Saturday, 12 January 2013

Tax Policy unravels..

Good morning. Does anyone know who is in charge of the Government's tax policy? The confusion this week has been noticeable, and the impression is of an operation that is misfiring on its core issues of economic policy. A spot of uncertainty over badgers is one thing, but the Coalition is behaving with what looks like indifference to the fundamentals of tax and spending. Take our report this morning that the child care tax allowance will not after all be offered universally, but will instead be limited to low-income workers. On Sunday No10 and ministers told us it would be available to all; but the Treasury has said it can't be. The matter is still being haggled over with by the Quad as they try to accommodate Lib Dem demands. But before you conclude that this might be another of those Lib Dem bungles, think again: it was the Tory end of the operation that got its story wrong. Ominous. Or take pensioner benefits: the Sun reports that all will be up for grabs in 2015. Nick Clegg wants them reviewed. But Mr Cameron has ruled that out. Again, a vital policy area, that affects a constituency that is particularly anxious to be offered certainty about future income, is being buffeted about. Debate is all well and good, but this looks scrappy and vulnerable to cock-up.
A week being a long time in politics, it is no surprise that between Monday's MTR and this morning's papers, cutting benefits for the elderly has gone from an "if" to a "how" and a "when" and a "what". The Sun reports that ministers will scrap the Winter Fuel Allowance, free bus passes, TVlicences and eye tests for pensioners rich and poor, but only for those yet to retire. Poorer pensioners would be compensated with a boost in pension credits. The plan is in keeping with the ideas put forward by Nick Clegg in his radio debut yesterday. The Deputy Prime Minister labelled 2015 a "scarcity election" and said it would mark the end of "completely irrational" universal pensioner benefits. That brings us back to another story splashed in Monday's papers, universal child tax credits for working mothers. With means testing for the elderly and in child benefit, the idea of a new, universal allowance made little sense and, following a meeting of the Quad on Wednesday, the scheme has now been delayed and will be targeted in its distribution. Another victory for the leak first, design later model of government.
The Great EU Speech is coming the week after next, according to the Sun. The paper reports that the speech is now scheduled for the 22nd of January and will be bolstered a statement from Dutch leader Mark Rutte who will back Mr Cameron's campaign for a repatriation of money and power to EU member states. Mr Rutte may not have the star wattage of President Obama (whose opposition to a Brexit should be seen in the context of major trade ties between the countries, as the FT (£) reports), but his presence would show that the UK's cause is not entirely a lone venture.
He will be largely alone, though. German opposition to British "blackmail", splashed in the Times (£), is arguably as problematic as that from Washington. As I wrote in my blog yesterday, the howling from opponents of renegotiation is becoming more intense and more hysterical in tone, and we can expect more of it. At the moment, Mr Cameron will be sanguine - at least he has the full and undivided attention of his critics abroad.
As for his critics at home: Nick Clegg wants to stay in says the Telegraph(which we knew) and Ken Clarke would quit the Cabinet if Britain chased a marginal role says the Mirror (which we suspected). The Prime Minister also has an ally in the Telegraph's Jeremy Warner, who argues powerfully for reform, not exit this morning. In any case, argues the paper's leader writer, it's no business of America's:
"Washington could better use its influence to persuade EU leaders to recognise and respond to the difficulties that Britain will have dealing with a new federation on the Continent. As a nation, we may well conclude that staying in the EU is in this country’s long-term interests. However, we must not conduct our foreign policy on the basis of what is right for America, but what is best for us."
A number of papers carry the surprising news that Dr Liam Fox is not much of a Cameroon. In a letter to constituents, Dr Fox wrote that the Coalition's gay marriage plans were "divisive, ill thought through and constitutionally wrong", the Telegraph reports. He adds that he doesn't believe that the plan is a scheme to antagonise "traditional Conservatives". If it was, though, it's working - 140 Tory MPs have now promised to oppose the move.
"Wad a nerve" is the Mirror's comment on the news that two thirds of MPs support a rise in basic pay, with the average figure suggested an increase of 32% from £65,738 to £86,250. While Labour and Lib Dem MPs put the figure they deserve in the mid-seventies, Tories suggest an average figure of £96,740. Intriguingly one "hero MP" has suggested a pay cut to £40,000, which is odd, considering how many advocates of public austerity sit on the green benches.
The revelation that Nick Clegg owns a green, Incredible Hulk themed onesie (the Sun's thoughtful mock-up will help you get the idea) was not entirely spontaneous. Harry from Sheffield who asked the DPM about his wardrobe was the same Old Etonian party activist who gave it to him, the Telegraph reports. Oh well, as the Guardian points out, if the next election goes badly, at least Mr Clegg now has some useful work-experience under his belt.
The Telegraph reports that Sir Jeremy Heywood's evidence to the Public Administration Committee conceded that he failed to act on suspicions that Andrew Mitchell may have been the victim of a conspiracy. Although he was suspicious of some circumstances, he decided not to pursue the matter further. More confusingly, he did not look at whether the word "pleb" had been used at all, which was surely the crux of the whole issue.
New Labour's obsession with the world of corporate finance continues unabated, today's Times (£) reports that Mr Tony is in talks with mergers and acquisitions banker Michael Klein on a prospective partnership which would see them combine their political and financial world contacts. You'd hope Mr Blair would be intensely relaxed about any prospective fee, too.
Dave can do later. The Prime Minister is to follow in the footsteps of the mop-headed Mayor and visit India to strengthen ties in the light of falling student visa applications, according to the FT (£). The locals famously mistook Bo-Jo for firstly Boris Becker and then "the King of England". You wonder what they'll make of Mr Cameron?
You can spot a scrounger, George Osborne confided in his conference speech. They're the ones with the curtains still drawn while you're on your way in to work. Well, either they're scroungers or the skills minister. Matthew Hancock managed to miss his Daybreak interview on youth unemployment yesterday morning having overslept, the Mailreports.
Rail minister Simon Burns found it was standing room only, even though he commuted from Chelmsford to London before 6am, the Telegraphreports. The minister had meant to catch the 5:40 train, but missed it as he stopped to buy a copy of the Times. He must have the Telegraph delivered...
David Jones on the benefits of Coalition :
@DavidJonesMP: "Huge gap in my zeitgeist awareness. Until today I didn't know what a onesie was and thought it was pronounced 'oh-kneesy'." 

In the Telegraph
Best of the rest
Philip Collins in The Times (£) - To do or not to do - that is the PM's question
Janice Atkinson in the Daily Express - How dare the US lecture us about staying in the EU
Today: Education Minister Edward Timpson to make announcement on adoption support. 
Education Secretary Michael Gove to announce new figures on existing and planned Academy schools.