Press Watch 18/10/19

Whilst much of the focus today is on Brexit, there are other matters of note.

The Guardian reminds its readers online that the Chancellor has fuelled speculation that he is planning a voter-friendly budget next month. In fact only a few days after October 31st, the date on which we are due to leave the EU.

The Government are suggesting that interest rates will remain at rock bottom levels. This in turn - so they say - means that public sector debt repayments will be low thereby giving them headroom to increase Government borrowing.

Javid’s comments were made at a press briefing in Washington, but the Guardian points out that there is speculation that a package of public spending and tax cuts is being planned for the budget on November 6.

The Chancellor is quoted as saying that “I have believed for a while, for the past two to three years but especially for the past year, that with interest rates where they are today it makes sense to borrow and spend the money where it can be put to good use, into rock-solid infrastructure and to boost our productivity. That’s a sensible thing to do,”

However, this is Tory gloss. The truth is that the economy is slowing. There is worry about the future state of the economy after almost ten years of Conservative stewardship. This is the explanation for continuing low-interest rates.

A further interesting thought is provoked by the Chancellor’s comments. A smaller economy than predicted means that borrowing will rise above 2% of GDP next year. But this is outside the Government's fiscal envelope. The Chancellor acknowledged this fact.

He said that while fiscal discipline was important, it didn’t mean that one set of fiscal rules should exist for ever. “When the circumstances change you should change the rules,” he said. “There are record low-interest rates that will be low for a long time. That’s my view and it is shared by serious economists. Britain faces a productivity challenge and it is right for me to look at what more I can do.” The FT, however, has given a distinctly cool reception to Javid investment proposals.

What does all this add up to?

First, the economy is in poor shape in the short and medium-term after all the Tory years.

Second, that in the longer term the country is now suffering from years of chronic underinvestment.

Third, that there is a quiet panic in the Treasury and after years of austerity they are preparing to abandon their spending limits to attempt to correct the direction of travel.

The political lessons of all this are especially important, however. The left position on austerity and investment was correct all along. It was a mistake in the past that previous Labour leaders had embraced some mild forms of austerity.

But finally on this matter, the truth is that the current screeching u-turn will be met with silence by the media, though it would be met with week-long headlines if Labour did it. And the reason for this relative silence and lack of criticism is self-evident. It is because it is in the political interest of the Conservative Party to have a giveaway budget in the period immediately preceding a probable general election.

Press Watch is a look at the day's news by Labour MPs.

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