Opinionomics | 29 March 2012

Must read analysis and comment. Featuring Tim Worstall, Ezra Klein, and – yes – pasties.

1. Britain struggles to kick its addiction to consumption (Telegraph)

Jeremy Warner seems confused, arguing that reducing Britain's addiction to consumption is much needed, but that doing so is directly and substantially harming growth. He is unclear whether we should be applauding Osborne for making his decisions with an eye on the long-term, or condemning him for not putting off the "rebalancing" until the more important matter of the ongoing depression is sorted.

2. Not a tax on pasties, but a right-wing tax on heat* (LabourList)

*Not really. Conor Pope argues – perhaps tongue-in-cheek – that liberal atomic motion within cheap savoury snacks will lead directly to the eventual disintegration of the traditional nuclear family

3. Papers I need to read: Do tax cuts really help growth? (Washington Post WonkBlog)

Ezra Klein links to a paper that fairly demolishes George Osborne's argument that tax cuts lead to growth.

4. Spiked on rare earths (Tim Worstall)

Worstall applies his day-job expertise to look at the global market for rare earth metals – not as rare as their nam implies.

5. Scotland’s economy running on empty after Osborne’s Great Stagnation Budget (Left Foot Forward)

Willie Bain MP presents a (partisan, obviously, but) well-researched account of the budget's impact on Scotland

Pasties are left to cool in a shameless tax avoidance scheme. Credit: Getty

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

Photo: Getty
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Can Philip Hammond save the Conservatives from public anger at their DUP deal?

The Chancellor has the wriggle room to get close to the DUP's spending increase – but emotion matters more than facts in politics.

The magic money tree exists, and it is growing in Northern Ireland. That’s the attack line that Labour will throw at Theresa May in the wake of her £1bn deal with the DUP to keep her party in office.

It’s worth noting that while £1bn is a big deal in terms of Northern Ireland’s budget – just a touch under £10bn in 2016/17 – as far as the total expenditure of the British government goes, it’s peanuts.

The British government spent £778bn last year – we’re talking about spending an amount of money in Northern Ireland over the course of two years that the NHS loses in pen theft over the course of one in England. To match the increase in relative terms, you’d be looking at a £35bn increase in spending.

But, of course, political arguments are about gut instinct rather than actual numbers. The perception that the streets of Antrim are being paved by gold while the public realm in England, Scotland and Wales falls into disrepair is a real danger to the Conservatives.

But the good news for them is that last year Philip Hammond tweaked his targets to give himself greater headroom in case of a Brexit shock. Now the Tories have experienced a shock of a different kind – a Corbyn shock. That shock was partly due to the Labour leader’s good campaign and May’s bad campaign, but it was also powered by anger at cuts to schools and anger among NHS workers at Jeremy Hunt’s stewardship of the NHS. Conservative MPs have already made it clear to May that the party must not go to the country again while defending cuts to school spending.

Hammond can get to slightly under that £35bn and still stick to his targets. That will mean that the DUP still get to rave about their higher-than-average increase, while avoiding another election in which cuts to schools are front-and-centre. But whether that deprives Labour of their “cuts for you, but not for them” attack line is another question entirely. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to domestic and global politics.

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