Uk politics

Wednesday

James Forsyth

Resisting an EU tax on financial services

From our UK edition

The prospect of taxes being levied directly by the European Union is one of those stories that pops up on a fairly regular basis. It is never likely to actually happen as national governments won’t want to cede the power of the purse strings. But the great Hamish McRae makes a very good point about the taxes that the EU wants to levy in his Independent column: ‘The two areas the EU wants to put taxes on, banking and air traffic, would hit the UK particularly hard. Financial services are the UK's largest export industry, with net exports (ie exports minus imports) of £33bn last year, more if you add in associated professional services. We are by far the world's largest net exporter of such services.

Peter Hoskin

The government’s transparent approach to worklessness

From our UK edition

Sometimes hope lies in the details. Take this morning's press release from the DWP, for instance. On the surface, it is a response to today's encouraging employment figures. But what it really is is a new way of approaching the problem of worklessness in this country. And all because of its headline: "Figures reveal five million on out of work benefits as Grayling pledges to make work pay." This is, as far as I can remember, the first time that the total out-of-work claimant count has reached the summit of an official release. The last government always knew what the figure was, of course, but never drew much attention to it. Instead, we heard Brown mumbling on about "3 million new jobs," while wilfully ignoring the millions who had been overtaken by globalisation.

David Blackburn

Osborne needs to hold the line

From our UK edition

Even governors can be wrong. The Bank of England’s quarterly inflation report is expected to downgrade its original growth forecasts and predict a sharp increase in inflation, albeit one that peaks this year and returns to the target rate by 2012. A spike in inflation is scarcely surprising given the planned VAT rise, and the Bank’s original growth forecasts were, like Alistair Darling’s forecasts, absurdly over optimistic – predicting 3.4 percent growth next year and 3.6 percent the year after. The Bank’s revisions needn’t trouble George Osborne, whose forecasts of 2.3 percent growth next year and 2.8 percent in 2012 were drawn from the OBR. However, the OBR may have over-estimated recovery too.

Tuesday

James Forsyth

IDS’ resignation would be a catastrophe

From our UK edition

If Iain Duncan-Smith resigned from the government, the coalition would be in trouble. If Vince Cable is the coalition’s left tent peg, IDS is the right one: his departure would leave the coalition’s right side dangerously open to the elements. Which prompts me to oppose Ben Brogan’s blog saying that the coalition would not suffer much if IDS walked. If IDS left, the Cabinet would be dangerously unbalanced. There would, in these circumstances, be only two people in it who the Tory parliamentary party considers to be on the right, Liam Fox and Owen Patterson. The right, as the Liberal Democrats seem to appreciate, would in these circumstances demand far more policy concessions from Cameron in return for its support.

Peter Hoskin

Ominous signs in the housing market – but Osborne must remain undaunted

From our UK edition

Are we on the verge of a double-dip in housing? The graph above, courtesy of Citi, certainly looks ominous enough. The blue line is a Royal Institute of Chartered Surveyors metric for the balance of surveyors reporting rising house prices - and, last month, it slipped into negative territory for the first time since July 2009. The pink line is the rise in house prices, year on year - and it's heading downwards too. At first glance, the picture looks a lot like the peak which preceded the crash in 2008. The question is whether we're going to plumb a similar trough. Citi, it must be said, are fairly sanguine about our prospects.

David Blackburn

Prepare to be nudged

From our UK edition

‘Nudge’ posits that people can be subtly cajoled into changing their behaviour. The Cameroons were convinced nudgers at one stage. Greg Clark and Grant Shapps designed The Green Deal, a free home insulation programme to encourage green living, paid for by savings on energy bills. Then David Cameron and Steve Hilton conceived the Big Society and nudging was discarded as some unwanted puppy.    But, James Crabtree reports that nudging is back. There’s even a ‘nudge unit’ in No.10: ‘The group, whispers one insider, was first set to find alternatives to the constant regulations flowing through Whitehall, but is becoming increasingly influential.

James Forsyth

Strange bedfellows

From our UK edition

As the row over Naomi Campbell’s testimony at Charles Taylor’s war crimes trial fills up acres of space in the newspapers and hours of airtime for the news channels, I can’t help but remembering the friendship between the model and Sarah Brown. Brown even selected Campbell as her 21st century heroine in a 2009 Harpers Bazaar poll, praising her as a “loyal friend”. Now, it should be stressed that the work Brown and Campbell did together was for a series of worthwhile causes, improving maternal health and helping Haiti post-earthquake. But it struck me as surprising at the time that a savvy former PR woman married to the Prime Minister chose such a controversial friend.

David Blackburn

Downing Street extends a tentacle

From our UK edition

Following the milk fiasco, No. 10 plans to tighten its control over Cabinet Ministers. The Times (£) has the details. To paraphrase, No.10 holds the egregious Andrew Lansley responsible for not recognising that Anne Milton’s proposals were politically untenable. Cameron has ordered a political review of Cabinet Minsters’ proposed cuts to minimise embarrassments ahead of October’s spending review. Understandably, Cameron is keen to insulate himself against inevitable negative publicity. But there is a danger that a hands-on Downing Street will become publicly embroiled in Whitehall spats.

Peter Hoskin

The questions surrounding Cameron’s benefit crackdown

From our UK edition

There were hints of toughness in his article at the weekend, but now David Cameron has rolled up his shirt sleeves and pulled out the baseball bat. In a combative piece for the Manchester Evening News the PM outlines out a zero tolerance approach to welfare fraud and administrative error. The two problems "cost the taxpayer £5.2 billion a year," he says, "that's the cost of more than 200 secondary schools or over 150,000 nurses. It's absolutely outrageous and we can not stand for it." And so IDS is going to prepare "an uncompromising strategy for tackling fraud and error," which will be published this autumn.    Two things are worth keeping a close eye on. First, the Lib Dem reaction to all this.

Monday

James Forsyth

Cameron, Villa and the succession

From our UK edition

The Prime Minister is, as we know an Aston Villa fan. So we can expect him to be disappointed at Martin O’Neill’s departure. On his trip to Birmingham the other week, Cameron’s support for Villa caused the PM to, as the phrase has it, misspeak. He told the Birmingham Post that with “the Governor of the Bank of England as a supporter, the next King of England and the current Prime Minister, [Aston Villa] got a good set” of fans in high places. But his reference to the next King of England being a Villa fan will raise a few eyebrows as it is Prince William — not Prince Charles — who is the Royal Villain. Now it is obvious that Cameron just slipped up and that he didn’t mean to impart any information about the succession.

Peter Hoskin

Huhne backs nuclear energy through gritted teeth

From our UK edition

You could almost hear the thumbscrews being tightened as Chris Huhne appeared on Today this morning to back nuclear power. The Energy Secretary has an, erm, patchy history when it comes to supporting nuclear – and that fact, coupled with his less than evangelical rhetoric on the matter in government, has got plenty of industry professionals worried. So there he was reassuring us that, actually, the first new nuclear power station is still on course for 2018. And he added, gritting his teeth no doubt, that "providing there is no public money involved, there will be a majority in the House of Commons favour of nuclear power stations.

Peter Hoskin

Cable’s 50-50 warning

From our UK edition

As compliments go, there's something slightly backhanded about Vince Cable's claim that, "Having worked with [the Tories] at close quarters, I've been pleasantly surprised that they're not as I'd envisaged them." And that's just one of the little nuggets embedded within his interview with Decca Aitkenhead this morning. The Business Secretary touches on everything from what he thinks of George Osborne ("he's clearly able") to his own ability to craft a joke ("I'm actually quite good at one-liners"). If you want a sense of where Cable is at, then Aitkenhead's piece is worth a quick read.

James Forsyth

Will the Tory right oppose a graduate tax?

From our UK edition

One of the vulnerabilities of the Coalition is that when Labour moves position one of its flanks can be exposed. When the Coalition agreement was drawn up, it seemed sufficient that the Lib Dems would maintain the right to carry on opposing tuition fees as both Labour and the Conservatives were in a favour of them. The Lib Dems would still be able to tell students, a key constituency for them, that they were the only party committed to abolishing fees. But as soon as the Labour leadership contenders started moving rapidly towards a graduate tax, the Lib Dems had a problem.

Peter Hoskin

Maintaining the private sector motor

From our UK edition

There's a lot of economic speculation swirling around the Westminster washbowl at the momment, but little of it is as eyecatching as today's report from the Chartered Institute of Personnel and Development. Its finding that a third of employers are expecting to cut jobs in the next quarter is bound to spark double-dip fears, even if that expectation is more keenly felt in the public sector than in the private. 36 percent of public sector employers foresee job losses, against 30 percent in the private sector. Perhaps more worryingly, both sectors are expecting more redundancies than they did in last quarter's report. Look below the headline figures, though, and there are signs that the private sector is driving on ahead regardless.

Sunday

David Blackburn

Opposing social housing reform looks like a marginal issue

From our UK edition

The Sunday Times YouGov poll (£) contains some statistics that will warm Cameron’s cockles. ‘The poll also backs the idea, floated by the prime minister last week, that new tenants in council and social housing should have a limited term of five or 10 years before they have to make way for others if their circumstances have changed. The proposal, criticised by Simon Hughes, the Liberal Democrat deputy leader, is supported by 62% and opposed by 32%. Even among Liberal Democrat supporters there is strong support for the idea, by 67% to 26%. Tory supporters overwhelmingly back it, by 78% to 18%. Labour voters are only narrowly in favour, by 48% to 47%.’ The figures for Liberal Democrat and Labour support are surprising.

David Blackburn

Sour milk

From our UK edition

David Cameron can’t afford to be known as ‘The Milk Snatcher.’ It is for that reason that N0. 10 has airily dismissed Anne Milton’s suggestion that free school milk for the under fives be cut. Still, it is encouraging that Milton has the freedom to think the unthinkable in government – her immediate predecessors were subject to a maniacal control-freakery. Despite the restitution of cabinet government, Ben Brogan asks if Cameron remains ‘too tight’ with his ministers, denying them the latitude they require run byzantine bureaucracy. This is an important point: ministers will only find cuts if they are allowed to get their hands dirty.

Peter Hoskin

Cameron makes the cuts more presentable

From our UK edition

David Cameron's neatly-constructed article in the Sunday Times (£) perfectly typifies the balancing act he is performing ahead of this autumn's Spending Review. The Prime Minister has to sound tough on the deficit because, thanks to the fiscal brinksmanship of one G. Brown, that's the job he has been appointed to do. But he doesn't want to come across as sadistic or gloomy, lest it alienate voters and coalition partners alike. The edges of the cuts need to be rounded off, made more presentable. To that end, Cameron suggests first that the cuts aren't ideological. There are, he says, items of spending that he'd like to keep – but wider budget constraints mean that he can't.

Saturday

Peter Hoskin

The Treasury’s cutting difficulty

From our UK edition

Among the most eyecatching, and potentially important, stories of the day is this one in the Telegraph. It suggests that various departments have "failed" to outline a "worst case scenario" of 40 percent cuts that was demanded by the Treasury. And it even names and shames Caroline Spelman's Department for Environment, Farming and Rural Affairs as one of the offenders. Mrs Spelman, we're told, has now "been forced to use the time before her holiday to work up the projections with her officials and permanent secretary." Nothing like a last minute job, then. To be fair to Whitehall civil servants, there is a general sense that they have set about identifying cuts with some flair – although, obviously, the process won't go entirely smoothly.

Peter Hoskin

Alan Johnson, summarised

From our UK edition

What became of the likeable lads, that group of New Labour politicians who seemed more decent than the government in which they served? Alistair Darling was one, and he has effectively retired from the frontline of British politics. Alan Johnson was another, and today he gives a frank and wide-ranging interview to Rachel Sylvester. In it, Johnson spends much time cheerleading for David Miliband, and criticising Ed Miliband quite harshly, but there are some points which are worth recording. So here goes: 1) What a drag. As Sylvester puts it, "The [leadership] contest has, in [Johnson's] view, already gone on too long and should not have been extended until September." This is an opinion which many Labour types seem to share.

Peter Hoskin

Will Hughes succeed in stirring up trouble over Right to Buy?

From our UK edition

Simon Hughes led the angry response to David Cameron's thoughts on social housing, and now he's stirring it up again. In an interview with the South London Press – picked up by Sunder Katwala over at Next Left – the Lib Dem deputy leader has attacked the Right to Buy, saying that local councils should decide whether to offer it or not. Given the Thatcherite roots of the policy, there's a firecracker quality to Hughes's comments: lobbed into the debate, and designed to provoke the Tories. I'm not sure the Tories will be too perturbed by Hughes's intervention, though. Of course many of them are proud and supportive of Thatcher's Right to Buy policy – and rightly so.