Tuesday, 28 May 2013

Another spending brawl looms.. Ben Brogan's morning briefing

BREAKING NEWS: George Osborne has told Today that he could not foresee further cuts to welfare in the Spending Review. He said: "I am in effect ruling it out." He wants further savings to come "out of the machinery of government".

"We've just got seven departments to agree to substantial savings. They've accepted cuts of anywhere between eight and 10 percent... It's a difficult decision, I'm not hiding that from anyone - but it's necessary."
Good morning. Iain Duncan Smith has always been well-regarded by the Tory right, but his star may be rising to its greatest height yet. Mr Duncan Smith has offered to cut the welfare budget by up to an additional £3 billion annually to protect spending on the Armed Forces, as we report. He has personally contacted Theresa May and Philip Hammond with the details, after they had raised concerns about the impact of national security of further cuts to their departments.
We understand that Mr Duncan Smith has offered to restrict housing benefit for the under-25s, and to limit state payments to families with more than two children. It's a bold offer but one that our leader lauds:
This has got to be the right approach. To govern is to choose, as the old adage goes, and the Coalition has arguably made the wrong choices when it comes to public spending. It has protected programmes like the NHS and overseas aid from the scrutiny and radical reform that greater budgetary discipline would have necessitated.
The particular difficulty is that further cuts will require legislation, which would test Mr Cameron's ability to command support of the Lib Dems. Lib Dem MPs are likely to resist the changes as cuts too far, at a time when Mr Clegg's position is weakened and he is vulnerable to a show of strength from his opponents. Lib Dems have said that the only chance of welfare cuts happening is if Conservatives are first willing to agree to means-testing benefits paid to pensioners - but Dave's debate promise not to touch these makes that impossible.
The result is an unsatisfactory impasse. And the political rows will only rumble on, with the next spending review to be published on June 26th.
As Dave continues his accumulation of enemies within the Tory party, the prospect of a no confidence vote lingers. There's a lot of anger about - so we can't be sure how close the 1922 Committe Chairman is to receiving the necessary 46 letters to trigger a no-confidence vote. David Ruffley yesterday warned of the importance of next year's European elections for Dave's future. But, as I write, that might not be Dave's main threat:
The Whips Office says there is a hard core of about 30 irreconcilables who will do anything to bring down Dave: they want to see him fail at all costs. Around them is a wider circle of disgruntled MPs, many of them sacked ministers and backbenchers who feel their talents have been ignored. How many of them have put letters in to Graham Brady is unknown. For my money the danger to Mr Cameron is not the coordinated revolt implicit in the Ruffley threat, but a sudden, unscheduled crisis.
Even against this backdrop, criticising Dave for having the temerity to go on a pre-arranged half-term break still seems quite something. A burned out PM helps no one but the opposition - whether that's internal or external. As Dan Hodges writes for us:
In one breath we criticise our leaders for being drunk on ambition, and hungry for power. Then in the next we criticise them for too readily abandoning the corridors of power in favour of their Balearic sun loungers. 
The reforming efforts of Iain Duncan Smith and Michael Gove rightly get much attention, but is Chris Grayling the most radical minister of the lot? The latest evidence of this comes in Grayling's plans to privatise the court system. As The Times (£) reports, this would establish the courts as a commercial enterprise free from Treasury control - and would save the Ministry of Justice £1 billion a year. Grayling's radicalism is borne of the need to find £2.5 billion in cuts before the 2015 general election.
The new Whitehall review into the UK's deterrent will reject alternatives to Trident, reports the FT (£). But the possibility of clashes remains. Lib Dems have long advocated a cheaper alternative and the Alternatives Review report will leave open the possibility of a scaled-down version of Trident, which would save £5 billion in capital costs and around £1 billion a year thereafter. The battle lines are being drawn, with a Tory adviser accusing Lib Dems of "gambling with our security".  Meanwhile, Labour's exact policy remains under review.
Britain and France have opened the way to supplying weapons to opposition forces in Syria's civil war, reports The Times (£). After negotiations with the European Union, William Hague said: "While we have no immediate plans to send arms to Syria it gives us the flexibility to respond in the future if the situation continues to deteriorate."
Nick Boles is tackling Britain's housing shortage head-on. Imploring that current housing laws risked sending the country back to the 19th century, when only the wealthy could afford homes, Mr Boles sees building on greenfield sites as increasing "human happiness", as he tells the Mail. And no one could accuse him of nimbyism: 7,000 homes are being built on greenfield land in his own Grantham constituency.
Theresa May's plans for new legislation after last week's Woolwich murder has been branded "kneejerk" by a senior Lib Dem, reports TheGuardian. The communications data bill - the so-called snooper's charter - remains staunchly opposed by Lib Dems, with Labour apparently also unconvinced by the safeguards offered. 
As the Mail notes, will Ed Balls be a political goner by the next Parliament? William Hill offers odds as low as 9/4 that Balls won't be an MP after 2015 - his majority in Morley and Outwood is only 1100.
Jim Murphy resists a cheap attack on David Cameron:
@jimmurphymp: There are many reasons to be annoyed with David Cameron but him going on a short holiday isn't one of them.

In the Telegraph
Best of the rest
Ross Clark in The Times (£) - Osborne is putting politics before prudence
Matthew Syed in The Times (£) - Give Cameron a break. He'll be a better PM
09:00 am: London: Business Secretary Vince Cable and former Dragons Den star James Caan to give speech on female entrepreneurship. Millbank Tower, 30 Millbank.