CentreRight

The Lurcher: Axing child benefit will hurt strivers and stay at home mothers

High rate tax payers are not all high earners. To take a family which makes choices that the coalition says that it values: a married couple with 2 children decides that their children would be best brought up by a parent not a child-minder, and so one parent (usually the mother) stays at home, whilst the other continues in work, earning £45,000 a year. There's a financial sacrifice, but it can be done at a stretch, and it's worth making. And make no mistake, Child Benefit is very much part of the current financial calculation for that family.

Axing child benefit will impose real hardship: £20.30/week for the first child; £13.40 for the second: £33.70 per week, or £1,752.40 a year out of the household income. That's not about a few extra bottles of Chardonnay, as some caricature it, but a very significant sum - it would cover about 30 litres of fuel a week for example, which is that family's and children's mobility.

It does more than that. At the moment Child Benefit is a universal recognition of the value society places on having children - the tax payers of the future who will have to shoulder the costs of our healthcare and pensions, not to mention the national debt that our generations have wracked up. It's also paid directly to the mother, giving her recognition of the value of what she does.

This cut comes in from 2013. It needs to be balanced either by an uplift in the Higher Rate Tax banding, or by some form of tapering. Otherwise, it will hit very hard many families who are already struggling. There is a case to taper it and abolish it altogether above a higher income level, but to cut this in full for every family above £44,000 a year, without some tapering to soften the blow, will justifiably strike many who voted for a Conservative government as inconsistent and wrong.

8.00 am update:

Just listened to David Cameron who tried to say both that this is fair, and that it was OK because it won't affect 85% of families. Hmmmm 15% of families who feel unfairly treated is a pretty large number of voters to infuriate. And most of them should be conservatives.

Just to illustrate: a married person earning £45,000 takes home £32,860.40 after tax and NI (but not of course before car tax, council tax etc etc). To lose £1752.40 is to lose over 5% of their take-home income. That will hurt those people very hard. They do not have "broad backs" as Cameron described them this morning.

The first duty of government

"We are agreed that the first duty of government is to safeguard our national security and support our troops in Afghanistan and elsewhere – and we will fulfil that duty." - David Cameron and Nick Clegg in their foreword to the Coaltion's programme for government.

This applies across government, even to the Treasury. It's necessary to remind ourselves of that, because of the way that the Strategic Defence and Security Review has been made subject to the Treasury's timetable this summer; it hasn't been allowed the time to be properly consultative or strategic. This is even more vital than would be usual given the utterly toxic nature of Labour's legacy in Defence.

One of the gravest charges made against Gordon Brown by the Conservatives was that as Chancellor he did not like the armed forces and saw no reason to make an effort to understand them, that on his watch the Treasury let down our armed forces in a time of wars. Combine that with Labour's failure to hold a full strategic defence review after 1998,whilst at the same time splurging on long-term contracts so that there are now unfunded defence liabilities of about £37 billion over the next ten years, and you get some measure of the mess the coalition has been left with. Clearing this up was bound to be hazardous.

To his credit, Goerge Osborne seemed to understand that in opposition and visted Afghanistan before the election. However it's far from clear that those good intentions have altogther successfully been carried into government.

It was to be expected that the review would pitch Army against Navy against Air Force, with defence contractors and backbench MPs of all parties joining in, and that the politics at that level would be hard-fought. However, with the extraordinary pressures that the coalition faces, it was vital that ministers stick together. That hasn't happened. Instead there have been briefings and black ops, some of them snidely personal. Personal calculation and animosity, rather than strategic consideration, seems to have been the order of the day, a recent example being last weekend's Sunday Times reporting that "Osborne's emmissaries" to the Liberal Democrat conference were briefing journalists against the Secretary of State for Defence. That's a dismaying return to Brownite tactics.

Liam Fox was entirely right to write as he did, and is justifiably appalled at the leak. It's ludicrous to say that this should not have been committed to paper: there's something badly wrong somewhere if the Secretary of State for Defence cannot write in confidence to the Prime Minister without it being leaked.

There are things the coalition can do to build public confidence in this process:

1. Extend the time allowed for the SDSR, allowing a contingency in the Comprehensive Spending Review if necessary
2. Set out, for public discussion, its vision of Britain's future global role and strategic interests, together with an analysis of the medium-term threats to our security (to the extent these are publishable)
3. Use the expertise of Parliament: the Defence Select Committee should hold public hearings; there should be a full day's debate in both Houses, attended in the Commons by the PM, DPM, and Chancellor as well as the Secretary of State
4. Ministers in all departments should demonstrate that they are approaching this in a collegiate spirit, with a shared recognition that their first duty is our security.

Number 10 should be backing new ministers not briefing against them

It's pretty depressing to see No 10 officials briefing against three Cabinet Ministers already. That this comes barely 48 hours after the Budget, when all hands should be focussed on making the coalition's case on the economy to the nation and sticking it ruthlessly to Labour, makes it all the more reprehensible.

Shaking up an unreformed defence establishment and re-shaping welfare are two of the toughest ministerial briefs. Ministers must be extraordinarily focused. If they do their jobs well, they will inevitably make enemies and come under attack. Some of that will be very personal, playing the man not the ball. They shouldn't have to be checking over their shoulders to make sure Downing Street is still with them and not joining in to catch them in a cross-fire.

No surprise, either, that all three Ministers are on the right of the Party. Astonishingly it appears that many Number 10 insiders genuinely believe that the election campaign was a success and that they couldn't have done any better. They see the coalition as the best of all possible worlds, preferring to work with Lib Dems rather than conservatives on the right. A touch of humility, reflection and acknowledgement of poor strategy and tactics where necessary wouldn't go amiss. Reaching for the Alistair Campbell handbook of briefings and counter-briefings against our own side is destructive and self-defeating.It needs to end now.

Who will speak for the government on 55%?

...and explain what on earth they were thinking of?

Nick Clegg, presumably, as Deputy Prime Minister, Lord President of the Council (with special responsibility for political and constitutional reform). He needs to do it quickly. This is fast developing into the coalition's first significant test.

A Healthy Coalition?

In a constructive spirit, having said that the AV concesssion was unnecessary and mistaken, it might be helpful to suggest a policy area in which making some concessions to the Lib Dems might bring dividends. Given the importance that all parties attach to health and the NHS in particular, it's been a little surprising that so far as I have seen health has not yet been identified as an issue for coalition discussions, whether LibDem-Lab or LibDem-Con.

There are some areas where adopting the LibDem position would help disimpale us from hooks that, upon reflection, we may wish we had not fashioned and open up positions that we might like to move into:

• The "independent NHS Board": this would diminish public and political accountability not strengthen it. The Lib Dem policy of locally-elected health boards is much more appealing to many conservatives.
• Care of the elderly: our £8,000 insurance policy to cover the cost of care homes is actuarially vulnerable. It needs widespread take-up, and assumes that people won't use their insurance policy to enter care homes earlier than they might otherwise have done. The financial services industry needs to ensure that it comes up with transparent, loophole-free products, which it's not always good at doing. Insurance might have a place as part of a pluralist system, but it's not a complete answer. We have said very little about the cost of home care, which is the setting where most people want to stay as long as they can. The Lib Dem call for a Royal Commission to look at all of this is sensible, provided we then go on to implement its recommendations swiftly.
• Deficit reduction. It may well not prove possible to increase health spending every year. The Lib Dems did not make this commitment. In order to help fund other Lib Dem proposals which we might agree to (eg lifting the very poorest out of income tax altogether) we may need to revisit this. I accept this may carry too much political risk, but we should consider it.
• Personnel: Norman Lamb is liked and trusted in health and social care. He's also a reformer - Nick Bosanquet frequently calls him one of Reform's (the think tank's) "favourite sons." Andrew Lansley could still become Secretary of State for Public Health if David Cameron wants, but Norman Lamb could become a senior minister with special responsibility for accountability and efficiency. If for no other reason than my desire to see the headlines: "Lamb chops health fat" or "Lamb fleeces health waste", "Lamb shears...." etc etc

There are lots of issues in common between the parties as well, for example, shared commitments to reduce the DH, join up health and social care services, empower patients and carers, and do more to focus on prevention and public health. I hope they're talking about this behind those there closed doors.

Clegg blinked; why did Cameron?

Driving back home I heard Radio 5 Live describe Gordon Brown's statement as "statesmanlike." I hadn't heard it at that stage, but of course it was nothing of the sort. As ever, Party calculation predominated. And by colluding in it and asking for talks, Clegg made himself vulnerable. Brown's resignation should not have made an iota of difference to LibDem calculations; his departure was inevitable. If the Lib Dems are seriously envisaging going into coalition with Labour (and also necessarily with the Scots Nats, Plaid, Green and...?) without knowing who Labour's next leader might be, and in the knowledge that whoever it is will be Labour's second unelected Prime Minister in a row, they should have been left to do so. The parliamentary arithmetic makes a coalition utterly impractical and unsustainable. It would have been old politics at its worst, and the best possible argument against any form of proportional representation. The markets would  react ferociously. Parties of the left would have to engage seriously with making the cuts that their profligacy has necessitated, and take the necessary heat. There would be another election swiftly, and all involved in such a coalition of losers would sustain further heavy losses. And if they failed to cobble this unedifying coalition together they would have had to return to the Conservative table in a much weaker position. So the Conservatives should have called their bluff.

Instead we folded. There was absolutely no need to offer the LibDems a referendum on AV or any other form of electoral reform. To the limited extent that there is any public transparency in these negotiations, we know that the Conservatives had offered a committee on political reform, and the voting system was but one part of that. There are other important system reforms: constituency size; postal voting; Lords reform, fixed term parliaments, MP recall by voters, to name but a few. But, by offering a referendum on AV we have put proportional representation on the table, and it will now be very hard to take it off again. We have said for a long time that we believe that FPTP is in the national interest, even when it works against us. If we believe that we should defend it. It looks tonight like a principle too cheaply discarded. And it makes us look weak. I am rocked.

At the end Brown would have been better to remain silent

Watching the worm on the BBC website last night, for the closing remarks. Brown's line dropped into negative and stayed there pretty much throughout his final comments, which were as negative as his scoring. He would have been better off saying nothing at all.

Winning the election is not the same as winning a mandate

The momentum is now with David Cameron and he is set to become Prime Minister. His strongest debate performance came when, at last, he started to explain the elementary conservative proposition that scrapping a tax on jobs isn't taking money out of the economy, but leaving it in the hands of job creators. That the economy and government spending are not the same thing. This is a genuine dividing line that should have been turned against Labour much harder and earlier.

How now to use this week? The danger is that David Cameron will become a Prime Minister without a mandate to do what needs to be done. The deficit, not imigration, was Gillian Duffy's main concern. But all main parties are refusing to acknowledge the scale of the problem. And in public opinion terms they have reaped the thin fruit that their collective failure of leadership deserves.

Yesterday, Today carried a story about a report from the 2020 Public Service Trust. Two poll findings, which should terrify anyone hoping to be in government in a week's time:

• Only 24% of the public believe that spending on public services needs to be cut at all to address the level of national debt (yes, debt, not deficit was what Mark Easton reported and I guess he knows the difference)
• 75% believe that efficiencies alone can deliver the required savings without damaging the services themselves.

We shouldn't be surprised by this; those findings reflect exactly what the main parties have been saying. Public opinion is in the place that politicans have led it to. But it means that an enormous task needs to be done to explain and then build consensus around the cuts that must come.

There are things that can be built on in the next week. David Cameron was the only politician last night who wanted to talk about Greece and he needs to do so again. We have said that we will publish an emergency budget, and we need to explain why. We need to challenge Labour for their failure to publish a Comprehensive Spending Review before the election. We need to explain the power of publishing on-line all government contracts for goods and services over £25,000 (an immediate benefit will be the number of bids and contracts that might otherwise have been worth up to about £30,000 suddenly coming in at £24,950). In power, publishing a Domesday Book of public debt and Labour's liability legacy, including public service pensions and PFI, will be vital.

Conservative strategy has been too risk-averse for too long, and culpably, it saw conservatism as too much of a risk. Momentum has come from getting real and getting conservative about cutting business taxes and trusting wealth creators not waste creators. In the next few days more needs to be done to build a mandate for being in government. CCHQ should understand that doing that will also help us get into government.

"Plundering and blundering" (Disraeli on Gordon Brown and Gladstone)

Interesting to see David Cameron quoting Gladstone yesterday at the Centre for Social Justice. The CSJ's foundations were laid on the work of the Conservative Party's former Renewing One Nation unit, set up under IDS by Tim Montgomerie and others.

In the  interests of adding One Nation ballast to DC's reported Gladstonianism, it's worth pointing out that whilst the best of Gladstone rightly can command some cross-party appeal today, at his worst he definitely had something of the Brown about him: control-freakery and a considerable sense of his own moral compass being amongst his characteristics when in power. More than once he combined in himself the roles of Prime Minister and Chancellor. This was not a great success. As Disraeli pointed out before winning the 1874 general election (thereby giving the Conservative Party its first absolute majority for a generation and enabling it to implement an ambitious programme of social reform):

"For nearly five years the present Ministers have harassed every trade, worried every profession, and assailed or menaced every class, institution, and species of property in the country. Occasionally they have varied this state of civil warfare by perpetrating some job which outraged public opinion, or by stumbling into mistakes which have been always discreditable, and sometimes ruinous. All this they call a policy, and seem quite proud of it; but the country has, I think, made up its mind to close this career of plundering and blundering" 

As with Gladstone, so with Brown.

A poll lead isn't a Ming Vase. It's a horse.

According to Mary Riddell: "Tory strategists say that winning this election is like carrying a Ming vase across a room. One stumble, and the treasure is smashed."

We have heard this election-lead-as-Ming-Vase talk before (see here and here). It is badly, dangerously wrong. If this is still the mindset inside CCHQ it needs to change. Today.

 Ming vases may be precious. But they are fragile, easily smashed, brittle, hollow, static, inert and need wrapping in lots of cotton wool before being taken anywhere. They may look beautiful, but they are cool to the touch. You can admire even covet them, but they don't engage the heart. You cannot have a relationship with a vase. There is absolutely nothing in common between a Ming vase and what it takes to get in front and stay ahead in an election race.

Look down the road from Manchester to Aintree. Think horses: race horses, and steeplechasers in particular. They need to be nourished, exercised, trained, stretched, galloped every day. They have to take jumps, at speed. There's risk involved, but if you don't face the risk and overcome it you'll never win. They need guts and stamina. They are organic, dynamic, living creatures that capture hearts as well as heads.

An election's a race, not afternoon tea in a well-appointed country house. It's not about a precious vase full of pretty orchids; it's about being Desert Orchid.

You can campaign as if you are cradling a vase that you are terrified of dropping if you want. But you won't win, nor will you deserve to. And it doesn't smack of hope optimism or change. But if you acknowledge the risks and make sure you jump them and stretch every sinew until the end, you have every chance.

Brown the clear loser; Clegg's success creates a LibDem dilemma

Brown had to win tonight and he bombed. He was wooden; his prepared jokes fell really flat (agonising to hear them repeated); his smile was a rictus; he interrupted much more than the others; he was boring.

Clegg won on energy and passion, as reflected by the instant polls. But what do the Lib Dems do now? The Seer Vince, last week, positioned himself close to Labour; tonight Clegg distanced himself from Brown's increasingly desperate "I-agree-with-Nick" ploys. The Lib Dems need to work out their position: do they exploit Brown's weakness and turn their fire on Labour, or do they stick with the Vince strategy and try to keep close to Brown? The Clegg approach is not the same as Cable's. How does this impact on their strategy for the rest of the campaign - do they defend in the South West, or attack in the North? On tonight's evidence, they are better placed to take votes from Labour than position themselves close to Labour.

Cameron did OK; his closing remarks were his high point, but he never caught fire. He missed some openings - he never tried to explain his most radical and exciting policy - Gove's school reforms (even though Clegg gave him an opening by praising the Swedish system). Nothing on the Broken Society (again Clegg used Conservative language abiut the conveyer belt to crime, which Cameron could have developed) . He didn't mention his big idea of the Big Society until the very end. He didn't communicate his hunger to change Britain. He didn't challenge Brown on his ridiculous assertion that opposing the NIC rise is to take money out of the economy.

For all of them: anecdotes about people they have met ("some of my best friends are...") are not the same as their personal experience of the system. David Cameron sounded authentic when talking about his own experiences of the NHS. But he needs to build on his performance tonight.

The debate on the economy will be vital. Some clearer announcements about the debt and deficit  over the next couple of weeks may be needed to boost Cameron's supply of arms and armour. At the moment too many people blame it all on the bankers. We need to explain how much is Brown's debt, and how much is the Banks'.