POLITICS

Mehdi's Morning Memo: The Coalition's Tax Bombshell?

28/06/2013 08:29 BST | Updated 28/06/2013 08:31 BST
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LONDON, ENGLAND - JUNE 27: A member of the public and commercial services union holds a Chancellor of the Exchequer George Osborne face mask at a demonstration on Whitehall on June 27, 2013 in London, England. The union members were expressing their opposition to the 11.5 billion GBP cut to public spending outlined by the Chancellor of the Exchequer George Osborne in the House of Commons yesterday. (Photo by Oli Scarff/Getty Images)

The five things you need to know on Friday 28 June 2013...

1) THE COALITION'S TAX BOMBSHELL?

George Osborne may have run out of cuts to announce - but not tax rises, according to the Institute for Fiscal Studies. From the Telegraph's splash:

"More than five million middle–class workers could face stealth tax rises of £600 each after the next election to help fill a £25billion black hole in the Government's finances, leading economists have warned.

"The Institute for Fiscal Studies (IFS) said that the Government may have to raise £10billion from tax increases as deep spending cuts are increasingly difficult to find.

"George Osborne, the Chancellor, last week set out a new round of spending cuts for the 2015–16 financial year but has admitted that further austerity measures will be required until at least 2018.

"However, he has yet to say how the black hole in the public finances will be filled, prompting growing speculation that tax rises are being secretly delayed until after the election."

Note: There will be no Memo this coming Sunday morning. You'll just have to wait till Monday for your morning politics fix via email. Apologies.

2) DO THE LIB DEMS UNDERSTAND DEFENCE?

The Defence Secretary doesn't think so. Philip Hammond will have won over plenty more supporters on the Tory backbenches with his interview in the House magazine - reported on by the Telegraph:

"In the interview, he is scathing about the Liberal Democrats’ attitude towards his department. Asked about their deciding not to push for a minister in the Ministry of Defence after their representative was demoted in last year’s reshuffle, Mr Hammond replied: 'I was surprised. I hadn’t seen that coming at all. I think we are the poorer for not having that direct link into the Deputy Prime Minister’s office and having someone in here who really understands defence, who can explain to him why things are being done the way they are.'"

Hammond also attacked the Lib Dems for being "naive" and "reckless" in their opposition to the upgrade of Trident. All is well in the coalition marriage, I guess...

(On a side note, Hammond was spotted last Saturday night attending David Edgar's new play on the coalition, 'If Only' - reviewed here in the Guardian - which, among other things, imagines how a beleagured Conservative leadership might respond to UKIP winning the Euro elections in August 2014.)

3) 'RECESSION? WHAT RECESSION?'

That's the splash headline in the Mirror, which reports:

"The cost of supporting the monarchy in the Diamond Jubilee year increased by £900,000 to £33.3million.

"Among the astonishing outgoings was the Queen's laundry bill which rose by £200,000 to £700,000.

"A huge chunk of cash has been splashed on renovating William and Kate's new home - Kensington Palace Apartment 1A - to make sure it is perfect for them and their baby when they move in by the autumn.

"Building work inside and repairs to the roof have cost us £1million so far, Buckingham Palace's annual accounts revealed yesterday."

The Queen's pay rise, however, is defended in the Express: "[I]t still means that the Royal Household will cost taxpayers just 53p per person, providing remarkable value for money."

Hmm, I'm sure similar such calculations could be made to justify/downplay our contributions to the EU budget or our foreign aid bill but I doubt you'll see them in the Express...

4) LET THEM ALL STAY!

Is this a significant moment in the (right-wing) debate over immigration? From the Times:

"An amnesty for more than 500,000 illegal immigrants must be considered by David Cameron to win over ethnic minority voters, a prominent Tory MP has suggested.

"Nadhim Zahawi, regarded as loyal to the Prime Minister, said the reluctance of non-white electors to vote Tory at the previous election 'should send loud alarm bells ringing in Downing Street'. He added that the "electoral penalty" faced by the party would become ever greater unless it became 'Thatcherlike in our willingness to think brave and think big'.

"In an intervention designed to reopen the debate over Britain's borders, Mr Zahawi said that only 16 per cent of ethnic minority voters backed the Tories at the election. He said that a 'seismic shift in policy' was needed."

However, as the paper notes:

"While supported by Boris Johnson, the London Mayor, an amnesty is opposed by the Prime Minister. The idea would blow apart his pledge to cut immigration to the 'tens of thousands'."

Meanwhile, the US senate last night passed a broad immigration reform bill that, according to the BBC, "includes a path to citizenship for an estimated 11 million undocumented immigrants".

5) BOZZA'S BALLOON BURST?

Finally! A boost for Dave, not Boris. And that, too, courtesy of a Lord Ashcroft poll.

From the Daily Mail:

"Just one in five Tory voters thinks Boris Johnson would make a better Prime Minister than David Cameron, according to a major new poll.

"The survey of more than 8,000 voters found that although the London Mayor is comfortably the most popular politician in the country, many people still harbour doubts about his suitability for the highest office.

"... Among the wider public 29 per cent of people said Mr Johnson would make the best Prime Minister, behind Mr Cameron on 33 per cent and Ed Miliband on 31 per cent - but well ahead of Nick Clegg on seven per cent.

"Conservative voters preferred Mr Cameron to the London Mayor by 81 per cent to 18."

"The survey was conducted by former Tory Treasurer Lord Ashcroft, who said it suggested it would be a 'gamble' for the Conservatives to assume that electing an entertaining leader would distract attention from the party's problems."

PUBLIC OPINION WATCH

From today's Sun/YouGov poll:

Labour 39

Conservatives 33

Ukip 13

Lib Dems 10

That would give Labour a majority of 78.

900 WORDS OR MORE

Philip Collins, writing in the Times, says: "Cut the welfare bill. Pay people proper wages."

Fraser Nelson, writing in the Telegraph, says: "Our tantric Chancellor doesn’t realise he’s winning the debate."

Polly Toynbee, writing in the Guardian, says: "Ed Balls was too prudent. We need full-throttle fury."

Got something you want to share? Please send any stories/tips/quotes/pix/plugs/gossip to Mehdi Hasan (mehdi.hasan@huffingtonpost.com) or Ned Simons (ned.simons@huffingtonpost.com). You can also follow us on Twitter: @mehdirhasan, @nedsimons and @huffpostukpol