Osborne needs answers now
Bad economic news bombarded the Treasury on Monday as new International Monetary Fund forecasts cast doubt on the chancellor’s deficit reduction plan, while near-term indicators suggested the recovery was losing the little momentum it had. The IMF judged that Britain’s economy had less capacity to grow quickly over the next few years than the government had hoped, slowing the reduction in borrowing to the point where it comes within a whisker of missing George Osborne’s main fiscal target. – FT
In a comprehensive analysis of the state of the British economy, the economic watchdog said that, between them, families would have £35 billion less disposable income due to the Government’s attempts to tackle the deficit. In addition, a fall in the value of houses would wipe off more than a tenth of their “tangible” wealth in real terms by 2016, the IMF said in its report. The forecast for household finances came amid a growing political row about recent slow growth. George Osborne has come under pressure from David Cameron to come up with new ways to stimulate the economy. – the Telegraph
The UK faces a “bumpy and uneven” economic recovery, with families £1,500 a year worse off, the International Monetary Fund has warned. A report from the organisation backs the Coalition’s fiscal policies, but said the Government must be ready to change course if growth and inflation figures do not improve. Deficit reduction plans will leave households with £35 billion less in disposable income, with falls in house prices cutting 12% from their “tangible wealth”. –PoliticsHome
Local authorities forced to make council tax benefit cuts
Town halls are to be forced to take charge of drastic cuts to the £5billion paid out each year in council tax benefits. Amid claims local authorities are standing by as the system is defrauded and claimants languish on the dole, ministers will today announce they are handing them responsibility for the payments. Local Government Secretary Eric Pickles says councils will have to determine who is eligible for the benefit – currently administered by the Work and Pensions Department – which is given to low-income households to help them with the cost of council tax. Pensioners will be protected against any reduction, but many working-age claimants are likely to face cuts. – The Mail
Miliband brings in Allen to review party structure
Charles Allen, the former chief executive of ITV and chairman of EMI, is to oversee a management and commercial review of the Labour party asEd Miliband moves to underline his pro-business credentials. The Labour leader said that Allen, a longstanding supporter, will bring huge experience to the rebuilding of the party. Allen, who was recruited to EMI by financier Guy Hands, said: “I am delighted to be asked to conduct this review and to play my part in developing a strong and effective party, built on the foundations of strong grassroots support.” The appointment of Allen, who will work on a voluntary part-time basis at Labour headquarters, is the second significant appointment by Miliband in recent weeks after the arrival of Iain McNichol, the former GMB national policy officer, as general secretary. McNichol said: “Charles is a longstanding supporter and friend of the Labour party, as well as an experienced and successful businessman. His expertise in both private and public sectors will help us to build the stronger organisation Ed and I want to see.” – the Guardian
Big Society? Charities in decline
More than 2,000 charities are being forced to close services and sack staff as local authorities slash their funding, or in some cases completely withdraw it, according to research published on Tuesday. The study – based on 265 freedom-of-information responses from local councils across England and obtained by the union-backed anti-cuts campaign False Economy – reveals the scale of the impact that cuts are having on the charitable sector. Birmingham city council has cut funding to the largest number of charities, with more than 190 organisations losing out, followed by the cross-council organisation London Councils, which has cut funding to 174 groups. Many charities will see their funding cut by half while others will lose entire budgets. The hardest hit include children’s and young-people charities, with more than 380 organisations hit. Another 150 disability, 142 elderly and more than 110 adult care charities are also affected. – the Guardian
