ConservativeHome's ToryDiary

David Cameron refuses to rule out scrapping/ delaying replacement for Trident

The Tory leader was speaking at his monthly press conference.

MORE SOON.

10.30am, Highlights from Mr Cameron's press conference

On Trident and defence cuts: Mr Cameron was asked on three occcasions about making savings from the defence budget.  He said that the Conservative Party supported all of the items currently in the 'forward defence programme' but given the scale of the budgetary crisis would not say if the aircraft carrier and Trident programmes were still affordable.  I'm not going to start ruling things in and out, he continued.  In the FT this morning David Davis had questioned the affordability of Trident.

On today's votes on expenses: Mr Cameron said the Conservative frontbench would abstain from the vote on second jobs disclosure because it is badly drafted, but added that he supports the principle of it.  PoliticsHome has more on this aspect.

On the 50p tax band: He agreed with Fraser Nelson that the 50p tax band was bad for Britain but declined to agree that it might lose the Treasury money.  He didn't know for sure, he said.  In a follow up question Fraser Nelson said that rich people would not change their plans and move abroad if they knew that the 50p band would be repealed by a Conservative government.  Mr Cameron said that he would not make a commitment now and that 50p would have to join a queue of other bad Labour measures that the Conservatives wished to repeal.

On working with Nick Clegg: He said that yesterday's victory on Gurkhas was hugely important and said that the Conservatives will work with the Liberal Democrats on issues of common interest, such as the environment, strengthening local govenment and opposing the surveillance state.

On Obama's first 100 days: He declined to comment on the American President's domestic policies but paid tribute to a "pretty successful" foreign policy.  He highlighted an end to torture, the promised closure of Gitmo, the re-engineering of strategy in Afghanistan and engagement with Iran.

On Margaret Thatcher's thirtieth anniversary: I asked if he would be marking the anniversary in any way and if he was studying how she prepared for government... As Mr Cameron started to answer a military band started playing and marched past the window... Mr Cameron credited Andy Coulson with arranging the march past!  After the journalists' laughter had died down he said that the best way of honouring Margaret Thatcher was to elect another Tory government.  Yes, he was studying the period - the things she got right but also the things that were wrong including the decision to honour Labour's public pay commitments from the Clegg Commission that delayed the necessary fiscal adjustment until 1981.

Tim Montgomerie

David Davis concludes that he cannot justify a wholesale upgrade of Trident, as he weighs into the debate about public spending

As a former chairman of the Public Accounts Committee, David Davis was always likely to want to contribute from the self-imposed freedom of the backbenches to the debate about how to get the public finances under control.

And today, through an article in the FT, the former shadow home secretary addresses the question of where the Government - and therefore a future Conservative government -  could find savings.

Firstly, he tackles the Labour language of "Tory cuts" head on:

"The choice we face is not between Labour growth in public services and Tory “cuts”. It is between taking a grip of the public finances and watching our people’s economic prospects, and our ability to afford decent public services, slowly dribble away."

Mr Davis goes on to suggest some of the ways in which he would find savings; several, such as abolition of ID cards and abolition of regional government, are already party policy - but others are not and therefore act as a useful contribution to the debate on the issue of how to tighten the nation's belt:

Boris attacks 50p tax band as an "assault on London"

Boris Johnson's office has released a press statement condemning the 50p tax rate as "an assault on London".  Research by the Greater London Authority says that 145,000 Londoners will be hit by Darling's "banker taxes".  That 145,000 includes those earning £100,000 and affected by changes to allowances.

Boris Johnson believes that London already pays more than its fair share of UK tax revenues and is unhappy at this extra tax burden:

"Our capital is the engine room of the UK economy, generating 17% of the UK’s GDP each year and yet our figures show that the Government’s plans for high earner taxes will hit London four times harder than the rest of the UK. Penalising high earners with higher taxes could undermine London’s competitive edge. It runs the risk of driving highly skilled workers away from and deterring others from coming to our great city – which is a real concern to me."

Ten conclusions from the Cheltenham Spring Forum

(1) The media have decided that the Conservatives have won the next election.  There has long been an expectation of Tory victory but it's become a near certainty because of recent events (particularly the Budget and misuse of expenses).  One BBC journalist told me that his colleagues and editors were now more interested in an announcement from George Osborne than from Alistair Darling.  Yesterday's announcement on primary school academies from Michael Gove led bulletins throughout the day.  Tory policy matters because the media class has decided that it will be Government policy in a year's time.

(2) The Tories have decided that Labour has reached the contempt phase.  William Hague predicted in 1997 that New Labour would first produce fascination among voters, then disillusionment, and then contempt.  It's taken longer than he perhaps hoped but yesterday the Shadow Foreign Secretary launched a no holds barred attack on the "decomposing political muckheap" that is Labour's frontbench.  He described Labour as the "disgustingly grubbiest" of all administrations of the modern era.  Strong stuff and it wouldn't have been issued if CCHQ wasn't confident that the public is now contemptuous of Brown.  William Hague is pictured with our Cheltenham PPC, Mark Coote.

(3) David Cameron is oozing confidence.  The Tory leader is a confident man who has a realistic expectation that he will be Prime Minister in a year's time.  It was obvious from his powerfully delivered speech and also obvious from two brief chats I had with him earlier today.  He is fully aware that with the expectation of a Tory victory he, his team and his manifesto are about to face unprecendented scrutiny.  A media class that gave Tony Blair an easy ride will not give an easy ride to the Conservatives.  David Cameron is pictured with the Liberal Democrat PPC who defected yesterday.

(4) The media are attempting to set up a Boris V Cameron split.  Saturday's Times suggested that Boris "despises" Cameron.  Interviewed by ConHome yesterday the Mayor of London dismissed the story as "tripe" and "fantastic".  He also said that it was "almost certain" that being Mayor would be his last big job in politics but not one journalist in Cheltenham believes that Boris has given up his ambition to follow David Cameron into Downing Street.  The Boris story is going to run and run.

(5) David Cameron and George Osborne say they want a mandate for specific spending cuts.  David Cameron said that ministers will be promoted according to their success at using new technology and decentralisation to deliver more on smaller budgets.  And, nearer the time of the election, they will spell out the specific nature of planned spending cuts.

ConservativeHome Comment: It is still far from clear to me whether those cuts will be just enough to move Britain away from the cliff (and the next Conservative government will be about managing relative decline) or whether they'll be big enough to start to restore Britain's 1997 status as the enterprise capital of Europe.

(6) The next Conservative government will probably raise taxes.  That has to be the conclusion from David Cameron's address to Spring Forum.  He said (my emphasis): "Fifteen years ago, I was in the Treasury as we had to deal with public finances that had got out of control; debt that had got too high. We had to put up taxes, and I hated it. But it was the right thing to do and that lesson has stayed with me." 

(7) Philip Hammond is a rising star.  His steady rise in the ConHome league table captures the increasingly high regard that grassroots members have for the Shadow Chief Secretary to the Treasury.  A safe, intelligent and hardworking frontbencher, George Osborne said that Mr Hammond would be "one of the most powerful members of the government."

(8) Spring Forum needs to be better organised.  The Saturday agenda was very thin - rescued by strong speeches from Boris Johnson to all representatives and from William Hague to candidates.  Two half hour sessions from Andrew Lansley and Michael Gove were closed to the media (except to ConHome!!) and put in such a small room that many conference attendees couldn't even get in.  The party needs to decide whether it wants a two day conference or a one day rally (although it must always be addressed by Dan Hannan).  Spring Forum fell between the two possibilities this weekend.

(9) Jeremy Middleton will be a great representative of the grassroots.  I backed him and am therefore biased but the grassroots have a new Chairman of the National Convention who believes in members' democratic rights and is a believer in the internet's transformational power.  Commiserations to the other candidates for the job and the party owes the now retired Don Porter enormous thanks for all his years of service to the Conservative Party.

(10) The new generation of Conservative candidates is impressive.  I hesitate to name too many names but the more I see our candidates the more I'm hopeful about the next Conservative government.  Andrea Leadsom, Harriett Baldwin, Charlie Elphicke and so many others I caught up with in Cheltenham are going to make us proud.

Tim Montgomerie

Cameron: It was right to raise taxes when Britain last faced a debt crisis

Speaking to the Tory Spring Forum in Cheltenham the Tory leader said tax increases were the right thing to do when Britain last faced a (less serious) debt crisis in the early 1990s.  Echoing George Osborne's remarks to Sky News earlier he promised that, in due course, he would tell voters about Tory spending plans BEFORE the election.  Tory strategists believe that voters are not yet clamouring for details from the Tories and that they don't expect them until nearer the election time when the scale of the budgetary challenge facing the incoming government is clearer.  In the meantime the Tories intend to show they are working hard on plans to deliver better value for taxpayers' money and that ministers will be promoted (or sacked) in proportion to their success at cutting their budgets and using decentralisation and technology to deliver better services.  "More for less," is David Cameron's promise.

Highlights from David Cameron's Spring Forum address:

We've created a balanced and true Conservatism: "Yes we’re the party of strong borders, law and order and low taxes – and we always will be. But today we’re also the party of the NHS, the environment and of social justice too."

Britain needs massive change: "Unless we deal with this debt crisis, we risk becoming once again the sick man of Europe.  Our recovery will be held back, and our children will be weighed down, by a millstone of debt. So this is no time for business as usual. This is no time for more of the same. There is only one way out of this mess, and that is through massive change. I’m frustrated it’s not happening. I’m impatient to get on with it. And today I want to explain what the change needs to be."

We will tell people how we'll balance the books BEFORE the General Election: "In the weeks and months ahead, the Shadow Cabinet will redouble its efforts to identify wasteful and unnecessary public spending. Make no mistake: I am very clear about how much more work there is still to be done in order to identify significant future savings. We will carry out this work. We will do so responsibly. And in time, we will set out the hard choices that lie ahead."

Highlights of George Osborne's speech to the Cheltenham Spring Forum

Labour has run out of ideas: "They have run out of ideas. The economy is on its knees, enterprise is suffocated, we’re falling behind in the race to the future. And what is there proposal? A return to the 1970s with a 50% top rate of tax. With the dishonesty of trying to present a £2 billion tax rise on the wealthy as the answer to a £200 billion borrowing requirement. So out goes all that New Labour talk of ‘aspiration’ and ‘opportunity’ and owning the centre ground. In comes all that Old Labour language of ‘soak the rich’ and ‘make the pips squeak’. We will look back at this time and realise that we were hearing the last, sour notes of a requiem mass. New Labour. Born 1994. Died April 22nd 2009. Private funeral. Don’t send flowers."

Labour have taxed dishonestly: "Our priority must be to stop the tax rises on the many not just the few. Perhaps we should not be surprised that the great New Labour experiment ended like this. It was always built on an economic lie. The lie that you could go on increasing spending faster than your economy was growing, and never have to pay for it. At first, they promised there would be ‘no tax increases at all’. Then they turned to stealth taxes, like the tax raid that did so much damage to pensions. After that they tried stealth spending through PFI. And still it was not enough. So they sold our gold at a record low, and then they started to borrow when our economy was on a high. They borrowed and they borrowed, and they never stopped. They should have fixed the roof while the sun was shining. Instead they stored up debts that will take a generation to pay off."

Conservatives were right on the fiscal stimulus: "Last autumn, I stood before you at our Party Conference and I told you that the cupboard was bare. It’s worse than I thought. The cupboard itself is about to taken away by the bailiffs. The public finances are out of control and that presents a clear and present danger to the prosperity of an entire generation. We must act and act fast. We need a government of thrift in this age of austerity. David Cameron and I have earned the right to be heard on this. It wasn’t easy standing up and telling the public that the country could not afford Labour’s temporary VAT cut, but we did it and we did it almost alone. And it wasn’t easy standing up and telling some people in this party that sound money is the only route to real tax cuts – but we did that too."

Philip Hammond will be one of the most powerful members of a Cameron government: "Gordon Brown downgraded the job of Chief Secretary and removed from his Cabinet colleagues their right to be involved in the overall spending decisions of government. I want our Chief Secretary, Philip Hammond, the star of this week’s Question Time, to be one of the most powerful members of the government. I want my colleagues in Cabinet to be collectively responsible for the spending decisions we take. They won’t be the representatives of their departments in the Cabinet, they will be the representatives of the Cabinet in their departments."  Yesterday's ConHome survey of members found Philip Hammond rising steadily up the shadow cabinet league table.

Conservatives will be more specific about how we'll fix things but only when the time is right: "given how dramatically the borrowing forecasts have deteriorated and how fast this last Budget has unraveled, I ask how sensible would it be to write that 2010 Budget now? Yes, we will give specifics. Yes, we will seek a mandate. But we will take our time and get it right – because we can see today with this government what happens when you get it wrong."

George Osborne wants mandate from voters for specific spending cuts

PoliticsHome has recorded his words as delivered to Sky News:

"I have always been under pressure to set out my budget for 2010. We will provide the country with specifics - we are looking for a mandate at this election for the decisions we need to make. But we will do it at the right pace."

Let's hope there's a secret plan

A year ago the Conservative Spring Forum was in Gateshead.  I urged the Tory leader to give a speech that levelled with the British people:

"It's time for David Cameron to tell the British people that Britain is going in the wrong direction.  He needs to say that we're living beyond our means.  We're spending too much and borrowing too much.  We have surrendered our streets to yobbery and incivility.  Britain's schools are failing the poorest members of society.  He needs to promise a government that will put things right and he should tell the British people that it won't be easy or painless.  We need to forget the focus groups and the polling for just one minute and tell the truth about a nation that is in trouble.  Mr Cameron might be surprised at voters' reaction.  Our hunch is that the first politician to tell the British people 'how it really is' will form a bond with many millions of them."

From reports it appears that David Cameron will deliver something close to that speech today, in Cheltenham.

With the considerable exception of the party's opposition to Darling's autumn stimulus (although even that was backed by considerable private polling) the Tories have been very unwilling to get ahead of public opinion on the recession.  And let's be clear: This tactic has been an enormous political success.  A second YouGov poll put the Tories 18% ahead last night.  The collapse of Labour means that it's as certain as anything in politics that David Cameron will be Prime Minister. Political success doesn't mean success for the country, of course.  New Labour were an enormous political success but did not succeed as a government. 

David Cameron agrees public has a right to know Tory spending plans... but is the party waiting on the IMF to order austerity?

Amidst reports that David Cameron "has effectively taken over the party's economic policy" (Iain Martin) the Tory leader was on the Today programme at 8.10am to answer questions on how he would restore order to Britain's public finances (listen again).

A member of the shadow cabinet told ConservativeHome yesterday that the Tory leadership half expects Britain to be in the hands of the IMF by the time the party hopes to come to power and that an IMF regime will force a programme of cuts.  Labour ministers have been at pains in recent times to suggest that going to the IMF should no longer be seen as shameful.  David Cameron mocked that alleged preparing-of-the-ground in his response to the Budget on Wednesday. 

During his Radio 4 interview Mr Cameron declined to add to existing Tory commitments on public spending restraint but he did say that the public have a "right to know" how the Conservatives will fix the deficit problem.

Mr Cameron said that a Conservative government would focus on getting "more for less".  There needed, he said, to be greater focus on getting value for money from existing spending.  He outlined three areas for savings:

• Stopping the extensions of the state into new areas eg ID cards
• Reviewing the current transfers of tax credits to higher earners
• Reviewing the pay enjoyed by the quangocracy while protecting nurses, teachers and other frontline staff.

He said that he opposed Labour's 50p tax rate but repeal would have to join the queue of the demands on the public purse.  He reiterated George Osborne's pledge that repealing the increase in National Insurance on those earning £21,000 or more will be a higher priority.

I set out my three Tory budget priorities yesterday.  On Star Chamber today we seek your views on Vince Cable's spending cut ideas.

Tim Montgomerie

Three priorities for George Osborne's first budget

We mustn't get ahead of ourselves but...

Priority one: Repairing the public finances by focusing on reducing spending. Tax rises should not even be contemplated until possibilities for reductions in the size of the state have been exhausted.

Priority two: Defending the wealth creators. Without growth we are never going to get out of Labour's mess. We need to make it clear to every investor and entrepreneur - at home and abroad - that a Conservative government will create an economic climate that rewards risk, innovation and effort.

Priority three: Measures to advance social justice. Not the big state schemes favoured by Labour but the pro-society compassion of the Centre for Social Justice. If there is to any new or protected public expenditure it should be the budgets that build family, the voluntary sector and Michael Gove's schools revolution.

I've developed these themes in an 800 word piece for Comment is free.

Tim Montgomerie

New Labour is D.E.A.D.

D is for debt. Britain is drowning in Brown's borrowings. As the BBC's Robert Peston said, this was a truly historic budget. Historic because debt of £200bn per year will handicap Britain for a generation. The causes are many... A failure to put money aside in the good times... A banking system that lost all sense of prudence during a state-sponsored credit boom... A collapse of British society that has produced a dependent and dysfunctional population and cries out for David Cameron's social reform agenda. Crisis is an over-used and exhausted word but today's level of debt is a crisis that places Britain in the global slow lane for many years to come.

E is for envy. The 50p tax band won't raise much money. It may not raise any. But it sends the message to wealth creators that their efforts to innovate and create jobs are going to be penalised. Higher rate earners are being pursued in a cynical bid to please the core Labour Party vote and to caricature the Conservatives as friends of the rich. The Conservatives must not allow Labour to move Britain any further towards the statist Left. It must defend wealth creators and say that it will not accept tax rises that damage the prospects for economic recovery. The Tories' acquiescence on 45p invited today's move.  In Cheltenham at the weekend I hope George Osborne and David Cameron will oppose this return to economically destructive levels of taxation.

A is for all gone. At an end. Bare. Consumed. Done. Drained. Empty. Finished. Spent. Squandered. Void.  Washed-out. Wasted. Yep, I've swallowed a Thesaurus.  But it's obvious that Labour has no solutions to the economic mess that the Brown-Blair years have produced.  Labour has ruined the British economy again and yet again the Conservatives will need to put things right.  The years from 2010 to 2013 are going to be at least as painful as 1979 to 1982.

D is for dishonesty.  When Alistair Darling told us last year that the economy would be growing again by the end of this year it was a lie.  His economic forecasts weren't worth the paper they were written on. The signs of dishonesty and deception were there from the very first days of Labour. Brown's budgets always trumpeted the good news and hid the stealth taxes within the footnotes. The Sun and The Daily Mail gave those early budgets very warm welcomes. I hope they'll hammer Brown and Darling tomorrow.

Tim Montgomerie

Live blog of Alistair Darling's Budget statement

1.21pm Alistair Darling sits down.

1.20pm ISA limits to be increased.

1.19pm Increase in statutory redundancy pay from £350 to £380 a week. Promise that pensions will rise in real terms. Winter fuel allowance to be maintained at higher level.

1.16pm Child element of child tax credit to increase by £20. Extra money in child trust funds for the disabled children.

1.15pm £535million in support for off-shore wind farms. Combined heat and power technology to be exempt from the climate change levy.

1.13pm £435 million to promote energy efficiency in homes, businesses and public buildings.

1.10pm Extra funding to expand the broadband network announced.

1.06pm £500 million of support for house-building; £50 million investment in modernisation of  accommodation for the armed forces. £100 million towards local authorities building energy efficient housing.

1.05pm Public spending growth reduced to 0.7% from 1.1% in 2011-12.

1.03pm Local health and schools investments will continue. £9 billion of efficiency savings by 2013-14. £1 billion to combat climate change.

Tories urge £600m investment in a new generation of scientists and engineers

The Conservatives have today urged Alistair Darling to adopt a £600m package to provide more science and training courses for what otherwise could be a lost generation of scientists and engineers.  The package which, the Tories say, will be financed by spending restraint in 2009/10* communicates (1) a concern for potentially unemployed young graduates and (2) also the party's belief that Britain's economic future depends upon much more investment in tech-based industries.

The £600m should be spent in three ways according to the plan's joint authors, David Willetts and George Osborne:

• £350 million to provide funding for 25,000 new Masters Degrees in science, technology, engineering and mathematics (STEM)
• £100 million to fund an extra 50,000 learners aged over 25 in STEM and other subjects
• £150 million to support the thousands of apprentices who risk losing their training place during a recession.

Tim Montgomerie

* The Tories say this scheme is affordable if Labour adopt the Tory plan for reduced growth in spending - a plan that will save approximately £5bn in one year.  The Tories have earmarked the rest of the £5bn for tax incentives to save.

Darling may be about to set second supertax trap for Tories

Jonathan Oliver and David Smith report that Alistair Darling may use this week's Budget to beef up the planned supertax on higher earners:

"Last year the Chancellor announced the introduction in 2011 of a 45% top rate of income tax for people earning more than £150,000. Darling has come under pressure from Labour colleagues to reduce this new top-rate threshold to £100,000 – a move that would lead to higher tax bills for 500,000 high earners."

Opponents of George Osborne's acquiescence on the current 45p plan feared that this would happen.  We shall know more on Wednesday.

Last year's surge in the polls towards the Tories followed Darling's Budget of green tax rises.  If the advance speculation is right and Darling plans to 'greenwash' tax rises we might see a hardening of this weekend's large Tory leads.

Interviewed on Andrew Marr's Sunday show earlier today Mr Osborne said that it wasn't sensible for him to set out his plans to close Labour's economic hole until the true size of the hole was clearer.  A year ago he was being asked to fill a £40bn deficit, he said.  More recently the talk was of a £110bn deficit.  Now there's even the possibility that the deficit will be £180bn.  The Shadow Chancellor said one thing is absolutely true: If spending cuts are necessary they will be "Labour cuts" and if tax rises are necessary they will be "Labour tax rises" - all necessary to deal with "Labour's budget deficit".  

During the interview he declined to toughen his rhetoric on public spending.  Talking of "restraint" rather than reductions.

Writing in The Sunday Times Mr Osborne did use a very good turn of phrase to explain why taxes should be a last resort for dealing with the debt crisis: "We should not be overtaxed because Labour has overspent."  ConHome - with our new Star Chamber - has today launched a search for spending cuts.

Tim Montgomerie

> Iain Dale thought George Osborne's Sunday AM interview was "probably his best ever interview".  Iain focuses on the revelation that Gordon Brown did not write one of his letters of regret to George Osborne's wife, Frances.  Mrs Osborne being a victim of McBride's smear operation.

George Osborne will only guarantee that hospitals and overseas aid are protected from spending cuts

1pm Update: In response to this, a Conservative spokesman has just emailed me to say:

"Our position on protected areas of spending for 2009-10 is the same - we have ring fenced the health, education, defence and aid departmental budgets, but would spend £5bn less than Labour on other things."

---

Yesterday it was Frank Field; today it is shadow chancellor George Osborne who is warning the public that drastic action will be required in order to deal with the "atrocious" state of the public finances.

Mr Osborne has given an interview to the FT (of which there is more inside the paper here) in which he asserts that Labour's projected 1.1% annual increase in public spending between 2011 and 2014 is "unsustainable" and that it will be spending cuts rather than tax rises which account for reducing the the fiscal deficit:

"You don’t want to kill off the recovery with heavy tax rises that bring you back to square one... I’ve mentally adjusted myself and David Cameron has mentally adjusted himself to the fact that we are going to have to take some very difficult decisions for the good of the country."

But anyone expecting a swathe of detailed proposals in response to next week's Budget - or at any point before the general election - will be disappointed:

Mr Osborne said the Conservatives would not be drawn into a rerun of the last election, when they came under fire for revealing detailed plans of proposed cuts. He signalled that the Tories would present most of their tax and spending policy in terms of broad principles only, rather than allowing the run-up to the election expected next summer to become “drowned in numbers”.

Does the Government now have "a moral duty" to cut public expenditure?

The hare has been set running on the above question today not by a Conservative politician, but by a Labour MP who is pressing for such cuts.

In the latest ConservativeHome survey of Tory members, no fewer than 94% took the view that significant cuts in public expenditure would be necessary to restore order to the public finances.

Today that position is eloquently echoed by the man who is most Tories' favourite Labour pin-up, Frank Field - the former welfare reform minister who was told to "think the unthinkable" by Tony Blair and then prevented from doing just that.  

In advance of the Budget next Wednesday, he has written in The Spectator a devastating critique of the economic problems stored up by the Labour Government, which is worth quoting extensively here, not least because most Conservatives will find it almost impossible to disagree with him:

"It is difficult to overdramatise the danger that is engulfing our country. In some ways our position is more precarious than in 1940 when we stood alone against the Nazi tyranny. The danger can be stated easily enough. Far from building up reserves during the latter stages of the boom, the government went on a borrowing spree..."

Having effectively echoed the Tory charge that the Government "didn't fix the roof while the sun was shining", Mr Field writes that last November's Pre-Budget Report estimation of proposed borrowing of £78 billion is now guesstimated by the Government at somewhere between £180 billion and £190 billion for each of the next two years (today's Times reckons £175 billion):

David Cameron should clear his diary and propose a new system for MPs' pay and expenses

Most of our MPs are decent, public-spirited citizens but that is not how many millions of Britons now see them.  The collapse in their standing could not have happened at a worse time.  Over the next few years the House of Commons will have to make some very tough decisions on tax and spend but it has rarely been so lacking in moral authority.  A Populus poll for today's Times finds that more than two-thirds of voters think that all or a majority of MPs abuse their expenses.  Today's Express leads on the fact that taxpayers subsidise MPs' cups of tea.  Guido is blogging that he is "digging into a whole new seam of scams that have come to his notice."  The anti-politician narrative is relentless.

Someone needs to get a grip of this.  David Cameron challenged Gordon Brown at last week's PMQs to meet him and Nick Clegg as a matter of urgency and fix the problem on a cross-party basis.  Brown was too busy with his G20 summitry to respond properly.  At the weekend David Cameron took one specific issue into his own hands and pledged that no Conservative minister with a grace-and-favour residence would claim expenses for a second home. Good stuff and not the first time that the Conservative leader has led on this issue of standards in public life but enough? No.

David Cameron is quite rightly taking a few days off this week.  While he is away his aides should be preparing a series of proposals for root-and-branch reform of MPs' pay and expenses.  The aim should be to devise a system which sees MPs paid fairly and transparently and under which the total bill for the taxpayer is smaller than under the present system.  Proposing such a system should now be Mr Cameron's number one priority.  He should clear his diary so that he can scrutinise his aides' proposals and consult senior colleagues.  He can promise to enact the new regime as soon as he becomes Prime Minister.  Only with MPs' moral authority restored can they get on with the much more important work of saving Britain from fiscal crisis.

Tim Montgomerie

How much should George Osborne reveal on tax and spending plans?

All the details are on today's ConservativeHome frontpage but there is some confusion about yesterday's seemingly get-tough message from George Osborne on public sector pay.  The FT leads its morning edition with the story - headlining 'Tories take risk over pay and pensions' - but The Times says that advisers to Mr Osborne "backtracked" from the idea of a confrontation with the unions.  The Daily Mail, in a leader praising Vince Cable, accuses the Shadow Chancellor of "muttering" about public spending control but lacking a clear plan.

It's the biggest question facing the Tories this side of the election: How much should be said about post-election plans on tax and spending?  We asked Tory members for advice for the party leadership.  On a forced question we asked members to choose between three options:

1. Maximum openness: "Closer to the election the Conservative Party should give voters a very honest and open indication of the changes to tax and spending that will be necessary to restore order to the public finances."
2. Medium openness: "The Conservatives should avoid specifics but lay out the general principles for recovery in the public finances, saying that spending will be brought under control and taxes increased if necessary."
3. Minimum openness: "The Conservative Party should say that the economic situation is grim and we cannot write a budget until we have seen the books."

The results confirm that it's not an easy choice...!

Tim Montgomerie

MPs' moral authority to preside over public spending cuts

The above has been a preoccupation of mine for a couple of weeks now.  I suggested that a temporary 5% cut in MPs' pay and a temporary 10% cut in ministers' pay would help give the House of Commons the moral authority to preside over the public spending cuts that 94% of Tory members think are necessary.  Unfortunately only 40% of Tory members support a 5% cut in MPs' pay during a period of public sector austerity.  Hmmm.  Over at his indispensable blog, John Redwood may have come up with a better idea.  He writes:

"The government should require all MPs to cut their total expenses by 10% in 2009-10. It would not be that difficult, especially for those of my colleagues spending over the average. Indeed, why not ask the big spenders to cut by more? Then, armed with the modest moral authority that would bring, the government should demand a 10% cut in all the other administrative overheads of the public sector."

It's not a full solution to the problem of allowances (Tory MP James Clappison is now under fire) but it's a good component of the coming squeeze on state spending and for that reason I second the Rt Hon gentleman for Wokingham.

Tim Montgomerie

Tory members want George Osborne to focus on cutting spending, not raising taxes

The thin strip of clear blue water between the Government and Opposition's positions on public spending is steadily widening.  On this morning's Today programme, George Osborne's statement that "the age of excess" in public sector pay is over is another step towards the kind of hawkishness that will be necessary to clean up the Brown-Darling mess.

The latest ConHome survey of Tory members shows that a whopping 94% believe that "significant cuts in public spending are going to be necessary to restore order to the public finances."  86% agree with the ConHome line that "tax rises should only be considered after the possibilities for reductions in state spending have been exhausted."

The membership is split on the suggestion that "significant tax rises will be necessary to restore order to the public finances."  40% agree and 41% disagree.

Members are very suspicious about the 45p tax band.  82% agree that "the Government's increase in the top rate of tax to 45p will raise little or no money."  Only 36% agree that "Conservatives must support the 45p tax rate in order to avoid Labour's 'you-are-the-party-of-the-rich' attack."

There is no enthusiasm for delaying on inheritance tax.  More than three-quarters (77%) say that "the Conservatives' inheritance tax policy should remain a priority."  16% disagree.

Supply-siders will also be pleased with the fact that 74% believe that "some taxes should be cut in order to boost the economy."

Tim Montgomerie

Brown's third bounce will be smaller and shorter than the first two

Listening to this morning's Today programme you might think that Gordon Brown had saved the world.  It's true that the G20 summit went better than many pundits had expected and it would be churlish to say that Brown didn't perform well.  The summit went well as an event and Brown was a beneficiary of the glow that still surrounds America's very popular new President.  I suspect that the Prime Minister will get an immediate boost in the opinion polls.  We'll know within days because there will be a YouGov survey for Sunday and a Populus poll in next week's Times.

But Peter Riddell is surely right to say that the G20 will not have a lasting effect. "There is no evidence that past summits have made any real difference domestically," he writes in this morning's Times.  There will be much more voter interest in Alistair Darling's budget - now just three weeks away.

ConservativeHome's Parliament page records George Osborne's reaction to the G20 communiqué.  The Shadow Chancellor welcomed the summit's progress on expanding the IMF facility, increasing trade finance and on regulation.  He noted, however, that Brown had failed to get an agreement on fiscal stimuli - once his biggest hope for the summit.  Mr Osborne also warned that the summit would appear remote to most British families:

"The question that the British people will ask tonight is what it all means for them, once the world leaders have left. There is still the small business that cannot get credit. There is still the mother working in the high street shop who fears for her job. There is still the family who fear for their home. The G20 will seem very remote for them. No $1 trillion boost for the IMF and trade finance will help us to deal with a £1 trillion national debt, which we are leaving to our children, thanks to this Government. The truth is that Britain will be clearing up the economic mess created by this Government long after the G20 show leaves town."

Tim Montgomerie

The era of increased state spending is over

The era began under the Major years when the Tories allowed both taxes and spending to rise.  Spending growth accelerated under Gordon Brown.  The idea that unreformed public services can be improved simply by hosing them with increased public spending has been tested to destruction.  According to a new PoliticsHome/ Spectator poll, 72% of Britons are ready for reductions or a freeze in public spending (click on chart to enlarge).

The public now know that extra spending is not the answer to the nation's problems.  As Fraser Nelson writes: "If spending can be more than doubled with little or not effect on services (some, like education, have grown worse) why should [the public] believe that cuts should be so damaging?"

And let's be clear: The public has come to this conclusion without any leadership from the nation's politicians.  Daily experience of bad services and stealth taxes has provided voters with more than enough instruction.  All the mainstream parties have beeb stuck in 1997 - listening to Portishead, watching This Life, reading Philip Gould - all believing that voters still want still more spending.

Harry Phibbs calls on the Conservative Party to realise the significance of the poll: "The proposition that spending cuts are impossible is now recognised as downright absurd. The public knows it and thanks to this poll, the Tories know that they know it. Let us stop pretending. For the nation to recover, the burden of state spending must be lifted. The Conservatives must be clear and open that they will face up to this challenge."

Tim Montgomerie

PoliticsHome has lots more details on its poll for The Spectator here.

Tories will slash government advertising spend by £250m

Stop Smoking!

Drink Less!

Learn New Skills!

Stop Defrauding The Benefit Office!

Claim Tax Credits!

Wear A Condom!

Join The Army!

Those are just some of the messages within a £400m government advertising budget highlighted by The Sunday Telegraph.

Grant Shapps MP attacked the fact that the state is now the biggest advertiser in the country:

"If it is almost obsessively talking at you about what you can do, what you can't do and what you shouldn't do, there is a risk that the public will switch off. When you go to the cinema and watch an ad break, so many of the ads are now the government telling you what you can and cannot do. It really does feel like the ultimate nanny state."

On Platform yesterday, Matt Woods asked if the splurge in government advertising could be a sign of an early election.

The Conservatives are committed to reducing the advertising budget by more than 60%; from £400m pa to £150m pa.

Public split on whether Tory IHT pledge should be a priority

The headline poll numbers suggest a Tory lead of 13% (1% more than the previous ICM survey).

The ICM/ Sunday Telegraph poll also asked if the Tory plan to raise the inheritance tax threshold to £1m should be a priority.  48% said yes, 48% said no.  More here.

George Osborne: Opposing the VAT cut was my toughest call

Speaking to Conservative activists in Wales, George Osborne has said that his decision to oppose Alistair Darling's VAT cut was the toughest call of his time as Shadow Chancellor.  On the right is the extraordinary poster that M&S had in all their stores just before Christmas, celebrating the cut.  Note the 'Thanks Darling' sign off.

That decision proves, Mr Osborne says, that he and David Cameron have the "courage and the judgement and conviction to make the difficult choices and put this country’s finances back on the right path."

Key extract:

"Let’s be honest – opposing the VAT cut was the toughest call I’ve had to make in this job – leading Conservative MPs, with the support of David Cameron, into the division lobbies against what looked to many like a Labour tax cut.

It wasn’t the easy or popular thing to do either.  Almost no one openly agreed with us.  We could have stayed quiet, and turned a blind eye as the debts our children will face mounted up.

But we didn’t.  David Cameron didn’t.  I didn’t.  This Party didn’t.

We stood alone then.  But we are not alone today.

One retailer after another queues up to denounce the VAT measure.  One Labour MP after another calls on their government to abandon it early.  And one European finance minister after another makes it clear that it wasn’t a very sensible thing to do.

But we were there first.

And I think in that decision we showed that this Party has the courage and the judgement and conviction to make the difficult choices and put this country’s finances back on the right path."

Earlier this week the Conservatives declared victory in the battle of the fiscal stimulus.