David Cameron pledge not to increase National Insurance contributions by 1% next April leaves a "£7bn hole" in the public finances.
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David Cameron’s credibility on the economy took another hit last night, as the Tories’ pledge to halt rises in National Insurance contributions left a £7bn black hole. Cameron and shadow Chancellor George Osborne have failed to spell out where the £7bn would be found, reports The Independent. They had claimed that stopping the 1% rise in NICs, due to take effect in April 2011, would be their “top priority”, yet an inability to say how it will be funded raises serious questions about their credibility.
Alistair Darling, meanwhile, revealed that Labour’s planned cuts would be “deeper and tougher” than Mrs Thatcher’s in the 1980s, reports The Guardian. His admission came as leading economic think tank the Institute for Fiscal Studies warned that Britain faced “two parliaments of pain” to extricate itself from the deep hole in the nation’s finances. The Chancellor said of planned cuts in public services: “They will be deeper and tougher – where we make the precise comparison I think is secondary to an acknowledgement that these reductions will be tough.” And the IFS calculated: “Of the £46bn a year of real cuts in public services spending that we think budget forecasts would require by 2014-15, the government would presumably claim to have ‘found’ about £20bn by 2012-13 from pay restraint, cutting programmes and efficiency savings.”
Britain faces its first national rail strike for 16 years, following the announcement of four days of “travel misery” immediately after the Easter weekend. The walkout, due to start the day the general election is called (April 6), results from a row over job losses and changes to working practices, reports The Times, and comes in the wake of the British Airways cabin crew strike,the second phase of which will ground hundreds of flights for four days from midnight tonight. Transport secretary Lord Adonis called on unions and management to get round the table and negotiate: “Both sides should seek to resolve this dispute by negotiation and not confrontation, and I am urging them to do so.” However, at present there seem little chance of deal, reports the Telegraph, Network Rail’s Robin Gibsy accusing RMT leader Bob Crow of “classic militant tactics” and vowing that he was not prepared to see the country “held to ransom”.
Eurozone leaders have finally agreed a €30 billion (£27bn) bailout package for Greece, with sweeping new powers to co-ordinate all EU economies. The rescue deal, driven by France and Germany, includes assistance from the International Monetary Fund and bilateral loans from other Eurozone economies, reports the FT. Herman von Rompuy, president of the European Council, hailed the deal, insisting the Eurozone would “never let Greece fail”. He added: “If there were any danger, the other members of the eurozone would intervene.” The new plans to co-ordinate Europe’s economies could, however, cause problems for Gordon Brown, reports The Times: “It will be seen as a direct challenge to Gordon Brown, who will want to make sure that Britain does not surrender any control over its own economy to Brussels.” While the Telegraph reports the global reaction to the deal: “China is watching nervously, increasingly worried about the large chunk of its $2.4 trillion (£1.6 trillion) of foreign reserves held in eurozone bonds. ‘Greece is only one case, but it’s only a tip of the iceberg,’ said Zhu Min, the vice-governor of China’s central bank. ‘The main concern today obviously is Spain and Italy.'”
The Conservative party have re-hired the Saatchi brothers for their general election campaign following a series of gaffes since the turn of the year. The party deny claims this is a panic measure, that the Saatchis have been brought in because of a narrowing of opinion polls, reports The Times. The Tories will hope the re-hiring enables them to move on from the spoofed “myDavidCameron.com” airbrushed posters and the mocked “I’ve never voted Tory before…” series. The Advertising Standards Authority, meanwhile, has banned a Home Office campaign highlighting the government’s “policing pledge” that neighbourhood officers spend 80 per cent of their time on the beat, reports The Guardian. The ASA say: “The ad must not be broadcast again in its current form. We told the Home Office to ensure the basis of claims was made clear in future. We also told them to ensure they held adequate substantiation for future claims.”
And the Times and Sunday Times websites are to start charging from June, £1 a day or £2 per week, reports The Guardian. They will become the first British papers to charge for digital content, with News International’s other titles The Sun and News of the World next in line. Rebekah Brooks, News International chief executive, explained the company’s thinking: “This is just the start. The Times and the Sunday Times are the first of our four titles in the UK to move to this new approach … These new sites, and the apps that will enhance the experience, reflect the identity of our titles and deliver a terrific experience for readers. We expect to attract a growing base of loyal customers that are committed and engaged with our titles.” The Guardian calculates that “Assuming that only 5% of daily users convert to the paywall system – a standard metric for paywalls – that would bring in £1.83m if they each buy a £1 daily pass. At a 10% conversion, it would net £3.66m per month for the two papers. If more people of those choose to buy the weekly pass, the revenues would be lower.” Left Foot Forward is pleased to announce that we have no plans to follow suit!Like this article? Sign up to Left Foot Forward's weekday email for the latest progressive news and comment - and support campaigning journalism by making a donation today.