Uk politics

Tuesday

David Blackburn

Allowing localism to flourish

David Orr, Chief Executive of the National Housing Federation, and 551 local councillors have written to the Times (£) warning that short-term cuts to care charities will bequeath deeper medium-term costs. They say: ‘Local councils face a difficult spending situation. However, cutting services for the vulnerable does not make financial sense. Without early identification and support, vulnerable individuals will reach crisis point as their needs become more severe, leading to greater pressure on acute health services, the criminal justice system and carers.’ The spending settlement in local government is stringent and some services are being necessarily affected: even model councils like Reading have cut some of its education services.

Monday

David Blackburn

Cameron’s Libyan double standard

After the Libyan blood money scandal at the LSE, inquiries were bound to be made about other universities. Robert Halfon, the Conservative MP for Harlow, has exposed how Liverpool John Moores University (LJMU) agreed to contracts with Gaddafi’s Libya worth at least £1,272,000.00. (He has since been threatened with a defamation suit for pointing this out, but that’s for another time.) He raised the issue in parliament and the Prime Minister replied: ‘I think that there are lessons to be learned. As I have said, I think that it was right (of the previous government) to respond to what Libya did in terms of weapons of mass destruction, but I do not think that the way in which that response was handled was right.

James Forsyth

Another phase in Gove’s revolution

Michael Gove has just finished announcing to the Commons his proposed replacement for Educational Maintenance Allowance. The new scheme is more targeted than the old one that went to 45 percent of those who stayed in education post-16. Interestingly, it will be administered by the schools and colleges themselves. Gove’s argument is that it is these institutions that are best equipped to know which student needs how much money to support them staying in education. This drew predictable opposition from the Labour benches which wanted a top down, national scheme. On top of this discretionary fund, every student who is receiving income support will receive £1,200 a year.

James Forsyth

Clegg’s new direction?

Perhaps the most interesting political story of the weekend was Nick Clegg’s political mentor, Paddy Ashdown rejecting the idea that the Lib Dems should be equidistant between the two main parties in an interview with The Times: 'I don’t want to go back to using the word ‘equidistant’ because the world has changed.” He predicts that Labour will look increasingly like “a bunch of superannuated students shouting from the sidelines.' There are two schools of thought in the Lib Dems about their approach to the next election. One has it that the party must appear equally prepared to do a deal with either of the main parties in the event of a hung parliament.

Peter Hoskin

Clegg weaves more divides between himself and Miliband

“He’s elevated personal abuse into a sort of strategy.” So says Nick Clegg of Ed Miliband in one of the most noteworthy snippets from his laid-back interview with the FT today. Another sign, were it needed, that Labour's animosity towards the Lib Dem leader is mutual — if they won't work with him, then he almost certainly won't work with them. And a sign, perhaps, that the coalition is keen to undermine Miliband's claim to post-partisanship (or whatever). Labour constantly criticise Cameron for being more Flashman than statesman. Now the same charge is being levelled at their leader too.

Sunday

James Forsyth

Why Cameron is so keen on start ups

Cabinet ministers were relatively relaxed about yesterday’s march against the cuts—and rightly so. It did not make a sea-change in British politics and merely served to underline the lack of a credible alternative to what the coalition is doing. But what does worry ministers is where the growth is going to come from in the economy. The corporation tax cuts and the planning law changes are designed to help big business. But what the Prime Minister is more interested in is small businesses; hence tomorrow’s launch of Start-Up Britain by the Prime Minister. The scheme is designed to offer help—both technical and financial—to those looking to start a business.

Peter Hoskin

Signs of nerves from the Lib Dems

Judging by today's reports, it's fear and self-loathing in Lib Dem Land. And it's not just that one of their Scottish candidates has quit the party in protest at its, ahem, "draconian policies" and "dictatorial style". No, according to this insightful article by Melissa Kite and Patrick Hennessy in the Sunday Telegraph, there are more manoeuvrings going on than that. Here are some passages from it, by way of a summary: 1) Chris Huhne, waiting in the wings. "Mr Huhne, who ran Mr Clegg close in the last Lib Dem leadership election, has told colleagues privately that he would be interested in leading his party in the future." 2) A rebrand (back to the SDP?).

Fraser Nelson

How much are we still paying for Brown?

The story today of a pregnant woman being downgraded so Gordon Brown and his six aides could travel business class from Abu Dhabi to London may ring a bell with CoffeeHousers. We revealed last August that Brown has a taste for freebies, and that he was offering himself for $100,000 at speaking and award-giving engagements. For an extra $20,000 he would throw in his wife, Sarah. The Mail on Sunday reports that one of the pregnant woman's co-passengers was "livid, asking why it was necessary for all of [Brown's team] to be travelling business — and if it was being paid for by the taxpayer." He raises an interesting point. Tony Blair notoriously claimed a "pension" of £64k, and an £84k contribution for the costs of running his office.

Saturday

James Forsyth

Miliband is marching to the wrong drum

Ed Miliband’s decision to address today’s anti-cuts march is a strategic mistake. It makes him look like the tribune of an interest group not a national leader. He’ll also be tarred by association, fairly or not, if these scuffles we’re seeing turn into anything more serious. In his speech, Miliband tried to place the march in the tradition of those for female emancipation, civil rights and against apartheid. But this rhetoric doesn’t work as, given Miliband’s commitment to the Darling plan, we are talking about relatively modest differences about the pace of cuts. One other thing that was striking about the speech is Miliband’s attempt to accuse Cameron of practicing the politics of division.

David Blackburn

Lawson: don’t do it George

Lord Lawson has given George Osborne’s Budget an A-minus. Writing in today’s Times (£), the former chancellor said that his successor ‘got the big questions right’ by sticking to deficit reduction and assisting hard-pressed taxpayers where he could. The only blemish was the carbon price floor for the energy sector, which Lawson describes as ‘nothing less than an anti-growth strategy’.  Also, Lawson warns Osborne against uniting income tax and national insurance. Unsurprisingly, Mrs Thatcher’s great reforming chancellor looked into this measure and is convinced that it is a non-starter. ‘This superficially attractive reform, which is by no means a new idea, was known in the Treasury in my time as NICIT.

David Blackburn

Marching with no alternative

Thousands have converged on London today, to march against the monolithic evil of 'cuts'. They have not stated an alternative, a fact that led Phil Collins to write an eloquently savage critique in yesterday's Times (£). That the protesters are incoherent beyond blanket opposition to the government is not really an issue: as this morning's lead article in the Guardian argues, the Hyde Park rioters of 1866 weren't brandishing drafts of the Second Reform Bill. But it's intriguing that Ed Miliband has decided to address this rally, thereby endorsing it. The Labour party hierarchy recognises that it is taking an enormous and perhaps totally unnecessary risk. First, Ed Miliband's oratory is not in the same league as that of Michael Foot, Jim Callaghan and Harold Wilson.

Friday

Peter Hoskin

Miliband’s two big risks

Who would have thought it? Miliband's short speech in Nottingham today went largely unheralded, and doesn't seem to be getting a whole lot of attention now — and yet it tells us more about his approach to Opposition than almost anything he has said previously. Fact is, the Labour leader is taking two risks that may be either bold or foolhardy, depending on your point of view. These risks could come to define his Labour party. The first is splashed right across the entire speech. Miliband dwells on three "challenges" that the country will face over the coming decade: the "cost of living crisis"; declining prospects for the next generation; and the erosion of the "Merrie Englande" that David Aaronovitch wrote about this week.

James Forsyth

Welcome revisions to IPSA’s rules

If you want to get an MP going, just ask them what they think of IPSA — the new expenses watchdog. The body is hated: when Cameron joked at PMQs this week that it should be relocated to Croydon there was laughter across the House. IPSA is regarded as rude and inefficient. When Tory MPs were in a particularly grumpy mood before Christmas, David Cameron went to the ’22 and promised that IPSA would either have to mend its ways or be mended. Today’s revisions to the rules by IPSA (£) will go some way to addressing the concerns of MPs. The old rules only allowed children to be treated as dependants until the age of 5. Now, they can be treated as such until 18.

Thursday

Matthew Hancock-Mp

What Portugal means for the UK

Last night, Portugal's parliament voted to reject its latest measures to deal with its deficit. It was the fourth time that the Portuguese parliament had been asked for more taxes and for more spending cuts. The result has been a further loss of confidence in Portugal’s ability to pay its debts. Market interest rates have risen to over 8 percent. European leaders are meeting this weekend to work out a path forward. The lessons for us here in the UK are starkly clear. First, it is better to set out all the difficult decisions needed to deal with the debt crisis, even if these take place over a number of years, rather than continually going back to ask for more. That the Budget was neutral overall shows that a clear plan is being followed here.

Matt Oakley

Please sir, can we have some more?

There were few surprises in yesterday’s Budget. As expected, it focused on growth and the majority of the policies announced had been heavily trailed in the weekend newspapers. The fiscal picture did not change much. Potential over-optimism from the Office for Budget Responsibility on inflation and the output gap aside, the Chancellor is still on course to eliminate the deficit by the end of this Parliament.   This is very good news. The biggest danger during a fiscal consolidation programme is that governments water down their proposals due to political opposition or economic difficulties. In a 2009 report, Controlling Spending and Government Deficits, Policy Exchange argued that the preferred ratio of spending cuts to tax increases is around 80:20.

Mats Persson

Cameron’s €4 billion Portuguese challenge

As if the budget and Libya weren’t enough, the UK Government woke up today with another major challenge on its hands – yet another flare-up in the eurozone debt crisis, which has been continuing to bubble away under the radar.   Yesterday, Portugal’s Prime Minister José Sócrates literally walked out of Parliament, during a debate on EU-backed austerity measures. The austerity package was subsequently voted down and shortly afterwards Sócrates announced his resignation. Portugal is now facing the prospect of being without a government for months, as its electoral rules require a 55 day break between the dissolution of Parliament and new elections.

Matthew Sinclair

Merging Income Tax and National Insurance Contributions – Simples?

“I am announcing today that the Government will consult on merging the operation of National Insurance and Income Tax.” The word ‘consultation’ in the Budget drew the longest, loudest sigh from me. Some commentators had hinted that Osborne was considering merging Income Tax and National Insurance Contributions (NICs), which would be a fantastic move towards simplifying our tax system.  Of all the pre-Budget leaks, this was one that sounded truly exciting and innovative.  But, alas, this idea is only in infancy and all that was promised was a consultation.  Of course, the Chancellor can’t rush into this. He has to get this right if it goes ahead, so a consultation is probably prudent.

Peter Hoskin

Laws gives another signal on 50p

Usually, the task of David Laws Watch is to judge just how close the former minister is to a return to government. But, today, his article for the FT is worth highlighting for a different reason altogether. Referencing George Osborne's signals on the 50p rate in the Budget speech, Laws has this to say (my emphasis): "The chancellor also signalled that excessive marginal rates of income tax – of 50 per cent, even 60 per cent – are on their way out. The Treasury believes that the majority of expected revenue from the current top rate is lost in avoidance. But the government is rightly cautious about the timing of the removal of these high rates: this cannot be our highest priority when those on low incomes are facing a real squeeze.

Fraser Nelson

Scouring the Budget small print

This morning's newspapers have a feast of analysis on the Budget. I've covered 15 of them, and what journalists normally do is spend the day trawling the small print of the Budget document hunting for stories. But this time, the stories seem to have migrated to the Office for Budget Responsibility's accompanying report, packed with new analyses and metrics — even disaster scenarios — which those with an interest in UK economics will find useful. The OBR document is now released with the Red Book, and speaks with the authority of government economists who (unlike the rest of us) have had weeks to chew over Osborne's claims. The OBR must now be considered part of the Budget's small print.

Fraser Nelson

Osborne gets his man

So Martin Sorrell is set to move WPP back to Britain. This was always part of Osborne's Budget plan, as I revealed in my News of the World column and also mentioned on Coffee House. As I said in the newspaper: "The Chancellor has been on bended knee, pursuing Sorrell with energy that would make Berlusconi blush. 'What do we need to do?' he asks. Sorrell’s answer is to cut the tax on overseas profits. So Osborne will, hoping to lure back companies who generate most of their cash abroad." Today, Sorrell will announce that he'll come back from Ireland if the Budget is made law. Of course it will be made law, governments collapse if they can't have their budget passed. So he'll redomicile, as will (perhaps) other multinationals.