Thursday, 7 March 2013

Cable's plan v..

Good morning. There's no Plan B, and there's no Plan A+. That will be David Cameron's message at lunchtime when he gives a speech on the economy from a mystery location in West Yorkshire. What can we expect? Steady as she goes, and lots of it. Mr Cameron will warn that despite the "long, hard road ahead", changing course would "plunge us back into the abyss...we’re getting some signs that we can turn our economy round and make our country a success is the very moment to hold firm to the path we have set," we report. A year ago, those remarks would have been aimed at the opposition's demands for greater spending and less austerity. Today, they are made with the Tory backbenches in mind. Dave and George are not about to deliver the harder cuts and tax reductions on Conservative wishlists. The market reaction? The pound fell below $1.50 in early trading.
But while there's no Plan B, a constant of Coalition life is that there is always a Plan V. Vince Cable has called for more infrastructure spending in a 3,800 word essay for the New Statesman calling for "greatly expanded" capital spending funded through borrowing rather than cuts. Borrowing to invest, as Labour might put it. The Coalition's measures of economic  credibility shift like the sands in the desert, but with borrowing costs the new metric, giving even a hint that purposefully ramping up the annual deficit is on the cards would spook the bond markets. This is a suggestion with the next parliament (and a prospective Lib-Lab partnership) in mind, not today's.
Whither radicalism in the Budget? Not quite. The FT (£) foreseessignificant new powers devolved to Mark Carney when he takes up the reins in Threadneedle Street come July. Their story, echoing a Times (£) business splash a fortnight ago, reports that Mr Osborne sees even looser monetary policy as the flip side to fiscal austerity. New powers under discussion in the Treasury include tinkering with the inflation target and a BoE mandate to tackle unemployment as well as inflation. In the meantime, Sir Mervyn King has been pushing for even more QE according to recent bank minutes. Whether he has been successful will be revealed when the interest rate decision is published at noon. As Thomas Pascoe wrote on our blogs site earlier this week, money printing is far from a one way bet, and probably won't help the Coalition's problems with living standards falling.
So the recipe is for gradual fiscal consolidation and significant monetary "activism". Will that be enough to  assuage the "dinner table plot" malcontents who the Times (£) identifies as Chris Grayling, David Davis, Liam Fox, John Redwood and a dozen other MPs all of whom met last week to discuss the prospect of a leadership election prior to 2015? Will it be enough to derail Theresa May, who the Mail this morning dubs the "stop Boris" candidate? In itself, no. Only a return to growth can do that. Given an angry Lib Dem leader on one side and an indisciplined back bench on the other, the politics are currently being allowed to obscure the economics, as Jeremy Warner argues in his column today: 
"Deregulation and tax cutting are where supply-side reform must start, but it needs quickly to be extended into disgracefully inept energy policy, education, deficient infrastructure spending, welfare, the public services, competition policy, the labour market and much else besides. Politically, there are big risks in radicalism – but there has rarely been a more urgent need for it."
The Mail's leader hails a "remarkable new consensus" on immigration this morning, in the light of Ed Miliband's mea culpa in last night's party political broadcast. Labour's bid to reposition themselves continues this morning. At 10:00, Yvette Cooper will give a speech at the IPRR in which she will pledge that Labour will keep the Coalition's migrant cap, provided "the evidence shows it would not cause problems for our economy", which sounds like a bit of a movable feast. Labour lurch or no, Theresa May is not about to be out manoeuvred. The Home Secretary is examining a benefits bond for immigrants, requiring cash down on entry to the country which will later be repaid if no benefits are claimed later on. The Guardian reports that these would not be universally required, but would instead be imposed on two or three "high risk" nationalities.
Mid Staffordshire is something of a political nightmare for all parties (and the story developing about the Royal Bolton could make it even worse), but particularly for Labour. It happened on their watch, and significant blame has been apportioned to the target driven culture they instituted. All the same, it's the Conservatives who seem vulnerable on the NHS, particularly given support for Sir David Nicholson which is not echoed on Fleet Street. Dave's attempt to shift the focus onto Labour at PMQs involved calling for "other people [involved] should be thinking of their positions", a barely concealed dig at Andy Burnham which Labour dismiss as "cheap and shabby" in today's Guardian. But if those involved should be considering their positions, what about Sir David? Writing for us, Sue Cameron provides a rare defence of the Mail's Man With No Shame:
"To lose him now would be a recipe for chaos. It would not mean that he had been held duly accountable for what went wrong – merely that he had been hounded out of his post."
Dave, who had shown little interest in Labour's taunts over the "bedroom tax", sprang into life at PMQs yesterday, trying to explain the difference between a tax and the withdrawal of a benefit to Ed. IDS joins the fight today, writing for us that not only were the reforms "fair", they also "help us get a better grip of our social housing stock".
It's a cogent defence, but it's also a late one. Labour have been allowed to choose the vocabulary of the debate, and Ed's attempt yesterday to juxtapose a "bedroom tax" and the doomed defence of bankers' bonuses was crude, but effective. The opposition's attacks are nothing if not telegraphed, and Dave needed to get his defence forward at a much earlier stage of the debate than shortly before the April inception of the policy.
An air of unreality permeates British military policy at the moment. In the wake of Philip Hammond's announcement that several tank units would have to give up their tanks (Matt wonders what that means for the paras in his cartoon for us), we report that the Commons Defence Committee will warn that our reduced spending will leave us unable to keep our NATO pledge to spend at least 2pc of GDP on arms. At the same time, the Mail reports that the UK may arm Syrian rebels within months in a bid to counterbalance Iranian support for President Assad's regime. At least we now know where all those tanks are going...
The opposition have developed a "sense of entitlement" where the next election is concerned have become "lazy" according to Jim Murphy. Interviewed in the New Statesman, Mr Murphy cautioned against relying on northern anti-Thatcherist feeling to win elections in the south, adding that the country had been "segmenting" voters by playing to special interests. Not very One Nation.
The role and powers of the Prime Minister are the topic when the Political and Constitutional Reform Committee meet later today. One of their interviewees will be Michael Pinto-Duschinsky of Policy Exchange who writes for us today arguing that the anomaly whereby the senior Civil Service and the Deputy Prime Minister have their own policy units but Dave does not. "Politically sensitive planning cannot be left to civil servants," Mr Pinto-Duschinsky warns. This will be especially the case on Budget day - following the PCS vote yesterday, around 250,000 of them will be on strike.
If the lights go out, it would be no good John Hayes explaining that it was for "the right reasons", John Hayes explained in a Radio 4 debate yesterday. Instead, those warning that the carbon cost of transporting sufficient trees to be incinerated in the UK actually exceeds that of burning coal are being "detatched and bourgeois", he explained. And, as we all know, there has never been the hint of anything detached or bourgeois about the UK's thoughtful and far sighted energy policies.
BBC2 will air a documentary in which Bo-Jo talks openly about his rivallry with Dave on March 25. Whether it's quite as the Sun imagines it - "bred on the playing fields of Eton. A haircut no law can tame. A thirst for power no leader can ignore. A lust no woman can resist. Johnson is RamBoJo" - remains to be seen.
Say what you like, but life is never dull when you're Tim Farron:

timfarron: "Just been watching lots of Prefab Sprout on youtube, including a bizarre appearance on the wide awake club c1986. An evening well spent!" 

In the Telegraph

Jeremy Warner - It's plain what needs to be done, George - so just get on and do it
Sue Cameron - Nicholson doesn't deserve to be hounded out
Daniel Hannan - Latin America has chosen rage over progress
Telegraph View - Labour has only hollow words on immigration
Best of the rest
Steve Richards in The Independent - Once ministers fawned on Cameron. Not any more
John Studzinski in the FT (£) - British leaders must act fast to save the Square Mile
Stephen Glover in the Daily Mail - Labour's to blame for The Man With No Shame. It's pure folly for the Tories to back him
Leo McKinstry in the Daily Express - Labour betrayed the working class over immigration

TODAY: David Cameron to make major economy speech. At lunchtime at undisclosed venue in West Yorkshire. Britain hosts ministerial-level meeting of the international Friends of Yemen group.
09:00 am: Westminster Education Forum on the new history and geography curriculum. Sixty One Whitehall.
09:45 am: HMRC and Charity Commission give evidence on tax avoidance to the Commons Public Accounts Committee. Committee Room 15, House of Commons.
10:00 am: Yvette Cooper speech on immigration to IPPR. IPPR, 14 Buckingham Street.
10:00 am: Northern Ireland Secretary Theresa Villiers gives evidence to Northern Ireland Affairs Committee on Draft Northern Ireland (Miscellaneous Provisions) Bill. Committee Room 8, House of Commons.
10:00 am: Political and Constitutional Reform Committee takes evidence on the role and powers of the Prime Minister. Wilson Room, Portcullis House.
10:15 am: Mayor of London, Boris Johnson, to announce details of his £913m vision for cycling in the capital. Victoria Embankment - at the junction with Horseguards Avenue.

11:30 am: Scottish Affairs Committee hears evidence on the referendum on separation for Scotland. Committee Room 16, House of Commons.
12:00 pm: Bank of England decision on interest rates and quantitative easing.

07:00 pm: Boris Johnson hosts People's Question Time. The London Mayor and members of the London Assembly answer questions from members of the public The Broadway Theatre, Catford.