GDP Would Need to Collapse 5% in Next 12 Months to Meet Osborne’s Treasury Predictions

Worth reading the new growth figures in the context of the Treasury’s pre-referendum projections. HMT warned that in the two years following a Leave vote, the UK would enter recession with GDP falling by between 3.6% and 6%.

There has been growth in each quarter following the vote to leave: 0.6% in Q3 2016, 0.6% in Q4 2016, 0.2% in Q1 2017 and 0.3% in Q2 2017. That means to meet Project Fear’s two-year prediction, GDP has to fall by over 5% in the next 12 months. Let’s see…

Abandoning Austerity Wouldn’t Increase Wages

Boris, Jeremy Hunt, Justine Greening and other MPs flirting with Torbynism should read today’s Centre for Policy Studies report ‘Abandoning Austerity is No Solution‘.

Ireland’s significantly larger fiscal consolidation has seen it experience a larger fall in its deficit, a larger proportionate fall in unemployment and better wage growth than the UK, counteracting the narrative that a higher level of austerity leads to economically harmful outcomes. If only Osborne had been as radical as his Irish opposite number Michael Noonan. Osborne excused his lack of radicalism on the deficit on the grounds he was in a coalition and “had to get re-elected”. Fine Gael were also in a coalition and got re-elected… 

This is reflected across other OECD countries that had a large budget deficit in 2010. There is a strong correlation between those countries that cut spending by a higher degree, and countries which achieved better economic growth and better wage growth.

As the CPS says:

“Even John Maynard Keynes argued that austerity should be used at the top of the business cycle, and it is vital that the UK’s budget deficit continues on a downward trajectory… In fact, the UK’s budget deficit reduction programme is already very modest and the UK’s tax burden is already set to climb to its highest level in four decades by 2025.”

The report finds that the only responsible ways to increase public sector wages would be to re-gear spending priorities, for example by making savings in the international aid budget or ring-fenced pensioner benefits. It also suggests further extending regional pay structures (apart from London weightings, there are no other areas of England where huge differentials in cost of living are matched by pay). Take note Torbynistas…

Osborne Defends BlackRock’s £500 Million Investment on Standard Front Page

George Osborne has defended his employer BlackRock’s half-a-billion pound investment on the front page of the Evening Standard. In the most glaring conflict of interest since his editorship began, today’s Standard blasts Rebecca Long-Bailey as “out of touch” for criticising Uber, and favourably quotes her own colleagues who support the taxi app. BlackRock, which invested in Uber in 2014, has a stake now worth some £500 million. BlackRock pays Osborne a salary of £600,000 for 48 days work per year.

BlackRock keeps Osborne on retainer and it is in BlackRock’s direct financial interests to see Uber defended, Osborne will no doubt argue that he defends Uber on the Evening Standard front page for liberal reasons. Guido did warn him that as editor he would have to navigate a minefield of conflicted interests when he took the job. This was inevitable…

UPDATE: The first edition of the Standard had no mention of Uber on the front page. Second edition splashed it. Did someone pick up the phone to the editor? 

Brexit Won’t Cause Cancer

George Osborne is enjoying himself and the front page of today’s Standard basically implies Brexit will give you cancer. This will apparently be a consequence of the UK leaving Euratom – the European Atomic Energy Community. Allegedly it will mean nuclear scientists and material will not be able to cross borders. Which will be odd given Britain is, with France, one of Europe’s only nuclear armed states.

The UK also hosts the Joint European Torus (JET), the world’s largest operational nuclear fusion device. The JET project – carried out by a team of 350 international scientists – is formally a joint venture used by more than 40 EU laboratories. Euratom’s flagship nuclear fusion research project is the ‘International Thermonuclear Experimental Reactor’ (ITER), the world’s largest planned nuclear fusion experiment. Located in the south of France, it is funded and run by a seven-party consortium composed of the EU, India, Japan, China, Russia, South Korea and the US. Six out of the seven parties are not members of Euratom. Expect that to increase to seven out of eight.

Since 2014, Switzerland has participated in Euratom programmes as an associated state. As of 2016 the community had co-operation agreements of various scopes with eight countries: the United States, Japan, Canada, Australia, Kazakhstan, Ukraine, Uzbekistan and South Africa. After Brexit it will increase to co-operation with nine states.

According to Article 101 of the Euratom Treaty, ‘The Euratom Community may, within the limits of its powers and jurisdiction, enter into obligations by concluding agreements or contracts with a third state, an international organisation or a national of a third state’.  So the UK could work with Euratom as a third country, as can individual Britons.

By acquiring the status of third country the UK might join countries such as China and Russia, with which Euratom has established a ‘structured dialogue to identify a common set of research topics of mutual interest in which cooperation can take place on a shared-cost basis’. Alternatively under Article 206 of the Euratom Treaty, ‘The Community may conclude with one or more States or international organisations agreements establishing an association involving reciprocal rights and obligations, common action and special procedures’. That is the basis on which in 2014 Switzerland became an Associated Country to Euratom.

Did Guido mention that the UK is one of the biggest funders of Euratom projects? Osborne’s latest instalment of ‘Project Fear’ is not even up to his pre-referendum nonsense…

UPDATE: Guido forgot to mention the ONR which will take on Euratom responsibilities. Britain was after all a nuclear power before Euratom existed.

Osbo Mulling Euro Standard Hire

Guido hears a rumour that local free-sheet editor George Osborne is toying with the idea of hiring a “Europe Editor” to oversee the Standard’s anti-Brexit coverage. The one worry he has is of upsetting long-serving political editor Joe Murphy, who is basically a solid news hack of the old school and might not be thrilled at having his turf invaded by some Euro-commissar taking dictation from Nicky Morgan and Peter Mandelson. Osborne is understood to be prepared to ‘wave Evgeny’s cheque book around’ to get a big name. It occurs to Guido that Nick Clegg is currently unemployed. Just a thought…

Job Number 6 For Professor Osborne

Congratulations to George Osborne on job number six: he has just been appointed an economics professor at the University of Manchester.

  1. Washington Speakers Bureau after-dinner speaker
  2. Adviser to Blackrock
  3. Chairman of Northern Powerhouse Partnership
  4. Fellow at McCain Institute
  5. Editor of the Evening Standard
  6. Economics professor, Manchester University

Is George the best person to be teaching economics? Students will be wary of his previous forecasts: 500,000 to 820,000 jobs lost after the Leave vote (wrong), recession (wrong), wages falling by 2.8% (wrong), house prices hit by 10% (wrong). Undergrads will need to do better than their new professor’s Treasury paper to pass…

Cameroons Disagree on DUP

David Cameron tweeted his endorsement of Theresa May’s deal, ordering Tory MPs to get behind the PM:

Seems Dave’s old team didn’t get the memo. Here’s George Osborne’s front page:

Guido can give you Photoshop lessons, George. Meanwhile Cameron’s old comms chief Craig Oliver is also slagging off the arrangement:

Not listening to the boss anymore…

Osborne: May a Dead Woman Walking, on Death Row

Osborne: Rudd Doesn’t Support “Direction” of Tories Under May

Another helpful line from George Osborne today. He says Amber Rudd does not support the “direction” of the Tory party under Theresa May:

“The current Conservative leadership is moving further away from the social and economic liberalism that has made our country and its capital a global success story. That is the wrong direction. Their legitimate attempt to address the concerns of  those who feel left behind by globalisation has ended with them stigmatising the value that immigration brings to Britain, and it has produced a misguided programme of intervention in business.

Thankfully, many of the impressive candidates the Conservatives are fielding know this is a mistake. We have seen in this campaign faces of the future like Amber Rudd and Ruth Davidson, interviewed in this paper today. They have maintained a disciplined silence about their reservations concerning the direction of the party before the polls; we suspect they will make their voices more forcibly heard after the election.”

Hardly a surprise given Amber’s on the record views, which are certainly of a more liberal bent than May. Rudd is a long-time Friend of George, the pair are very close and she used to be his PPS. One to watch depending on the size of the Tory majority…

Osborne’s Immigration Hypocrisy

George Osborne is whacking the government on immigration again, splashing today’s Standard with an “exclusive investigation” making clear his view that the tens of thousands target is a fantasy. All very well and probably true. But less than a year ago Osborne was telling voters that he would meet the target. This exchange is from June 8, during the referendum campaign:

“I think it is achievable… It’s an ambition we intend to reach… In the manifesto that the country voted on last year, we set it out as an ambition. I believe it is an ambition we will achieve.”

Now Osborne says the target is “economically illiterate” and “wishful thinking”. He was lying to voters during the referendum. Rich of him to accuse May of the exact same fib…

Taxpayers’ Alliance Updates Iconic Tory Debt Poster

Remember this?

The crisis is worsening so the Taxpayers’ Alliance have updated the poster:

Now every child in Britain is born owing £26,500.

What is Phil Hammond going to do about the Tory Debt Crisis?

Never-Ending Tory Deficit Reduction Horizon

Today’s Tory manifesto will pledge to eliminate the deficit by 2025, several years later than Philip Hammond vowed just a few months ago and 10 years later than the Tories promised back in 2010. When Hammond became Chancellor he said he would clear the deficit by the early 2020s, in his Budget in March he said the deficit would fall to 0.7% of GDP by 2021-22. Now the Tories say the books will not be balanced until 2025, the middle of the next decade…

George Osborne consistently failed to achieve his deficit forecasts in the last parliament – the deficit in 2015 was almost five times what he envisaged in 2010. The Tories used to say Labour would “load debts onto our children that they can never hope to repay”, May and Hammond now warn voters of Corbyn and McDonnell’s policies: “Where’s the money coming from?” The answer is the same place they get it, the deficit. It isn’t just Corbyn and McDonnell’s Labour who are an anti-austerity party…

UKIP and Farage Seize on Osborne Immigration Revelations

George Osborne has admitted that the Cameron government never tried to keep its promises on immigration and claimed that every senior member of the Cabinet privately opposes the Tory target on reducing net migration. Osborne makes the claims in his latest Evening Standard editorial, writing that “none of its senior members supports the pledge in private and all would be glad to see the back of something that has caused the Conservative Party such public grief”. Just like Dave’s unhelpful Brexit comments last week, UKIP are already seizing on these revelations. Nigel Farage tells Guido:

“In admitting that the Tories never planned to keep their promises on immigration, and that the Cabinet does not even support reducing migration, I suspect for once George Osborne has got something right.”

And a punchy UKIP spokesman tells Guido:

“Osborne has blown the gaff. For the last 7 years the Tories have been knowingly lying about their inability to reduce immigration. Now Amber Rudd has been passed the baton by the Prime Minister to carry on doing so. It used to be said that it was the job of the Diplomatic Service to lie for Britain. It now seems to be the job of the Home Office to lie to Britain.”

Notable that the unleashed Leave voter-bashing Osborne is using his insider knowledge of Cabinet discussions so overtly so early on in his new job. ACOBA were insistent that he must not used privileged information garnered from his time in office:

“The Committee is mindful of the potential interest the Evening Standard may have in the vast array of information you were privy to as a member of the Cabinet and as Chancellor. Whilst the Committee notes the Permanent Secretary has no concerns about the role in relation to your time as Chancellor, it is concerned that given the specific nature of the role as Editor, there is a risk that your knowledge acquired in office could provide some advantage to the Evening Standard.”    

Every Cabinet member who appears on TV will now be asked if they privately oppose this key Tory manifesto policy, just in time for tomorrow’s launch…

Osborne on Leave Voters

George Osborne’s Evening Standard leader on Leave voters:

“Now, like a duped drunk in a strip bar, voters find that, far from getting their hands on the goodies, they have been left with a large bill.”

Tory Record: More Debt, More Taxes

As is traditional in elections the Tories are warning that Labour will bring more debt and more taxes. That is a given, however what is the Tory record after 7 years?

In 2010 the Tories promised to close the deficit by 2015. They failed to do that, so Osborne shifted the goal posts to aim for 2017/18. Under Hammond the OBR now says the government is unlikely to balance the budget by 2026. If the political will had been there they could have balanced the budget; from a worse position over the same period Ireland managed to balance the budget and cut the debt. Ireland now has a lower debt to GDP ratio than the UK and a higher GDP growth rate. The repeated Tory failure to balance the budget means that the national debt continues to rise and is now 89% of GDP. The Tories have added £500 billion to the national debt in 7 years, Hammond plans to add a billion a week to the national debt under Theresa May...

Taxes have risen under the Tories. The claim by the Tories to be a low tax party has not been true this century. They raised VAT almost immediately upon coming into office. They argue they have cut business taxes, yet they raised dividend taxes on small business owners and tried to raise National Insurance contributions. To be fair it is a mixed bag, some taxes have gone up, others down. According to the OECD the overall tax-to-GDP ratio has risen from 31.5% of GDP under Gordon Brown to 32.5% under George Osborne. Taxes have risen under the Tories…

This is not to say debt and taxes would not rise catastrophically under Labour. If you want to balance the budget you have to cut spending, George Osborne used to say privately that the Tories wouldn’t get re-elected if he slashed spending. Enda Kenny cut Irish government spending by 10% and GDP growth has been much faster than in the UK. He got re-elected and is the longest serving Fine Gael prime minister in Irish history.

Osborne’s First Front Page Toned Down

Fairly common for the Standard to change up its headlines between editions. Commuters heading home tonight are reading a very toned down Osborne first front page compared to the May bashing one he tweeted out earlier…

UPDATE: George gets in touch…

“There used to be one edition but we’re going to be running two editions during the election, to get reaction to news & stories thru the day”

Osborne’s First News Line

It’s George Osborne’s first day in charge of the Evening Standard and he has been given an appropriate welcome on Derry Street, where a group of cab drivers have laid out a ‘huge line of coke’ on the road outside. A gag that’s had Standard hacks snorting into their coffees…

H/T Felicity Morse

UPDATE: George twists the knife with his first front page:

UPDATE II: Osborne’s first leader says Brexit is “an historic mistake”, derides as “unrealistic” claims Britain has a strong hand, repeats the Juncker briefing uncritically as if it is gospel, and blasts Theresa May for an “election campaign [that] amounts to no more than a slogan”. Subtle…

Osborne Quits as MP “For Now”

 “I am stepping down from the House of Commons – for now. But I will remain active in the debate about our country’s future and on the issues I care about, like the success of the Northern Powerhouse.

“I want a Britain that is free, open, diverse and works with other nations to defend our democratic values in the world.

“I will go on fighting for that Britain I love from the editor’s chair of a great newspaper. It’s still too early to be writing my memoirs.”

“At the age of 45, I don’t want to spend the rest of my life just being an ex-Chancellor. I want new challenges.

“I’m very excited about the opportunity to edit the Evening Standard. I’ve met the team there, and their energy and commitment to this great newspaper are positively infectious.”

[My editorship will offer] straight facts and informed opinion to help them to make the big decisions Britain now faces about the kind of country we want to be. That starts with the coverage of this general election.”

Scoop in the Standard, naturally.

Friday Caption Contest (Taxi for Osborne Edition)

Evening Standard Editor George Osborne Could Have Been Locked in Parliament

Yesterday raised another question over George Osborne’s appointment as editor of London’s flagship Evening Standard: had the attack occurred in two months’ time, Osborne would have likely been stuck inside a locked-down parliament along with other MPs. Out of the newsroom…

The first edition of London’s Evening Standard hit the streets before the attack, nevertheless the paper says it rushed out a late change to its last editions giving the tragedy comprehensive coverage read by commuters on their way home in print and on their phones.[…] Read the rest

+ READ MORE +



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Quote of the Day

Alan Sugar on Jeremy Corbyn:

“It’s clear you alluded to students refunds to get votes from young impressionable people. You are a cheat and should resign.”

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