Spending Review

When Mr Osborne moved into No 11 in May, he could plausibly argue that the UK and its major trading partners were through the worst of the slump and on a straight road to recovery. Couple that with the panic over European government debt, and coalition ministers had (in their eyes) sufficient grounds to argue that they needed a serious plan to tackle government borrowing – and needed it now. Both parts of that argument no longer look so solid. The undoubtedly real alarm over government debt that gripped international markets this spring has eased. And besides, the truth is that the UK – a major economy with a good credit history, whose deficit is largely financed by domestic investors – was never in the same boat as Greece or Iceland. Meanwhile, the economic outlook has become considerably bleaker. – The Guardian

The government wants to eliminate the UK’s budget deficit – which currently stands at 10 per cent of GDP – by 2015. To that end, the coalition has decided to slash £83bn from its budget, with cuts to government departments of up to 25 per cent expected. On October 20, Chancellor George Osborne will deliver his comprehensive spending review, which will reveal where the axe will fall. But how bad could it be… – The First Post

Britain’s economy is still in “grave danger” of collapse, Ken Clarke warned yesterday. The Justice Minister also said Wednesday’s spending review will be “the most dramatic in living memory”. He added: “We’re in grave danger of financial collapse. We’re not out of the woods yet.” Mr Clarke, speaking in Derbyshire, said the debt crisis was unprecedented and people must brace themselves for tough economic times. His comments put him at odds with the Prime Minister who said two weeks ago the economy was “out of danger”. – The Mirror

Team Ed

A leader’s back-room team is as important, and sometimes as famous, as his front-line personnel. Alastair Campbell and Philip Gould were indispensable to Tony Blair; Steve Hilton and Andy Coulson are closer to David Cameron than most cabinet ministers. Among the most senior members of Mr Miliband’s kitchen cabinet is Stewart Wood, an academic and aide to Mr Brown who advises on policy and media strategy. Greg Beales, who also served Mr Brown, helps Mr Miliband with policy and speeches. Gatekeepers include Polly Billington, a former journalist, and Katie Myler, a ministerial adviser when Labour was in office. They are a strikingly young bunch. Mr Miliband owes his leadership in part to grizzled trade-union bosses, but his most ardent supporters have always been youthful idealists who hear echoes of Barack Obama in his talk of “a new generation”. The Tories, who privately think Mr Miliband will have to draft in some more heavyweights before long, are unworried. – The Economist

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First meeting for generation Ed

Ed Miliband has geared up for his first face-to-face clash with David Cameron since he was elected Labour leader by meeting his Shadow Cabinet for the first time. The Opposition leader will face intense scrutiny when he takes on the Tory leader at Prime Minister’s Questions in the House of Commons later today. The showdown will be seen as a key test of his abilities, after he narrowly won victory ahead of his brother David last month. Yesterday’s meeting of his front-bench team was the first since their appointments on Friday. In just over a week’s time they will spearhead the Opposition response to the Government’s swingeing public spending cuts. In a sign of the crucial role he will play, Alan Johnson, a surprise choice as Shadow Chancellor, sat opposite the new leader. – The Herald

So the shadow cabinet election winners are mastering their briefs. But spare a thought for those who saw hopes and dreams go up in smoke. In Scotland activists ran a tight operation. Ann McKechin wanted to be shadow Scottish secretary, and that’s what she got. But in Wales things became a little more complex. Distinguished as he has been, supporters of Peter Hain thought it was time he moved on to something more challenging than the Welsh secretary brief – again – and thus all sorts of other Welsh MPs were encouraged to stand. Ideally, there would be someone else to take the Welsh portfolio, leaving Hain free to take another plum brief. But it didn’t work out that way. So many stood – Chris Bryant, Huw Irranca-Davies, Ian Lucas, Wayne David, David Hanson and Kevin Brennan – that none made the shadow cabinet. Hain has been co-opted back as shadow Welsh secretary. Best-laid plans. Oh well. – The Guardian

ED Miliband’s top team met for the first time as his surprise pick for Shadow Chancellor Alan Johnson sparred for the first time with opposite number George Osborne. The nine-strong “Yorkshire mafia” were among those taking their seats at the Shadow Cabinet table yesterday as Mr Miliband addressed his team ahead of today’s first appearance at Prime Minister’s Questions since becoming leader. – The Yorkshire Post

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The Browne review

A plan for higher university fees, fewer subsidies, more markets and less government has been unveiled by an independent review into the future of the English higher education system. The radical blueprint, revealed on Tuesday by a panel chaired by Lord Browne, the former chief executive of BP, will cause tremors in the coalition government and problems for Labour.The review proposes removing the current cap on annual fees of £3,290. If institutions want to charge more than £6,000, however, they will be obliged to pay a levy to recompense the government for the cost of higher student loans. – The FT

David Cameron has urged Liberal Democrat MPs to “compromise” over university funding, as the Government prepared to announce a dramatic rise in university fees. John Hemming (Lib Dem Yardley) and Lorely Burt (Lib Dem Solihull) both signed a pledge before the general election promising to vote against any increase in student tuition fees. But they will face a dilemma if a Government review recommends allowing universities to charge more. Lord Browne of Madingley’s independent review of student finance is expected to recommend removing the existing tuition fee limit of £3,290 a year. – The Birmingham Post

Sky’s chief political correspondent Jon Craig said Prime Minister David Cameron would brief Labour leader Ed Miliband in the morning in an attempt to build a consensus. “The crucial vote will be in six weeks time,” Craig said. “That’s when the big showdown will come.” The National Union of Students said debts could double and students who have to borrow the most to fund their studies will be hit by higher interest payments. Speaking before the report’s publication, NUS president Aaron Porter said: “It would be an insult to the intelligence of those who voted for the Liberal Democrats to attempt to rebrand the regressive and deeply unpopular top-up fee system. Liberal Democrat MPs have long opposed tuition fees and at the general election each of them signed a pledge to vote against higher fees in Parliament.” – Sky News (more…)

Ed’s “new generation”

Other new-intake MPs who have been given shadow ministerial roles include Michael Dugher, a former special adviser to Gordon Brown, at defence. John Woodcock, who also worked for Mr Brown at Downing Street, becomes a Shadow Transport Minister. Gloria De Piero, the ex-television journalist, is a Shadow Culture Minister. Luciana Berger, who was once wrongly romantically linked to Tony Blair’s son Euan, is a Shadow Energy Minister at 28. Mr Miliband said: “I am delighted with Labour’s front bench team. I am particularly pleased that I could bring in a new generation of talent, whilst also using the experience of a broad range of Labour MPs. – The Herald

The Labour leader said he was turning to a “new generation of talent” with shadow ministerial jobs for 12 MPs elected last May. The frontbenchers include Gloria De Piero, Luciana Berger, John Woodcock and Shabana Mahmood. Rising star Chuka Umunna becomes Mr Miliband’s personal aide. Diane Abbott is shadow minister for health, while MP John Spellar joins Yvette Cooper in foreign affairs. Gareth Thomas is in business and skills, while Vernon Coaker will again work with Ed Balls, on home affairs. Mr Miliband said: “This is a team which will robustly hold the Government to account.” – The Mirror

LABOUR leader Ed Miliband has appointed another Welsh MP to a shadow ministerial role. Wayne David, MP for Caerphilly, is to become the party’s new Shadow Minister for Europe. Mr David, a former MEP, was one of the eight Welsh MPs who initially missed out on a role in the Shadow Cabinet thanks to the party’s ballot system. The party’s MPs elect their colleagues to the front bench while in opposition, but despite eight Welsh MPs putting their names forward, none made the final cut. – Western Mail

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Diane gets health gig

Ed Miliband gave defeated Labour leadership rival Diane Abbott a key job as shadow public health minister yesterday. The appointment of Ms Abbott means all the new leader’s challengers have been given posts in his top team – apart from his brother David, who decided not to run for a frontbench job. She will serve under the newly-appointed Shadow Health Secretary John Healey. A source close to Mr Miliband said: “Ed believes Diane Abbott will bring passion, formidable communication skills and combative political abilities to this key role.” Mr Miliband also appointed Kevan Jones and rising star Michael Dugher as shadow defence ministers. – The Mirror

Ed Miliband has recruited failed Labour leadership challenger Diane Abbott to his shadow ministerial ranks.  Ms Abbott, a left-winger, came last in the contest to succeed Gordon Brown and she also lacked the support needed from fellow Labour MPs to be elected to the shadow cabinet. But Mr Miliband, who is still appointing to the lower ranks of his first shadow team, has made her shadow public health minister. – Sky

“We’re all in this together”

David Cameron and George Osborne were the guests of honour at a lavish £25,000 party – just hours before they unveiled savage spending cuts. The Prime Minister and Chancellor joined more than 60 senior Tories at one of Britain’s top restaurants for the exclusive event[…]His guests enjoyed a four-course meal washed down with champagne and up to 24 bottles of Pétrus – dubbed “the most expensive wine in the world”. Just hours earlier Mr Osborne had delivered his “we’re all in this together” message at the Tory conference – announcing his plans to axe child benefit payments to 1.2million families. – The Mirror

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