Stephen Hester's eventual replacement is walking into a political minefield

By Peter Hoskin
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“Us? Encourage Stephen Hester to stand down? Nah, really? You mean the RBS Stephen Hester, right? Pffft, nothing to do with us. I mean, why would we even...? It’s not like we want the bank privatised according to some sort of timetable, y’know. We’re completely hands-off. See my hands? Off. Completely. Why would you even think…? Nah. Us?”

And so on and so on.

The above quote many not be – how you say? – real, but it captures the general noise coming out of the Treasury today. They don’t want their paw-prints anywhere near the Hester resignation, and for very understandable reasons. This state-owned bank may be state-owned, but no-one wants to create the impression that politics is determining its future. Any privatisation must be done for the good of the bank, the public and the public finances – not for the Tories’ electoral chances.

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An average worker spends £367.78p a year of their Income Tax on interest on the National Debt

By Harry Phibbs
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Gosh, I'm looking forward to getting my tax return through the post next year. It will tell me how the Government spends my money.

Transparency is not just a matter of lots of turgid data files available via obscure sections of Government websites. It is also about making the information intelligible. The personalised state spending breakdown for each taxpayer next year will be an extraordinary breakthrough. We will know not just the total amount we are paying in Income Tax and National Insurance, but what our money is spent on.

The Daily Telegraph has a sneak preview on their website this morning. You can select an income level (to the nearest £5,000 up to £40,000 - after that the gaps widen). That then tells you how much tax you pay and what it goes on.  The paper says their figures "are based on the formulas that will be used to compile the statements."

For instance, somebody earning £25,000 a year - slightly below the average - has an annual Income Tax and National Insurance bill of £5,179.96.  Of this £1,880.33 goes on pensions and other welfare payments.  Next on the list is health (£942.75p) then education (£709.65p). But in fourth place comes National Debt interest at £367.78p. That is a huge sum - you can get a return flight to New York for less than that. It's more than is spent on defence, more than spent on policing, prison and the courts.

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Reform by accretion: Why the Spending Review probably won’t deliver a Whitehall Big Bang, but a Tory majority might

This is the fifth and final article in ConservativeHome's week long series on the Spending Review, and follows those by Peter Hoskin, Sean Worth, Mark Wallace and Tom Papworth. Today, Peter Hoskin surveys the Coalition's efforts to reform the Civil Service. Follow Peter on Twitter.

Exhibit A: a speech that Francis Maude delivered to Policy Exchange earlier this week, on the subject of civil service reform. It contained a dose of lamentation about the state of things, both general: “reform plans generally end up gathering dust on library shelves.” And specific: “There have been occasions … when ministers in both the current and previous Governments have found that decisions they have made don’t get implemented.”

Exhibit B: an article that Sue Cameron wrote for yesterday’s Daily Telegraph. It contained lamentation, too, but this was about the ministers rather than the civil servants. “Watching ministers publicly rubbishing their senior civil servants, either in general terms or, even worse, by name, is an unedifying spectacle,” it began. And it went on to single out Mr Maude for opprobrium: “Francis Maude … has made another speech denigrating Whitehall and calling for ministers to have the final say on top appointments.”

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Will Maria Miller's case for the arts win over George Osborne?

By Paul Goodman
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In Othello, Iago suggests to the Moor that ideas can have value, but that money has none: "Who steals my purse steals trash. 'Tis something, nothing:/'Twas mine, ’tis his, and has been slave to thousands."  The audience knows as it listens that the man is manipulating his master - that although Iago has just told Othello that good name is an "immediate jewel" of the soul, he earlier said to Cassio that "reputation is an idle and most false imposition".  But Shakespeare's words have a life beyond the motives of those who speak them, and Iago's rubbishing of money and praise of reputation is an unforgettable expression of the notion that there some things that money can't buy.

This is also the view, pretty much, of those who stalk the commanding heights of Britain's cultural life - its concert halls and theatres and cinemas and libraries and museums and opera houses.  Their belief that art is worth more than money sits comfortably alongside their conviction that it none the less needs a lot of it (courtesy of the taxpayer).  In principle, they have a point, and anyone who doubts it should see Nicholas Hynter's mesmerising production of Othello at the National Theatre - proof that state subsidy can sometimes produce brilliant results.  In practice, though, there are a thousand qualifications, ranging from the obvious rejoinder that most subsidised art isn't as outstanding as Hynter's to the inescapable fact that the arts must shoulder part of the burden of deficit reduction.  Rightly or wrongly, voters value hospital theatres above artistic ones.

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That Cabinet Office radicalism I mentioned? Its fruits are evident today…

By Peter Hoskin
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A couple of weeks ago, I wrote a post on the radicalism of the Cabinet Office and how, in some instances, that radicalism is being slowed by ruts along Whitehall. Among its examples was “cost savings”. Here’s that section in full:

And the point of all that digital government? Openness is part of it, but there’s also the related cause of value-for-money. For instance, by publishing the Government’s shopping receipts online, waste can be more easily spotted. And by enabling people to access public services with a keyboard and mouse, several layers of expensive bureaucracy can be done away with. Indeed, one Cabinet Office report reckons that the “greater digitisation of transactions” could save taxpayers almost £2 billion a year. But that’s not the sum total of the Cabinet Office’s drive to cut costs. In 2010, the Efficiency and Reform Group was established to help other departments find spending cuts. By the National Audit Office’s account, this group is “clearly helping departments achieve substantial reductions in annual spending” – to the tune of £5.5 billion in the last financial year.

There are very few caveats to attach to the Cabinet Office’s efficiency drive; for a low cost itself, it is achieving significant savings elsewhere. But there is a fear that it will struggle to keep up its successes in the face of firmer opposition to cuts from other departments. As one civil servant puts it, “The Spending Review process is fraught and difficult. Cuts have become an even harder ask.”

And the reason I reheat those words now? Because today has given us very clear evidence of the Cabinet Office’s worth. Francis Maude is set to announce that, between the last general election and the end of the financial year 2012-13, the Government has saved £10 billion by implementing savings throughout the Civil Service – 25 per cent higher than the £8 billion target. As for what those savings are, the Cabinet Office has produced a handy infographic to elucidate matters. £1.7 billion has come from “better management of big projects”. £3.4 billion from “becoming a leaner, more innovative Civil Service”. And so on. Much of this has been driven by the Efficiency and Reform Group that I mentioned in my original post.      

Apart from the numbers contained within it, one thing that’s striking about today’s announcement is its presentation. The work of the Cabinet Office can often sound dry and technocratic, but here it’s sold in simple, human terms. Mr Maude describes the Efficiency and Reform Group as the “taxpayers’ champions in Whitehall”. The savings, we’re told, are “equivalent to almost £600 for each working household across Britain, enough to fund three million primary school places or the building of 500 new secondary schools.” The Cabinet Office clearly wants it radicalism to show.

Before making spending decisions, the Government must learn to count

What should George Osborne cut? How should he cut it? And how should those cuts be sold? These questions will be investigated in our week-long series on the Spending Review, which begins with this article by Peter Hoskin. Follow Peter on Twitter.

What if I told you that, as he prepares to deliver his latest Spending Review on 26th June, George Osborne can’t count? He has plenty of important decisions to make: should benefits be cut ahead of defence spending? Should schools, health and aid be protected from the axe? Should he ice the Department for Culture, Media and Sport? But, when it comes to it, he doesn’t even know that 2 + 2 = 4.

Okay, so I’m exaggerating. But it’s a fisherman’s tale with some truth to it. For years now, successive Chancellors haven’t been able to count as well as they would like. It’s got nothing to do with their respective educations, nor with their ability, but with the departmental machinery at their disposal. The abacus on Mr Osborne’s desk is wonky. Its beads do not add up, and it does not give the proper answers.

A good example of the problem is the Treasury’s COINs (or Combined Online Information System) database, which is meant to tot up spending across Whitehall. A department buys a box of paperclips, and adds it to the database – simple, yes? But the Treasury has had trouble with this set-up for years. Sometimes the receipt for the paperclips falls behind a filing Cabinet. Sometimes it gets mixed up with the one for Dave from IT’s lunch. And, even when the system works, the result is a near-unintelligible list of thousands of items of spending. As one civil servant lamented to me before the last election, “it’s full of junk”.

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Getting to know U-KIP 3) What are UKIP’s policies?

By Peter Hoskin
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Policies? What policies?! That used to be the cry when UKIP were less a political party and more a pressure group for our departure from Europe. But such scoffs and sneers are, if not entirely unwarranted, certainly less relevant nowadays. The party’s website provides a fairly clear list, split in to several sections, of their thinking on defence, on welfare, on energy, and most of the other areas where governments actually ought to do a spot of governing. There are gaps to mind – some hastily covered over with promises of reviews to come – but what party outside of government couldn’t say the same, two years away from a general election? Indeed, if you compare the UKIP website with, say, Labour’s, it offers a firmer sense of ideology and of policy. Can we even be sure that Ed Miliband’s policy on Europe won’t change before 2015? We can be sure that Nigel Farage’s won’t, and of more besides.          

The Big E

While Europe may not represent the sum total of UKIP’s aspirations, let’s start this five-point distillation of their policies on the Continent, as it were. After all, leaving Europe’s political union is not just the totem they bow before, it also provides the basis for many of their other policies. It’s all about freedom, you see. Apparently, once we’re free from what Mr Farage would no doubt describe as the “shackles” of the Brussels bastille, then so many other opportunities would present themselves; whether it’s opportunities to cut taxes, to severely reduce immigration, or to trade with the rest of the world.

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An improving economy may rescue Cameron and Osborne, but it won’t deliver them from some tricky questions

By Peter Hoskin
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Back in the early days of this Government, there was an easy consensus, among many commentators and politicians, about David Cameron's chances in 2015. They would rise or fall, it went, on the strength of the economy. If the Coalition had delivered us from downturn, the Tory part of it would be rather difficult to defeat. If not, then even the Sons of Brown might be given another chance.

That consensus has grown mushier and started to separate since then. This is partially because George Osborne’s economic plan has itself become less distinct, with many of its provisions pushed into the fog of the next Parliament. But it’s also because other arguments have emerged. There are those who say that, even if the economy hasn’t recovered, the Tories will be able to pitch for the don’t-rock-the-boat vote. Some say that, even if the economy has recovered, the next election will be more about living standards. And then still others talk about Europe and Ukip and constituency borders.

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David Cameron faces more opposition to pensioner perks. For once, let’s hope he gives in

By Peter Hoskin
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We don’t normally start ToryDiary posts by highlighting the words of a Labour frontbencher. That stuff’s generally reserved for LeftWatch. But there was a fairly striking moment in Harriet Harman’s Today Programme interview earlier – and it probably caught the ears of No.10, too.

It was her admission that Labour will review their policy on pensioner benefits ahead of the next election. Ed Miliband, you’ll remember, said last week that the current set-up, by which wealthy pensioners receive benefits such as Winter Fuel Allowance and free TV licences, “needs to be looked at” – before his party’s spokespeople swarmed out to reassure folk that no decisions had yet been made, that their leader didn’t like the idea of means-testing, etc, etc. But, listening to Mrs Harman, it seems as though something really is afoot. “You always have to look at everything,” is how she put it, “to make sure the provision is right for the income distribution at the time.”  

As the Telegraph’s Benedict Brogan suggests, there could be a strong dose of politics in Mrs Harman’s remarks. She’ll know that the Lib Dems are opposed to these universal benefits, and that – as Nick Clegg implied yesterday – it’s likely to be one of the sorest points of intra-Coalition discussion ahead of this summer’s Spending Review. Perhaps Labour are hoping to line up with the Lib Dems against the Tories, in this case.

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The Government regards the state-owned banks as symbolically important. The question is how it will use that symbolism around election time

By Peter Hoskin
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Talk to most Tory advisers about RBS and Lloyds, and they soon get round to symbolism. For now, they reckon, the state-owned (or partially state-owned) banks are symbols of all that was wrong and debased during the pre-Crash years. But in future… in future, all will be different. Returning the banks to the private sector, they say, will be symbolic of an improving economy. These dead weights will have become dead good.

Shuffling through the papers this morning, it seems that this transformation is well on course. After making a £2 billion profit in the first three months of this year, the share value of Lloyds Banking Group is close to the level at which the Government would break even were it to sell off its 39 per cent stake. Both the Mail and the Times (£) contain editorials urging George Osborne & Co. to consider how this might be done.

The Treasury’s stated position is to wait and see. Lloyds still needs to fulfil several requirements before a sell-off can be properly organised. This may even take until after the next election, perhaps 2016.

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