Uk politics

Your guide to all those tax cut proposals

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Nick Clegg, Ed Balls, Liam Fox, David Davis, the Centre for Policy Studies, the Centre for Social Justice and the Sun. It seems almost everyone thinks George Osborne should cut taxes in his Budget next month — the only disagreements are over how. Here’s a quick guide to the main proposals so far: There will doubtless be other suggestions before 21 March when we will finally learn which, if any, Osborne has chosen. UPDATE: The table originally gave the cost of the CPS' corporation tax cut as £8.5bn. This is their 'static' estimate of the cost, but a more realistic estimate, derived from the Treasury's ready reckoner, is £4bn.

Murphy launches Labour’s defence review

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Remember when Jim Murphy spoke about defence cuts last month? It was not only a smart refinement of Labour's fiscal position, but also a preview for the defence review that they're conducting as an alternative to the government's SDSR. Well, that review was officially launched this morning, and I was in the audience on reporting duty. Here's a quartet of quick observations that I bashed out on my phone: 1) Cuts, cuts, cuts. There was, it is true, a greater emphasis on the ‘constrained fiscal circumstances’ in Murphy's opening remarks than there is the consultation paper that Labour released today. But that emphasis was still striking in itself.

Miliband revels in his NHS attack

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Today’s PMQs was a reminder that whenever Ed Miliband goes on the NHS he is guaranteed a result. Indeed, I don’t think I’ve ever seen Miliband enjoying himself as much in the chamber as he was today. When Andrew Lansley leaned over to try and tell Cameron the answer to a question, Miliband mockingly remarked ‘Let me say to the Health Secretary, I don’t think the PM wants advice from you’. As Cameron’s assaults became more direct, Miliband did not — as he often does — go into his shell. As he sat down at the end of it all, the Labour leader had to push down on his knee to disguise the adrenalin shakes he was having.

A taxing problem for George Osborne

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Today’s FT reports that additional council tax bands are being considered as part of the Budget process. But there are several problems with introducing new council tax bands. First, this would require a wider revaluation, something that the coalition has ruled out explicitly and that would almost certainly drive up council tax for most people.   A revaluation, as a parliamentary question from George Osborne’s former chief of staff Matt Hancock established, would cost around £200 million. It would also take two to three years to complete, meaning revenues from any new band wouldn’t start accruing until either very close to, or even after, the next election.

When failure actually counts as success

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Michael Gove's latest prognosis for schools was delivered at a lunch in Westminster yesterday, but it's important enough to repeat the morning after. The Independent has a full report here, but the key quotation is this: ’Education is like trying to run up a down escalator. There are some uncomfortable decisions that will have to be taken. There will be years when, because we are going to make exams tougher, the number of people passing will fall. There are headteachers who have been peddling the wrong sort of approach to teaching for too long, who are going to lose their jobs.’ Just read that bit again: ‘the number of people passing will fall’. It's a deeply encouraging admission by Gove, and one that he ought to repeat frequently.

Nick Clegg’s NHS squeeze continues

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As I said last week, Nick Clegg is in a tricky position when it comes to this Health Bill. Thanks to the concessions that he secured and welcomed last year, he can't now just slander it outright. But thanks to the concerns of his own party, he will also be reluctant to endorse it in full. The result is the sort of ambiguous performance that the Deputy Prime Minister put in on ITV's Daybreak show this morning. He did get stuck into Labour for their ‘outrageous’ misrepresentation of the reforms. But when it came to actually supporting the Bill, it seemed to me that he used generalisations — such as, ‘I am behind reforming the NHS to improve care for patients’ — that could permit a slight change of heart about the specifics in future.

The Lib Dems step up their push for £10,000

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Set your TiVos. At 6.55 tomorrow evening, BBC1 will air the Liberal Democrats’ latest party political broadcast. For those of you who can’t wait, here’s a sneak preview: In the video, Nick Clegg describes his proposed increase in the income tax personal allowance as ‘a £700 tax cut for ordinary working people — that’s an extra £60 in your wages every month’. I’ve remarked before on the similarities in both rhetoric and policies between the Lib Dems and Barack Obama, but Clegg’s ‘£60 a month’ pitch is as close as you get to the way Obama sells his payroll tax cut extension as ‘about $40 in every paycheck’.

IDS defends his work scheme — but he may have to change it

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Articles by politicians are often flat and passionless. Not so Iain Duncan Smith's effort for the Daily Mail today. The welfare secretary sets about defending the government's Work Experience scheme for unemployed young people, but it soon turns into a full-blooded attack on its detractors. ‘I doubt I’m the only person who thinks supermarket shelf-stackers add more value to our society than many of those “job snobs” who are busy pontificating about the Government’s employment policies,’ he bristles, ‘They should learn to value work and not sneer at it.

Osborne accidentally makes the case for more savings

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Rhetoric aside, what’s the difference between left and right in British politics? You won’t catch either party quantifying it, because the answer embarrasses both. The ever-cautious George Osborne is cutting just 0.6 percentage points a year more from government departments than Labour planned to (see table, above). The great joke is that the difference between the two parties is actually within the margin of error. Government is a gargantuan machine that just can’t be controlled to that degree of precision: a billion quid is, to Whitehall, a rounding error.   Today’s public finances have demonstrated that.

The implications of today’s border security report

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Today brought closure of a kind to last year’s border fiasco (which I covered for Coffee House here and here), with the publication of the report by the Chief Inspector of the UK Border Agency, John Vine. On first reading, there is no ‘smoking gun’ which would trigger a ministerial resignation. The report does find that, in early 2011, the immigration minister Damian Green had authorised the relaxation of one of the checks at the centre of the controversy: ‘Secure ID’, which verifies the fingerprints of foreign travellers with visas. But the report also finds that Green’s authorisation should have been superseded by later instructions from the Home Secretary Theresa May.

Miliband guarantees a return to Brown’s Big Idea for the NHS

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It would be so much easier for Ed Miliband to attract headlines if he could shout in Andrew Lansley's face. As it is, the Labour leader has had to make do with giving a speech today attacking the NHS reforms. Within the parameters of what he might say, it's an okay effort. The predictable lines about ‘creeping privatisation’ are leavened by the admission that ‘the question is not reform or no reform. It is what type of reform.’ And he adds, by way of a cross-party sweetener, that he would ‘get round the table’ with David Cameron to discuss ‘the future of the NHS’. But the substance of the speech, rather than its rhetoric, is a little more questionable.

The depressing appointment of Les Ebdon

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Today brings confirmation that No.10 has not stood in the way of Vince Cable appointing Les Ebdon as the new director of fair access. Ebdon’s appointment is depressing for several reasons. First, Cable has ridden roughshod over the objections of the BIS select committee to his choice. So much for all of the coalition’s talk about respecting parliament — this is executive arrogance at its worst. Second, Ebdon represents the mindset that has done so much damage to British education in the past 50 years. It is worrying that he does not seem to appreciate that the biggest ‘root cause’ of poorer pupils not getting into top universities is the quality of state schooling in deprived areas.

A question of trust for Andrew Lansley

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It's not too surprising that people trust ‘organisations representing doctors nurses and other health professionals,’ well above David Cameron and Andrew Lansley, when it comes to the NHS reforms. People are sceptical of politicians in a way that they aren't of the health service, its unions and its workers. 64 years of ‘national religion’ status for the NHS, and many more years of gross political let-down, have made sure of that. But today's YouGov findings still shine a fresh light on Cameron and Lansley's changing approach to the reforms.

If Cameron doesn’t talk about greater powers for England, Labour will

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Action over Scotland is certainly producing a reaction in England. It's not what you'd call an ‘equal and opposite reaction’ yet, but it's there — and it's crystallised by Tim Montgomerie's article for the Guardian this morning. I'd recommend that you read it in full, but Tim's basic point is that David Cameron could score a ‘triple crown of political victories’ by moving towards a more federal UK: ‘By offering to extend Scottish devolution he can be the Conservative leader who saves the union. By promising to balance Scottish devolution with a commitment to new arrangements for the government of England, he can radically improve his own party's electoral prospects.

The tax debate at the heart of the Budget

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The run-up to last year’s Budget was all about fuel duty. This year it’ll be all about direct taxes. The Lib Dems are determined to put their manifesto pledge of raising the income tax personal allowance to £10,000 front and centre. They already managed to turn this promise into government policy in the Coalition Agreement, and last year’s Budget announced that the threshold would rise to £8,105 in April this year. But Nick Clegg’s made clear that he wants to go ‘further and faster’ on this. The Conservative response at the Treasury – according to today’s Telegraph – is simple: ‘how are they going to pay for it?

Balls the tax-cutter?

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‘Balls urges tax cuts’, we’re told. Has he had a Damascene moment? Has the borrowed penny dropped? Nope, this is his longstanding and cynical campaign to cut VAT. Under the Labour years, when Balls was encouraging Brown to adopt a ‘scorched earth’ policy to the public finances, he urged against raising VAT to 20 per cent as Alistair Darling wanted. Not because he didn’t think it was necessary, but because he knew that if Darling didn’t do it, Osborne would. So VAT could be an election campaign tool, and then a stick with which to beat the wicked Tories (and the Lib Dems, who dropped the ‘VAT bombshell’ that they warned of). There is also politics: Tories prefer taxing consumption to taxing income.