Friday, 22 February 2013

Osborne under the pump..

Good Morning. There must be times when George Osborne feels that it's all just a little bit of history repeating. He is under pressure again from campaigners to use the Budget to postpone September's planned rise in fuel duty when the escalator is due to kick back in. Given an AA report which found that the cost of filling an average car has risen £3 in the year-to-date, and Sir Mervyn King's recent remarks sending Sterling lower against the Dollar and pushing pump prices north, the Times (£) has found grounds to splash on calls to cancel rise in duty. So 2012. The revival of fuel prices as a political issue also highlights that although the pain in the real economy through austerity in fiscal policy is still yet to hit its peak, super-loose monetary policy is also hurting - analysts put 25pc of the rise in price at the pumps down to weak Sterling. With the FT(£) reporting that the Bank of England is content to "wander free of [the] inflation target", if anything that effect will be compounded in the months ahead.
Petrol prices aren't George's only Budget headache, or even his biggest. The Guardian reports that he is preparing to concede defeat on the deficit, acknowledging an OBR report which will show borrowing this financial year has gone up, not down (despite the second highest ever January surplus last month). Without a stellar final two months, however, the OBR now believes that the Government will fail to come in below the £121.4bn spend in the 2011/12 financial year.
The situation is unenviable for the Chancellor, and the newsflow this morning highlights the difficulty he has in facing both ways as Chancellor and strategist-in-chief. The next election will be fought on living standards, and it does the Coalition no favours to be seen to be exacerbating the problem with tax rises on what, for many, is a necessity. On the other hand, as Chancellor, George is keen on credibility. Failing to meet borrowing targets for the year undermines that. Bowing to political pressure and rejecting a tax rise on one of the most price inelastic products on the market would hardly convince the markets he was serious, either. As Peter Oborne noted yesterday, no wonder some believe he might benefit from just having the one role to concentrate on.
While Ed has been touring Scandinavia collecting policies (one previous owner, slightly tatty around the edges) and a set of charming photos for the mantelpiece, Jon Cruddas has been busy with the party's policy review. Today's FT (£) reports that he will float an attempt to revive the contributory principle with regard to benefit levels, meaning those losing their job after 20 years of work would receive more than those who have never worked. Whether the "strivers" the party prizes will bepersuaded by a plan which only benefits them when they fail remains to be seen. How Labour can do more with less is the economic argument the party must face before 2015. Given the party's hostility to low benefit uprating, it is unlikely they would consider an outright cut to benefits for those who have never worked. As such, this is offering a targeted benefits increase which does more with more. The strivers won't like that.
Dave was in Eastleigh yesterday. His urgent meeting with Maria Hutchings was sufficient to see her empty chaired by the BBC at a hustings which the other candidates attended. Dave was jolly cross about it, too.  "I think the BBC has behaved badly and stupidly… I think this is a totally got-up thing by the BBC… You know, you’re not the most important thing in this by-election," he ranted at a cable company Q&A. Our sketchwriter Michael Deacon thought he looked knackered, which raises the question of what he was doing there, given he had only just stepped off a jet from India. Given the approval gap between Prime Minister and party (a gap he is partly responsible for creating by defining himself against his backbenchers so often), perhaps it's the only way CCHQ see of reviving a campaign dying on its feet.
As interesting is the FT's (£) take on Dave's answer to a question about the EU referendum. He told voters that "to get an EU referendum you need to vote for a Tory-only government." The paper points out that this contradicts last month's assertion that "if I'm prime minister, the referendum will happen", implying that he may sacrifice the vote if another coalition government is formed. Given the levels of distrust which still exist over his back-tracking on the Lisbon Treaty, surely he wouldn't dare, would he?
The Lib Dems have launched an investigation into allegations that Lord Rennard, the party's former chief executive, pestered female staff for sex while colleagues turned a blind eye, we report. The claims were made by several former staff members on last night's edition of Channel 4 News. Lord Rennard's representatives said he had "no recollection" of any of the alleged incidents.
Semantic evasions aside, the Government have an estimate of the number of Romanian and Bulgarian migrants likely to be heading to these shores. As I blogged yesterday, estimates from the Bucharest embassy have been circulated amongst the relevant Cabinet ministers, and they're on the low side of expectations because many in Romania are more interested in heading to Spain (although our story that the Romanian ambassador fears violence towards immigrants in Britain hints at darker motives for avoiding the UK). I suspect that the public would accept that Whitehall wants more work done on the figure before it can be published, but let's not pretend, as some have done, that no estimate exists at all.
As usual, it's the cartoonists who are most damning. Our Blower cartoon depicting Dave siphoning off petrol from a gleaming DfID truck for a run-down tank, and the Independent's take capture the split on Dave's DfID/MOD cross-funding suggestion yesterday. Our leader offers the PM backing, writing that "such a move would be a welcome concession that the ring-fencing of DfID was a mistake." The Mail is curiously subdued, though, focusing on the "backlash" over the plan.
"Worthless for the workless" is the Mirror's take on the Coalition's flagship Work Programme after it emerged that of the 9,500 people transferredonto it from disability benefits, only 20 have found a job lasting more than three months. Including the able bodied, the Mail adds that of 785,360 people refereed to the scheme, only 18,270 or 2.3pc found a lasting job, half the projected rate. The Commons public accounts committee said that the £5bn scheme had made an "extremely poor" start since its launch in summer 2011.
Speaking to us, David Blunkett pleaded for politicians to reach a compromise on press regulation. The amendments proposed in Monday's House of Lords vote would risk "undermining a free press", he notes, adding that they ought to have focused attention on all sides making compromise easier.
Damian McBride will appear in parliament on Wednesday for the first time since quitting in 2009 to answer questions from the Commons public administration committee. Mr McBride will answer questions about the relationship between Number 10 and the civil service. If his evidence is as insightful as his blogging has been, we can expect fireworks.
"A lot" of Conservatives "inside government" support Lib Dem proposals for a mansion tax, Vince Cable told our reporter while out canvassing in Eastleigh. He added that he was confident that "there's now enough momentum around it that it will happen". Perhaps Vince has forgotten - Dave expressly forbid the Lib Dems from backing Labour's prospective mansion tax motion. That would have killed those thoughts dead, right?
Britain's foreign policy received another blow yesterday as the US said it would not recognise the results of next month's Falklands referendum on the island's future. The Sun reports that John Kerry can expect a rough ride from William Hague when he makes his first visit as US Secretary of State later next week. Fortunately, Mr Hague has been busy improving bilateral relations with another of Number 10's key allies. The Mailreports that Larry the Cat had been obstructed from taking his favouriteroute home by the erection of a shield at the entrance to the Foreign Office covering a gap between gate and wall. Fortunately, Mr Hague found time to order the barrier be taken down. The Mouser in Chief to the Cabinet can now continue his work unobstructed.

Kids say the funniest things, although not if you're Lisa Nandy:

@lisanandy: "Interviewed by young people in Wigan who just asked "what sort of transport was there when you were young?" Er, horse and cart? #feelinold" 


In the Telegraph
Best of the rest

Mary Dejevsky in The Independent - Politics needs to grow up and stop putting children first
Ian Birrell in the Daily Mail - Cover-up!
David Lipsey in The Times (£) - While there's work, we'll put up with low growth

02:00 pm: Green Party leader Natalie Bennett spring conference speech. East Midlands Conference Centre, Nottingham.