Afternoon:
10°c
THE New Year is barely under way but the Prime Minister is already doing his best to capture the initiative on the economy.
His meeting with business leaders today precedes a three-day tour of the country to talk about job creation in areas of particularly high unemployment.
Meanwhile, there is disagreement about whether his promise to deliver 100,000 jobs means new jobs or is largely a reworking of earlier commitments.
David Cameron, too, launches his economic strategy today. The Tory approach focuses on pensioners and savers — both groups largely ignored by the Government thus far in the recession. It includes a guarantee for banks' credit to business and tax relief to take pressure off savers, faced with the real possiblity of getting near-nil returns on their savings as a result of a possible further reduction in base rates by the Bank of England this week. There are also proposals for high-tech job creation schemes.
Obviously, the Tories can only propose while the Government can dispose. In some cases, like the proposal to guarantee banks' loans to business, the Opposition may well have the mixed blessing of seeing their clothes stolen by the Government. If it works, the electoral benefit redounds to Labour.
But the real difference between the major parties is their different approach to debt. As George Osborne, the Shadow Chancellor, points out in this paper, a major underlying cause of the present crisis here is Britain's overwhelming indebtedness. This is particularly true if state debt is taken together with corporate and personal debt. In this context, it is remarkable that the Prime Minister should have called on banks to return to the lax lending habits of 1997. There are signs that voters may, finally, be wary of ever-increasing government expenditure as a universal panacea. The Tories will hope that their new fightback erodes the poll gains the Prime Minister has made over his handling of the economy — and remind voters that far from having abolished boom and bust, he bears a heavy responsibility for the present downturn.
Gravy train
THE RETURN to work after Christmas has been made more painful for many commuters today. There were delays this morning to Virgin's West Coast Mainline services following an accident.
More galling are the increases in season and other ticket prices: Southeastern's are up by eight per cent to help pay for high speed trains on the Channel Tunnel Rail Link, which benefit only a minority of the company's customers, while some operators' off-peak fares have increased by 11 per cent. Most Tube, Docklands Light Railway and bus fares are up too.
Rail fares are up so much because ministers have allowed franchise arrangements where the five per cent inflation rate prevailing back in July is used to hike fares this January — plus a few extra percentage points. The vast majority of rail commuters have little choice but to pay up.
Most will be rightly angry with a system that hands too much money to train operators in exchange for only the most sluggish improvements to services. They want better standards in return from companies which, once they win their franchises, enjoy near-monopolies on their lines.
Public transport does need investment. But inflicting above-inflation rises on a captive market is always easier for rail operators than ensuring they operate at maximum efficiency. This year's sharp rises show that the existing system of subsidies built on soaring rail fares is not working. Commuters deserve better.
And celebrating ...
DAVID TENNANT. The reappearance of the actor best known as Dr Who as Hamlet after a back operation prevented him from playing the role earlier, delighted audiences at the Novello Theatre. His pluck in returning to the fray does him credit.
