Morning:
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AHEAD of a week of figures likely to confirm that a severe economic downturn is already under way, the responses from Labour and the Conservatives are very different. The Chancellor, Alistair Darling, wants to bring forward capital spending originally planned for the years after 2010. There is a good argument for such projects to boost activity when private-sector demand is weak, but there are immediate practical difficulties. The Government is committed to using Private Finance Initiative funding, which means using private-sector partners affected by the credit crunch. For instance there are signs that Britain's biggest road project, the widening of the M25, could be delayed because of such financing problems.
Yet this is a prime example of a scheme that has already passed a formidable planning hurdle and deserves to go ahead. The Government must focus on such projects that are ready to go. That should certainly include the Tube Lines element of the Underground upgrade, currently under threat because of the impact of Metronet's collapse on Transport for London's budget; and the Olympic project, with its unmoveable deadline of 2012, which must not lose out if further capital needs arise.
That said, these schemes will do little for the small businesses that account for more than a third of Britain's workforce. The Conservatives are right to offer a cut in national insurance contributions for small companies, cuts in corporation tax and potentially deferring their VAT obligations. At a time when Labour's bank recapitalisation is being seen as a safety net for big business, the Conservatives are seeking to show they have family businesses and local employers at heart. Lord Mandelson's deferral of new rules on flexible working has the same intention: the temporary truce with the Opposition over the economy is over. But the real test is yet to come, as the recession begins to bite.
Migrant benefits
THE row at the weekend over immigration is put into some perspective by the figures we report today on the proportion of immigrants to the UK who come from outside the EU more than 80 per cent. Net migration is predicted to keep running at 200,000 a year until 2012. It is these sorts of pressures that have forced the Government to retreat from its open-door immigration policy. Yet still its stance is unclear. Thus at the weekend the immigration minister Phil Woolas implied that there needed to be a limit on immigration but he refused to name a figure, and yesterday appeared to backtrack.
As shadow home secretary Dominic Grieve writes in this paper today, it is hard to have much confidence that a government which deliberately created the explosion in migrant numbers will now take decisive action to reduce them. London needs and values skilled migrants. Yet ministers appear to be trapped between wanting to sound tough and being terrified of accusations of racism. They should come clean about how many migrants they want to come to the UK, where the newcomers will find jobs, and how the extra teachers and doctors needed as a result will be paid for.
Fares not fair
TODAY's decision by the Department for Transport to ignore pleas to keep down rail fare increases is a slap in the face for commuters. The Commons Transport Committee had asked that ministers abandon the formula which will see fares on peak, season and saver tickets rise by inflation plus one per cent: that calculation will put average fares up in January by 6.3 per cent. This sop to the train operating companies will be especially painful at a time of rising prices; the decision also makes no sense, pricing people off the railways, coming as it does only days after the Government increased its official emissions reduction target. Commuters deserve better.
