The five things you need to know on Tuesday October 6, 2015...
1) CREDIT WHERE IT’S DUE
David Cameron has done his traditional Tuesday-of-conference breakfast media round, promoting his plan to dock child benefit from parents of truants (and in the process putting Nicky Morgan in her place – see below). But it is his equally hardline approach to tax credit cuts, and how that undermines his central pitch to be the ‘party of the workers’, that is in danger of overshadowing the Manchester gathering.
The whispered talk among some here is that Osborne’s tax credit cuts are the equivalent of Gordon Brown’s 75p pension rise, a sleeper issue borne of Treasury complacency. But with more than £4n in savings, this is no ‘accidental’ policy or oversight, it’s central to the Government’s economic plan.
Maybe that’s why Jeremy Hunt overreached himself yesterday at the Times fringe, saying the cuts were an important ‘cultural’ signal about the importance of working hard. (Hunt’s fringe produced other stories too, not least his line that obesity was such a national disgrace that it needed a troubled-families type programme and that CBeebies should be telling kids that ‘chips are bad’.) The Health Secretary claims he’s been ‘wilfully’ misinterpreted.
Boris Johnson has tried for months to be loyal (not least in the election campaign) but he never forgets the bigger prize. And when he appears on the conference platform today his carefully worded pleas to protect those on tax credits will be stark. I’m told Boris is ‘studying a range of options' to protect Londoners from the tax credit cuts.
The Sun reports that he will go further and tweak Osborne’s tail by saying that on other policies (living wage, devolved business rates, infrastructure) he’s nicked Boris’s ideas. “It is wonderful now to see the London agenda being rolled out across the country. In fact the only type of crime currently going up is theft of City Hall policies,” he’ll say.
On BBC Breakfast, the PM emphasised the national living wage and tax cuts and free childcare, and even lobbed in the 1% cut in social rents to the ready reckoner. On the Today programme, he pointed out that low taxes were a central Thatcherite philosophy. But of all his morning interviews, his 5Live one had a faint glimmer of an opening, not totally ruling some kind of review of the timing of the tax credit cuts.
The Treasury’s approach has been pretty hardnosed so far, taking a kind of omelettes/breaking eggs approach to getting deep welfare cuts. But what was strange yesterday was how Osborne didn’t use his speech to defend the tax credit reform.
2) MAY DAY
With a tough speech on immigration, Theresa May is today making sure she is not written out of the Tory leadership script and has succeed overnight in garnering front page splashes in the Times and Telegraph with extracts.
Asked if he agreed with her line that it was impossible to retain a cohesive society with continued high levels of migration, the PM told the Today programme: “I do agree, yes.”
But it is May’s verdict on the economic benefits of migration that most divides the Cabinet, particularly her claim that "the net economic and fiscal effect of high immigration is close to zero". Boris, in contrast, is possibly the biggest cheerleader among the Tories for the economic benefits of migration.
The PM on BBC Breakfast simply trotted out his defence of a net migration target, but was not asked about students being kept in the target. The Times reports he’s shifted from backing May to a ‘neutral’ position, and Osborne and Hammond may have the upper hand now. Number 10 says "no decision has been taken”.
Whether the Home Secretary can garner enough MPs to get on a leadership ballot remains doubtful (MPs contrast her lack of clubbability with Nicky Morgan’s affability). Still, May wowed Tories last year with a serious speech in Birmingham, while Boris’s comedy brick routine fell a bit flat in comparison. This year, he’s going to be more serious, using gaglines about Labour ‘tankies and Trots’ to ram home a more grown up message about seizing the centre ground.
Security is central to the Tories message here this week though. And the PM on Today revealed that on Syria he had moved from seeking ‘consensus’ on Syria airstrikes to saying ‘what matters is building a majority in the House of Commons’. He said Corbyn would never back military action but made clear he would work with Labour MPs who regretted the 2013 Syria vote.
3) BREXIT TIME TIMING
The Institute of Directors today meets and it’s boss Simon Walker (instinctively an ‘In’ man) is warning Cameron that if he waits to 2017 for his EU referendum, his own unpopularity could lead to ‘accidental Brexit’. He’s right that the third year of any government is always difficult and that spending cuts will really be felt by then (and he didn’t even mention interest rate rises).
Word among some ministers is that even holding the referendum next September could be just too late and that June would make more sense. The fear is that the longer Cameron waits, the more the public see ‘chaos’ on the continent on migration and the economy, but also the longer Farage will have to hammer home his case. Just as Cameron’s strategic error in the Scottish referendum was going long, they believe he could repeat that on Europe. More importantly, with the public only getting negative messages about the EU in recent years, it will be difficult to suddenly switch to a positive message of the benefits. But others disagree. "We may have to play it long," one minister tells the Indy. "It would be better to wait if that means getting a bigger and better package of reforms."
Cameron told Today he was making ‘progress’ in his renegotiation in Brussels but ‘it is not easy’. This Friday it’s his birthday ‘and I’m spending it with Angela Merkel at Chequers’ discussing all this, he said.
Meanwhile the Tory leadership race has to be reflected through this prism too. Some are urging Boris to make strong noises of support for the ‘Out’ campaign. (Nicky Morgan set out her stall on Sunday, saying she ‘personally’ won’t back Brexit). But it’s how Boris will react once Cam finishes his renegotiation that matters most: will he opt for ‘In’, or will he call for ‘Out’? Osborne is tied to staying In, assuming the PM recommends that. Some Osbornites would see a Brexit Boris as not just disloyal but deeply cynical because even if voters back ‘In’, he can win the rank and file of the Tory members in 2019 leadership race.
As for the In and Out campaigns, things are moving. PolHome reports that Bernard Jenkin last night told a fringe that his cross-party Out campaign “will launch within the next ten days or so and I think will quickly establish itself as the main campaign”.
Meanwhile, the European Court of Justice ruling on prisoner votes is due. In many ways, voters get more excercised about human rights (Qatada etc) than about other Euro issues, and some in Government believe a British Bill of Rights just as powerful as any renegotiation from Brussels in helping the ‘In’ cause.
The shy and retiring David Miliband appears at the IoD conference today too.
BECAUSE YOU’VE READ THIS FAR…
Watch this superb EastEnders version of pundits' reaction to a football manager’s sacking
4) BUILDER BERG CONFERENCE
George Osborne’s ‘Builders’ speech was most notable for the way he outlined his own political journey from laissez faire to someone who believed in the power of the state to get things done. Ever since that Omnishambles Budget - when he indulged a bit of political tourism by appearing on the White House South Lawn days when he should have been back home preventing pasty tax errors - he has been donning a hard hat and a hi-vis jacket virtually every week.
From Crossrail to HS2, he’s seen for himself the impact of public works on the economy and now takes a Heseltinian view of the world. And like Heseltine, he sees how his party can revive itself in the north, midlands and urban areas. Which, curiously, is exactly the Boris view of politics (and never forget how close Boris is to Hezza).
Last night, the cops erected extra barriers at the Tory conference to try to prevent the harassment by protestors of those attending. But with Jeremy Corbyn looking like a protestor rather than a party leader to many Tories, Osborne clearly thinks he can park not just his tanks on Labour’s lawn but bulldoze Labour councils into either agreeing to city mayor devolution or looking like Leftwing dinosaurs. Nicking Labour’s ideas on infrastructure, a living wage and grandparent leave are all attempts to reassure moderate Labour voters to make that leap of faith and back the Tories in 2020.
At a private dinner for business last night, Osborne stressed just how huge his business rate reforms were (though there are dangers that it could end up leaving poor areas poorer). But he also sounded a warning note about the economy, saying ‘things aren’t looking so great internationally..the US jobs market is slowing’ and that China is looking fragile.
The FT has splashed on something others have missed: the signing of a new Trans-Pacific Partnership between Obama and Japan’s PM. The deal covers 40% of world trade. It’s a reminder to Eurosceptics of just how much trade is out there beyond Europe. But it’s also a reminder for Europhiles of how the EU is still an enormous trade bloc, and of the benefits of an EU-US trade deal.
5) GRINDING NIMO
The PM big-footed Nicky Morgan this morning, stealing the truancy crackdown that was one of the most eye-catching announcements in her speech. In fact ownership of this policy of docking child benefit doesn’t belong just to the PM or Morgan. It doesn’t even belong to Michael Gove and his adviser Charlie Taylor (though the LibDems blocked it last year).
Yes, dear reader I’m old enough to remember when Tony Blair first floated it way back in 2002. And back then Gordon Brown and others ensured it never moved from the newspaper headline stage to actual policy. A certain Iain Duncan Smith (Then Opposition leader) even said it was one of many ‘gimmicks’ Blair was trying to reassure the public on anti-social behaviour.
What hasn’t changed is charities and others warning that docking child benefit could make the poor even poorer. The NUT’s Chris Keates is this morning warning that the child benefit move could make the chaotic lives of those affected even more chaotic.
Cameron told Good Morning Britain that his kids had never played truant, but there are a few ministers who think Ms Morgan is skipping usual lessons in not talking about becoming Tory leader. Although the PM said on Marr that he welcomed the idea of his team being capable enough to take the top job, the backlash against Morgan from some in No.10 has already started.
The Sun reports that insiders believe Morgan wants to ‘throw a bone to the Right’ by urging Cameron to scrap totally the £600m LibDem plan for free school meals for young primary pupils. The Education Secretary told me on Sunday that she didn’t mind her nickname NiMo but a No10 source tells the Sun it’s time she ‘got back in her fish tank’.
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