“Unfair” budget hits middle classes

The middle classes and stay at home mothers have borne the brunt of ‘unfair’ tax changes introduced in this year’s budget, experts will today inform Parliament. Small businesses were also hit by regulations unveiled by George Osborne, the Chancellor, in his March budget, with a range of measures aimed at cracking down on tax avoidance and evasion, but which the wealthy will work out how to sidestep. The verdicts were delivered by tax experts who were asked by the Commons Treasury committee to assess the budget to see whether it met principles of fairness, support for growth, certainty, simplicity, stability, practicality and coherence. Their views are published in a report for MPs who are preparing to debate the Finance Bill, which enacts measures set out in the Budget. Far from being “fair,” the experts said, moves contained in the budget to strip middle class families of tax credits and child benefit payments while freezing higher rate tax thresholds would have a disproportionate effect on those with an income of between £40,000 and £50,000. – the Telegraph

Clegg appeals to Labour voters

Nick Clegg has made a last-minute appeal to Labour supporters to set aside their desire to “poke him in the eye” and recognise that thealternative vote is an unambiguously progressive reform. He has also vowed that his party will be more independent of the Conservatives after the referendum, saying the first phase of unanimity in public had been necessary due to the need to tackle the economic crisis. In a Guardian interview, Clegg said: “For Labour party supporters thinking about how they should vote, Labour has always been at its best a progressive movement for reform. It always has been and always will be. This is a progressive change, an unambiguously progressive change. “Yes, I understand people want to poke me in the eye and signal their displeasure. I understand all of that – I do not want to belittle that – but this is a fork of the road for progressives which is much bigger than me. This is not about Nick Clegg or the coalition government, it is about whether you take the progressive fork in the road, or do you stick with the status quo.” – the Guardian

‘No’ appeal for turnout

No campaigners are urging supporters not to become complacent following polls which give them a double-digit lead ahead of Thursday’s vote. With turnout expected to be as low as a third of the electorate, and the campaign generally failing to capture public imagination, there are warnings that the more motivated Yes campaign could succeed in ushering in AV “by the back door”. Turnout is likely to be particularly low in areas such as London, where no other elections are taking place and where experts predict as few as 14 per cent could make it to the polls. In contrast, a high turnout is expected in Scotland, the only part of the country where surveys suggest voters support AV, because of the neck and neck battle between Labour and the Scottish Nationalist Party to capture the devolved Parliament on the same day as the referendum. In recent days, the No camp has been scrambling to damp down any sense of triumphalism at polls which show support for AV, which was backed by a majority at the start of the year, running at between 10 and 20 points below the numbers who plan to oppose it. – the Telegraph

Osborne adviser criticises oil tax

THE government’s own tax tsar has attacked the chancellor’s surprise tax raid on North Sea oil and gas producers, just days after British Gas owner Centrica warned it could shut one of its fields in response to the windfall levy. John Whiting, head of the Office of Tax Simplification (OTS), told City A.M. the North Sea tax raid was a “rabbit punch” – an illegal boxing move aimed at the neck or base of the spine – that was “precipitate and unexpected”. He added: “If there is one industry that requires stability, it is oil and gas. The long-term nature of the business means companies need visibility to plan.” The chancellor appointed Whiting to lead the newly-created OTS amid much fanfare last July, and tasked him with simplifying a tax code that he said had become overly complex after “a decade of meddling and intervening” by Labour. Although Whiting yesterday said he was criticising the chancellor in his capacity as a director of The Chartered Institute of Taxation rather than head of the OTS, his outspoken attack is likely to put further pressure on Osborne, who is facing calls to rethink the windfall tax. Whiting’s comments come as Centrica, one of the UK’s biggest energy suppliers, said it could permanently close two of its Morecambe gas fields as a direct result of the windfall tax. – City AM

Last roll of the dice for Labour in Scotland

Ed Miliband, Labour leader, has warned that Britain is heading for “disaster” if Alex Salmond’s nationalists continue their charge towards victory in next week’s elections to the Scottish parliament. Mr Miliband has watched in dismay as Labour’s apparently impregnable poll lead in Scotland has evaporated. He told the Financial Times the SNP would use a victory in Holyrood to press for Scottish independence, threatening the union and distracting political energy from the need to revive Scotland’s economy. “If Alex Salmond were to win a second term, he has said it would give him moral authority in relation to independence,” said Mr Miliband. “I think that would be a disaster for Scotland; I think it would be a disaster for the United Kingdom.” Mr Salmond has run a textbook presidential campaign to overhaul his party’s double-digit poll deficit of just a few months ago: opinion surveys now suggest he is on course for a second term as first minister. – the FT

Despite the SNP appearing to be on track for a comfortable victory in the polls, Miliband described the Labour effort as a ‘good campaign’ that had focused on the important issues. ‘Do you want a government in Scotland that is fighting on the issues that matter to you? Or do you want a government in Scotland led by Alex Salmond, an SNP government, which is going to be distracted by the issue of independence?’ he asked. The leader went on to note the elections in Holywood are vital not only in Scotland but for the whole of the UK. Miliband said it is not too late for Scottish voters to back Labour and instigate change in the country. A victory for his party, he asserted, would be a statement that people are unhappy with the direction taken by the Westminster government. – Metro

“They put the socialism in, they take the sense of humour out”

The Prime Minister was accused of sexism by Labour after his Commons put-down to Angela Eagle at Prime Minister’s Questions. Mimicking a catchphrase used by Michael Winner, the film director, on a television insurance advertisement, he repeatedly told her to “calm down, dear”, prompting calls for him to apologise. But yesterday he brushed off the row and made light of the remarks. He said: “I don’t know what it is about some people on the Left. It seems that when they put the socialism in, they take the sense of humour out. “I got home last night and my wife said to me: ‘What sort of day did you have, dear?’ And I told her I was attacked by Harriet Harman [Labour’s deputy leader] and defended by Michael Winner, and she said: ‘What on earth were you up to?”‘ – the Telegraph

The Stoate strikes back

Howard Stoate, the former Labour MP who left parliament to focus on his work as a GP, has attacked David Cameron for quoting him “out of context” on the government’s health bill. The comments triggered heated exchanges during which Cameron told a female shadow cabinet member to “calm down, dear”. Stoate, the former MP for Dartford, writes in the Guardian that doctors do not “glibly accept every aspect of the health bill; it clearly has many inherent problems”. He says Cameron “should stop using the health service as a political football and allow GPs to get on with the job of improving health services”. “I [had] said many GPs were enthusiastic about the chance to help shape services for patients,” he writes. “I was referring to GPs in my own borough of Bexley, south London, and qualified this by saying GPs in the borough had a head start, building on their experience of commissioning over the last four years. Taken out of context, and interspersed with condescending comments to backbench MPs, Cameron’s quote is entirely misleading.” – the Guardian

Tory ‘No’ plotters have back up plan

Secret moves are planned by senior Conservatives to overturn the result of next week’s referendum on electoral reform if the country votes to scrap the first-past-the-post system… Under the plan, supporters of first-past-the-post would approach the Commons business committee of MPs, which has the power to set aside time for issues concerning backbenchers. Although recent polls show the No campaign in a comfortable lead, large numbers of voters still appear not to have made up their minds how – or whether – to vote. The tactic of using the business committee to force a Commons division was successful in overturning moves to give the vote to prisoners. A senior Conservative MP said last night: “Suppose there was a tiny majority in favour of AV, but only 20 per cent of the country took part in the referendum; people on our side would find it hard to accept. There would be contact with the business committee.” He suggested a turn-out of 50 per cent should be required to give legitimacy to a Yes vote – a hurdle that could be impossibly high to clear. – the Independent

Economy “stagnating, at best”

Superficially respectable growth figures disguise an economy that is stagnating, at best, or even contracting again, according to the latest data from the Office for National Statistics. Although the economy formally grew by 0.5 per cent in the first quarter of 2011, in line with expectations, this was widely regarded by analysts as confirmation that the underlying recovery is fragile at best, and that the economy has escaped a relapse into a “double-dip” recession only by the narrowest of margins. The figure was also the final confirmation most City observers needed to rule out an interest rate rise by the Bank of England next month. The betting now is on an increase in the Bank Rate in August or as late as November. And growth could yet slow further: the bulk of the Government’s programme of fiscal tightening has only just begun to kick in, while inflation continues to erode the spending power and confidence of families. Firms are also showing caution over investment plans. – the Independent

Outrage over Syria invite

OUTRAGED MPs hit out last night over Syria’s ambassador to Britain STILL being on the wedding guest list. Dr Sami Khiyami’s invitation has not been revoked despite his country slaughtering hundreds of pro-democracy protesters in recent weeks. Labour MP Denis MacShane said it “bordered on the grotesque”. And Shadow Defence minister Kevan Jones warned of a “horrific spectacle” of the diplomat being at the Abbey while there was killing on the streets of Syria. St James’s Palace said the invitation had not been rescinded but a source added: “A final decision will be taken in the next 24 hours.” Libya’s invite was cancelled over its regime killing peaceful protesters. – the Mirror

#winnergate

David Cameron has been accused by Labour of “patronising, sexist, insulting and un–prime ministerial” behaviour after he told a shadow minister to “calm down, dear” in the Commons. Downing Street was forced to issue a “no offence intended” response after Ed Miliband’s office began a round of Labour denunciations of Mr Cameron, who made the comments during Prime Minister’s Questions yesterday. Michael Winner, the film director and food critic who coined the catchphrase in a car insurance advertising campaign, said that he was flattered that the Prime Minister had mimicked him, and accused Labour of being “politically correct lunatics”. Mr Cameron was defending the Coalition’s health reforms when he rounded on Angela Eagle, a shadow Treasury minister. She had told him that he had got his facts wrong about Howard Stoate, a former Labour MP and GP who has backed the NHS plans. – the Telegraph

The prime minister regularly plays fast and loose with the facts at prime minister’s questions and he got it wrong again yesterday when he claimed that ex Labour MP Howard Stoat had lost his Dartford seat at the general election. It was when I pointed out that he had actually retired, not been beaten, that the prime minister decided to single me out for the Michael Winner treatment by using a turn of phrase no modern man would use to a woman. He was patronising but I have been condescended to by far better people than the prime minister in my time and I can handle it. This wasn’t the first time his mask has slipped when he’s under pressure in the chamber. It reveals a side of him that I suspect his minders would prefer we did not see, because it is so at odds with his carefully constructed “cuddly Cameron” image. It reminds me of none other than Flashman, the appalling bully in Tom Brown’s Schooldays. Flashman’s increasingly frequent appearances at Westminster are now remarked upon even by MPs in his own party. I thought it was instructive that George Osborne thought the remark hilarious, while Nick Clegg sat stony-faced through the whole thing. – Angela Eagle, the Guardian

George joins in

Shelagh Fogarty co-hosts BBC Radio 5 Live’s breakfast show tomorrow for the last time before moving to the station’s lunchtime programme. What will her colleagues get her as a leaving gift? Some chocolates? A bunch of flowers? A fancy card? Uhm, try a message from the Chancellor about erotic dreams. Yep, that’s right. Fogarty revealed in September last year that she had a somewhat intimate dream about George Osborne and, to mark her goodbye, he has given his response. “I just wanted to say it’s sad to be losing you from the breakfast programme but I know you’ll do a great job on the lunchtime programme. It does give you, of course, more hours sleep everyday. More hours for those dreams you’ve been having. And so I’m sure you’ll have sweet dreams and I look forward to being interviewed by you on your lunchtime programme.” – Politics Home

GDP figures due today

George Osborne hopes to claim the economy is on the right track when official figures are expected to show the economy has returned to modest growth in the first quarter of this year after suffering a surprise severe contraction in the last quarter of 2010. Economists have struggled to reach a consensus on the likely growth figure after the shock decline of 0.5% at the end of last year, blamed on the severely cold December weather. City economists are more pessimistic than the government’s fiscal watchdog, the Office for Budget Responsibility, which predicted a recovery of 0.8% to leave the economy in positive territory over the last six months. The investment bank JP Morgan expects growth of only 0.2% for the first quarter of 2011, while Citi predicts 0.5% and Goldman Sachs 0.6%. Angela Eagle, the shadow Treasury secretary, said: “Our economy should not just be making up all the lost ground from the end of last year but growing strongly on top of that. We will need to compare growth over the last six months with growth of 1.8% over the previous six months.” – the Guardian

Balls: Salmond’s plans “totally crackers”

Ed Balls, the Shadow Chancellor, has stepped up Labour’s attacks on Alex Salmond’s economic arguments for independence by arguing they show the SNP leader is unfit for power. Mr Balls said it was “baffling” that someone who has made such inaccurate pronouncements about the economy over the last four years could be trusted to be in charge of Scotland. Reeling off a list of examples during a Holyrood election campaign stop, he called the notion of fiscal autonomy for Scotland “barmy” and Mr Salmond’s support for adopting the euro “totally crackers”. The SNP’s plans for Scotland to have its own financial regulation, interest rates and exchange rate would have been a “total and utter catastrophe” during the recent recession, he concluded. Mr Balls’ intervention will be seen as an attempt by Labour in London to salvage Iain Gray’s faltering campaign. Party leader Ed Miliband is also expected to join Mr Gray later this week. – the Telegraph

Plan for failure, MPs tell health department

MPs are demanding that the government urgently put in place plans to ensure vital health services continue if a hospital or other provider goes bust under its NHS reforms. In a report published on Wednesday, the public accounts committee says the proposals for the NHS do not include details of what will happen if providers fail in the new market model of healthcare provision. Members of the committee dismissed claims by the most senior civil servant in the Department of Health, Una O’Brien, that the government was “not planning for failure”, and condemned the lack of contingency planning, suggesting that the proposals now pose an intolerable risk to value for money and quality of services. Richard Bacon, the Conservative MP for South Norfolk, said: “In any organisation as large and complex as the NHS, things can and do go wrong, and the Department of Health has yet to establish a robust framework for dealing with failure in the system. The department must not only understand the danger of either a provider or a commissioner going ‘belly up’, but also toughen up its contingency plans, drawing upon strong, effective and clear chains of governance and accountability throughout the new NHS model.” – the Guardian (more…)

Mandelson and Johnson urge Labour to vote Yes

Two Labour grandees have accused the coalition of hijacking the AV debate to air its “petty tensions” and cynically turn it into a bitter row between the Conservatives and Liberal Democrats, after a series of high-profile clashes between ministers over next week’s referendum. Alan Johnson, the former home secretary, told the Guardian that the debate was “bigger than the Liberal Democrats” and appealed to Labour voters to back the alternative vote, claiming that a vote against reform was in effect a vote for the Conservatives. Lord Mandelson, the former cabinet minister, claimed the prime minister had adopted a high profile role in the no campaign to divert attention away from a debate about AV. The cabinet will meet for the first time after the Easter recess on Tuesday, with coalition relations at a new low. – the Guardian

David Cameron is today accused of cynically turning the referendum campaign on the voting system into a bitter row between the Conservatives and Liberal Democrats to head off a Yes vote. In his first intervention in the AV referendum, Lord Mandelson, the former Labour cabinet minister, claimed that the Prime Minister had adopted a high-profile role in the No campaign in order to divert media and public attention away from a debate about the alternative vote (AV). In an interview with The Independent, Lord Mandelson warned Labour figures who are backing the No camp that their actions could condemn the party to years in the electoral wilderness. He appealed to Labour supporters to vote Yes in next week’s referendum to damage the Tories and undermine Mr Cameron’s position. – the Independent

After AV, will the Lord’s be the next Coalition issue?

Like all of God’s earthly creation, the House of Lords is imperfect.  Its powers, its composition and its legitimacy have all come in for severe criticism over the years, from different parts of the political spectrum.  There have been several major reports, a Joint Committee and numerous votes in Parliament in recent years.  The result has been a lot of disagreement, and no change. It has now been reported that — as prefigured in the Coalition Agreement — the Government will publish a Bill at the end of May to bring in an 80% elected Upper Chamber of 500 or so using Proportional Representation.  “Senators” would apparently be elected in thirds every five years. People will differ over the merits of this and other possible models.  The question is, should an elected House of Lords be a priority right now?  To answer it, what we need are non-partisan arguments, arguments that ignore party politics and just look at the merits of the issue in the current context. From this viewpoint the answer is pretty clearly No.  – Conservative Home

Conservative whips under fire from newbies

For years they have been feared and loathed in equal measure, rumoured to have the ability to reduce errant MPs to tears and submission with a flick through their “little black book”. But now the fabled Conservative whips – who provided the inspiration for the murderous Francis Urquhart in The House of Cards – are facing a rebellion they are finding hard to control: the modern world. They are under attack from their new MPs who make up almost half the parliamentary party and cannot understand for need for the cast-iron discipline and subservience to the whips’ office that their predecessors took for granted. Most have had jobs in the “real world” as bankers, doctors and accountants and believe the whips should be keener on “career development” than career control. But what has caused the most ire among the new backbenchers is the whips’ policy of using “overwhelming force” to ensure they never lose a parliamentary vote. – the Independent

Clegg and Cameron’s choreographed war

Nick Clegg is spoiling for a fight with just about everyone – David Cameron, Andrew Lansley, all Tories, Ed Miliband, John Reid, universities, the Daily Mail, Germany, even his own MPs. Rivals will dismiss this as mere pre-election posturing: creating false dividing lines in a desperate attempt to avert a bloodbath in town halls the length of the country. But it seems to go deeper than that. After he has attacked in all but name by every Tory from the PM down, the rules of engagement have changed. Aides say Clegg has woken up to pleas from his party to make clear the Liberal Democrat influence in government, even if that means rocking the coalition boat. As a final effort to save his own skin, it could be too late. But he is going down fighting. The main battleground is over his attempt to ditch first past the post for the alternative vote in 5 May’s referendum. The stakes are high, which explains the escalation of tensions at the heart of government. The Prime Minister, in particular, gets both barrels: accused of telling “lies”, using big Tory money to fund “the very nastiest reactionary politics”. – the Independent

The criticism is seen by some in Westminster as an attempt by the Liberal Democrats to create clear dividing lines between the Lib Dems and the Tories in the run-up to the local elections. It follows yesterday’s public spat between Cameron and Clegg over internships which centred on comments made in an interview in which the prime minister admitted to recently giving work experience to a neighbour’s son. Cameron said he was “very relaxed” about the situation and that he would continue to help friends by offering their children internships. The remarks appeared to contradict a policy unveiled by Clegg earlier this month that seeks to reduce the number of unpaid internships, described by the deputy prime minister as a bar on social mobility. Yesterday, Clegg admitted he disagreed with Cameron. “I’m not relaxed about this at all,” he said. “It just can’t be right that plum internships are decided by who you know, not what you know.” – the Observer

Cameron’s new lords cost tax payer £18.25million a year

DAVID Cameron has broken his pledge to slash the cost of politics by packing the House of Lords with his cronies. The PM vowed the Coalition would bring in a plan to save £12million a year by cutting the number of MPs from 650 to 600 at the next election. But Mr Cameron’s move to appoint 117 new peers since the last General Election a year ago will cost taxpayers a staggering £18.25million a year – £6.25million a year more than his promised savings. Each new peer will cost an average of £156,000 a year, according to figures ­released by the House of Lords. The total cost of the 117 new peers will land ­taxpayers with an extra bill of at least £91million over a five-year ­Parliament. Labour MP Thomas Docherty said: “David Cameron said he wanted to cut the cost of politics. But, by creating a record number of new peers, he’s the one making the cost of politics go up.” – the Sunday Mirror

David Cameron has broken his manifesto promise to cut the cost of politics by creating an unprecedented number of peerages, Labour claimed last night. New figures show that the taxpayer will have to foot the £6m-plus balance from the creation of 117 new peers by the Prime Minister since the election. In the Conservative manifesto last year, Mr Cameron promised to slash the number of MPs from 650 to 600, saving £12m a year. But the cost of swelling ranks in the House of Lords – at £156,000 per member – was £18.25m, more than £6m more. A report last week claimed that Mr Cameron’s decision to elevate 117 people to the Lords, more than any other PM in his first year, had led to a cramped upper chamber, with 792 peers. No 10 indicated he will continue to create peerages to redress the balance in the Lords, where Labour is the main party. – the Independent

Mandelson says ‘Yes’

The ruthless and increasingly shrill determination they have shown in protecting their party interest in the AV campaign is part of a wider ambition to rebuild the same foundations for electoral success in this century that saw them dominate the last. I do not criticise them for it. Long-term majority Conservative government is their project and it will be greatly emboldened by a no vote on 5 May.  Equally, a yes vote would greatly undermine Cameron and spark a rupture in his party. The strains are already starting to show and we need to understand what’s going on. Cameron is fighting to retain the long-term advantage of a split between the progressive parties. But at the same time he is fighting to retain the unity of his party and his job. That’s why we have seen his more rightwing crowd-pleasing interventions of late. If he lost the referendum, a sin the Tory right would not forgive, it could fatally weaken and shatter his leadership. So progressives must wake up, including Liberal Democrats who need to reassert their own interests and self-confidence, just as their coalition partners are doing. Labour needs to recover the hunger we had in the 1990s, born from years in the wilderness. That means, above all, doing the hard work to regain trust in our capacity to manage the economy and public finances responsibly. – the Observer