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Showing posts from October, 2010

Spending cuts not radical enough

Whatever happened to the tough decisions?  It could hardly be a tough decision to trim universal benefits for the well-off so spending in universities could be maintained and kids could still get a reasonably priced education. But it was clearly too tough for the Government. As a result, even if they actually deliver on all their promises to cut spending and stick with it through to 2015, the state will have shrunk only to the size it was in Blair's first administration. Radical, it is not. The reality is in fact that this squeeze is the same old stuff we had in 1976, in 1982 and in 1993, in other words on each of the previous occasions the government finances tipped over the edge, albeit delivered with more professional spin.  Simon Ward, an economist with  Henderson , the fund management group, made that point succinctly enough yesterday afternoon. He noted that “total managed expenditure”, the ultimate measure of spending, would decline by 3.3% in real terms by 2014-15.  Hardly

Michael Gove pledges to increase school spending

Education Secretary Michael Gove has told MPs that real terms school spending will increase over the Spending Review period. Mr Gove responded to an urgent question from shadow education secretary Andy Burnham on the government's £7bn "fairness premium" package, announced last week by Deputy Prime Minister Nick Clegg. "This money will be invested in accelerating social mobility," he told MPs.  The package announced by Mr Clegg will include 15 hours a week of free nursery education for the poorest two-year-olds, at a cost of £300 million a year by 2014/15, and a "pupil premium" with funds handed to schools to help pupils eligible for free school meals - a measure of poverty - which will eventually be worth £2.5bn per year.  A "student premium" to help the poorest teenagers to go to university will also be set up, at a cost of at least £150m per year by the end of the Spending Review period.  Mr Gove said that the government had "inherite

Business leaders back spending cuts

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Leaders of 35 of the UK's biggest companies, including BT and Marks and Spencer, have expressed their support for the government's planned spending cuts. Writing to the Daily Telegraph, the bosses said there was no reason to believe Chancellor George Osborne's approach would undermine any recovery. They write it would be a "mistake" for Mr. Osborne to water down his programme for reducing the budget deficit in Wednesday's Spending Review. They said: "Addressing the debt problem in a decisive way will improve business and consumer confidence.Reducing the deficit more slowly would mean additional borrowing every year, higher national debt, and therefore higher spending on interest payments. The private sector should be more than capable of generating additional jobs to replace those lost in the public sector." In Wednesday's Spending Review, Mr Osborne will outline which areas of Whitehall's budget will be hit the hardest, as the govern

Boris Johnson's lead narrows to 2% over Livingstone

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Boris Johnson's lead over his opponent, Ken Livingstone, has narrowed to just two percentage points less than a month after his arch-rival was confirmed as Labour's mayoral candidate for the 2012 London election, according to a YouGov survey released today. The polling, conducted during the week of the Conservative conference at the beginning of the month, bodes ill for Johnson ahead of the drastic coalition spending cuts to be announced on Wednesday. Livingstone has made protecting Londoners from the cuts a key feature of his campaign, and has urged the capital's voters to "punish" Johnson for cuts imposed by his Tory ministerial colleagues. A sample of 1,271 Londoners questioned during the week of the Tory conference, when Johnson held a re-election rally following his decision to stand again in 2012, showed 46% would vote for the incumbent, while 44% would vote for Livingstone. Just 4% said they would vote for the Lib Dem candidate, who has yet to be s

The rise of the benefit cheat police

Hit squads of inspectors are to be sent to areas where problems with benefit cheats are rife, the chancellor George Osborne has said. Mr Osborne compared welfare cheats to muggers robbing taxpayers of their hard-earned money. He also warned that repeat offenders could have their benefits cut off for up to four years. Benefit and tax credit fraud costs the taxpayer an estimated £1.5bn a year. The government is planning to reduce the annual welfare bill by a further £4bn, on top of an £11bn cut made in June. Details of how the savings are to be made are to come in next week's Spending Review. The new anti-fraud drive will use hi-tech data-tracking techniques and another 200 inspectors are to be recruited to a new investigation service. Welfare reform minister Lord Freud said minor offenders would face instant £50 fines and offenders caught three times could face a three-year benefit ban. He also said investigators would seek to seize more assets from benefits cheats.

David Cameron scales down defence cuts

The national defence budget has been finalised after a personal intervention by the Prime Minister. The final settlement puts the cuts to the Ministry of Defence's £37bn a year budget at around 7-8%. This is significantly lower than the 10% cut favoured by the Treasury. Military chiefs said that drastic cuts would damage the front line in Afghanistan, something David Cameron has made clear he is not prepared to do. . Defence secretary Liam Fox, who has fought fiercely for his department, appears to have won this particular battle with the Treasury. Hillary Clinton's comments earlier this week, in which she expressed concern about the expected defence cuts, could have added pressure on the coalition. . A senior Downing Street source has revealed that the comprehensive spending review will not outline any substantial cuts to the number of Army personnel. The source added that £750m is to be saved over four years on Trident, although there is uncertainty about how such

Margaret Thatcher unable to attend her 85th birthday party

About 150 ministers, former ministers, MPs, and peers with careers stretching back over the last 40 years attended the reception at No 10 – the largest gathering of Thatcherite ministers in Downing Street since they themselves sat around the cabinet table more than 20 years ago. Unfortunately, Baroness Thatcher had to pull out of the Downing Street party after she fell ill with flu. Mr Cameron read out a message from Lady Thatcher, in which she said: ‘I am so disappointed not to be with you this evening. I hope that you will appreciate that on this particular occasion I have had to accept that the Lady is not for returning. Please, please enjoy yourselves.’ A spokesman for Mr Cameron said he was ‘obviously disappointed’ at the news, and that another party would be organised once she recovers. Lord Heseltine, who brought Mrs Thatcher’s premiership to an end when he stood against her for the leadership, was left off the guestlist which was co-ordinated between her office and Downin

Hillary Clinton concerned by UK defence cuts

Hillary Clinton has said that plans to cut the Ministry of Defence budget by 10% are of concern. The views expressed by Washington came as Britain's top military leaders launched a last ditch attempt to persuade David Cameron to scale down the cuts.  In an interview with BBC Parliament's The Record Europe in Brussels, Clinton said. "The reason it concerns me is because I think we do have to have an alliance where there is a commitment to the common defence. Nato has been the most successful alliance for defensive purposes in the history of the world I guess, but it has to be maintained. Now, each country has to be able to make its appropriate contributions." Robert Gates, who was in Brussels for a meeting of NATO defence ministers, voiced similar concerns. "My worry is that the more our allies cut their capabilities, the more people will look to the United States to cover whatever gaps are created. At a time when we are facing stringencies of our own, that's

Conservative Future backs unlimited university fees

This is a controversial issue throughout the country. It is also controversial within the ranks of Conservative Future. National Chairman Ben Howlett was quick to support the lifting of the cap on fees, currently set at £3,290 per year. This could see some of the more prestigious institutions charging upwards of £10,000. Many claim the move is necessary to fill a 'black hole' left by cuts in the education budget. But Clare Hilley, one of Conservative Future's Deputy Chairmen, has written of her uncertainty on the matter. Mr. Howlett should have invited discussion and debate within the organisation before jumping to the defence of the policy. Ben Howlett was elected as National Chairman on a turnout of 1%. He lacks any mandate to speak for young Conservatives.

The British Tea Party

Politics in the USA has been shaken up by the growth of a right-wing populist movement. The Tea Party movement, as it is known, has no central leadership but is a loose affiliation of smaller local groups. The movement's primary concerns include cutting back the size of government; lowering taxes; reducing wasteful spending; reducing the national debt and federal budget deficit; and adhering to the United States Constitution.  With taxes and spending cuts both on the increase on this side of the Atlantic, Britain has all the conditions necessary for a popular anti-tax movement. The inaugural British Tea Party took place back in February in Brighton. This being England, there was even real tea on offer. The "Brighton Tea Party" was backed by the Freedom Association, a libertarian group that counts Conservative MEP Daniel Hannan as a member. The American Tea Party movement also helped to organise the event. In addition to being anti-tax and a vocal Eurospectic, Hannan