Coalition

Dramatic cut in pension relief

The coalition is not afraid of the moneyed classes, or Peter Mandelson’s ‘filty rich’. Tax relief on pension contributions is to be dramatically cut.  The allowance will be decreased from £250,000 per annum to £50,000 and the pension cap will fall from £1.8m to £1.5m and retiring workers could be taxed at 55 percent on any sum above that sum. These changes will save the Treasury £4bn per annum, mainly by limiting how much of a bonus pot or a windfall can avoid income or capital gains tax. The Telegraph describes the move as a ‘raid’ on the ‘squuezed middle’, which is not strictly true. The previous governnment made similar

Cameron’s government has been brave so far; it must not flinch at the finish

The spending review’s actors are jostling for position at the final curtain call. Bit-part players are stealing for the prominence of the centre, Whitehall’s bigger beasts fight to preserve their dwindling limelight and the leadership try to direct and subjugate the warring egos. Defence seems more or less settled, with the navy’s grandiose element apparently securing its two super-carriers. Doubts remain over the education budget’s final reckoning and welfare is unsettled as yet. Après child benefit, le deluge – so to speak. An attack on the principle of universal benefit would have predictable consequences. Questions have arisen about the government’s commitment to the winter fuel allowance and the cold weather

Boles: the coalition is David Miliband’s natural home

Nick Boles is fast becoming ubiquitous. He wrote an article for this morning’s Guardian, urging Labour’s wounded Blairites to join the coalition, where ‘there is room for everyone inspired by the desire to transform the way that government works and give people more control over their lives.’ He writes: ‘If President Obama can keep Republican Robert Gates as secretary of state for defence, does Britain have to forfeit the remarkable talent of David Miliband? Can the coalition afford to do without the passionate expertise of Andrew Adonis as it completes his quest to connect Britain’s great cities with high-speed rail? Must we try to build the “big society” without the

James Forsyth

Miliband starts with a bang

Score the first round to Ed Miliband. In his debut PMQs performance, Miliband comfortably got the better of David Cameron, forcing him onto the defensive for most of the session. Miliband’s first question was a long and worthy one about the death of Linda Norgrove, the UK aid worker, in Afghanistan last week. Then, he moved to the proposed child benefit changes, asking Cameron to justify the anomaly where a single earner family on £45,000 a year would lose it while a two earner household on £80,000 would keep it. Cameron’s problem was that nine days after the policy was announced, he still has no answer to his point. (Although,

PMQs live blog | 13 October 2010

VERDICT: Well, who would have thought it? In his first PMQs performance, Ed Miliband not only put in a solid showing – but he got the better of David Cameron. I certainly don’t agree with the Labour leader’s central argument: that it is unfair to restrict child benefit. But he put his point across in measured, reasonable tones – and Cameron seemed flustered by comparison, as he wagged on about the size of the deficit. Make no mistake, the argument and the public’s sympathies will unwind themselves over the course of the entire Parliament. They will not be resolved in one session of PMQs. But in presentational terms, MiliE will

Counting down to the spending review

Only one week to go, folks, until the main event itself: the Comprehensive Spending Review. And judging by this morning’s papers, the Treasury have almost settled on their final acts. Only the welfare, eduction and defence budgets have any significant question marks hanging over them. Those question marks, though, are fading fast. A story in this morning’s Times (£) reports that David Cameron has endorsed the building of two aircraft carriers, but has decided to delay the Trident upgrade until after 2015. No, strictly speaking, he’s not going back on this. Rather, the idea is that the coalition will keep on working towards a replacement for Trident between now and

The Postie’s twinkle

The Postman’s eyes twinkled as he met George Osborne across the dispatch box for the first time this afternoon. With the air of an apologist who isn’t remotely contrite, Alan Johnson told the House of his ‘vast experience in this job’ and gave the impression he was having a blast. This jolly masque hid an insubstantial performance. Johnson latched on to Chris Huhne’s vow that he would not be ‘lashed to the mast‘ of needless spending cuts – Johnson wondered if the deficit might not be eradicated within one parliament. Osborne said that it would. Then Johnson repeated the substance of his attacks of the weekend. The government lacks a

James Forsyth

Winning over the squeezed middle

Politically, one of the key questions about Lord Browne’s suggestion that tuition fees should be raised is how the tribunes of the middle classes react. Will a rise in fees be seen as another burden on those who work hard, play by the rules and are already bearing more than their fair share of the costs of the state? If the argument is to be won, the coalition will have to show that students will now get more out of their university experience. There’ll have to be an emphasis on how these changes will make universities improve the quality of the teaching that they offer. It’ll be worth watching to

Cable and Clegg scrambling to repel errant MPs

The Lib Dems have met the Browne report with a mixture of cordiality and outright antipathy. According to the Guardian, Greg Mulholland is the ring-leader of a band who will vote against a fee rise come what may. Lib Dem ministers are describing the Browne report as ‘unpalatable’ in its current form but recognise that fees must rise and are ‘keeping their powder dry’. The stumbling block is Browne’s recommendation that interest free loans be scrapped. This stark move was to be offset by raising the threshold and tapering interest rates to protect the disadvantaged. There are also concerns that the affluent will be able to pay off their debt

An unlikely alliance against Murdoch

The Guardian, the Daily Telegraph, the Daily Mail, the Daily Mirror, Channel Four, British Telecom and the BBC have united in common cause: stop Rupert Murdoch. This has to be The Digger’s greatest achievement: not since Waterloo has more motley a coalition been scrambled to resist a ravening tyrant. The signatories have written a letter to Vince Cable, who is to adjudge if Murdoch’s proposed full ownership of BSkyB will endanger media plurality. In reality, this hostile alliance is about more than plurality; it is a battle for the control of the news in a digital future. The distinct trinity of print, television and online is being subsumed into one

The scale of IDS’ and Gove’s challenge

Yesterday was a day of weighty reports. At 700 pages, the Equality and Human Rights Commission’s ‘How Fair is Britain?’ won the thoroughness stakes. Aside from the usual findings that a disproportionate number of young black men are imprisoned and that the white working class is outperformed at school by Indian and Chinese migrants, it made some telling discoveries. The report found that a staggering 50 percent of Muslim men and nearly 75 percent of Muslim women are unemployed in certain regions. No clues as to where, though the reasons as to why should now be familiar: the figures correspond with the Centre for Policy Studies’ view that Britain has

A sustainable and permanent solution

‘A sustainable and permanent solution’, that was Lord Browne’s refrain this morning. Browne has aimed to fill the £1bn university funding black hole with a system that doesn’t prejudice the disadvantaged or force universities to privatise. Browne recommends that the tuition fee cap goes, but insists the Treasury should collect a levy from universities that charge above £6,000: fees set at £9,000 will cede 50 percent of £1,000 above £6,000, which will rise to 75 percent for fees of £12,000. This tapered levy is designed to discourage institutions from charging US-style of £20,000. Browne says that no English or Welsh student should be confronted with upfront costs – at the moment,

Green refuses to name names

In the government’s grid for the week, Sir Philip Green’s report into how to make the public sector more efficient was meant to be the top story today. For an obvious — and tragic — reason it is not. Politically, the report was meant to help the government make its case that the cuts can be done without throwing Britain back into some Hobbesian state of nature. Indeed, Sir Philip suggests to Robert Peston that a very large chunk of the £83 billion cuts that are needed can be made through savings on the government’s £191bn  property and procurement costs. But as Pete notes, identifying government waste is far easier

The AV rebels change tack

A little snippet from today’s Times (£) that is worth noting down: “Tory rebels will this week lift their threat to the date of next year’s proposed referendum on voting changes – because they believe May 5 offers the best chance of stopping the alternative vote (AV) system. That date coincides with the council elections in Scotland, Wales and most of England, and was thought likely to boost the ‘yes’ vote for replacing first-past-the-post general elections. Nick Clegg insists that the Lib Dems will not budge on the date. But a tactical rethink will see many AV sceptics wave it through when the Bill comes to the floor of the

Making the case for further tuition fees

Ever the opportunist, Ed Miliband recognised that university funding could be the coalition’s first test of resolve. Opposing a tuition fee hike has given him the chance to serenade disgruntled Liberal Democrats and to discard New Labour’s sheen (which so incensed Alan Johnson, the minister who introduced the fee in such difficult circumstances). Miliband is determined to mould the Labour party in his image. Speaking on the Politics Show yesterday (16:20 in), he said that the party, Johnson included, will strive to deliver a graduate tax. After a summer’s procrastination, the government has run out of time. The substance of Lord Browne’s recommendations is in the public domain and it

Reforming incapacity benefit will not be easy – but it is crucial

‘500,000 to lose sick pay as welfare reforms bite’. Those words boom from the front-page of the Times this morning – and they’re based on an article by Iain Duncan Smith (£) in which he admits that some 23 percent of the country’s 2.1 million Incapacity Benefit claimants could be found fit for work. This, it is said, should save the Exchequer some £4 billion. The numbers are striking enough, but the policy behind them shouldn’t be surprising at all. Even the last Labour government intended to reverse a political deceit that they had nurtured, but which was birthed during the Thatcher years: the artificial swelling of the sickness rolls.

Vince Cable’s discomfort is shared by the coalition

The trouble with holding a ministerial debate in public is that, when it comes to the crunch, it’s obvious who the winners and losers are. So it is with Vince Cable and higher education funding. A couple of months ago, the business secretary tap-danced onto the stage with a (problematic) plan for a new graduate tax. Now, it seems clear that the Browne Review will reject his advice (£) in favour of increasing tuition fees. And so Cable has had to send out an excruciating email explaining why a graduate tax was never really a good idea in the first place. After the flip comes the flop, so to speak.