Tonight:
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THE SYMPTOMS of recession multiply daily: figures out today show that supermarket food and drink sales have fallen for the first time in more than 20 years, while banking giant Goldman Sachs is shedding 10 per cent of its workforce, including a likely 600 in London. Meanwhile, the pressure on public finances will build as tax receipts go down and spending on unemployment goes up. The grimness of this outlook is put in stark terms in research undertaken by this paper, suggesting that tax receipts could be £125 billion lower than forecast for the three years to 2010-11.
Even back in March, the Chancellor's forecast of growth of 1.75 per cent this year, 2.5 per cent next year and 2.5 per cent in 2010-11 looked wildly optimistic, not to say, implausible. As the figures demonstrate, a steep recession would mean £125 billion less than forecast in tax receipts in those three years and an increase in borrowing to £275 billion in the same period. A mild recession would mean tax receipts falling to £80 billion below forecasts and borrowing rising to £235 billion. Either way, it's a legacy of debt.
During Prime Minister's Questions yesterday, Gordon Brown preceded every reference to the recession and the downturn with the word "global". And certainly, as falling global stock markets show, concerns about declining growth and the fall-out from the financial crisis have affected markets around the world. But Mr Brown cannot be allowed to get away with passing the buck to the world at large. As an economist for the Institute of Fiscal Studies said: "If the Government had acted earlier to address its repeatedly optimistic forecasts for public finances, we would not now be embarking on a recession with public sector borrowing and debt as high as they are."
In other words, the Government's limited scope to manoeuvre now can be attributed to the expansion in public spending over the past decade without even taking into account the enormous sums that Mr Brown kept off the balance sheet through Private Finance Initiatives. While much of the recession is indeed global, the effect on Britain is worse than it need be because Mr Brown spent in the fat years, without taking heed of the lean times to come.
The yacht question
Yesterday, the Prime Minister, in response to a parliamentary question about George Osborne's encounter with a Russian billionaire, declared he hoped for an investigation by "the authorities". Few people, including his advisers, seemed to know which authorities he meant, still less what impropriety Mr Osborne should be investigated for.
Granted the shadow chancellor was guilty of bad judgment when he allowed himself to be entertained on a yacht by a billionaire of Oleg Deripaska's reputation. Moreover, he should not have accepted entertainment in the company of a Tory fundraiser or countenanced discussions about whether the tycoon might contribute to Tory funds. But that seems to have been the extent of his imprudence.
Where Gordon Brown is on thin ice in raising the question of Mr Deripaska's hospitality is that his own Business Secretary, Peter Mandelson, was a guest on the same yacht. His relationship with Mr Deripaska appears to date back to 2005, when his position as EU trade commissioner had a bearing on tariff questions in which Mr Deripaska had a direct financial stake. Mr Brown may yet find that a glass house is a bad place to throw stones.
Good for the Met
The Met's new figures on knife crime are good news, showing a reduction of 10 per cent in the year to the end of September. Admittedly, that still means there were 6,439 knife crimes and 50 London fatalities this year, but the trend is down. It shows that stop and search, though controversial, can help, and so can a tougher response to knife possession from the courts. Now we need more of the same.
