Wednesday, 23 January 2013

Cameron rolls the dice over Europe..

Good morning. The things Dave has to do to get decent headlines. His offer of an in-out referendum dominates the papers this morning. It's a big moment, and having read the speech my first impression is that it exceeds expectations: once again, he has shown a knack for delivering under pressure. The focus is on the detail of his timetable for a referendum, but the argument he sets out in depth is worth studying. He analyses the EU's problems - the euro, weakening competitiveness, the democracy gap - and argues that the EU must reinvent itself based on five principles: competitiveness, flexibility, giving power back to member states, democratic accountability and fairness. Crucially, he says his preference is for a new treaty that would mean a collective change. If not, Britain will seek its own renegotiation. Britain is independent and open, he argues, and should be listened to. "I believe in confronting this issue, shaping it, leading the debate not simply hoping it will go away." He says that now of course but it wasn't always thus. Still, he has grasped the issue and now aligns himself squarely with the In campaign. Note that a major chunk of his speech sets out the argument for staying in the EU, and the perils of leaving: he does not linger on the fence. This speech will mark a significant break in the pattern of politics: Mr Cameron will offer the electorate a chance to leave the EU, a groundbreaking moment. He hopes this will be a major vote winner, and will trump Labour. It will also have substantial consequences for the Conservative party because it will force it to confront and resolve once and for all the division that runs through its heart. Polls suggest the EU is not the hot issue many say it is. But in the light of this morning I suspect those predicting Mr Cameron's defeat in 2015 may at the very least need to reconsider. 
The full details of the concessions Dave will demand are yet to be teased out (the Mail has a shopping list if he's short of ideas). Mr Cameron will need some real meat to put before the electorate, if only for party management reasons. An opt-out of financial services legislation, the working time directive or other areas of employment law may appease the party but test the enthusiasm of a country which sees these as sectional interests. An opt-out on unrestricted movement of people might be electorally popular with the immigration-conscious right, but would be almost impossible to negotiate and smacks of the nasty party. The Prime Minister's options are fewer than it seems at first glance. As Patrick Wintour writes in the Guardian, this most risk-averse and pragmatic of politicians has just taken the gamble of his life.
Yesterday's borrowing statistics were really poor. Spending is still outstripping increases in government income. The public sector net borrowing requirement excluding financial sector interventions (aka the structural deficit) rose from £14.8bn for December 2011 to £15.4bn last year. Borrowing for the year is up 7.3pc on this time last year, and if present trends continue, Britain will miss this year's deficit target by a cool £10bn, the Telegraph reports.
The Chancellor wants to respond with more cuts (all after the next election) to make austerity more, well, austere. Many in the Cabinet are opposed, as the FT (£) reports. Vince Cable's objections are to be expected, but Theresa May and Philip Hammond are hardly reds in the Cabinet bed. Their suggestion that their departments had cut enough already puts George in a spot. As Mary Riddell points out in theTelegraph, universal pensioner benefits are sustained only out of fear of the grey vote.
Worse still, George, who has always had a relatively painless public relationship with the Bank of England, has come in from criticism from a de-mob happy Mervyn King. Sir Mervyn has suggested that fiscal policy take up some of the slack and also questioned the idea of abandoning inflation targeting which Mr Osborne is said to be open to, the FT (£) reports. Kick a man while he's down, why don't you?
Want to spot a poor person? Look for the fat one. That's the advice of Anna Soubry, public health minister, who warns the Telegraph that deprived children have gone from being "skinny runts" to eating "an abundance of bad food". Stand-by for the Twitter storm.
Michael Gove will announce a return to two year A levels today, theTelegraph reports. AS levels will no longer be a component of a full A level, but will become shorter, stand-alone qualifications. The Russel Group of universities will also be asked to set up an academic board to advise on the design of the new A-levels, introduced in September 2015. Rather like old clothes, it seems that old qualifications drop in and out of fashion every ten years or so.
Tory supporters could be forgiven for occasionally feeling that the Government is attacking them. Tory councils are convinced they are. A group of 30 local council leaders have written to Downing Street asking him to forbid the "constant criticisms" and "patronising language" being used by Government ministers. If it isn't reigned in, they will withdraw their cooperation with Dave's re-election campaign, the Telegraphreports. The mood in the local associations is venomous as it is, particularly over gay marriage, unless Dave can offer them some meat soon, he's going to have to deliver his 2015 leaflets himself.
Danny Alexander has launched a broadside against the renewal of the Trident programme in this morning's Guardian. The Treasury Secretary told the paper that there are "credible and compelling alternatives" and that the Treasury does not have "a magic pot of money" to pay for the planned programme. The £7bn cost of new Trident submarines looks particularly difficult given that a further 5,300 redundancies in the army were announced yesterday. The Times (£) reports that the infantry will bear the brunt. As I blogged yesterday, with an army of only 82,000, Dave is going to have to accept that whether or not there is a "generational struggle" in Africa, our ability to play a part in it will be severely limited.
A man who knows a thing or two about getting a generational struggle going pops up to back Mr Cameron's military strategy in today's Sun. "David Cameron is right to warn that this is a battle for our values and way of life which will take years, even decades," he writes. "But it is a battle we cannot shirk."  Sincere face. Moist eyes. Step down from the autocue.
The Coalition's childcare reforms haven't exactly captured the female vote. While the Prime Minister's personal polling trails Ed Miliband's by only 1pc when men are questioned, the gap increases to 16pc among women, the Mail reports.
Of all the things Britain's honours system needs, greater scope for political patronage is probably not one of them. The Independent's report today suggests that under proposed reforms, however, ministers will be able to circumvent the normal civil service vetting procedure and directly recommend candidates to the independent Honours Committee. If the nomination was declined, the committee would have to explain itself to the minister. The catalyst? Mo Farah failing to be awarded a knighthood. Next week: ministers to directly nominate BBC Sports Personality of the Year...
The Commons debated the Succession Bill yesterday, Nick Clegg's bid to finally pass some constitutional measure enshrine Royal gender equality in the law. The Telegraph's Michael Deacon was impressed with one backbench contribution in particular:
"[Jacob Rees-Mogg] enlivened the debate with some magnificent expostulations. 'Mr Deputy Speaker, this is crucially important. Has the Deputy Prime Minister said that under the provisions of this bill, the Duchy of Lancaster would be separated from the Crown for the first time since Henry IV?' He couldn’t have sounded more startled if Mr Clegg had proposed to abolish corgis."

Mayor Bo-Jo has appointed Gerard Lyons, former chief economist at Standard Chartered, as his new chief economic adviser. The FT (£) reports that this raises "renewed speculation about his national ambitions". What national ambitions? Dave's staying on until 2020, after all, and Boris is nothing if not a loyal lieutenant.
Ever wondered how you should protect yourself from the cold? Tracey Crouch has the answer:
@tracey_crouch: "Stab vests are warm #fact"

In the Telegraph
Best of the rest
Daniel Finkelstein in The Times (£) - Obama is far better at hope than audacity
Peter Riddell in the FT (£) - What Whitehall can learn from London 2012
TODAY: Foreign Secretary William Hague and Foreign Office Minister Hugo Swire to meet the Vietnamese Communist Party General Secretary. Labour market statistics released for January 2013. 
08:00 am: Prime Minister David Cameron to deliver speech on Europe. The speech will take place at a central London location.
09:30 am: Education Secretary Michael Gove gives evidence to Commons Education Committee. Grimond Room, Portcullis House.
09:40 am: Oxford Media Convention. Culture Minister Ed Vaizey will deliver the keynote speech at 09:40 followed by Harriet Harman MP. Said Business School, Park End Street, Oxford.
10:00 am: Energy Secretary Ed Davey gives evidence to Commons Energy Committee. Wilson Room, Portcullis House.
10:15 am: Chiief Medical Officer Professor Dame Sally Davies gives evidence to Commons Science and Technology Committee. Thatcher Room, Portcullis House.
02:00 pm: Zionist Federation Lobby event with speeches from Douglas Carswell, Louise Ellman, and Ian Paisley Jr. Emmanuel Centre on 9-23 Upper Marsham Street.