Conservative Diary

Tax and spending

22 Sep 2013 13:32:56

Labour has £28 billion worth of unfunded spending commitments - Shapps

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By Paul Goodman
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Attack-mails from Grant Shapps and his sorcerer's apprentices in CCHQ's kitchen seem to be arriving in my in-box at a rate of approximately one a minute.  I'm not going to report each time the Party Chairman announces a new attack website, but here's today's, timed for the start of Labour's Conference, which gives a sense of how much the Tory assault operation has improved.

22 Sep 2013 08:12:41

Watch Sajid Javid

Screen shot 2013-09-22 at 08.12.46
By Paul Goodman

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It's no surprise to see Conservative attack dog Chris Grayling sinking his fangs into Labour's spending pledges in today's Sunday Telegraph.  By the same token, it wouldn't be a shock to see Conservative attack dog Michael Gove unleashed on Ed Miliband's vulnerabities (I leave it to the reader to decide exactly what and where these are).  After all, Grant Shapps and his apprentices in CCHQ's devil's kitchen cannot be expected to carry out every assault themselves.

But who's this popping up behind the Sunday Times paywall?  Why, none other than the relatively lowly figure of Sajid Javid, MP for Bromsgrove - and number five in the Treasury team, the bottom figure in the ranks.  Javid warns that Miliband has a £27 billion hole in his spending plans.  Watch for that figure to rise as this week's conference goes on.

And watch out for Javid, too.  That so junior a Minister in the Government pecking-order is trusted to work at the same level as Cabinet Ministers such as Grayling says much about him - and how highly the Party leadership rates him.  The Economic Secretary to the Treasury is a very modern success story.

The son of a family of Pakistani origin, he was brought up for a while in "Britain's most dangerous street", went first a Bristol comprehensive, then to Exeter University, and onwards to Chase Manhattan - where he became the youngest Vice-President in the history of the bank.  Elected to the Commons in 2010 and already a Minister, he will be promoted before 2015.

The move may stir suspicions of tokenism.  It shouldn't.  You don't get to a senior level at Chase Manhattan by being a slouch.  Javid is very bright, straightforward, sharp and, for that matter, right-wing: he pushed earlier in this Parliament and on this site for a debt ceiling.  My only question is whether he is, well, political enough: business people and politics don't always mix.

This is presumably why George Osborne - whose previous PPS, Greg Hands, is very political indeed - talent-spotted Javid and made him his PPS.  (The Bromsgrove MP had previously served John Hayes in the same position.)  Javid will be learning some of the political tricks of the trade in the Treasury, not to mention gaining experience of Whitehall's most senior department.  You will hear more about Sajid Javid in the months to come.  Which is why I say: watch him.

18 Sep 2013 06:51:24

Who is winning the Coalition? Us or the Lib Dems?


By Mark Wallace
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Now that both parties are fighting to take credit for the coalition's achievements, rather than seeking to blame each other for its impact, it seems an opportune moment to ask: who is winning the Coalition? Do the Lib Dems or the Conservatives enjoy more success in Government?

Let's tot it up, match by match, across thirteen key policy areas:

Home Office

With PCCs introduced, an immigration cap in place, the concept of regional immigration limits rejected, spending cuts to the police but crime falling regardless and even the now-famous "Go Home" vans, the Home Office is a round victory for the Conservatives. The Lib Dems will be happy about the scrapping of ID cards, but it's worth remembering that this was Tory policy at the election, too.

Blues 2 - 0 Yellows

Local Government

Both parties described themselves as localist in the run-up to 2010, but the plan the Government have implemented is almost entirely Eric Pickles'.  Spending transparency, guaranteed referenda for council tax increases over 5 per cent and relaxed planning regulations all point to a Conservative win.

Blues 2 - 0 Yellows


It's a little hard to say how the different parties have fared in the Justice department. The failure to fulfil the Tory pledge for automatic jail sentences for carrying a knife illegally and the fact the Human Rights Act still has not been replaced by a British Bill of Rights are certainly points against the Conservatives, but they were respectively scored by Ken Clarke and a Commission set up by the Prime Minister, so count as own goals. Since he took over as Justice Secretary, Chris Grayling has been pushing ahead more productively with cuts to legal aid, reform of the courts system and a new, more accountable prison regime. The Lib Dems have had barely a look-in, but the own goals go on their tally - we can expect a better rematch later in the Parliament.

Blues 3 - 2 Yellows

Constitutional Reform

The Lib Dems had a good sequence of play early on - for a while it looked like they might romp home. They certainly secured the referendum on AV which they had demanded, but then the electorate overwhelmingly rejected the plan. Lords reform briefly came onto the agenda, before being torpedoed by Tory backbench opposition. In revenge, Clegg sank the boundary reform the Conservatives desperately need to iron out structural bias in the election system. Both sides lose out - a no-score draw.

Blues 0 - 0 Yellows


It's fair to say Michael Gove has emerged victorious on almost every measure in Education. The academies scheme has been dramatically extended, Free Schools are springing up and new, more rigorous exams are in place. The flagship Lib Dem policy of the Pupil Premium has been implemented, but their promise to aboilish tuition fees has been entirely reversed.

Blues 5 - 1 Yellows


Both parties supported High Speed 2 in 2010, and despite heavy fire from all sides it remains Government policy. The Lib Dem policy of introducing road pricing has been rejected, and replaced by reductions and freezes in fuel prices, driven by Rob Halfon. Clegg and Cameron both promised that Heathrow would not be expanded, and they've got their way - with Lib Dem support for the policy helping to overwhelm any Tory suggestions it be revoked.

Blues 2 - 1 Yellows 


The decision to hold a Strategic Defence Review rather partially removed this department from the realm of pure party politics early on in the parliament. However, the Lib Dems regularly boast that they have managed to delay any decision to replace Trident until at least 2015, while the Conservatives have successfully slimmed down the MoD's size and balanced its budget for the first time in years. A score draw.

Blues 1 - 1 Yellows


Energy and Environment

Chris Huhne, and later Ed Davey, have dominated these policy fields from DECC until Owen Paterson gave DEFRA more Tory bite in the last year. The Green Deal is in place (and splashing money everywhere), wind farms are still going ahead despite the Tories wishing to implement a moratorium and the Green Investment Bank has got the go-ahead. Shale gas has now been given the green light, but only after lengthy delays thanks to Lib Dem opposition. 

Blues 1 - Yellows 5

Tax and Spend

Both parties agreed on the need for austerity after the Brown years, but we should note that the Lib Dem manifesto proposed £15 billion of spending cuts, delayed until 2011-12. Austerity has been larger than that, and began immediately. While Clegg and Alexander's presence in the Quad has certainly reduced the fiscal tightening somewhat, Government policy looks closer to Osborne's position than theirs.

On tax, it's a different story. The 50p rate is gone, but it is now 45p rather than the 40p many Tories would have preferred. The income tax threshold is rising to £10,000, following a Lib Dem manifesto pledge - though it's not a policy many Conservatives are uncomfortable about. It's fair to say Osborne's enthusiasm for tax cuts (for example on Inheritance Tax) has been sizeably hindered by his coalition partners.

Goals for each side, but level pegging so far.

Blues 2 - Yellows 2

Welfare Reform

Like Eric Pickles, Iain Duncan Smith went into the 2010 election with a coherent plan and a deep personal dedication to his brief. As a result, he's got his way on the bulk of his proposals. The two parties have collaborated to protect the Universal Credit scheme from Treasury attempts to axe it or scale it back. It says a lot that the Lib Dems' main impact on the DWP has been to veto IDS' offers to make even more savings from his budget.

Blues 2 - Yellows 1

Business and Banks

Vince Cable has long touted his Department as the heartland of Lib Dem opposition to Conservative leadership of the coalition. He's certainly managed to get the Government to adopt his industrial strategy, and blocked the Beecroft reforms to workplace regulation. But he has also had to accept the abolition of the Regional Development Agencies and the Conservative-driven cuts to red tape. The decider is the Government's decision to accept the Lib Dem policy to break up the banks.

Blues 2 - Yellows 3


To say the Health and Social Care Act proved controversial is an understatement. Various of the policies within it are drawn from the Conservative 2010 manifesto, although Lib Dem opposition forced the Government into a "listening period" and resulted in several changes to the legislation. 

Blues 2 - Yellows 1


This always seemed likely to be the sticking point of the Coalition. Clegg has prevented Cameron from offering an earlier referendum, and the Conservatives have been forced to use a Private Member's Bill to pursue their policy post-2015. However, the Lib Dems so far have been too afraid of public opinion to vote against the Wharton Bill, resorting to wrecking attempts in the Committees. The In/Out referendum is on the way, but Yellow blocking tactics have left the Blues open to attack by UKIP.

Blues 1 - Yellows 2

Scores so far

Here are the overall scores from the first half of the Parliamentary season. Of 13 matches, there have been 7 Blue victories, 3 Yellow wins and 3 draws. 25 goals for the Conservatives and 19 for the Liberal Democrats leaves the goal difference at +6 for the Blue team.

The contest is only going to become more hotly contested - as can be seen by Nick Clegg's attempt to take the credit for Rob Halfon's ideas today - so we will continue to watch every match and report back.

12 Sep 2013 07:54:22

On tax, raising the stamp duty threshold tops our "red lines" poll and restoring the 10p tax band comes last

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By Paul Goodman

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I wrote yesterday that it is perhaps surprising not to see the economy or tax in the top five issues raised by respondents to our "red lines" poll.  It's therefore necessary to say today that an economic issue came in sixth.  On a scale of one to ten, in which one represents "very negotiable" and ten "non-negotiable", the statement "the structural deficit should be eliminated by 2017/2018, if not sooner" scored a eight - coming in only a fraction behind those top five issues - an In/Out EU referendum and renegotation; the reduction and equalisation of constituencies; keeping or lowering the benefits cap; keeping or lowering the immigration cap and pressing ahead with the development of shale gas.

Here are the remaining scores of economy and tax-related issues:

  • Stamp duty threshold should be raised to £250,000 or higher - 7
  • The inheritance tax threshold should be raised to £1 million or higher - 7
  • Tax allowances should be fully transferable between married couples - 7
  • Cut the 45p tax rate, raise the threshold or both - 6
  • Cut the 20p tax rate, raise the threshold or both - 6
  • Cut the 40p tax rate, raise the threshold or both - 6
  • A 10p income tax rate should be introduced - 5

There are in some cases only marginal differences between the scores, so it follows that not too much should be read into them.  However, it's worth noting that the proposal for the restoration of the 10p income tax band, supported on this site by Robert Halfon and opposed by Andrew Lilico comes in bottom of this list.

10 Sep 2013 16:59:06

The BBC reports "softening attitudes on benefits" - but the polling numbers say the opposite

By Mark Wallace
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Yesterday I looked at new polling suggesting the young are more radical than their elders when it comes to the welfare state. Today, the British Social Attitudes survey has been released (play with the interactive data charts here), an annual orgy of data for those interested in such things.

To read the BBC, you'd think it was full of bad news for Conservatives. "British Social Attitudes Report finds softening attitudes to benefits", yells the headline

As is so often the case, though, it's the still, small voice that holds the truth and the headline that holds the wishful thinking. The data, and the trends over time in particular, don't show a "softening" - if anything, they show the opposite.

For example, here is a graph showing two of the BSA's findings on welfare over the last thirty years. The grey line is those who think "the Government should spend more on welfare", while the black line is those who think "most benefit recipients don't deserve help""

Welfare 2
The two trends are quite clear - despite "spend more on welfare" carrying the approval of fashionable opinion and "most benefit recipients don't deserve help" carrying some social stigma.

If that isn't enough to convince you, check this next graph out. Here we have a comparison between the percentage who agree "unemployment benefits are too low" (the purple line) and the percentage who agree that "if welfare was less generous people would stand on their own two feet" (the red line):

Welfare 1
The BBC don't report any false numbers, but they are highly selective.

For example, they report a fall (to 51 per cent) in those who think benefits are too high - but neglect to mention that those who think benefits are too low are in a small minority of 22 per cent. The proportion who think they are neither, ie that the level is about right, is 17 per cent - the highest rate in a decade. 

The public are still on Iain Duncan Smith's side when it comes to welfare - no matter how much his critics might wish otherwise.

8 Sep 2013 08:34:40

With his speech tomorrow, Osborne is trying to pre-empt a new set of political circumstances

By Peter Hoskin
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Here are some numbers to chew over with your Sunday brunch. In December last year, George Osborne’s approval rating in our Cabinet rankings stood at a measly minus 1 per cent. In the latest Cabinet league table he’s on 52 per cent.

That’s a faster, steeper rise than any of the Chancellor’s colleagues have enjoyed, and it tallies with a report in today’s Mail on Sunday. Whether Osborne is now officially the Tory backbenchers’ favourite to replace David Cameron as party leader, as the report suggests, I don’t know – but his position is certainly far less vulnerable than it was last summer, when I wrote about it for the Times (£). Funny what a little ol’ economic recovery can do.

Continue reading "With his speech tomorrow, Osborne is trying to pre-empt a new set of political circumstances" »

20 Aug 2013 12:05:20

Let’s look ahead to the Autumn Statement – it could be the first of a new breed

By Peter Hoskin
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Autumn Statement

The dead space of summer is the time for casting forward to the future. What will happen at the forthcoming party conferences? What are the chances of another Con-Lib coalition? Can Ed Miliband hold on to his party’s leadership? But there’s one scrap of politics-yet-to-come that isn’t getting as much attention as these but that is just as significant: this year’s Autumn Statement.

Normally, I’d be wary of over-emphasising the importance of one of George Osborne’s (or any Chancellor’s) statements – they rarely alter the parameters of British politics. But this one is likely to be different. Judging by the current mutterings from the soothsayers, including the CBI yesterday, this one could contain something that has been unfamiliar to Osborne: improved growth forecasts from the Office for Budget Responsibility.

Continue reading "Let’s look ahead to the Autumn Statement – it could be the first of a new breed" »

16 Aug 2013 13:06:21

There’s a conservative case for reducing prison numbers – Conservatives ought to talk about it

By Peter Hoskin
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Wouldya just look at that graph above? It shows the vertiginous increase in our prison population since 1990. Back then, there were about 44,975 crims locked away in English and Welsh prisons. Last year, it was 86,634. And that means a lot of extra spending. As I pointed out in an article for the Times (£) on Wednesday, a year-long stay in prison costs, on average, almost as much as a year’s education at Eton.

One response to this fiscal expansion would be to make prisons more cost-effective – Policy Exchange has some decent ideas in this regard. But this also has its limits. So long as the prison population keeps on rising, there will always be new costs for taxpayers to bear. It could even come to that stupendously expensive point where we need to build new, additional prisons.

Continue reading "There’s a conservative case for reducing prison numbers – Conservatives ought to talk about it" »

6 Aug 2013 07:54:42

Osborne's pro-marriage move is part of the Cameron charm offensive

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By Paul Goodman
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George Osborne is sparing with the appearances on camera, deploying them mostly when he wants to make a point - as recently with his visit to night workers.  His trip to a nursery yesterday was thus intended to identify him with childcare help for working parents - a modern-minded cause which appeals to the Chancellor's inner political strategist (never long absent).  But the visit also drew from him what seemed to be an unambiguous commitment to transferable tax allowances, which would balance the new childcare voucher scheme with help for non-working parents. "Later in this parliament we're going to be introducing tax breaks for married couples", he said.  The coverage of his remark about some parents caring full-time for their children being a "lifestyle choice" has been unfair: he clearly meant simply that this is their decision.

Continue reading "Osborne's pro-marriage move is part of the Cameron charm offensive" »

30 Jul 2013 12:06:08

How Maude believes government could save more taxpayers' money

By Paul Goodman
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For all Francis Maude's ultra-modernising views, his Conservative roots run very deep: after all, his father, Angus Maude, was Margaret Thatcher's Paymaster-General and co-author, with Enoch Powell, of Biography of a Nation.  In his time, man who now holds the same post as his father has been a Treasury Minister, lost a seat, found another, served as Shadow Chancellor and been Party Chairman.  In short, Maude is a veteran politician who could have put his feet up in office - as others have been known to do as they age - and treated his appointment as a bit of a last hurrah.

This hasn't happened.  Even his critics concede that he has made "far-reaching reforms", and Maude himself points out that the civil service is now at its smallest since the Second World War.  And although some of the work will doubtless have been outsourced, there's no doubt that the waste and extravagance of the Brown and Blair years is being curbed.  Behind the Times's paywall today, Rachel Sylvester describes how a team of civil servants helped to drive finding £500 million of savings last year, and believes that there are big digital reductions to be made across Government - "the Cabinet Office believes it can save 40 per cent on the cost of building secondary schools". (Peter Hoskin has described the enthusiasm of younger civil servants for change on this site.)

Continue reading "How Maude believes government could save more taxpayers' money" »