Mehdi's Morning Memo: Sealed With A Wink

Mehdi's Morning Memo: Sealed With A Wink

Happy New Year and welcome to 2013 - the first year not to contain a repeated digit since 1987.

As we wait for MPs to return next week, here are the five things you need to know on Wednesday 2nd January 2013...


Hurrah! (Some) Republicans caved: the US economy - and, thus, it's world counterpart - won't be going over the so-called fiscal cliff this morning. For the first time in 20 years, (some) Republicans agreed to (some) tax rises on the rich. From my HuffPost USA colleagues Michael McAuliff and Sabrina Siddiqui:

"A day late and trillions of dollars short, Congress passed a hard-won deal to ease large portions of the 'fiscal cliff.'

"The nation started sliding down that cliff on New Year's Day, after lawmakers dithered for more than a year over solving the combination of across-the-board spending cuts and tax hikes that began taking effect with the start of the year.

"The Senate passed a compromise at 2 a.m. Tuesday. The House threatened to blow up the deal, but reluctantly followed suit 20 hours later, ultimately passing a permanent extension of many Bush-era tax cuts by an overwhelming vote of 257 to 167.

"The weeks-long debacle of tax negotiations brought into stark relief how focused the nation's Capitol remained on the deficit and debt, while focus on the jobs crisis nearly vanished, along with talk of economic devastation from climate change.

"...Liberals were unhappy Democrats left out a number of their goals for the bill, and that they did not push for setting the upper limit for retaining the old tax rates at $250,000 -- a promise Obama campaigned and won on. Obama had hoped to raise $1.6 trillion in revenue over 10 years. The bill only raises $620 billion, suggesting to many Democrats that future deficit reduction could come from cutting cherished programs."

But the Daily Mail notes that "President Obama was in a triumphant mood as he addressed the nation after the vote on Capitol Hill, even winking at photographers before flying back to Hawaii to resume his vacation."

Is it really time to celebrate? This middle-of-the-night 'deal' merely delays severe spending cuts, as well as a potentially catastrophic national default, for... wait for it... two months. See you all again at the end of February, folks. Or, as the Independent's leader puts it:

"[T]he wrangling over fiscal policy is far from over. Not so much an avoidance of the cliff, then, as a slight slowing in the speed at which Washington is racing towards it."



The UK's "squeezed middle" faces its own fiscal cliff this morning. The i's front page splash pretty much sums up all you need to know:

"Fare hikes make rail travel 'an extravagance'

"Increases of up to 10 per cent kick in today

"Prices have risen 'three times faster than wages'

'England has most expensive rail travel in Europe'

'English travellers pay far more than Welsh or Scots"

The response from the (Lib Dem) transport minister on the Today programme this morning? "It's not ideal," said Norman Baker MP.

Given this is the tenth consecutive year of above-inflation fare rises, some might say that now is the perfect time for Labour's policy review to take a look at rail renationalisation...


It's a new year but the coalition's 'war on welfare' continues to pick up pace ahead of next Tuesday's Commons vote on whether to break the link between benefit rises and inflation.

The Daily Mail's front-page splash says:

"Benefits rising twice as fast as incomes"

The paper reports that "out-of-work benefits have jumped in value by an astonishing 20 per cent since 2007 while wages have crept up by just 12 per cent, official figures released last night reveal" - yet, as economist Jonathan Portes has noted, "the numbers are correct: but they are highly selective... The value of out of work benefits relative to average earnings (and more broadly the incomes of those in work) has fallen steadily over the past three decades, until the recent slight uptick resulting from the recession".

Iain Duncan Smith and his work and pensions department won't let such pesky statistics get in the way of their campaign to target the so-called shirkers and scroungers - in fact, IDS, in a piece for the Telegraph on New Year's eve, claimed Labour's tax credits policy for the poor "was a calculated attempt to win votes. Tax credit payments rose by some 58 per cent ahead of the 2005 general election, and in the two years prior to the 2010 election, spending increased by about 20 per cent".

But Channel 4's FactCheck says his pants are on fire - "Mr Duncan Smith’s got his sums wrong on this one" - and notes how the correct figures are 8% not 58% and 8.8% not 20%.

Meanwhile, in a typically coruscating and amusing column, the Independent's Matthew Norman notes how Duncan Smith's department is "planting stories about large families on benefits and other supposed wastrels in friendly tabloids on a daily basis" and says that the "reinvention of IDS, sacked by his party in 2003 on the twin grounds of being preternaturally incompetent and sensationally dim, is one of the wonders of the political age".


Relieved the US didn't fall off the fiscal cliff? Then watch this video, from NowThisNews, of the best examples of Hollywood cliff-falling, from "Thelma & Louise" to "The Lion King".


From the Times splash:

"MPs and peers have received hundreds of thousands of pounds from arms manufacturers, pharmaceutical companies and foreign governments to sponsor parliamentary special interest groups.

"Dozens of all-party parliamentary groups have received funding and other benefits from outside organisations during the past 12 months, reaching a total of more than £1 million a year. Many of the groups have produced reports that echo the views of their industry funders and petitioned ministers on policy, raising questions about the relationship with their backers."

Depressing, eh?


The Sunday papers were filled with stories about how 2013 would be the year that the beleaguered Lib Dems engaged in a strategy of 'differentiation' - reminding voters how different and distinct they and their policies are from the Tories. Funny then to see Nick Clegg's piece in the Times this morning repeating all the same ol' guff about the deficit and Labour's legacy, and continuing to lash the junior partner in the coalition firmly to George Osborne's mast of austerity.

In a column entitled "Carping Labour must come clean about cuts", the deputy prime minister writes:

"Labour admit they wouldn't reverse every coalition cut. They should tell us which they would keep, which they would lose and where they would find the money instead.

"...To oppose everything is to offer nothing, and the country will not be duped. The biggest divide in politics today — here and around the world — is between those who offer leadership and those who only offer dissent."

But perhaps we need a bit more "dissent", Nick. After all, the results of austerity are plain for all to see - a double-dip recession in the UK, a near-depression in the eurozone, a self-inflicted fiscal cliff in the United States. As Frances O'Grady, the new (and first female) leader of the TUC, who takes over from Brendan Barber today, observes:

"[O]ur economy is sick and the Government's medicine is not working. We were told that short-term pain would deliver long-term gain, yet all we see are nasty side-effects with no sign of a cure.

"What is worse is that we now seem to be locked into a vicious downward spiral of cuts. They are not working so the Government cuts even more.

Welcome, I guess, to 2013. Not that much different from 2012.


From the final poll of 2012 – the fortnightly Opinium poll published in last Sunday's Observer:

Labour 39

Conservatives 29

Ukip 15

Lib Dems 8

That would give Labour a majority of 112.

Meanwhile, yesterday's YouGov poll in the Sun found Boris Johnson beat David Cameron - 25% to 9% - as the politician who made the 'biggest impression' in 2012. Ouch.


@Joe Trippi Just think we will be doing this throughout 2013 with Dems having little leverage after this deal. GOP might help Obama if they balk

@TimMontgomerie Perhaps Clegg's new year resolution is to attack Labour a little more and Tories a little less? Good news if true

@Mike_Fabricant 40 years ago we joined the EEC, then an E dropped off so became EC. Then the 1 screw on the C fell out so it flipped over to become EU.


Jeffrey Sachs, writing in the Times, says: "America fights over taxes, ignores spending and creates budgetary black holes. It’s no way to run an economy."

Simon Jenkins, writing in the Guardian, says: "First on the list for 2013 is Europe. It is already gnawing at David Cameron's vitals, as it has gnawed at all his predecessors for 30 years."

John Kay, writing in the Financial Times, says: "There are few certainties about the future other than that it is uncertain."

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

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