Tag: Conservatives

DON’T ROCK THE REFERENDUM BOAT CHANCELLOR!

PETROL TAX IS TEMPTING TARGET FOR OSBORNE.

George Osborne is in danger of being caught in an ambush of his own making when he presents his budget next week.

He needs to keep voters sweet ahead of the EU referendum but recently announced that the optimistic note he struck at the time of the autumn statement has now gone flat. There was always a danger that mid term unpopularity might lead people to vote against the government for reasons unrelated to Europe. At the moment the Conservatives hold a healthy lead over Labour, but an unpopular budget with new cuts and tax rises could change that before June.

The Chancellor was too bullish in the autumn and now that the economic headwinds are beginning to blow, he is thrashing around for answers to keep his pledge of a budget surplus by 2020 intact. The suggestion of a major reform of pensions was a spectacular example of this. The idea was floated to remove tax relief on pension contributions rather than taxing withdrawals later in life. This would have been a complete reversal of the current position but would have given Mr Osborne more tax revenue now. The plan met severe criticism, not least because a future Chancellor might be tempted to tax withdrawals as well.

That pledge of a budget balance by 2020 is crucial if George Osborne is going to make a bid for the premiership, but it certainly restricts his room for manoeuvre as uncertainty persists on the international front. With growth forecasts cut and average earnings rising more slowly, tax revenues are not what he expected as recently as November.

Reaching for more cuts in public services is going to prove very difficult. The well reported difficulties faced by councils like Lancashire clearly show there is no low hanging fruit on the public spending tree. Indeed the Chancellor will need a long neck to munch much more. So let’s nickname any more economies in this area, the giraffe cuts!

It is always difficult to predict what Chancellors will do, but I would be surprised if petrol duty remains frozen as it has been since 2011. With the drop in forecourt prices to around a pound a litre, this would be a relatively pain free area to raise tax. He ought to do something about taxing the amount of sugar we consume but there seems to be a reluctance to do so.

With virtually zero interest rates the climate remains favourable for investment and consumer growth remains strong. However the latter familiar development in the UK economy may be storing up trouble in the future. If only the manufacturing figures were as healthy.

Osborne will be entitled to say that his campaign to make multinationals pay their UK taxes is beginning to work. This is an essential development as people grow weary of the austerity agenda.

Wednesday’s budget will be both a temporary distraction from debate on the EU referendum, whilst also potentially affecting its outcome. Osborne has been in post nearly six years now. He will need all his political skills to get through this Budget.

POWERHOUSE SAVED BY TORY CONFERENCE

OFF THE RAILS.

After the shameful “pause” in electrifying the Leeds-Manchester rail link, we now have the shamefaced about turn.

In June when the “pause” was announced, I described it as one of the most disgraceful decisions ever made because it undermined the Northern Powerhouse based on connectivity, it undermined companies’ procurement plans and finally politicians must have known before the election about the crisis in Network Rail that caused the decision to be taken.

Be in no doubt that the decision to reinstate the electrification is directly related to the fact that the Conservatives are in Manchester this weekend for their annual conference. The Chancellor George Osborne will want Ministers to make frequent references to the Northern Powerhouse. He didn’t want critics asking how meaningful the concept could be without better rail links between the two principal cities of the Powerhouse.

Two independent enquiries had been set up after the “pause” was announced. The hapless Transport Secretary Patrick McLaughlin told us no decisions would be taken until they reported. But George Osborne, who I understand wasn’t fully in the loop on the “pause” decision, can’t wait for the enquiries and has ordered the go-ahead to be given.

All this faffing around comes at a price. It has delayed the project by three years so passengers can carry on standing until 2022.

DEVO DEALS.

I understand the Tory conference may also be used for announcements about devolution deals for Sheffield and the North East where agreement has been reached on elected mayors. The latter will be small consolation to the steel workers of Redcar.

JEREMY’S FINGER ON THE BUTTON.

At least the Tories are in power, Labour look a long way from it. That’s my conclusion after spending some sun drenched days in Brighton. The moon turned red but I fear that was more a sign of the Gods’ displeasure than a happy omen for socialism.

Much of the press coverage of the new Labour leader is over the top. Jeremy Corbyn has revitalised his party, he has caught the mood of public disillusionment with speak your weight politicians and some of his policies (housing and rail) have considerable merit.

But the Trident row has immediately highlighted the inherent instability of his leadership. In all honesty who really thought Prime Minister Corbyn would authorise the use of nuclear weapons? But by definitively saying he wouldn’t he has fatally undermined his chances of victory in 2020.

Most of the Shadow Cabinet criticised him as did the big unions whose members are employed in the nuclear industry. But most seriously Corbyn says repeatedly he wants the party to be more democratic. They voted, against his wishes, not to discuss changing the multilateral disarmament policy at the conference. Instead a defence review is under way when the issue of Britain, under a Labour government, becoming unilateralist would be discussed.

But what is the point of Maria Eagle, the Shadow Defence Secretary and Garston MP beavering away on her review when the would be Prime Minister has already told our potential adversaries that he will blink first?

Perhaps the truth is that Jeremy Corbyn is determined to shake up the Labour Party, give it back its socialist principles and then hand over to someone more electable in a few years time.

FREE DEBATE AT LABOUR CONFERENCE?

30 YEARS AGO……

Exactly thirty years ago Neil Kinnock launched his famous attack on Liverpool’s Militant Tendency at the party conference. His reference to taxis being hired by a Labour council to take redundancy notices to the city’s council staff has become legendary or infamous depending on your point of view. The speech marked the beginning of a necessary purge of Trotskyist infiltration. It also marked the last time the Labour conference was a showcase for disunity.

For over a decade the Labour conference had laid bare its divisions for the TV audience to see. That had to be stopped. However over the years, and particularly after Tony Blair’s public relations team took over in 1994, all dissent was marginalised. Real debate was discouraged and policy was formed in the National Policy Forum which was firmly in the grip of the leadership. It was an overreaction to the mayhem of 1975-85.

So what’s going to happen this weekend now that the party is lead by Jeremy Corbyn, the arch dissenter. He wants real debate in a democratically run party. Let’s hope we get it. The public might respond well. They seem to have liked his style at Prime Minister’s Questions. On the other hand a demonstration of total policy incoherence might turn them away. That was what worried the party managers under Kinnock, Blair, Brown and Ed Miliband.

I am certainly looking forward to my second visit to the south coast to see the rebel of thirty years standing now in charge. Some are speculating this will be his only conference as leader, but I wouldn’t be so sure. Over the next few months leading up to important elections next May, Corbyn has the ability to rally different sections of the electorate to his new way of doing politics. There are many Scots who deserted the party out of frustration with austerity rather than any desire for independence. If they come back in numbers in the Scottish Parliament elections, Corbyn’s critics will be muted. Then there are Green supporters impressed by his environmental policies and general radicalism. But the largest group of all are the young, the poor, people disillusioned with politics or who have never engaged. Some were mobilised by the Corbyn campaign. Will they stay around? Will others join them? Will they watch the coverage of a party conference for the first time?

LIB DEMS AND CORBYN.

Whilst Scots, Greens and radicals might rally to Corbyn, the Liberal Democrats were hoping this week that they could occupy, what they saw as, the huge gap opening up in the middle of politics. Although at one fringe meeting after another I heard speakers saying they weren’t in the centre, they were Liberals they nevertheless believe the Tories have swung right because they are no longer in Coalition with them. With Corbyn off to the left, they see an opportunity. What they must avoid is opening the door too easily to defecting Labour MPs. They mostly won’t be true Liberals, just careerists trying to save their seats.

If Labour’s conference in Brighton is going to return to real debate, it is only fair to point out that the Lib Dems have always maintained that tradition. The debate last Monday on the Trident nuclear weapons system was open and excellent.

Perhaps the Conservatives will try it in Manchester next month but don’t hold your breath.

BEWARE OF ARROGANT TORY GOVERNMENT

WE ARE THE MASTERS NOW

The surprise victory of the Conservatives in May and the Labour implosion since has led to an arrogant style of government this summer.

Election promises have been abandoned and proper procedures bypassed by Ministers who see their time in government stretching into the mid 2020s. It is essential that judges, the media and voters keep this government under scrutiny in the absence of effective political opposition.

The list of examples of arrogance in power is quite long considering this government has only been in power for three months.

Take the crash of Kids Company. Only last week Ministers overruled civil service advice to give the organisation three million quid. Civil servants insisted on the rare procedure of a direct written order to do it. We need more of that from the Sir Humphreys.

Take the National Living Wage announced in the Summer Budget. The Low Pay Commission which gives independent advice to the government in this area, appears to have been by passed. At the very least its policy of making recommendations that keep job losses to a minimum has been seriously compromised according to many business organisations now deeply worried by the implications for their wage bills of paying £9 an hour by 2020.

Another example is the funding of the BBC. This is meant to be decided after a lengthy period of public consultation. In 2010 this requirement was ignored as the BBC was forced overnight to accept a TV licence freeze, funding the World Service and paying towards broadband roll out. The excuse then was the financial crisis prevailing at the time. What’s the excuse now? The decision to make the BBC pay for free TV for over 75s is an important one with many implications. However the BBC has once again been forced to accept the deal in return for getting the licence fee tied to inflation increases with no reference to us.

Government promises have been torn up left right and centre. More is yet to come out about when Ministers knew they were going to “pause” the electrification of the Manchester-Leeds rail line. And remember that promise to the elderly that there would be a £72,000 cap on their contribution to their care. That’s now been put back to 2020.

Then there is the political trickery that all politicians get up to but it leads to cynicism amongst the public. The demand by Tory backbenchers that we spend 2% of gross domestic product on defence has been met. Hurrah! But wait a minute, that’s only because intelligence spending has now been included. Then there are the British pilots flying bombing missions in Syria without parliament’s permission.

The one thing these arrogant Tories haven’t done is announce forty new Conservative peers. That sort of move is usually announced on a quiet Friday afternoon in early August. But Lord Sewell’s political discussions with ladies of the night focussed attention on the failed structure of the House of Lords and the preferment of a load of time servers and party donors is being delayed.