Friday, 28 June 2013

Osborne setting the terms of the debate..

Good morning. The dust is settling on the spending review, and it has survived first contact with the IFS: there's no sign of it falling apart so far. Conservative MPs who in the past have been swift to criticise the Chancellor are keeping their counsel. Mr Osborne is setting the terms of the debate even if, as Fraser Nelson says, he doesn't seem to quite realise it yet. 
But the black hole in the British finances remains - and the IFS have said that the Government may have to raise £10 billion in tax rises after 2015 to achieve its delayed objective of closing the deficit. The think tank's preferred method is stealth: the process of "fiscal drag" whereby tax bands remain unchanged, drawing more people into higher-rate tax. It's been done before, and you can detect at Westminster a sense of inevitability that whoever is in power after 2015 will have to jack up taxes yet further. It's worth pointing out though that the Treasury is making confident noises about being able to achieve yet more savings in the years after 2015/16 on the scale needed. The stealth taxes scenario is just one - albeit influential - think tank's idea. 
Of course some of this could be avoided if only we could get some consistent growth. This is what Danny Alexander's statement on “investing in Britain’s future” yesterday was all about. The FT (£) has a useful summary of the measures, with steps to improve roads and railways the most prominent, though it's worth remembering that, in real terms, spending on infrastructure fell in 2015/16. 
As ever when something goes well, a lot of politicians want to take credit. But also worth noting one of the unsung heroes: Sharon White, the Treasury's director general of public spending, is credited in The Guardian as being the brains being the spending review.   
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"Shamburger"-gate continues. The Sun reveal that George Osborne's claim that Byron delivered to Whitehall was not quite true: 
"Burger and lies". Of course, the real issue, as I tweeted when he said it in his Commons statement, is to take a man's money then joke about his weight was a dangerous thing for George Osborne to do. No wonder that Eric Pickles has got a little revenge by tweeting a photo of himself having a salad for lunch with the accompaniment "Putting final touches to the LGA speech". 
Dave is more familiar than he would like to be with comparisons to Edward Heath. There may be more of the same as the National Grid has proposed that companies curb their electricity use between 4pm and 8pm on winter workdays next year. Ofgem have warned of the risk of power shortages by the middle of the decade. 
Against this backdrop, the case for embracing new energy sources is strong. The British Geological Survey's have estimated that 1,300 trillion cubic feet of shale gas could be trapped in Yorkshire and Lancashire alone - if only 10 per cent were extracted, it could meet Britain's annual gas demand for over 40 years. Energy companies are being proactive to try and make it happen: they have agreed to pay £1.1 billion over 25 years to communities who live near shale gas sites. The Times (£) say that only growth can bring hope - so it is time to drill. 
Remember that double-dip recession? Turns out it didn't actually happen: the economy remained static in the first quarter of 2012, rather than declining by 0.1 per cent. It doesn't sound a big difference, but the symbolic importance can't be underestimated. There is further bad news for Labour as GDP is now estimated to have fallen by 7.2 per cent in the post-2008 recession, compared to 6.3 per cent as previously thought. Perhaps that's what led to Ed Balls jumping a red light as he left Parliament
Nick Boles's attempts to stimulate house building in England encountered a tough crowd yesterday. Mr Boles's dispute of claims that there were over 400,000 plots with planning permission in Englandwere heckled at the annual meeting of the Campaign to Protect Rural England, as you can watch hereMichael Deacon "got the sense that one or two members of the audience were muttering lively and frank things under their breath."
Dave has one overwhelming challenge from the EU leader summit in Brussels: to ensure the rebate he successfully protected in Februaryremains. If the rebate is cut, as France and Italy would like it to be, Britain would have to contribute an extra £300million towards farm funds for the new member states. A reminder, if one were needed, that reforming the EU is a fight worth winning. 
Lord Ashcroft's latest poll challenges the assumption of Boris solving all the Conservative party's problems. As he writes:
The question “are you serious?” would not just be one the voters asked of Boris: it would demand an answer of a party that thought an entertaining new leader would be enough by itself to win them over. 
Imagining Boris as leader is certainly a fun game. But he will be acutely aware of becoming another Heseltine - a charismatic blonde the party never gets past flirting with. 
Labour's unseemly brawl over the selection of their candidate for Falkirk only intensifies. Len McCluskie is now threatening to take legal action in the ongoing row, reports The Guardian. Peter Mandelson's wish that trade unions "should publish and be transparent about the process by which they decide which candidates to nominate and support", as he writes for Progress, seems rather ignored.  
Chris Bryant doesn't think Boris will be PM.
@ChrisBryantMP: The Ashcroft poll basically tells us what we already knew about Boris: good for politics as show biz, dangerous if he ran the country. 
In the Telegraph
Best of the rest
Philip Collins in The Times (£) - Cut the welfare bill. Pay people proper wages
Philip Stephens in The Financial Times (£) - Prosperity fuels the new age of unrest
Lord Ashcroft in Conservative Home - Would Boris be a winner?

1030 London: Damian Green MP gives Policy Exchange talk on Transforming the Criminal Justice System. 10 Storey's Gate.