Tonight:
5°c
In a speech today David Cameron challenges the Government's argument that the Tories are the "do nothing" party and the Prime Minister's self-image as the man who saved the world from financial collapse. The key element of the alternative Tory plan is the establishment of a £50 billion guarantee scheme to underwrite bank loans to business.
This is a serious policy that tackles the liquidity crisis at the heart of the recession. Getting banks to lend again to business, especially small firms, is crucial, not least because of the real threat of rising unemployment. As Mr Cameron points out today, more than a million people are claiming unemployment benefit for the first time since 2003. The collapse of sterling's value against the euro may be excellent news for exporters but it is hardly a vote of confidence in Mr Brown from the markets, and a weak pound can only do so much to underpin jobs in manufacturing. Meanwhile, the crisis in the housing market continues, threatening to undermine consumer confidence further: Barclay's chief executive John Varley today predicts a 30 per cent drop in house prices.
With Mr Cameron's challenge, a real choice is emerging for voters. The Tories are focusing on the needs of employers and business with their scheme to get the banks to lend more freely. The Government, with its centrepiece VAT cuts, is trying to restore consumer confidence and bolster the retail sector. Now Mr Cameron will hope that voters judge Mr Brown's debt-fuelled crisis plan as the markets are doing and put their faith in a rescue package that instead targets wealth creators.
Heathrow doubt
There are growing signs that ministers will compromise over a third Heathrow runway. In an interview this weekend, Environment Secretary Hilary Benn became the first minister to break ranks publicly, expressing his unhappiness over the environmental damage, a point on which the Government has never convincingly made its case. Two weeks ago, the Transport Secretary, Geoff Hoon, postponed the long-awaited decision to next month. One potential stop-gap, as we report today, is to allow more flights from existing runways.
Such a "mixed mode" solution, allowing take-offs and landings to alternate from existing runways, would allow more flights, although overall it would inevitably create more pollution and more noise. It will not satisfy airport owner BAA and British Airways, the main proponents of expansion. But Mr Benn is right to be concerned: with new EU air quality targets coming in before a third runway would be completed, a bigger Heathrow would be almost certain to breach the rules, before even taking into account the damage to the Government's own targets for reducing greenhouse gas emissions.
While predictions of massively increased passenger numbers look optimistic in the current climate, in the long term the Government will have to come up with a more radical solution to overcrowding at Heathrow, whether other runways elsewhere, more investment in high-speed rail, or a regulatory solution that challenges BAA and BA's business model, built on large numbers of transit passengers. For the moment, though, mixed mode use of Heathrow runways may be the best available compromise.
And celebrating...
Alexandra Burke. The 23-year-old former waitress from Islington who won the X Factor collapsed in tears at the news of her victory. The 14.5 million viewers will have felt she deserved it. Her performance with Beyoncé Knowles was a wonderful television moment. And her insistence that her newfound fortune means that she can buy the best possible care for her seriously ill mother warmed many hearts. The X Factor may be cheesy, manipulative and gushing but in Alexandra Burke, it has found a new star.
Reader views (5)
Central office has its bloggers out in force again I see. If you Tory supporting morons want to have a rant do so, but try and get your facts right and stop writing total nonsense.
How can the global fiscal crisis be put firmly at the door of "Comrade Brown" Tom?
We have been ripped off, not by Labour, and ~I'm no friend of them, but by the Tory supporting wide boys in the City.
- Kerry Trubee, Purley, 15/12/2008 22:34
Report abuse
As the weeks go by and the efforts of Nulabour to solve the economic crisis fail calling the Tories the 'do nothing party' looks sillier by the day as nothing they, Nulabour, do seems to work.
- Steve.W, B'ham UK, 15/12/2008 18:02
Report abuse
Gordon Brown's "miracle cure" appears not to be working and the Tory plan has much common sense to recommend it. Nu Labourites should stop looking backwards to past Tory administrations. They have had their favourite sons in charge for 11 years - if they cannot get things right now, they deserve to be booted out and their supporters, umlike their masters, should show a little humility.
- James Elliott, Eastbourne UK, 15/12/2008 15:48
Report abuse
Michael Howd, Pinewood England
The 1979 recession was actually caused by labour....which only leaves the 90-92 recession to blame the tories for. The blame for the current 'global' crisis can firmly be placed at the door of comrade Brown, the numpty who has done everything possible to destroy our economy aswell as the social fabric of this country. What is more, he continues in his quest to destroy us with ridiculous and unworkable 'panic' fiscal measures. The labour party just don't understand money or wealth creation and every single time they have been in power since the 1920s, they have left the economy in a real mess. At least by 1997, the tories left labour a budget surplus rather than a deficit - something the labour party have never achieved. However, this budget surplus was soon reversed by Mr Bean and his mad orgy of spending.
- Tom W, London, 15/12/2008 15:48
Report abuse
This comes from the committee comprising Lamont, Howe, Lawson, Osborne, Cameron and Clarke so must be questionable. This lot seemed to be a lot better at creating regular recessions than the current Government. They usually seemed to happen just after a General Election had been won.
- Michael Howd, Pinewood England, 15/12/2008 12:36
Report abuse
