Monday, 25 March 2013

Dangerous precedent..

Good morning. Overnight, a deal has been reached in Cyprus (follow our live coverage here). An agreement which will secure €10bn of bailout funds was agreed by finance ministers from the 17 eurozone countries. Depositors and bond-holders will be hit. Popular Bank of Cyprus will be shut, with all deposits below €100,000 shifted over to Bank of Cyprus and a "bad bank" created to house the remainder. Deposits above €100,000 in both banks will be frozen, and a raid on savings is expected to net up to €4.2bn. Even senior bank bondholders face being "wiped out" as we report. The deal does not require the approval of the Cypriot parliament as it involves the restructuring of the banks, not the direct imposition of a tax, although the FT (£) is reporting that those accounts which will be drawn on for "bail-in" funds will lose a "significantly higher" sum than 20pc (with the Today programme suggesting that some may lose up to 40pc).
So, the eurozone lives to fight another day, but the precedent established here will send chills throughout the rest of the continent. Germany is no longer willing to play lender of last resort without a significant level of self-sacrifice from the country with the begging bowl. Given that eurozone economics is still oriented largely towards the notion of perpetual German goodwill, and that by all accounts President Anastasiades came close to leaving during overnight negotiations, it feels as though the continent has edged closer to the brink that ever before over the last week. 
Cyprus is the big, bad news of the day but Westminster will be riveted by the Boris Johnson bike crash. Has it made a difference to the blonde bombshell's chances? No, if by that you mean has it changed what we know about him. All the allegations have been in the public domain for years, and well studied by Borisologists. His friends will point out that he has twice been elected mayor despite his past, and that suggests the voters take a sanguine view of his failings. But Eddie Mair's demolition job will have an effect nevertheless: Boris has so far traded on a collective willingness by the media to overlook his record in order to relish his personality. He is too good a story to stop, or at least was until yesterday. The danger must be that it will now be open season, and we will get more like this. Boris has to consider what his response will be if the Mair moment proves to be the beginning of a trend. Team Dave likes having Boris as the enemy: a threat, but a contained one (not in the Commons, and with baggage). They will be happy to see him squirm, but don't want him to implode. Not yet at least.
The headlines tell the story so far as the interview goes. The "bike crash" line is the Guardian's, the paper also describes it as "the worst interview the mayor has ever conducted". The Times (£) found that Bo-Jo was "made to squirm at past misdeeds", while the Mail's Quentin Letts suggests that the additional scrutiny, both yesterday and in tonight's BBC2 documentary, might be no bad thing: "Bonker Boris versus Honker Miliband. It’s not hard to see who would win the ladies’ vote in that one." As for the mop-haired one, he's launching a new policing initiative this afternoon (see schedule), and it's that he talks about in his column for us, but there's no doubting that Brand Boris is looking a little tarnished this morning.
For an issue which we are often told is not discussed frequently enough, we have heard an awful lot about immigration recently. Today, it's Dave's turn. He'll be speaking in Ipswich shortly after midday and will be being jolly tough on benefit tourists. As we report, new plans will require migrants from the European Economic Area to have a "genuine chance of finding work" to claim benefits. He will also outline plans to cut benefits to some jobless migrants after six months, require non-European immigrants to pay to visit a GP, and prevent  people here illegally claiming benefits based on past National Insurance contributions. As the Sun's newest columnist writes himself, "Since I became Prime Minister, I’ve said that my Government will back everyone who wants to get on in life. And that’s true whether your family have lived here for centuries or you came last week."
If the plans contribute to a slackening of the pace at which the welfare bill is expanding, they will be very welcome. As we report, figures alongside last week's Budget show that forecast spending on benefits between 2011/12 and 2015/16 has risen by £6.4bn since the Autumn Statement. With the Lib Dems ready to block further welfare cuts, as they did with a proposed £6.5bn saving earlier this month, the welfare system has become one of the great obstacles to putting Plan A into practice.
The "catastrophic leadership failure" which Lin Homer delivered while in charge of the UK Border Agency ought to have acted as a bar to her taking up a position as chief executive of HM Revenue & Customs, according to the Home Affairs select committee. As we report, Mrs Homer left a 24 year backlog of immigration cases in her wake at the UKBA, a total of 312,726 cases or the population of Iceland. Keith Vaz has said that he was "astounded" that Mrs Homer was then promoted. With a background like that, she's sure to be on the shortlist if Sir David Nicholson ever gets the boot from his NHS role. Listening to Keith Vaz, though, it's hard not to conclude that the select committee system is fast becoming a vehicle for personal and political point scoring rather than a source of reliable, forensic analysis.
The Tory campaign database is in disgrace, the Times (£) reports. Having frozen in the run-up to Eastleigh, as it had done before the 2010 election. Grant Shapps has brought the system into the party's Milbank HQ, but the messing around has proved too much for some, "they are trying to patch up something that is un-patch-up-able" one staffer grumbles to the paper. The Tories could do with some organisational help. As Tim Montgomerie writes, they cannot rely on Dave's charm alone:
"Mr Cameron's shift from mending the economy to saving his bacon is only the latest in a long line of 'strategic adjustments'. He has struggled to ever define a mission, let alone stick to one."
John Prescott's concern for the Queen's workload, expressed via the comment pages of the Sunday Mirror, has drawn fire from all corners today, not least from Jacob Rees-Mogg who tells the Mail that "the Queen is anointed our Sovereign for life. It is a vocation not a job. Lord Prescott should remember his oath as a Privy Counsellor and as a peer."
The National Planning Policy framework comes into force tomorrow, as we report. With planning permission grants up by a quarter in England since the changes were announced (and down in Wales and Scotland, where they do not apply), there is, as we report, a sense that Nick Boles' drive for greenfield development will alienate further much of the Conservative party's rural base. As our leader puts it, "at a time when the Conservatives are already unpopular it is either brave or foolhardy to pick a fight with their own people."
Douglas Alexander will warn today that Britain's relationship with America would suffer if we were to leave the EU. Euroscepticism risks leaving the nation "relegated diplomatically and economically", Mr Alexander will say in a speech at the Kennedy School of Government at Harvard University. It may be true, but it also raises the question: is the best argument the "in" camp can muster that America will be cross with us if we leave?
The British people are so wealthy that they lack the "national will" to push for economic recovery found in countires like India and China with "real problems", Lord Heseltine tells the Independent. "The richer you get, the less imperative there is," he adds, although he also questions the accuracy of the GDP statistics in the face of rising house prices and employment.
A mere 35 years after it was posed, the McKay Commission have put forward a suggested solution to Tam Dalyell's West Lothian Question - how to address the problem of Scottish, Welsh and Irish MPs voting on issues which only impact English constituencies. Writing on our website, Sir William McKay, the commission's chairman explains that his "menu of options" allow governments to progress along different procedural paths which would give English MPs primacy. However, the reforms proposed do not amount to a formula allowing only English MPs to vote on English laws. That's a pity because, as we report, David Cameron has already promised "English votes for English laws", and he'd be loath to break a pledge.

Chris Bryant reveals a shaky grasp of the constitution. Since time immemorial (ok, 1997), new government policies have been introduced either in the Queen's Speech or the Sunday newspapers:

@ChrisBryantMP: "Shouldn't the new proposals on immigration be made to parliament? 


In the Telegraph

Boris Johnson - It's bobbies, not buildings we need in the fight against crime
Best of the Rest

Alan Rusbridger in The Guardian - We need reform and a free press. This will require both time and openness
Tim Montgomerie in The Times (£) - Charisma won't win Cameron the election
Trevor Kavanagh in The Sun - PM a political dwarf: sleepy, dopey, grumpy

09:15 am: Launch of Mayor of London's policing plan. The Mayor of London Boris Johnson and Metropolitan Police Service Commissioner Sir Bernard Hogan-Howe will join members of the Dalston Safer Neighbourhood Team on their local beat to launch the Mayor's Police and Crime Plan. Dalston Safer Neighbourhood base, Shacklewell Lane, E8 2DA.
09:30 am: Assembly committee publishes report on organ donation bill. The Health and Social Care Committee publishes its Stage 1 report on the Human Transplantation (Wales) Bill. The bill aims to increase the number of organs and tissues available for transplant by introducing a soft opt-out system of organ and tissue donation in Wales. National Assembly for Wales, Cardiff, CF99 1NA.
09:30 am: British Bankers' Association (BBA) releases its latest high street banking report.
12:45 pm: David Cameron speech on immigration. Ipswich.
03:15 pm: Public Accounts Select Committee to hold an evidence session on funding for new school places. Barking Town Hall, Barking.
04:00 pm: Launch of report by all-party parliamentary group on the Off-Gas Grid. Room R, Portcullis House.
06:30 pm: Business minister Michael Fallon speech to Politeia. East India Club, 16 St James' Square.