Dermot Finch

Ban bank holidays?

Last time, it was the snow. Now, it's the Royal Wedding and all those bank holidays. Each time we get a bit of bad economic news, it seems there's always an excuse.

Today's Q2 GDP figures reveal that the UK economy has been flat for the last nine months. After shrinking by 0.5% in the final quarter of last year, and growing by 0.5% last quarter, the economy was barely able to get out of bed in Q2, posting just 0.2% growth.

The ONS concedes today that the Royal Wedding and all those bank holidays were a factor in April. But isn't it a bit much (and unpatriotic) to blame Kate & Wills for our economic woes? We were only too happy to take all that time off work, in the middle of a fragile recovery. And I'm sure all that bunting and booze boosted the economy just a little bit.

Fewer bank holidays isn't the answer (I hope). And a right Royal April can't explain the wider picture - that the economy is flatlining, and demand is still very weak.

As Alistair Darling told the Institute for Government last week, there's a real risk that growth remains sluggish for the foreseeable future - that we "bounce along the bottom" for the next 5 years or more. This won't be solved by shaving a bit off VAT temporarily (as Ed Balls is calling for) or reducing the top rate of tax from 50% (as many Conservatives want). Bigger steps will be needed, to boost demand and confidence.

So, the Chancellor faces an awkward autumn. As I wrote earlier this month, the Office for Budget Responsibility might conclude that Osborne is not going to meet his fiscal goal of eliminating the structural current deficit by 2014/15. This, and further flat growth, would be embarrassing for the Treasury. But don't expect a volte-face or completely different Plan B.

The fact that Ed Balls is calling for a Plan B means that Osborne won't resort to one. Instead, I expect a few more stimulus-inducing measures in his party conference speech and Autumn Statement, combined with some clever arithmetic.

Parliament bites back

Parliamentary select committees here have traditionally lagged behind their counterparts on Capitol Hill. Rather tame by comparison, ours have rarely managed to equal the drama of Congressional hearings. Until today, that is.

All eyes will be on this afternoon's Murdoch grilling by the Culture Select Committee. Look out for particularly stiff questioning from Labour's Tom Watson, Louise Mensch (Con) and Adrian Sanders (LD). The Culture Committee will also probe Rebekah Brooks, while the Home Affairs Select Committee takes on Sir Paul Stephenson and John Yates.

As well as the obvious short-term headlines, today's spectacle could mark a turning point in the role of Parliamentary select committees. Now elected by their fellow MPs, select committee chairs are a more confident and strident bunch these days - witness Andrew Tyrie and Margaret Hodge, for example. 

Until this month, hardly anyone had heard of John Whittingdale - but today he will be presiding over the clash with the Murdochs and the Met. His new-found celebrity status is bound to rub off on the other committee chairs, many of whom will now want their own moment in the limelight.

Congressional committees have always had a formidable reputation, most recently exposing BP chief executive Tony Hayward to relentless and unforgiving scrutiny. Committee chairs in Washington DC are often the best-known politicians in the US. After today, our own Parliamentary committees will become a bit more prominent - and the MPs serving on them, a bit more challenging.

After being overshadowed by Whitehall and Number Ten for generations, this Parliament could be the one that starts to bite back - with Tyrie, Hodge, Whittingdale et al leading the way. If sustained, this rebalancing of power towards the legislature will make the business of government more difficult and less predictable. Awkward for Ministers, but probably a good thing.

Murdoch crisis: political fallout

This article first appeared in PR Week on 15 July.

Now that the News of the World is no more, what's the longer-term political fallout?

First, public trust in the establishment has taken another hammering. Already disillusioned with MPs and the banks, the public is now questioning the integrity of not only the media but the police as well. About the only pillar of the establishment that hasn't lost trust over the past couple of years is the Royal Family.

Second, David Cameron is now facing the most difficult phase of his premiership so far. His judgement is being questioned and he's been running to catch up with the agenda instead of setting it. Hugh Grant has done a better job of articulating the public's outrage. The PM needs to regain his grip, and quickly.

Third, Jeremy Hunt's in-tray suddenly looks very different. News International's full acquisition of BSkyB, a near-certainty last month, is now hard to imagine.

The Press Complaints Commission's days are numbered - despite protestations to the contrary from chairman Sir Christopher Meyer - and the long-term decline of the print media has just accelerated.

Ed Miliband, meanwhile, has been gifted a major opportunity to assert himself and his leadership. Ridiculed only a fortnight ago for that 'loop' interview, Miliband now looks more like a contender. But his strategy is not without risk: he will now incur the additional wrath of the Murdoch press, and he will need to ensure that his own press team is squeaky clean.

Finally, Vince Cable must be reflecting on his 'declaration of war' on Murdoch last year. Although more people will now agree with him, he needn't have bothered. Murdoch's own goal has achieved more than Cable ever could. Indeed, had Cable kept his counsel he could now be presiding over the withdrawal of News Corporation's bid.

U-turns: who's next?

Caroline Spelman must be feeling just a little bit smug by now. Since being slated for her forests U-turn in February, the Coalition has excelled itself in the art of U-turning. On prisons, NHS reform, and now News International. Step forward Ken Clarke, Andrew Lansley and Jeremy Hunt. Their about-turns make Caroline's look tiny by comparison.

Who's next, I wonder? With GDP growth so weak recently, inflation well above expectations, and borrowing likely to be higher than he first thought, George Osborne may need to revisit his deficit reduction plans. It's entirely possible that the Office for Budget Responsiblity could warn the Chancellor this autumn - on the eve of his Autumn Statement - that he's not going to deliver his two-pronged Plan A, to eliminate the structural current defict by 2014/15 and have debt falling as a percentage of GDP by then too.

Just recently, Osborne has started talking about the (cleverly disguised) "flexibility built into" his plans. Currently, his fiscal mandate is to eliminate the structural current deficit and meet his debt target one year later (by 2015/16), so he has some wiggle room there. And if that's looking unachievable, next year's Budget could push the target back another year to 2016/17 by triggering a rolling 5-year timeframe.

In reality, the impact of tweaking Plan A would be more political than economic. It would be embarrassing for the Chancellor, and give Ed Balls a lot of ammunition. But it wouldn't necessarily make Osborne change course - his tax rises and spending cuts would still happen as planned, it's just that they wouldn't erase the non-cyclical deficit as quickly as originally hoped.

Of course Osborne would never admit it, but any change to Plan A would be seized on by Labour as a major U-turn. Mainly because he was so bullish about achieving it, in the first place. But he shouldn't feel too embarrassed about U-turning. With so many Cabinet colleagues already embarked on their own U-turn, Osborne won't be alone.

The Miliband Loop

Ed Miliband has had a lot of stick for that interview he did on the strikes last week. The one where he said - five times, regardless of the question - "These strikes are wrong...the Government has acted in reckless and provocative manner...both sides should put away the rhetoric and get around the negotiating table".

Cue an avalanche of shock and negative comment from all sorts of commentators, accusing Miliband of being a robot.

But as most media commentators know, politicians do this loop thing all the time. Miliband wasn't giving a full interview last week - he was aiming to provide a short soundbite, so just kept repeating himself in the knowledge that the BBC and ITV would only run with 10 seconds or so.

If you don't believe me, see this confessional from Krishnan Guru-Murthy and this from Charlie Brooker. And here's George Osborne, doing pretty much the same loop thing last year.

So why all the fuss about Ed Miliband? It's pretty obvious, really - the media (and quite a few in his own party) are getting increasingly frustrated with him, and looking to undermine him. They're not doing the same to Osborne (yet) because he is judged to be performing relatively well.

One big irony with all this. The loop thing is meant to be a fool-proof way for politicians to avoid gaffes. Just say the same thing over and over, and you'll avoid an unguarded ad lib getting onto the TV news. But unfortunately for Miliband, he rather overdid the loop and his risk-averse approach actually became the gaffe.

Let's see whether the politicians - and the interviewers - go for a less robotic approach from now on.