The Institute for Fiscal Studies said yesterday there was a good chance that the deficit for the full year would come in below Alistair Darling’s £178bn forecast in the pre-budget report. Gemma Tetlow, a senior research economist at the IFS, told the Guardian: “In December, [tax] receipts fell less and spending rose less than last month’s pre-budget report forecast for the remainder of this financial year.” The FT reports that Gordon Brown and Alistair Darling have, “struck a deal where money released by falling jobless rates [which could be worth £4 billion] can be used to fund more spending.” The Times headline wrongly claims that “Public debt soars to record at 61.7% of GDP” It was last at this level as recently as the 1960s. The Wall Street Journal reports that there was solid demand for the latest gilt auction – dampening concerns about the rising cost of Government debt. Meanwhile, Steve Bundred, head of the Audit Commission, told MPs on the Commons public administration committee that it was “absurd” to shield schools and hospitals from spending cuts when they have been “most generously funded for 10 years.”
The Independent reveals that David Cameron will “rush through a 10 per cent cut in the number of MPs if he wins power this year in an attempt to boost the Conservative Party’s prospects of a second victory at the following general election.” Previous reviews have taken up to seven years. His plans may be scuppered since new research at the University of Plymouth concludes: “The geography of each party’s support base is much more important, so changes in the redistribution procedure are unlikely to have a substantial impact and remove the significant disadvantage currently suffered by the Conservative Party.” In the Times, Jonathan Isaby writes that the next generation of Tory MPs are female or gay, state-educated, socially liberal but warns, “while they are generally socially liberal, sympathetic to localism and in favour of reversing Labour’s erosion of civil liberties, they are Thatcherite on Europe, tax, enterprise and defence. They are not, in the main, especially moved by the green agenda that Mr Cameron has so personally embraced.” The Indy also reports that George Osborne will repay £1,666 to the Commons authorities after being found guilty of overclaiming for his mortgage under the MPs’ expenses system.
President Obama has launched a new “fight” on the banks saying, “Never again will American taxpayers be held hostage by a bank that is too big to fail,” prompting shares in banks to fall on both sides of the Atlantic, according to the Telegraph. The Tories have jumped on the bandwagon with the FT reporting that George Osborne “fired a warning shot across the bows of financial institutions including Barclays, Deutsche Bank, Credit Suisse and UBS, saying the Obama crackdown on proprietary trading was ‘definitely something we think needs to be done’.” The Guardian outlines that Britain’s City minister, Lord Myners, will talk to US officials on Monday as part of a meeting with G7 countries to discuss ways to impose a financial levy on a banking system that has already bounced back to profit barely a year after a multibillion pound taxpayer bailout.
All the papers have a different angle on Jack Straw’s appearance at the Chilcot Inquiry. The Independent focus on his statement that he told his officials a year before the invasion that regime change was ‘off the agenda’ as it would not have been legal. The Times says, “Jack Straw supported the Iraq war only ‘very reluctantly'” while the Daily Mail says “Jack Straw turns up the heat on Blair by telling inquiry: I could have stopped Iraq war.” The Guardian go with, “Jack Straw: I drew up secret plan to keep Britain out of Iraq war.” The papers also cover the news that Gordon Brown will give evidence to the inquiry before the general election after writing to Sir John Chilcot.
The FT reports that the government is planning to push to get new rights for 1.3m temporary workers into law before the election. The paper’s agenda is clear describing the rights as “controversial” and a “threat” to job creation. Brendan Barber, TUC general-secretary, said the rights were “good news” for agency workers but he was disappointed they would not start earlier.
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