The Coalition might fix schools and welfare but voters won't be grateful if the economy remains flat

By Tim Montgomerie
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Pete - while hopeful of change - has already noted the clouds hovering over the Coalition this morning. On days like this you realise the high price that the country is paying for David Cameron's decision to form a Coalition government with the Liberal Democrats.

Allister Heath has written a superb piece for today's Telegraph setting out three essential shock-and-awe policies that are necessary to get the British economy off its back:

• "George Osborne needs to slash corporation tax to 11%, just below the level levied in Ireland, which at 12.5% is the lowest of our close competitors";
• Abolish Capital Gains Tax;
• Cut real public spending by 1.5% to 2% per year rather than the planned 1%.

It's an open question as to whether George Osborne would do any of this - even if his hands weren't tied by Clegg, Cable et al - but, as I argued on Saturday, I'd like him to tell us.

The Coalition is doing many good things. Education reform. Making work pay. Unchaining local government... But none of these things matter much if the economy isn't renewed. Last year's Autumn Statement was depressing for its lack of ambition. Green policies are still hurting manufacturers. The tax system is getting more burdensome. Bank reform has been too slow. There is no big, confidence-building narrative.

On the morning after the Liberal Democrats betrayed David Cameron on boundary reform - and kicked Conservative election prospects in the unmentionables - the price of Coalition is looking very high indeed.