POLITICS

The Waugh Zone July 1, 2015

01/07/2015 08:32 BST | Updated 01/07/2015 08:59 BST

The five things you need to know on Wednesday July 1, 2015...

howard davies

1) PROJECT RUNWAY

So, the third runway at Heathrow is very much back in David Cameron’s in-tray and with it a huge political headache. Sir Howard Davies’ report, published at 7am, makes crystal clear that while Gatwick expansion is ‘credible’, it’s neither desirable nor the best choice for the UK economy.

The Davies report makes tough demands on Heathrow in return for its backing, with demands for ‘guarantees’ of no additional noise, a ban on flights before 6am, a Parliamentary pledge not to build 4th runway, a noise levy and legal commitment on air quality.

Sir Howard Davies was clear this isn’t a fudge, telling the BBC that the economic benefits of expanding Heathrow were ‘much greater’ than Gatwick, not least because it was by a ‘long, long way’ the best freight airport. “We’ve taken our cue from Hounslow Council ‘better, not bigger’,” he told the Today programme. He said a lot of benefits will go to consumers in lower costs, and 60% benefit goes to areas outside London.

At Cabinet yesterday, only George Osborne, Patrick McLoughlin and Sajid Javid spoke on the topic of aviation, each stressing that the economic case for jobs and growth was paramount. Well, if it is paramount, that suggests they have to back Davies.

But the PM is in a real bind here. Having warned in Opposition ‘no ifs, no buts, no third runway at Heathrow’, he turned this into an issue of trust rather than mere policy. Yet equally if he rejects an independent recommendation backing Heathrow he will look like he’s putting party (and a few well-heeled seats under the flightpath, plus Zac Goldsmith's Mayoral hopes) before country. Both options are damaging and he’s going to have to choose the lesser of two evils.

Davies this morning tried to help the PM out of his ‘no ifs, no buts’ hole, pointing out that was at a time of a radically different and ‘deficient’ Heathrow plan. “I think the Prime Minister has a very different proposition to look at today...” The boss of Heathrow told Radio 4: “It’s us who have U-turned, so the Prime Minister doesn’t have to”.

Still, Cameron probably won’t be PM when this thing is built, and Boris may be. And Boris is on the warpath. He insists he wants the Davies report ‘filed vertically’ (ie into the bin). The Mayor was emollient in tone today, but strident in content. He wasn’t convinced that the Davies noise restriction pledge would be delivered. Most importantly he seems convinced the PM will not accept Heathrow.

Davies chuckled when asked how likely it was that the politicians would accept his recommendations. ‘I think that ministers will realise that a decision is needed’. But few are chuckling in No.10 this morning.

There’s a real risk to Osborne’s northern powerhouse too here, with a rejection of Heathrow looking like a rejection of the north in favour of the south. Note that MPs near Gatwick say that their unemployment rate is so low that they don’t need the extra jobs (and in fact worry about temporary accommodation for any workers).

Michael Dugher has made clear Labour could swiftly back Heathrow, putting huge pressure on Cameron. He told the FT: “if we find that the main recommendation in the final report meets a number of conditions that we have set, we will take a swift decision to back Sir Howard’s recommendations...The current Conservative government’s own difficulties with their party must not influence the government’s approach.”

2) DEFAULT IN OUR STARS

Angela Merkel put her foot down yesterday, saying she wouldn’t consider any new emergency bailout deal until after Sunday’s referendum. Larry Elliott in the Guardian says Tsipras’ last minute move was actually quite clever because it showed a willingness to negotiate, but that may not cut much ice with those in Brussels infuriated by the Greeks’ tactics.

Greece became the first Western country to miss a payment due to the IMF (some call it default but that’s not technically true). It joins Zimbabwe and other basket cases, but at $1.7bn, Greece’s is the largest non-payment in the IMF’s history.

The Guardian splashes on unpublished documents that reveal that even if Greece signs up to its creditors’ demands the country faces 15 more years of unsustainable debt. The papers from the troika of the IMF, European Commission and ECB show that even if Athens signed up to tax and spending reforms, and had strong growth, the country’s debt would still be 11% by 2030 - above the 110% the IMF deems ‘sustainable’. No wonder the Syriza government’s really big prize is debt restructuring.

3) TUNISIA LIBYA LINK

The repatriation begins today of Britons murdered in Tunisia, with more than five bodies expected at RAF Brize Norton before their formal transit to West London Coroners’ Court.

The Mirror splashes on claims that Seifidinne Rezgui was ‘off his head on cocaine’, after stimulants were found in his body. The Indy’s excellent chief reporter Kim Sengupta reveals that the killer made a 10 second phone call on his Samsung Galaxy just before his shooting spree. The Sun splashes on claims that Rezgui took selfies with British holidaymakers two days before the murders.

The wider problem was confirmed yesterday when Tunisia said Rezgui had been trained at an ISIL terror training camp in Libya. Philip Hammond defended the UK’s Libyan intervention but admitted “I think the thing that has changed is the spread of Isil into the ungoverned territory of Libya”.

A new statutory duty on public authorities to look for signs of radicalisation comes into force today. ‘Changes in dress’ is one of them. No.10 confirmed yesterday it was reviving plans blocked under the Coalition to get universities to do more to combat radicalisation on campus.

BECAUSE YOU’VE READ THIS FAR...

Watch Tony Blair try to impersonate Dennis Skinner’s northern accent. Even his best friends would say it wasn’t entirely successful.

4) PHEW WOT A SCORCHER

With the heatwave triggering temperatures of upto 35 degrees C, the only question I have is whether the Speaker will finally agree to allow reporters to remove their jackets in the Press Gallery. But more seriously, there’s lots of stories about overheated hospitals, rail lines buckling and the Indy reports that temperatures on the Tube will exceed the legal limit for transporting cattle (which is 30 degrees under EU rules). Wimbledon will be watched closely.

However, as the Climate Change committee warned yesterday, maybe it’s time to realise that extreme weather is more man-made than random. And on that note, the FT puts on its front page the genuinely hot news that the US, Brazil and China yesterday signalled they were ready for a serious deal on global emissions. Ahead of the big Paris conference at the end of the year, the US and Brazil both pledged to produce 20% of power from wind and solar by 2030, while China pledged big cuts in its emissions.

5) CORPORATION POPPED

BBC DG Tony Hall is to set out plans to cut hundreds of jobs to help the Corporation cope with an expected £150m shortfall in funding, partly caused by a drop off in licence fee as viewers use a loophold that means you can watch iPlayer for free. The Guardian reports a source saying the cuts will be ‘painful’.

There are bigger issues however. Will ministers force the BBC to pay more towards the £700m cost of free TV licences for over 75s? And will they push the decriminalisation of non-payment of the £145 licence fee, a move that could cost the Beeb a further £200m? The BBC fightback could start today though with a new study by auditors PWC which suggests that the corporation is already among the most efficient organisations in the public sector (just 8% of spending is on general overheads, well below the average of 11.2%).

ONES TO WATCH

Chris Leslie has handed a big headache to the Labour leadership contenders, declaring yesterday that when it comes to jacking up the top rate of tax from 45p to 50p, ‘the issue is gone’. He’s right that Labour’s immediate focus will be on stopping further cuts from 45p, but how will Kendall, Cooper, Burnham and Corbyn respond?

Lord Harris’s review of suicides in custody is due at 1.30pm and is expected to find serious problems on the prison estate.

Legal aid lawyers are on strike.

A formal announcement of the US reopening an embassy in Cuba is expected later.

England’s women take on Japan at midnight in their World Cup semi-final

The UK’s four children’s commissioners have used a report to the UN to warn that more benefit cuts could worsen child poverty. It also calls for a repeal of laws allowing parents to smack their children.

The SNP aren’t happy about plans to change standing orders tomorrow to introduce a form of EVEL.

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