus of Tory discontent”. It isn’t just the death tax, Jeremy Warner says no one knows what is going on with the economy, Rachel Sylvester warns Osborne is in real need of a trump card.

It is worth remembering the Afriyie plotters hinted they would go for Osborne first…

George Os-browne pic via @carlamillar1

Way back in August 2011 Guido wrote an article - “One Term Tories“ - predicting that if the economy didn’t get going the Tories would not win in 2015. This was before it was fashionable, before Ed Miliband’s “One Nation” speech when he was still considered a joke by the Tories and well before the bookies made Labour favourites to be the largest party.  The article was re-tweeted furiously by the likes of Peter Hain and other Labourites who pretend not to read this blog.

Last night’s vote embedded Labour’s electoral advantage, psephologist Anthony Wells says the current constituency boundaries give the Tories a 7% to 11% electoral handicap depending on how the LibDems perform. Is Cameron doomed?

If the answer the electorate give to Ronald Reagan’s “Are you better off than you were four years ago?” question is “No”, they probably are not going to be the largest party in 2015. This fact should concentrate minds in Downing Street more than any other issue, not Europe, gay marriage, HS2, Heathrow runways or any of the other side issues. Getting the economy growing is all that matters.

The government is going down a Keynesian path accelerating capital infrastructure projects – most of which will be shovel-ready in time to hand an incoming Labour government a growth boost. Ed Balls, the IMF, the editor of City A.M. Allister Heath and Guido all agree that an immediate stimulus would come from tax cuts. The Treasury resists the idea because it will widen the deficit. Well they are going to miss the deficit target anyway, you might as well miss it for the right reasons.

We can argue about what kind of tax cuts are best, Ed Balls and the IMF say a temporary VAT cut. Guido favours income tax rate cuts and threshold hikes, Allister Heath wants job creating cuts in business taxes. The Taxpayers’ Alliance revealed this week that the Coalition has raised 299 taxes. A flat-lining economy needs the government to get off its back and stimulate the economy, now.