Good morning. George - well Jeffrey, if you listen to what Barack Obama called him at the G8 Summit - Osborne last night gave his Mansion House speech. Wisely, Mr Osborne avoided any mention of "green shoots", but it's clear that was what he was thinking as he spoke of the economy moving "out of intensive care". The Chancellor emphasised his determination to ensure that significant changes were enacted in the banking sector, though this aim needs to be balanced against protecting the City of London from populist, and counter-productive, assaults.
Mr Osborne gave the strongest indication yet that RBS could be broken up into a "good bank" and a "bad bank". Laying the groundwork, he outlined three tests to determine this - "if it supports the British economy; if it’s in the interests of taxpayers - and if it accelerates the return to private ownership".We are sceptical - "the good rump of the bank that remains could be somewhat duller and less dynamic". But Mr Osborne's move is modestly welcomed by Nils Pratley in the Guardian, who writes that "the assembled forces of Lord Lawson and other members of the Banking Commission, the governor of the Bank of England, and business secretary Vince Cable have scored a notable victory." The FT (£) has a useful summary of the pros and cons of an RBS split.
One interesting aspect of Mr Osborne's speech was a "with hindsight" criticism of the nationalisation of RBS in 2008, saying that the bank should have been split at the time. Mr Osborne admitted that he "didn't suggest it in opposition" but it could be read as light criticism of Alistair Darling's role - potentially significant given the decent chance of Mr Darling's return to the Labour frontbench after the Scottish independence referendum.
WHO STEERS THE TORY SHIP?
For the Conservatives to win in 2015, they first need to overcome themselves.Peter Oborne writes of the organisational problems facing the party today: with Chairman Grant Shapps having no real authority, it is unclear who steers the Tory ship. Instead:
Conservative organisation is a mess of special agendas, secret influence, and back-channels of communication. Contempt for traditional party structures is complete, meaning that conflicting messages and operational incompetence have become the hallmark of the Tory machine.
The solution? Peter suggests the need for a strong chairman "with the vision and substance to shape his own election-winning machine" to increase Dave's chances of remaining PM. He suggests Boris, though I'm not convinced the arrangement would work.
If Dave does win re-election the EU referendum will dominate the start of his second term. In this regard he will be encouraged by a new poll that shows over half of Tory grassroots members would vote to remain in the EU if he is able to win back powers from it. As Tim Bale argues, this reveals a surprising truth: the grassroots "trust David Cameron's strategy on the European Union." Whether they trust him more widely is rather less clear.
Meanwhile, the inclusion of Sir Michael Hintze on the Queen's Brithday Honours list has been explained. Far from being the result of his Conservative Party donations, Sir Hintze was awarded his peerage in spite of concerns from Dave. It was driven by charities who Mr Hintze has given over £30 million to, reports Richard Kay in the Mail.
DAVE COULD IGNORE MPS ON SYRIA
Mr Cameron has hinted that the House of Commons might not vote on whether the British military should intervene in Syria. While he said he maintained a "big commitment" to allow MPs a vote, Mr Cameron added that "obviously governments have to reserve the ability to take action very swiftly on this or on other issues". The comments seem to contradict William Hague's previous assurances that MPs would get a vote ahead of any military action.
UKIP WANT LORDS REFORM
David Cameron is running scared of House of Lords reform: that's the verdict of Nigel Farage, complaining about Mr Cameron's inaction on proposals that the appointment of peers should be based on results at the previous General Election. Mr Farage writes that, "What is clear is that he is afraid of a bank of Ukip peers sitting on the red benches making life even more difficult for his coalition than they are already doing themselves" in this month's Prospect magazine. Ukip currently only have three peers in the Lords.
CUTS? YOU AIN'T SEEN NOTHING YET
The next government will have to cut spending by 50% more than this government is if it is to meet the current deficit target. That's the stark verdict of new research by the Resolution Foundation thinktank, reported in The Guardian. There is also yet another reminder of the problems caused be an unbalanced approach to tackling public spending: if departments continue to be cut, the Foreign Office will have had its budget reduced by 64% between 2010-11 and 2017-18.
A LITTLE MINISTERIAL TINKERING
Mr Cameron yesterday announced a surprising change in his Trade Ministers.Lord Green will retire as Minister of State for Trade and Investment in December, credited with leading the "reform and rejuvenation" of UK Trade & Industry by Mr Cameron. Lord Green's successor will be BT chief executive Ian Livingston, who will also receive a peerage.
WORK PROGRAMME FAILING
The Work Programme was one of the Government's flagship schemes to combat unemployment. That was the idea, anyway. Results from employers’ organisations taking part in the scheme suggest that two-thirds of those who been on the Work Programme for over a year are still without work - including 90 per cent of disabled and long-term sick adults who have been receiving employment and support allowance. And what of the official figures? These are released on June 27 - coincidentally, a day after the Comprehensive Spending Review.
William Bain is confused by the SNP's plans for banking:
@William_Bain: Salmond confirms he wants separate Scotland's banks to be regulated by the BoE & by a Scottish regulator - who would resolve a failed bank?
In the Telegraph
In the Telegraph
Peter Oborne - Five Tory chairmen is a shambles
Sue Cameron - The populists reshaping politics
Daniel Hannan - Brazil is close to boiling point
Telegraph View - Our faith in the health system is eroding fast
Best of the rest
David Aaronovitch in The Times (£) - Keep out, they say. But then comes cataclysm
Chris Giles in The Financial Times (£) - Britain's banks are still a danger to the real economy
Joris Luyendijk in The Guardian - Banks are not out of control. They're beyond control
Steve Richards in The Independent - We need more intervention at home
Today: Owen Paterson speech on the role of GM crops. Berkshire.
0900: Call Clegg on LBC 97.3.