Monday, 6 January 2014

Osborne wants £25 billion more cuts..

Good morning and happy new year. The morning briefing is back, rested and a bit fresher. Dave has been busy over the new year, so the rest of us will just have to catch up with the No10 tornado of activity. The Chancellor's speech today is the main event. We lead on it, and he's just been on Today to preview himself. The big drop into the programme is that he is looking for another £25bn in budget cuts, a figure we already had an inkling of. Also interesting that he makes a case for targeting major programmes rather than fiddling with minor ones. On pensioner entitlements, by the way, he pointed out that reducing them would save only "tens of millions", hardly worth the candle. Mr Osborne's case for seeking out worthwhile "substantial" cuts is the right one, but that will prompt questions about the areas that are protected. If it's to be welfare, then why not pensions, which form the lion's share of social security spending? And what about the NHS? If he wants big cuts, can he credibly ring-fence the areas of greatest spending? 
The Chancellor's job today is to flesh out - or "unpack" in Downing Street's preferred phrase - the Government's economic plan. It has five parts, and its main message is that just because things are improving it isn't a reason to ease up on austerity: "If we don't continue to work on our plan... we will be back to square one, back to economic ruin", as the Chancellor warned on Today. Spending has further to fall. The deficit has been reduced but only by a third. There are more cuts on the way. As a message, it's a useful corrective that is designed to dampen those minded to start spending the proceeds of growth. He talks of "hard choices", a term that is fast being debased. A hard choice would be to tell pensioners they can't have a fee TV licence anymore, though Mr Osborne appeared to defend the approach to pensioners by saying that "Increasing the pension age has saved more money than any other decision I've made as Chancellor." That debate is for later though. 
Here's the key extract released overnight: "There’s still a long way to go. We’re borrowing around £100 billion a year – and paying half that money a year in interest just to service our debts. We’ve got to make more cuts. That’s why 2014 is the year of hard truths. The year when Britain faces a choice. Do we say: 'the worst is over; back we go to our bad habits of borrowing and spending and living beyond our means – and let the next generation pay the bill'? Or do we say to ourselves: yes, because of our plan, things are getting better. But there is still a long way to go – and there are big, underlying problems we have to fix in our economy." By the way, the five components of the economic plan are: 1. Reducing the deficit. 2. Cut spending to cut taxes. 3. Better infrastructure and lower taxes for business. 4.Cap welfare and reduce immigration. 5. Better education. 
Let's hope Mr Osborne will use his speech (1015, his office say helpfully 'the Midlands', apparently it's Birmingham) to clear up some of the confusion that has crept into the morning's coverage. Or rather the Mail is confused: it splashes "Turmoil over OAP benefits" and says Downing Street was in disarray last night. The confusion is over what Dave said on Marr about pensioner entitlements. Having promised them an extension of the triple lock on the state pension, the Prime Minister was unclear about what would happen to the winter fuel payment, free TV licence, etc. The Mail thought he "dropped his cherished pledge", but itself dropped the claim in later editions. No10 later insisted he was in fact likely to repeat his 2010 pledge in 2015 and offer to keep them. Today No10 says Mail is "over-written" and that it is simply the case that he is minded to maintain entitlements but hasn't made a formal decision yet. We'll pass on the wisdom of shooting the messenger - if Dave wants clarity in reporting, he should make himself clear when he speaks. Will the Tories offer a manifesto pledge to maintain pensioner entitlements in 2015? Hints don't butter parsnips. As I blogged yesterday, at the very least this tells us the Tories are anxious to keep the elderly happy, and are prepared to do just about anything to secure the grey vote. The Chancellor on Today made as plain as he could that the most likely outcome is the re-assertion of the 2010 pledge (which we should recall was dragged out of Dave by Gordon Brown's shameless dishonesty). 
Michael Gove and Nick Clegg played out their latest row in the Sunday papers."He's out of control," Mr Clegg is said to have said of his Tory colleague. 'Friends of Gove' accuse Mr Clegg of 'lying' and screwing things up himself. What's the significance of it all? Mr Gove will relish Mr Clegg's criticism of his policies as "too ideological" - and Conservatives anxious to prove that this has been a true blue government will find them rather handy too. For Mr Clegg it also serves a purpose, by adding to the Lib Dems' differentiation strategy. No 10 is reassuringly relaxed about it all - not least because, as I note in my blog, "it keeps the excitement away from the relationship that matters, namely between David Cameron and George Osborne." 
Tim Yeo's re-selection meeting is later this month. His constituency has a membership of 600-odd, which makes it a big one. Last night the leadership rallied strongly to his support. George Osborne and Michael Gove, neither of them natural allies, have written to endorse him. The Chancellor described him as a "politician of principle" and said: "We need people like you in Parliament. Experienced, conscientious, thoughtful, loyal and steady under fire. It would be a real loss to the House of Commons if you were forced to stand down when you still have so much to contribute. The Conservative Party at Westminster would be weaker without you." Mr Gove praised him as a "highly respected" and "extremely valuable" MP who campaigned for free schools. All the Suffolk MPs have signed a joint letter of support. At one level there is nothing surprising about MPs opposing the de-selection of a colleague - it's self-preservation. However, it would have been easy for those at the top to distance themselves from Mr Yeo, or just say silent. That they are willing to speak out in his favour sends a clear message both about his worth and also about the damage a de-selection can do to a party's wider image.
Lord Ashcroft has released another fascinating poll. It shows that 37 per cent of 2010 Tories would not vote for the party tomorrow, which puts Mr Cameron's challenge into perspective. This makes a significant majority seem a remote possibility but, as James Kirkup writes, another coalition is rather more likely: "the Ashcroft polling shows that 55 per cent of voters would prefer a second Coalition to an all-Tory government. Most intriguingly, even 18 per cent of Conservative loyalists say the same. The suspicion that Mr Cameron is among them is likely to linger all the way to polling day." Another finding of the poll is that over half of those who've turned against the Tories would now vote for Ukip - but don't think that this means that Ukip is just a party for disillusioned Conservatives. Nigel Farage tweeted "Go look at the figures. I don't lead some Tory splinter group". On Murnaghan yesterday, Mr Farage nodded in agreement to some of the words of Enoch Powell's infamous "rivers of blood" speech and, when told what the speech was, he said that "the basic principle is right".
There's more in the ongoing history wars today, with Sir Tony Robinson branding Mr Gove as “irresponsible”, “unhelpful” and “unprofessional” for his comments about Blackadder and accusing the Education Secretary of "slagging off teachers". Boris Johnson takes a rather different view, and writes that "If Tristram Hunt seriously denies that German militarism was at the root of the First World War, then he is not fit to do his job, either in opposition or in government, and should resign." Nigel Farage is also supportive of Mr Gove, writing that he is "essentially right in his analysis of how the previous decades have sought to paint the First World War as the brave Tommy being ordered to his slaughter by an out of touch elite." If you missed it, here's Tristram Hunt's attack on Mr Gove yesterday, accusing the government of "using what should be a moment for national reflection and respectful debate to rewrite the historical record and sow political division."
The Morning Briefing email is edited by Tim Wigmore. Follow Tim on Twitter 
Catching the train isn't much fun:
@SteveBakerMP: Commuting to Parliament by train this week. KTM silencers succumbed to dissimilar metal corrosion: the noise is most un-Parliamentary
In the Telegraph  
Best of the rest 
Edward Luce in The Financial Times - Meet the Anglo-Saxon trumpeting
0930 London: Walkout by barristers in protest at legal aid cuts. Barristers in courts across England and Wales are expected not to attend morning trial hearings and instead join protests outside courts. Among those at the London demo will be Janis Sharp, the mother of Gary McKinnon.
1015 Birmingham: George Osborne speech.

1400 London: Phone-hacking trial resumes. The Old Bailey.