It seems as if our MPs have only just come back – but at the end of this week they’re off again for their Whitsun recess and won’t be back until June 11. Before they no doubt put up the bunting for the forthcoming diamond jubilee celebrations, there is the small matter of a week’s parliamentary service for her majesty’s government. One hopes that George Osborne remembers that he is indeed the chancellor of the exchequer and returns from his jolly in Munich where he watched the Champions League final with his German counterpart. From the relative ‘joy’ of seeing Chelsea win the biggest prize in European football, Osborne will come back down to earth with a shuddering jolt. On Tuesday the Office for National Statistics is set to corroborate that the economy shrank 0.2 per cent in the first quarter – thus officially confirming our return to recession. On the same day, the ONS is expected to show that inflation slowed to 3.1 per cent which still leaves inflation more than a percentage point above the 2 per cent target.
As part of the independent remit of the Bank of England, Sir Mervyn King, the governor, is obliged to write a quarterly open letter to Osborne while inflation stays above the 3 per cent ceiling explaining the deviation and what he intends to do about it. On Tuesday he will have to write a tenth consecutive letter to the chancellor. For the first 10 years after the Bank of England was given independence in 1997, inflation was so well behaved there was never a need to flourish the governor’s fountain pen. But since the start of the financial crisis in 2007, the quarterly letter-writing process has become something of a ritual.
The Bank of England – and by extension the government – will gain some respite in its battle against the rising cost of living if, as expected, the figures reveal a sharp fall in inflation. But it is still well above the official target. This is now the longest period of unchanged interest rates in 62 years. A minority on the Bank’s nine-strong monetary policy committee – supported by increasingly vociferous critics in the City – think the time has come to start raising rates. Labour, as part of its ‘squeezed middle’ agenda, should exploit this opportunity to tap into people’s widespread nervousness about the basic cost of living.
On Tuesday in the commons it’s Clegg-baiting day, with the deputy prime minister starring at question time. With a Lords reform bill promised, not to mention Clegg’s serially dour demeanour, expect a fairly ill-tempered session. Then the house polishes off two more bills left over from the previous parliamentary session – the most important being the financial services bill, which aims to tighten up the running of the City of London to hopefully prevent another credit crunch.
The public accounts committee takes evidence on how the government handles fraud within welfare to work providers. Robert Devereux, permanent secretary at the department for work and pensions, is the star witness. The Scottish affairs committee also has a one-off evidence session on blacklisting in employment. Both committees seem apt given the story that emerged at the weekend of a severely disabled Dundee man who was contacted by the DWP to inform him his benefits were to be cut. The narrative in this country is so heavily tipped towards ‘benefits scroungers’ by the toxicity of the predominantly right wing press that redress is surely due, while it is always worth pointing out to the likes of Mr Devereux that tax avoidance and evasion by our nation’s rich costs the Treasury 15 times more than benefit fraud.
For Labour, the task is straightforward though no less demanding. Don’t become distracted by the polls; the breathlessness over supposed 15per cent poll leads provides a welcome comfort blanket. The fear is the perception of success, plus the slide back into recession and the government’s general lack of purpose and competence, will be used as an excuse to shut down party debate. A few good weeks does not an election win make – but one bad one could do irreparable damage.
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David Talbot is a political consultant, tweets @_davetalbot and writes the weekly The Week Ahead column on Progress
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Photo: HM Treasury