MORNING BRIEFING – By Benedict Brogan (Daily Telegraph).
Good morning. Big week for George Osborne. If it goes wrong, he really will have something to cry about. Thursday’s Q1 GDP figure will define the narrative for the weeks ahead. If we go into triple dip, it’s disaster and we can expect the calls for his head to intensify.
Plan A would be up for grabs, not on merit but because the likely panic on the Tory benches would create an overwhelming pressure to do something else. All this talk of a change in fortunes that I and others have been indulging in would be out the window. Thankfully for the Chancellor, all the betting seems to be that he’ll get some growth, despite the wrong kind of cold this winter.
And if he does then the pressure will ease, his “steady as she goes, long road to recovery” account of what’s happening will be intact, and the Coalition will be able to make the case for a change in its fortunes. Growth this week helps the Tories and the Lib Dems next week when they have to account for themselves in the locals. Growth, albeit anaemic growth, won’t be a surprise and so won’t be a story in the way that a triple dip would be. That will make it easier for the Tories to keep pressure on Labour over its plans. Thursday’s number will decide whether the story is indeed switching from the Tories to Labour.
As our Deputy Political Editor James Kirkup reports, the economy is one reason the Tories are starting to look a bit perky.
“Lots of people in the blue team have recently told me they see signs that the UK is about to turn the corner and emerge from the doldrums. This optimism, which is being quietly stoked by HM Treasury, is at odds with some of the economic data.
As we say in our leader, “inevitably there will be calls for the Chancellor to change course, abandon austerity and borrow more money to spend our way out of the slump. This has been the Labour Party’s approach for some time; and last week, even the IMF… began to wobble.” The Times’s leader joins us in saying that George must stick to his guns – and keep Plan A alive: “To veer from the path of deficit reduction when its pockets are so empty would, far from accelerating Britain’s economic recovery, put any recovery in jeopardy.”
Trouble is, as the Times (£) reports, “the four most senior members of the Cabinet all champion different projects and policies” when it comes to growth. That comes via Jeremy Heywood, the Cabinet Secretary, who told a private meeting of bankers that: Dave prioritises exports, free trade, micro and small business; Nick “wants greater concentration on regional growth”; Vince prefers to bash the bankers; and George is focused on infrastructure investment and attracting overseas businesses to Britain. (On that front, he may enjoy Boris’s column: the mayor says we can’t afford to ignore our dynamic friends in the Gulf.)
The banks aren’t being helpful, either. The FT’s splash warns the “banks have put a damper on George Osborne’s hopes that an expansion of the Funding for Lending scheme will spark a rush of credit to small and medium-sized companies”. The scheme is “not a panacea”, says Stephen Pegge of Lloyds.
But how much of this is a sideshow? Roger Bootle explains in our Business section that Thursday’s GDP figures certainly are. “You should rather focus attention on commodity prices and developments in the eurozone. Cyprus could yet provide a shock that shakes the world.” There’s only one bit of good news for George: Ed Miliband’s sheer incompetence. In the Telegraph Jeff Randall writes persuasively that Ed has had “a flow of killer passes into an undefended box with an open goal before him”, yet somehow he “continues to miss the target more often than he hits it”.
Ed Miliband’s strike-rate is not the only thing that’s letting him down. We report that David Watts, the Chairman of the Parliamentary Labour Party, says Ed has “a way to go” before voters see him as a prospective PM. Welfare is a problem area: voters think he’s a softy. As one shadow minister says: “Our welfare position is wrong and needs to be tougher. Otherwise we have no chance of actually winning votes directly from the Conservatives.”
If you missed it, check out Toby Helm’s Observer piece, which quotes a senior Labour figure saying “the lesson for us is you cannot underestimate Cameron and Osborne… After last year’s omnishambles Budget we thought Osborne was finished. We have seen he definitely isn’t.”
The problem for Ed, as I blogged yesterday, is that Labour is suddenly the story – and it hurts.
We are seeing a trend, of stories about Labour divisions, party arguments about policy, complaints about its economic strategy, hostile briefing from insiders, and worries that the polls are going the wrong way. Politics is a fickle business. If Westminster and the media have decided that Labour is now the story, it’s going to hurt.
It seemed to hurt Jim Murphy yesterday, who refused to say whether Labour would increase spending if it won power in 2015. He blamed his party’s narrowing poll lead on Margaret Thatcher’s funeral: “We’ve just had a week… where the country appeared like a one-party state, where it was the Conservative Party and those who were supporting Mrs Thatcher eulogising what they considered to be her achievements.”
BUSINESS FOR BRITAIN
A group of 500 business leaders has called on the Coalition to negotiate a better deal for Britain with Brussels, we report. The new Business for Britain campaign backs Dave’s approach to renegotiation and calls for a cross-party “national drive to renegotiate the terms of Britain’s membership of the EU”. It’s heartening stuff for No 10. As John Caudwell writes in the Times, “Business for Britain will be at the Prime Minister’s elbow, encouraging him to be bold in his demands for a more competitive EU.”
A LITTLE LOCAL DIFFICULTY
In the Mail, Andrew Pierce reveals the “funeral plot to bury Dave” which centres on the county council elections on May 2. Some of the “biggest beasts in the Tory parliamentary jungle,” he says, “have quietly determined how many losses the PM can sustain before there is a challenge to his leadership.” Says one Thatcherite MP: “If we lose 400 councilllors he’s safe, but if it’s double that, he’s not.” Estimates vary, but Plymouth University research, reported in the Sunday Times, reckons the Tories will lose 310 seats.
TORY RACISM ROW
A 73-year-old Tory councillor has resigned after suggesting inner-city children from a “coloured area” would not be welcome at a proposed new school in the countryside. “Ninety-seven per cent of pupils will be black or Asian. It depends what type of Asian. If they’re Chinese they’ll rise to the top. If they’re Indian they’ll rise to the top. If they’re Pakistani they won’t,” John Cherry told the Mail on Sunday. Michael Gove said those opposed to the plan were “trying to obstruct an inspirational project”.
LIZ ‘TRUNCHBULL’ TRUSS
Too many nurseries allow toddlers to run around “with no sense of purpose”, says Liz Truss. Her comments were leapt on by the lefty Twitterati. But there is nuance: “This isn’t about two-year-olds doing academic work. It’s structured play which teaches children to be polite and considerate through activities which the teacher is clearly leading.”
The FT reports that up to half the 21 companies in which the government has a shareholding could be privatised in the next few years. That’s according to Mark Russell, the newly appointed head of the Shareholder Executive.
TWEETS AND TWITS
First prize for marathon #humblebrag goes to Labour’s speedy Jim Murphy:
@jimmurphymp: “My main achievement at #LondonMarathon2013 was outsprinting the guy dressed as Scooby-Doo in home straight to finish in 3hrs31min45sec.“
In the Telegraph
Boris Johnson: We can’t afford to ignore our dynamic friends in the East
Jeff Randall: A sitter for Miliband, but he still can’t score
Margot James: Shorter school days only thwart the young
Telegraph View: Osborne must fight to keep Plan A alive
Best of the rest
Tim Montgomerie in the Times (£): To beat the Left, Tories must aim for its heart
Trevor Kavanagh in the Sun: Police become a law unto themselves
John Gieve in the FT (£): Who is supposed to be in charge of the British economy?
08.45 Michael Gove makes announcement about the TechBacc; visits Uxbridge College with Skills Minister Matthew Hancock.
10.00 A court hearing will decide how much Chris Huhne and Vicky Pryce should pay for their points-swapping prosecution. Southwark Crown Court
12.00 To mark the Queen’s 87th birthday, a 41-gun salute in Hyde park.
14.30 Memorial service today to mark the 20th anniversary of Stephen Lawrence’s murder. St Martin-in-the-Fields, Trafalgar Square.
18.30 Parliamentary ethics and finance panel debate, with Archbishop of Canterbury Justin Welby, Andrea Leadsom MP and the BBC’s Robert Peston. Attlee Suite, Portcullis House.