Cost-cutting we all can dig

Important – and exciting news from the UK Foreign Office – the BBC World Service is being closed down. Newsbiscuit has the scoop:

The BBC World Service is to be replaced by a rolling 24-hour radio show presented by Foreign Secretary William Hague.

‘I have always dreamed of being a DJ,’ said Mr Hague, ‘as a small boy I would regularly spin classic vinyl of the speeches of Winston Churchill. I can’t wait to get down and funky with the global massive.’

The World Service, which is funded through the Foreign Office, recently announced that it was axing 650 jobs and would be cutting five of its language services.

‘I can easily do the jobs of these people,’ insisted Mr Hague, ‘I may not be fluent in 32 different languages but music is a universal language. Listeners will soon forget their need for an impartial news service when I start playing them tunes from my Abba collection.’’ […]

The show will feature regular phone-ins allowing the 180 million listeners worldwide a chance to engage in light-hearted jovial banter with Mr Hague about war, famine and global hegemony. There will also be exciting new competitions in which people can win foreign aid, an arms shipment or military intervention.

US and EU: Others must fail

When I took part in a wash-up after Copenhagen with a group  of American policy makers, I was struck by the sense that, although the summit had been tough for the United States, they took great consolation that the Europeans had had a much worse time of it during the climate talks.

It all made me think of a quip attributed to Gore Vidal: “It’s not enough to succeed. Others must fail.”

Today, Richard posts the following digest of Hillary Clinton’s meeting with the UK’s new Foreign Secretary, William Hague (a man she is yet to grow as fond of as she was of his predecessor):

If you want to boil all this down to essentials, I’d suggest the following: (i) Mrs Clinton effectively said, “you’d better show discipline when it comes to the EU”; and (ii) Mr Hague basically said “OK”.

I’d parse the ‘better show discipline’ line in two ways. First, the US wants the UK to play an active role in Europe. Second, it needs the Europeans to respond with one voice to a growing roster of global problems.

Fine.

But to take this beyond complacent lecturing (“we may have a lamentable recent foreign policy record, but at least we’re not as shambolic as those awful old worlders”), the Obama administration needs to do what it can to create an incentive for European cooperation.

When it (i) starts listening to Europeans when they have caucused and arrived at a joint position; (ii) continues to listen, even if it doesn’t agree 100% with the European position; and (iii) foregoes the temptation to divide and conquer by playing favourites among European nations for short term tactical advantage – then, and only then, will I believe that the US is serious once again about the transatlantic relationship.

If Obama’s team wants a ‘disciplined Europe’, good. But it should back this up with its actions. Reward Europe with access when it’s united (as it was, more or less, on climate incidentally). Sideline it when it’s divided. And see the extent to which that makes Europeans pull together in the face of transnational challenges…

Labour, Tories – mixed messages on money

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It’s no wonder the markets are raising questions about UK public finances – neither of the main parties has anything approaching a clear message on fiscal tightening.

From Labour, you get blithe assurances on taxes. Liam Byrne didn’t quite ask us to read his lips yesterday when promising no new tax increases, but he might as well have done. Carl Emmerson from the Institute for Fiscal Studies was unimpressed:

I cannot see how the Government can promise to not affect front line services when you look at the scale of the cuts they have got to plan for.

Liam Byrne is talking just about the first four years and after that there will undoubtedly have to be more pain and that is likely to be tax rises or even greater public sector cuts.

But the Tories are not in the clear either. I was baffled by William Hague’s recent speech at the Conservative Party Spring Forum. Half way through his speech, he lays out the Tory pitch to the undecided voter:

And to those who say they do not know what the Conservatives will do, let us tell them. We will cut the spending that cannot go on and the borrowing that leads to ruin.

So what follows? Here are all the commitments Hague makes that will cost money:

(i) Cutting taxes on business to give the UK the ‘most competitive’ tax environment in the G20

(ii) reversal of Labour’s planned national insurance increase

(iii) abolition or reduction of inheritance tax

(iv) two year freeze on Council tax (despite promises of the ‘biggest ever’ transfer of power to Councils)

(v) stamp duty abolished for first time buyers (despite unsustainable prices in the housing market)

(vi) more university places and apprenticeships

(vii) nursing care in their homes for the elderly.

And here are all the commitments is the only commitment that will clearly save money (though not much):

(i) Scrap ‘a large slice’ of expensive quangos.

And voters are supposed to be convinced this adds up to “vision of a Britain restored.”

Both parties need to convince the electorate they can get Britain back on its feet (the slogan I’d advise either to run their campaign under). But as Martin Wolf argues in today’s FT, at the moment it’s shaping up to be an election that both sides deserve to lose.

Ingham on Europe

Bernard Ingham and Margaret Thatcher
In today’s FT, William Hague underlines (again) that a new Conservative government will see the European Union as a platform for achieving progress on global issues.

With David Miliband’s enthusiasm for a G3, we’re left with robust cross-party consensus on Europe’s role as a foreign policy actor (whether it can fulfil this role is another matter).

I’m reminded of how Margaret Thatcher’s press secretary, Bernard Ingham reacted when asked, shortly after the new Tory government took office, to write a report on how the government could build public support for the European Community.

According to Robert Harris, Ingam wrote that:

A community of 250 million could achieve more than a ‘debilitated nation of 55 million, however much the latter may trade on past imperial glory‘.

Government publicity should stress this, ‘with all the instruments of the orchestra, not only central Government, reading the same score, playing the same tune and coming in on cue.’

True in 1980. Even more so thirty years’ later.

(Photo from Iain Dale.)

Hague the Bear (updated)

I am rather taken aback by William Hague’s claim, reported by Iain Dale, that the UK is forecast to be only the world’s 11th largest economy by 2015. Given that Britain currently ranks 6th in PPP and nominal terms, that’s quite a drop. Russia is currently 11th in nominal terms – its economy is 40% smaller than the UK’s.

Now I am very bearish about the British economy, but I also expect many other countries to face rocky times over the next decade. Not only does Hague make me look like a wide-eyed optimist, he obviously expects the UK to be alone in its economic troubles. He even mentions Italy as one of the countries he believes will prosper as the UK suffers – which strikes me as a real stretch (assuming he isn’t factoring in the Euro as a shield for the Italian economy).

Anyone know what source Hague is using for his forecast? (And just to hedge a little – it’s possible that Dale misquoted him.) You can read the full speech here.

Update: The source appears to be this analysis from the Centre for Economics and Business Research Ltd, which argued in a December 2009 press release:

In 2005, the UK was the 4th largest economy in the world. China overtook in 2006, France in 2008 and Italy in 2009. So now the official figures suggest that we have dropped to No7  (although  I still have some doubt about  the Italian figures  that are  incorporated  into  this analysis).

Projecting  forward,  the combination of economic growth and population growth, plus a likely rising real exchange rate mean that Brazil and Russia will overtake us sometime soon, perhaps in 2012. India will almost certainly overtake as well, though probably not till 2015.

But it also looks as though Canada could, if demand for natural resources continues to rise strongly, catch up and surpass UK GDP around 2015 as well. Even Australia is likely to have overtaken by 2020.

Not sure which ‘official figures’ CEBR is using though…