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The Financial Times reports that, “Senior Liberal Democrats are warning George Osborne to resist pressure from the Tory right to retreat from the coalition government’s agreement on increasing capital gains tax”. Simon Hughes, the newly elected Lib Dem deputy leader, told the paper he was “trusting [the chancellor and chief secretary] will find a way of squaring the circle that colleagues in my party can sign up to and that will send a message to colleagues around the edges that they can’t suddenly change the game after the rules have been agreed”.
Lord Oakeshott, Lib Dem Treasury spokesman in the Lords, urged Mr Osborne to turn a deaf ear to the “great deal of noise” from right-wing MPs, who were “trying to chip away at this agreed programme”. The concerns are echoed by the Lib Dem grassroots with the Guardian reporting that the Social Liberal Forum, a new pressure group, have warned that any “watering down” could “bring into question the legitimacy of the coalition itself”. They also signal grassroots disapproval of a possible rise in VAT to 20%. “It seems incomprehensible that we could be contemplating a rise in VAT at this stage.”
The FT‘s front page reports that official growth forecasts for the UK economy will be cut. The newly created Office for Budget Responsibility publishes its first report on the country’s economic prospects today. The Guardian says that the announcement is, “expected to provide George Osborne with justification for tough action to cut the budget deficit”. Deputy Prime Minister Nick Clegg will today give a speech blaming the big spending cuts to come on “bankrupt” Labour, according to the Independent. During the election campaign, the Lib Dem leader opposed any cuts in 2010-11. In the Daily Telegraph, Ed Balls writes that it would be, “economic madness to raise VAT” which is “always the least fair option for raising tax.” He says, “Raising VAT will either depress spending and stifle growth, increase prices and stoke inflation, or be absorbed by the struggling retail sector.” Mr Balls claims that he “privately urged Gordon Brown to make our stance on VAT explicit in our manifesto.”
The Daily Telegraph‘s front page declares the “beginning of the end” in Afghanistan. The paper reports that David Cameron will today tell MPs that he will start a reduction in troop numbers from July 2011. He won’t, however, set an “artificial timetable” for troops to return from Afghanistan. Meanwhile, Liam Fox, the Defence Secretary, has announced his decision to accelerate the exit of Sir Jock Stirrup, chief of the defence staff, as well as Sir Bill Jeffrey, the Ministry of Defence’s Permanent Under-Secretary. The Guardian and Times report that senior military figures want believe Stirrup “should go before defence review” rather than after its conclusion in the autumn. The candidates to replace Sir Jock are Gen Sir David Richards, the head of the Army, and Gen Sir Nick Houghton, Sir Jock’s deputy.
The Daily Mail declares a “furore over Justice Secretary Ken Clarke’s plan to cut the jails budget”. Mr Clarke suggested yesterday that millions could be saved from the £2.2 billion prisons budget by jailing fewer offenders and slashing sentences. The paper says his comments are surprising because when in opposition the Tories promised to create 5,000 more prison places if they got into power. Backbench Tory MP Philip Davies told the paper: “It’s very sad that somebody of Ken Clarke’s calibre is talking such drivel. This is a ridiculous false economy – it saves money to have the most persistent criminals in prison.” Last year, former shadow home secretary Chris Grayling called for a “hardline approach” to deter criminals.
The Times‘ front page outlines “New expenses chaos as MPs clash with watchdog”. According to MPs new rules on staffing, housing and office costs are unclear and efforts to clarify them are often frustrated. The paper reports that a newly elected female MP said that she was told that she could not install a burglar alarm at her constituency office until she had obtained a police risk assessment, which could take a year to complete. But Andrew McDonald, head of the Independent Parliamentary Standards Authority has complained to party whips about abuse of his staff. Mr Clegg’s Cabinet Office is responsible for Ipsa and he will have to answer for its conduct in the Commons on Wednesday when MPs air their grievances in an adjournment debate.
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