Politics Summary: Wednesday, February 24th

The IMF warning on cutting the deficit too soon, the MPs' report into the News of the World phone-hacking scandal, schools, prisons and banks.

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The International Monetary Fund has backed Labour’s approach to spending, warning that slashing the deficit before 2011 may lead to a “double-dip” recession. The warning comes in an IMF paper on exit strategies carried out by stricken advanced economies, reports the Telegraph, and “will be characterised as a blow for the Conservative party”, with the fund saying countries risked sparking a potential double-dip in their economies if they start cutting spending and raising taxes too early, emphasising governments and reguators should be careful not to start tightening either monetary or fiscal policy too early. The Guardian describes the report as giving “strong backing” to the government’s ‘wait-and-see’ approach to cutting Britain’s budget deficit, the weakness of growth requiring tax increases and spending cuts to be delayed until next year. The Guardian calls it a “rebuff” to David Cameron’s plans to start repairing the public finances as soon as he comes to power in the event of him winning the election.

The Guardian leads on the select committee report into the conduct of the News of the World, which criticises the tabloid’s “collective amnesia”, “deliberate obfuscation” and “hush money” payouts. There will be relief, however, in Tory circles, with David Cameron’s media chief escaping censure, the report finding “there was no evidence that he knew of phone hacking”, though the report does say “that such hacking took place reveals a serious management failure for which as editor he bore ultimate responsibility, and we believe that he was correct to accept this and resign”. The Sun, meanwhile, claims that the report “was hijacked by Labour MPs for political gain”, and “tried to link the Tories with bullying allegations”. More widely, the report describes the Press Complaints Commission as “toothless”, criticises the reporting of the Madeleine McCann story, and recommends changes to libel law and limits on the use of superinjunctions. Left Foot Forward will have detailed analysis of the report later today.

The Independent reports government plans to give parents a vote on whether struggling schools should be taken over by new owners. The scheme, unveiled by the prime minister yesterday, would force local authorities to conduct a ballot on whether a new organisation should be brought in were a significant number of parents to express dissatisfaction with the present leadership, the new owners having to come from a list of approved providers, including universities, colleges, successful schools and private sponsors. Schools secretary Ed Balls said: “If you are dissatisfied with the progress your local school is making, you will be able to get a new and quality-guaranteed provider.” However the general secretary of teachers’ union Voice, Philip Parkin, told the Indy the scheme would be “impractical and unworkable and would create more bureaucracy”, adding: “The ballot box is not the way to organise a programme of school improvement.”

The Telegraph reports the Chief Inspector of Prisons Anne Owers’s warning that budget cuts have raised fears that “offenders are released without being fully rehabilitated”. In her final annual report, says the Telegraph, she implies that resource restraints could lead to violent disturbances in jails and warns of “increased instability in a fragile environment” – which could see a return to an overcrowding crisis in future. She says: “The hidden and incremental pressures this produces should not be underestimated … there are two risks: of increased instability in fragile environments and of reducing prisons’ capacity to rehabilitate those they hold.” On Monday Left Foot Forward reported concerns that Tory plans to reduce levels of community sentences could lead to an increase in re-offending.

Finally, The Independent reports Lib Dem Treasury spokesman Vince Cable’s insistence that “banks must do more to help businesses”. He accused them of “denying the facts” and “endangering economic recovery” – though he was keen to stress the Liberal Democrats were not “anti-bank”. Outlining his party’s policy on banks, he said of RBS and Lloyds in particular: “They insist that they are falling over backwards to help their business customers despite all the mass of evidence to the contrary … Most small and medium-sized businesses, however, never indulged in the overleveraged excesses seen in the domestic property market or by major commercial property developers. The problem with the banks’ argument is that there is a fallacy of composition … On the anniversaries of the RBS and Lloyds lending agreements, I challenge Alistair Darling to give a full, public account of what has happened under these legally binding agreements.”

• US magazine Dissent hosts “Obama – what’s gone wrong?” on March 24 at 6.30pm for a high profile panel debate. Free. To RSVP email [email protected]

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