Monday News Review

AJ to “push for growth”

Johnson pushing for growth

Alan Johnson, the new shadow chancellor, has suggested banks should pay an additional £3.5bn a year in taxes on top of the £2.5bn annual bank levy already introduced by the coalition. Mr Johnson will set out his thinking in a speech in the City on Monday, but has made it clear that he wants higher taxes to play a bigger part than public spending cuts in the deficit reduction. The shadow chancellor said the pace and scale of Mr Osborne’s planned £83bn spending cuts were “masochistic”. He argues that deficit reduction should go hand-in-hand with more infrastructure investment. Mr Johnson’s proposal to raid the banks to pay for this investment was questioned by the Tories after he appeared to suggest that a new bank tax would only proceed if there was international agreement. Labour officials later said that Mr Johnson regarded international consensus as desirable – but it was not a precondition. – The FT

Alan Johnson, the shadow Chancellor, has said that banks should take a more prominent share in plugging Britain’s budget deficit, as he attacked the Government for its “perverse” plan to bring public spending under control. Mr Johnson, who admitted he was “mildly surprised” when he was given the job by Ed Miliband, also revealed that Labour would consider increasing capital gains tax to help to avoid the brutal £83bn spending cuts being lined up by the Chancellor, George Osborne. In his first major interview in his new role, Mr Johnson conceded Labour would have to be “more specific” about its economic plans, but promised to set out further details on tax policy during a major speech today. “We think tax, on the banks in particular, should play a bigger role in this,” Mr Johnson told the BBC One’s The Andrew Marr Show. – The Independent

Shadow chancellor Alan Johnson is to accuse the Government of taking a “huge gamble with growth and jobs” as he sets out Labour’s alternative to the Treasury’s £83 billion cuts package. In his first major speech in his new role two days ahead of the comprehensive spending review, Mr Johnson is expected to reject Chancellor George Osborne’s argument that Britain’s structural deficit must be eliminated within four years, and insist: “There is another way.” The shadow chancellor is expected to unveil plans to make the banks contribute towards investment in infrastructure as part of a £7 billion “push for growth”. On Sunday Mr Johnson accused the coalition Government of “economic masochism”, warning that by cutting “too deeply and too quickly” it risks pushing Britain into an L-shaped recession in which the economy fails to recover momentum and “bumps along the bottom” for a period of years. Unless growth is supported, Britain could repeat Japan’s “lost decade” of economic stagnation, he suggested. – The Press Association

Labour will give its strongest indication yet of how it plans to approach the government’s economic agenda with a major speech from Alan Johnson in London today. The opposition has been noticeably silent on economic issues since Mr Johnson was made shadow chancellor earlier this month. In the meantime, rumours have circulated in Westminster that Ed Miliband is preparing to adopt a 1:1 ratio of tax rises to spending cuts, as he tries to formulate a distinct narrative on deficit reduction. Key to the new Labour leader’s success will be an agenda that does not strike centrist voters as irresponsible but is still capable of uniting those opposed to the government’s plan. –

The new regime generation

What a change we have now under the Miliband regime. Balls, who failed to win the leadership precisely because of his thuggish reputation, hasn’t been given the job he wanted. Instead we have as Shadow Chancellor the thoroughly likeable Alan Johnson: the only person he’s been heard to do down is himself. Nick Brown, Gordon’s plotter-in-chief, was told by Miliband not to stand for election as chief whip. Meanwhile, even Tom Watson, a big Brown supporter who engineered the 2006 coup against Blair, wrote last week: “We’ve been on a long march through an arid desert of cynicism in recent years. So, Ed: thank you for giving me my dignity back by treating me like an adult. In return, I promise to stop behaving like a child.” Well, peal the bells for the sinner that repenteth.

Lib Dems in a mess

Kavanagh and Cowley go on to tell the story of how the party approached the election in no better shape than under Charles Kennedy or Menzies Campbell. Clegg’s leadership was sustained largely by Cable’s “somewhat overplayed … reputation for economic farsightedness”. The authors quote, with implied approval, a Conservative MP who said that “Cable had predicted nine out of the last one recessions”. And the chapter also includes a telling account of the repeated attempts by Clegg, Cable and Danny Alexander to water down the party’s policy of abolishing tuition fees – which makes their willingness to sign the National Union of Students pledge seem ever more absurd. It is interesting that the leadership regarded the “muleish stubbornness” of the Federal Policy Committee “frustrating beyond belief”; while members of the FPC found Clegg “petulant” and Cable “obnoxious” and “deeply arrogant”. The party was weak – “a cult for people who like delivering leaflets”, according to one anonymous member of the Federal Executive – going into the election campaign. It was then saved by the gift of equal status in the televised debates, which Clegg exploited brilliantly. But it is not a story that inspires confidence for the party’s prospects over the next five years. – The Independent

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