What’s the alternative?
Radical plans to make banks pay the lion’s share towards a £7bn “push for growth”, to be unveiled by Labour on Monday, will be at the heart of Ed Miliband‘s alternative to £83bn of proposed government cuts. In his first major speech as shadow chancellor, ahead of Wednesday’s spending review, Alan Johnson will accuse the government of taking a “huge gamble with growth and jobs” by concentrating solely on deficit reduction. Johnson, who has been working closely with the new Labour leader to define a clear alternative, will say it is fundamentally unfair that cuts to child benefit should play a bigger role in reducing the deficit than the banks that did much to cause the economic crisis. In a departure from Labour’s policy at the general election, Johnson will call for a big increase in capital spending on road building and construction – probably funded by a far higher levy on banks and action against bankers’ bonuses – to boost economic activity and create jobs. – The Observer
Peter Hain is wizened counsellor to young king Ed, or gives that impression at least. The two are close, which makes Hain’s recent comments on tax noteworthy. Hain describes universal benefit as ‘non-negotiable’, adding: “If you start driving a coach and horses through universality you’re effectively saying to middle Britain, ‘you’ve got no stake in the welfare state.’ I think the Tories and Liberals are making a very big mistake on child benefit. There’s an answer to people on higher incomes and that’s they pay higher taxes. And that is the answer to squaring that circle.” Miliband is determined to defend universal benefit regardless of cost and he also favours a 50:50 split between tax hikes and spending cuts to reduce the deficit – a policy that would require £61bn to be raised in tax. Miliband and Alan Johnson will reveal Labour’s economic policy on Monday; expect it contain a fetid dram of Old Labour. – The Spectator
Osborne sharpens the knife
Even before Chancellor George Osborne makes his announcement, we know it is going to be terrible. What we aren’t yet sure of is the scale of the harshest blows. What has become clear is that the most vulnerable will suffer the most. In particular, the elderly and those in poverty are going to be hit hardest. Yes, the middle classes will be affected but those who can least afford to lose anything will be crippled. Although the Government was panicked by last week’s Sunday Mirror revelation about pensioners’ allowances being slashed and swiftly backed off, older people will still be targeted. – The Mirror
TORY axeman George Osborne is to chop a staggering £4billion from public spending in Scotland. The Chancellor is preparing to slash the funding which pays for schools, the NHS and councils north of the Border by £1billion a year over the next four years. Scottish Secretary Michael Moore revealed the savage cuts ahead of Osborne’s Comprehensive Spending Review on Wednesday. This year’s budget for Scotland is £29.2billion but within four years it will fall back to 2005-6 levels of £22.9billion -equivalent to £25billion in today’s terms. – The Daily Record
Ministers are locked in a lastditch battle over moves to axe child benefit payments for over-16s. Chancellor George Osborne wants to save £3billion by ending payments of £20.30 for the oldest child and £13.40 for any other children up to the age of 18. But a number of Tory MPs are aiming to change his mind ahead of Wednesday’s spending review. Tory grandee Lord Tebbit has hit out at the cuts, saying they “would appear to be in conflict with Mr Cameron’s Big Society”. Police forces could be hit with 40,000 job losses and universities face £3billion budget cuts. – The Mirror
Not so strategic Defence review
Critics fear the PM has been “got at” by the uniformed service chiefs who briefed him later on Thursday about the “catastrophic” impact of reining in military spending. Dr Paul Cornish, Carrington professor of international security at Chatham House, said there appeared to have been little strategic work to look radically at the future role of the forces. “What we have got is carry on with everything, for a bit less. It is neither strategy-led nor Treasury-led, but led by government indecision,” said Dr Cornish who publishes a report today entitled Strategy in Austerity. One senior military analyst added: “Senior military people have been lobbying hard to defend their patch, and everyone seems to have forgotten about thinking radically.” – The Independent
A last-minute ambush by the heads of the three armed forces has forced Prime Minister David Cameron to concede that cuts to the Ministry of Defence’s budget will not exceed 7% over four years, according to MoD sources – a significant reduction on the expected 10%. The reduction also suggests the Strategic Defence and Security Review (SDSR), due to be published tomorrow, has been rushed through and will be based less on strategic needs and more on the necessity to cut costs. Yesterday the influential Chatham House think-tank challenged the rationale behind the review. “If the SDSR is to succeed as a strategic plan it should be more than a product of the moment,” said the think-tank’s defence expert Paul Cornish. – The Herald
Lib Dem hypocrisy
Vince Cable resorted to a motoring metaphor to justify tearing up his party’s election pledges on student tuition fees. “The road to Westminster is covered in the skid marks of political parties changing direction,” said the business secretary and erstwhile craggy poster boy of Lib Dem integrity. The quantities of rubber left on the tarmac since the election are indeed great; the House of Commons looks like the Top Gear test track. But what the business secretary announced was not just a standard U-turn, not a-fuss-today-forgotten-tomorrow reversal. This one is a wheel-squealing, tyre-smoking, bone-juddering, eye-popping, bowel-loosening, brain-melting U-turn. It is a volte face with much bigger consequences than the Lib Dems currently seem to realise.
I’ve seen a lot of politicians reverse themselves over the years. This has to rate as one of the most spectacular. Dr Cable, Nick Clegg and their colleagues campaigned on a promise to fight any increase to tuition feesand work towards their abolition. Said Mr Clegg: “We will resist, vote against, campaign against, any lifting of that cap.” That promise was solemn; they just forgot to tell anyone it was not at all binding. Now Mr Clegg and Dr Cable will vote for the doubling of the fees they pledged to abolish. – The Observer
Cameron rattled
Fans of politics – as distinct from normal people – were especially excited because Miliband was such an unknown quantity. Could he ruffle David Cameron‘s feathers? Expectation was low. The prime minister brings easy establishment confidence to the fray. He is a more than usually cocky cock. But the new Labour leader (not to be mistaken for a New Labour leader) deployed cunning. He probed the issue of child benefit cuts, a wound in the PM’s flank, with slow, calculated tenacity. The unflappable premier flapped. The young pretender had first blood on his beak. – The Observer
Having watched videos of Cameron’s TV interviews during the Tory Party Conference, they decided they would press the Prime Minister on how it could be fair that a family with one person working and earning £45,000 was losing its child benefit and one with two parents working and each earning £40,000 was keeping theirs. To their surprise, Cameron had no answer. They noted with pleasure that the notes Cameron had were all about tuition fees. He was not prepared for this line of attack. For the first time since becoming Prime Minister, Cameron looked deeply uncomfortable at the dispatch box. So distracted was he that later in the session he had to ask a Labour backbencher to repeat his question because he hadn’t heard it. – The Mail on Sunday
