Friday News Review

Osborne under fire for “misleading the public”

The chancellor, George Osborne, came under fire today from MPs on the Treasury select committee, charged with “misleading the public” for claiming the UK was near bankruptcy in the weeks after he took office. He was accused of using inflammatory language to justify massive public spending cuts. The committee chairman, Tory MP Andrew Tyrie, said Osborne’s claim that Britain had been “on the brink of bankruptcy” was “a bit over the top”. He also challenged the chancellor’s claims that his emergency budget had been progressive, accusing him of “over-egging it a bit”. Tyrie’s comments followed heated exchanges during which Osborne was tackled over his handling of plans to cut central and local government spending. The chancellor has repeatedly justified the cuts as a reasonable response to unprecedented debt levels and the threat from credit ratings agencies to downgrade the UK’s blue-chip AAA rating […] “I think there is something there to look at when making these remarks, which do look to me more like the language of opposition than government. Tell it as it is.” – The Guardian

Mr Osborne, who appeared before a Commons committee yesterday, was criticised by its Conservative chairman, Andrew Tyrie, for exaggerated claims that his recent budget was progressive – affecting the rich more than the poor, despite strong declarations from the respected independent think tank the Institute of Fiscal Studies that it would have exactly the opposite effect, particularly after 2012. Equally, Mr Tyrie was unhappy that Mr Osborne had exaggerated the dangers facing the UK earlier this year by saying that the country was close to bankruptcy. Mr Osborne should be more statesmanlike now that he holds senior political office, said Mr Tyrie. However, the chancellor was unrepentant: “The situation I found myself in May this year was incredibly serious for this country. The largest bond investor in the world said UK gilts were a no-go area.” – Irish Times

Cable vs Cameron: round 26

David Cameron has moved to head off a damaging row with Vince Cable by allowing companies based in London to transfer employees from abroad to the capital without falling foul of the Government’s new immigration cap. The Business Secretary has been at loggerheads with the Prime Minister over the issue and warned that companies were considering moving jobs abroad because they could not recruit the staff they needed. Mr Cameron said yesterday that new limits on non-European immigration would not mean a change to existing “inter-company transfers”. It will be criticised by some Conservative MPs who will see it as a further “sop” to the Lib Dems that waters down tougher Tory measures. – The Telegraph

Ainsworth warning over Trident

Ex-Defence Secretary Bob Ainsworth has said Labour may re-consider its support for replacing Trident. In a debate in the Commons, he said the decision that the Ministry of Defence must fund the replacement for Trident meant that in real terms the MOD faced a cut of 13% rather than 8%. He said delaying the decision to go ahead would increase the overall cost. “My own party may well as a result of that… have to look at whether we maintain our position on Trident.” He said that if there was to be no decision for five years and if the cost would fall solely on the defence budget at the cost of other military capability “then we are going to have to think seriously about whether or not there is another way… of maintaining Britain’s deterrent, without the huge cost cutting expenditure on the rest of our armed forces.” – BBC

Cable blocks News Corp’s progress

Let me be clear”, Vince Cable told the Liberal Democrat conference last month, “the Government’s agenda is not one of laissez-faire”. Well so far, the Business Secretary has been as good as his word. Mr Cable has referred the £12bn bid by Rupert Murdoch’s News Corporation to take full control of the satellite broadcaster, BSkyB, to the media regulator Ofcom. The inquiry will examine whether the deal will have a detrimental effect on “media plurality” in Britain. The decision by Mr Cable to refer the bid was the right one. Given the widespread suspicion of a pre-election commitment from David Cameron to neuter the UK competition regulators in return for the support of Mr Murdoch’s newspapers, a failure to examine the move from a public interest perspective would have been a justified scandal. – The Independent

Vince Cable, the UK business secretary, moved yesterday to halt the progress of News Corp’s proposed £8.2 billion bid to take British Sky Broadcasting private, when he took the earliest possible opportunity to issue an intervention notice. After Rupert Murdoch’s global media group filed an official proposal to buy the 60.9 per cent of BSkyB it does not already own, to European Union regulators on Wednesday, Brussels passed the formal notification on to the UK business department that night. Mr Cable issued an intervention notice before the start of London trading yesterday.  – Irish Times

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