Danny Alexander: we won't spend a penny more

Uneasy cabinet minister denies plans for an extra £5bn of capital spending.

With everyone from George Osborne downwards now acknowledging that growth this year will be weaker-than-expected, an argument has restarted in government about how best to stimulate the economy. Last night, the BBC's Nick Robinson reported that some cabinet ministers were agitating for an extra £5bn in capital spending, to be channelled towards the nation's roads, rail and broadband internet.

Naturally, Robinson didn't name names, but I draw your attention to comments made by Chris Huhne at a fringe event at the Lib Dem conference on Monday night. "Remember ... the target that we have is the structural current balance," the Energy Secretary said. "It is current not capital spending. That is an important distinction." In other words, the government could ramp up capital spending without breaching its fiscal mandate: to eliminate the structural deficit (the part of the deficit that remains even once when the economy has returned to normal growth) and to ensure a falling debt-to-GDP ratio by the end of the parliament. Huhne has since insisted that he doesn't recognise the £5bn figure and that there is "no such plan". As the great Claud Cockburn once quipped, "never believe anything until has been officially denied".

Whoever the culprit was (and Vince Cable uttered the s-word - stimulus - several times in his speech), they were swiftly squashed by the Treasury. "We have our spending plans and we are sticking to them," a spokesman said.

Appearing on the Today programme this morning, an uneasy sounding Danny Alexander stuck to the script. The government would "strain every sinew" to promote growth but it would not spend a penny more then the limits set out in the Spending Review. "We have set out plans on capital spending, we're going to stick to those plans across the board on spending," the Chief Secretary to the Treasury said. He added: "I just don't recognise the numbers involved or the process as described."

It was Chris Huhne who previously suggested that the cuts could be scaled back in the event of a serious downturn, and who declared that he was not "lashed to the mast" of deficit reduction. But Alexander certainly is. As growth continues to fall and unemployment continues to rise, this is one argument that will not go away.

George Eaton is political editor of the New Statesman.

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PMQs review: Theresa May shows how her confidence has grown

After her Brexit speech, the PM declared of Jeremy Corbyn: "I've got a plan - he doesn't have a clue". 

The woman derided as “Theresa Maybe” believes she has neutralised that charge. Following her Brexit speech, Theresa May cut a far more confident figure at today's PMQs. Jeremy Corbyn inevitably devoted all six of his questions to Europe but failed to land a definitive blow.

He began by denouncing May for “sidelining parliament” at the very moment the UK was supposedly reclaiming sovereignty (though he yesterday praised her for guaranteeing MPs would get a vote). “It’s not so much the Iron Lady as the irony lady,” he quipped. But May, who has sometimes faltered against Corbyn, had a ready retort. The Labour leader, she noted, had denounced the government for planning to leave the single market while simultaneously seeking “access” to it. Yet “access”, she went on, was precisely what Corbyn had demanded (seemingly having confused it with full membership). "I've got a plan - he doesn't have a clue,” she declared.

When Corbyn recalled May’s economic warnings during the referendum (“Does she now disagree with herself?”), the PM was able to reply: “I said if we voted to leave the EU the sky would not fall in and look at what has happened to our economic situation since we voted to leave the EU”.

Corbyn’s subsequent question on whether May would pay for single market access was less wounding than it might have been because she has consistently refused to rule out budget contributions (though yesterday emphasised that the days of “vast” payments were over).

When the Labour leader ended by rightly hailing the contribution immigrants made to public services (“The real pressure on public services comes from a government that slashed billions”), May took full opportunity of the chance to have the last word, launching a full-frontal attack on his leadership and a defence of hers. “There is indeed a difference - when I look at the issue of Brexit or any other issues like the NHS or social care, I consider the issue, I set out my plan and I stick to it. It's called leadership, he should try it some time.”

For May, life will soon get harder. Once Article 50 is triggered, it is the EU 27, not the UK, that will take back control (the withdrawal agreement must be approved by at least 72 per cent of member states). With MPs now guaranteed a vote on the final outcome, parliament will also reassert itself. But for now, May can reflect with satisfaction on her strengthened position.

George Eaton is political editor of the New Statesman.