Politics Summary: Thursday, May 27th

Iain Duncan Smith, the new Work and Pensions Secretary, has hinted that he may change the definition of child poverty. In an interview with the Guardian, he said, “You get this constant juddering adjustment with poverty figures going up when, for instance, upper incomes rise.” Mr Duncan Smith described Britain’s benefits system as “bust” He said, “My general view is that the benefit system is a deeply ineffective and costly way of subsidising people’s lives. If you want to help people above a certain income the route to do that is through tax – it is simple, straightforward and easy.”

Mr Duncan Smith said that both Conservative and Labour governments had “used [Incapacity Benefit] as a way of slightly getting out of the unemployment figures and not being overly honest.” Yvette Cooper told the Today programme, “If you look really at what the Conservatives are proposing they talk about trying to get more people back into work. In fact the only thing that they have done so far is to cut £300 million from the employment programs budget… that means really cutting 80,000 youth jobs.”

The Telegraph reports that, “Labour activists try to avoid a Miliband contest”. It says that, “Members are putting pressure on party chiefs to change the rules to ensure that Labour’s electoral college has a wider choice of candidates.” The Daily Mirror reports that, “Andy Burnham yesterday launched his Labour leadership campaign by vowing to “reconnect” the party with its grassroots”. The Telegraph says that, “Friends of Mr Burnham are hoping that, if the rules are not changed, enough undecided MPs would be persuaded by the argument that a full range of candidates should be able take part in the contest. They would then nominate those who failed to reach the threshold even if they did not go on to vote for them.” Left Foot Forward reported yesterday on the launch of David Miliband’s website, which seeks to emulate the site used by Barack Obama.

The Times‘ front page reports that, “George Osborne has opened talks on watering down the planned increases to capital gains tax before his emergency Budget on June 22.” The paper writes that, “The coalition Government is facing its first serious rift after Lib Dem aspirations to rebalance the tax system ran into angry opposition from Tory backbenchers and grassroots supporters in the shires.” In the Daily Mail, David Davis writes, “unless it is very carefully designed, the plan to increase Capital Gains Tax will not only fail to raise the money needed, it will cost money.” Osborne is “understood to be looking at a range of options, from minimising the rise to restricting the scope of tax so that it hits fewer people.”

The Daily Telegraph‘s front page headline says, “University vice-chancellors’ pay ‘out of step with reality’, says Vince Cable”. The paper reports that research showed that university heads were paid an average of £219,000 last year, as salaries and benefits rose by almost 11 per cent. Mr Cable said: “I was very taken aback to discover that last year the pay of vice-chancellors rose by over 10 per cent in the middle of a financial crisis.” Universities UK, which represents vice-chancellors, said the average rise in 2009-10 was 0.5 per cent. Meanwhile, the Guardian reports that Mr Cable, “stood down from his role as deputy leader of the Liberal Democrats last night in order to concentrate on his role as business secretary in the new coalition government.” Simon Hughes is rumoured to be a possible favourite to replace him.

The Financial Times‘ front page reports that, “UK and France reject EU bank plan”. The paper says, “London rejected the idea, arguing it would introduce “moral hazard” and encourage banks to think the levy was an insurance premium that entitled them to help if they got into trouble. French officials said Paris had similar concerns.” Michel Barnier, EU internal market commissioner, set out plans for member states to form national funds to help wind up or reorganise failing banks, funded by a levy on the financial sector. Mr Osborne plans to press ahead with a unilateral levy in the Budget next month. Meanwhile, The Times reports that Chris Huhne, the Energy and Climate Change Secretary, urged other European Union members to raise their sights and increase the target from 20 to 30 per cent by 2020. During the election Mr Huhne signed a Friends of the Earth pledge calling for “a reduction in UK greenhouse gas emission of 42 per cent by 2020.”

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