Wednesday, 13 November 2013

Can Osborne contain optimism?

Good morning. It's good news that's preoccupying the Coalition today. The Bank of England's inflation report later will give us an idea of what Mark Carney expects for the economy, and how long, as the FT wonders, the good news will continue. The public may not be quite ready yet to discuss when it will all go wrong, given that most of us haven't noticed that things are much better. But George Osborne, as custodian of the Conservative election effort, needs to imagine where  Britain might be in the spring of 2015. Will we be overheating? Will inflation be surging? Will the stimulus to the economy prove to have been too much, too fast? In his address to the Telegraph's Festival of Business yesterday the Chancellor did his best to contain the optimism, both economic and political, that is building among Conservatives. There are still risks to the economy, he said, including the state of the banking system and America's public finances. Inflation fell yesterday, prompting speculation about when the Bank will have to start to push interest rates up: before or after the general election?
Tories like the way things are going. Help to Buy, as Janan Ganesh argued yesterday, is their political weapon. Creating a new generation of homeowners, mostly young, mostly outside London, is a concrete way of spreading wealth and opportunity. In private Tories are uneasy about Mr Osborne's strategy. In terms, they worry he's stoking a consumer boom. But they are happy to look the other away if it helps their chances of winning outright in 2015. No matter what the poll numbers say - and they say Labour is most likely to be the largest party - Tories think the election will break their way. So Mr Osborne's message yesterday that the UK fundamentals are right, combined with what is expected to be an optimistic statement about the prospects for next year from the Bank, will add to the growing sense of what Sir Alan Greenspan might call irrational political exuberance. "We are on the path to prosperity, we've got the fundamentals right and we've got an economic plan that is delivering what very many countries would crave, which is certainty, predictability and competitiveness," Mr Osborne said. The economy is being lifted by floods of cheap cash. His reputation is being lifted by economic success. He will now have to explain why things are going well, but not too well. 
Jack Straw has admitted that Labour made a "spectacular mistake" allowing migrants from Poland and Hungary to work in Britain from 2004. The Home Office had predicted that no more than 13,000 immigrants would come every year, but Mr Straw writes in the Lancashire Telegraph: "Net migration reached close to a quarter of a million at its peak in 2010. Lots of red faces, mine included." It's the furthest a New Labour figure has gone in suggesting that the party made a mistake on immigration. The Mail's leader calls it a "commendable mea culpa" and says that "The question for David Cameron is whether, by ignoring sensible calls to keep the existing controls on Romanians and Bulgarians in place, he is about to make a ‘spectacular mistake’ of his own."
The Opposition Day motion on the bedroom tax yesterday was defeated 252 to 226. The most notable dissident vote was by Lib Dem President Tim Farron - he was one of two Lib Dems (Andrew George was the other)to vote with Labour, which will be seen as another sign of Mr Farron ostentatiously distancing himself from the Coalition. The Mirror labels IDS a coward for missing the vote. For Labour, the risk is the issue will add to the potency of Tory attacks on them as the "welfare party". The FT reports a Tory aide saying: "Labour is talking to their base, they just can’t get a coherent line on welfare together". The challenge is now on Rachel Reeves to tackle welfare spending. The debate also saw an extraordinary speech from David Davies, the Tory MP for Monmouth. Mr Davies said that the Government should "get hold of some of these feckless fathers, drag them off, put them in chains if necessary, make them work and make them pay back society for the cost of bringing up the children they chose to bring into this world."
Chris Philp has been selected as the Conservative PPC for Croydon South, beating Suella Fernandes, Lucy Frazer, Chris Philip and Charlotte Verayesterday evening.
Sir Jeremy Heywood should be stripped of any role in deciding whether key documents on the Iraq war should be released to the Chilcot inquiry,according to Lord Owen. In a letter to the PM, Lord Owen wrote: "Sir Jeremy Heywood was Principal Private Secretary to Tony Blair in No 10 from 1999-2003, the very time when the decisions to go to war were being taken. I cannot believe that now as Cabinet Secretary he can be the arbiter as to whether documents should be published between Sir John Chilcot and Tony Blair."
Dave might not be thrilled by the news that Lord Ashcroft is writting a biography of him. Lord Ashcroft said: "the book will discuss the politics of the current parliament, the challenges facing the parties in the context of public opinion, and in particular the campaign leading up to the 2015 election." The book, co-authored by Isabel Oakeshott, will be published a few months after the next general election.
Eric Pickles has admitted that "From a purely partisan political point of view, the Conservative party would be much better placed without Scotland because some where down the line we have mislaid our Scottish votes." But Mr Pickles isn't one of those Tory MPs Lord Forsyth of Drumlean suggests secretly want the union to break up. The Communities secretary said it would be an "absolute tragedy" if Scotland gained independence.
Michael Gove says Sir John Major was "right" and it's an "inescapable fact" that too much power in Britain remains with those who are privately educated, and this was a driving force for his education reforms and ensuring "that vulnerable children don’t suffer from neglect and don’t have their futures blighted."
Labour is under pressure from the continent to say whether or not they support an EU referendum. Diplomats from the continental embassies including Germany and France, have been holding meetings with Labour MPs and peers to work out what Labour will do if they win the next election. Lord Mandelson is among those who have been lobbied. Just how long can Labour stay on the fence?
More unfortunate headlines about Falkirk in The Times. Karie Murphy wrote in an email that she received dispensation from Labour’s general secretary Ian McNicol to use a recruitment method causing unease among other Labour Party staff. Ms Murphy wrote in an email to her team:  "I will personally collect their direct-debit details once we have given them a reason to support the Labour Party. I will do this after the selection process, this is what Lennie [McCluskey] agreed with the Labour Party GS [Mr McNicol]".
There was a seminal moment in British politics yesterday. Grant Shapps became the first British politician to write a post on BuzzFeed, attacking Labour's energy policy with lots of graphs in his "12 Facts: Why Energy Bills Are Sky High, And What We Can Do About It". All a bit of fun, but the point is that politicians are finding innovative ways to reach us. Labour used new software to send 848 identical tweets about their energy policy last week. 
The Morning Briefing email is edited by Tim Wigmore. Follow Tim on Twitter 

Simon Danczuk is no fan of the Big Six:
@SimonDanczuk: Energy boss (from SSE) drowning on @BBCr4today this morning - they're an absolute disgrace.

In the Telegraph 
Best of the rest

Daniel Finkelstein in The Times - Who killed Yassir Arafat? We need to know
Parliament in recess - so no PMQs.
Business Secretary Vince Cable opening a Sutton Trust international summit on access to leading universities.
9.30am Unemployment figures.
10.30am Bank of England publishes quarterly forecasts on GDP and inflation. Followed by Q&A with Governor Mark Carney.

4.45pm NHS England medical director Prof Sir Bruce Keogh to speak at The King's Fund annual conference. Sir Bruce's keynote address will be on raising quality and reducing costs in the NHS.