Mehdi's Morning Memo: Are We Really 'Out Of Intensive Care'?

LONDON, ENGLAND - JUNE 19: Chancellor of the Exchequer, George Osborne, addresses the audience of the 'Lord Mayor's Dinner to the Bankers and Merchants of the City of London' at the Mansion House on June 19, 2013 in London, England. Mervyn King will address the Mansion House audience for the 10th and final time as Governor of the Bank of England before he is replaced in the post by former Bank of Canada Governor Mark Carney on July 1, 2013. Prime Minister David Cameron has announced that the o
LONDON, ENGLAND - JUNE 19: Chancellor of the Exchequer, George Osborne, addresses the audience of the 'Lord Mayor's Dinner to the Bankers and Merchants of the City of London' at the Mansion House on June 19, 2013 in London, England. Mervyn King will address the Mansion House audience for the 10th and final time as Governor of the Bank of England before he is replaced in the post by former Bank of Canada Governor Mark Carney on July 1, 2013. Prime Minister David Cameron has announced that the o

The ten things you need to know on Thursday 20 June 2013...


Green shoots anyone? The chancellor was in black tie last night, giving his much-awaited Mansion House speech to his friends in the City.

"The economy is 'out of intensive care' and moving towards a recovery from the financial crisis, George Osborne declared last night.

"The Chancellor made the claim as he prepared the ground for major changes in state–owned banks, suggesting that RBS could be broken up and shares in Lloyds Banking Group sold off."

Isn't this the same chancellor who told us, back in 2010, that the economy was "out of the danger zone"? Hmm.

"Mr Osborne balanced his comments with a warning that the Coalition has much more to do to build on recent progress. 'While Britain has left intensive care, we still need to secure the recovery and make sure we continue to treat the ailments that brought us low in the first place.'

"That will mean significant changes to the British banking sector, especially the banks that came under State control during the financial crisis.

"The Government is 'actively considering' ways to sell off its stake in Lloyds, Mr Osborne said. 'We can now take the first steps to returning Lloyds to the private sector where it belongs.' The first offer would be to pension funds and other institutional investors but a subsequent round could see shares offered to the public.

"Mr Osborne dashed recent political speculation about an early sale of RBS shares, insisting that the right moment to sell is 'some way off'. RBS remains 'weighed down' by too many bad loans from its pre–crisis expansion."

The Times says Lloyds shares could go on sale ahead of the general election in 2015.

But, despite his optimism, there's some more bad news for Osborne - and for the rest of us. The Guardian reports:

"The next government will have to increase the pace of spending cuts by 50% in the two years after the 2015 election if it is to meet the current deficit target, new research by the Resolution Foundation thinktank shows.

"The report finds that if the next government decides instead to stick with the current – already punishing – pace of cuts, the deficit target will only be met by raising taxes by £10bn or finding further welfare cuts."

Responding to Osborne's 'positive' speech, the shadow chancellor Ed Balls said: “At a time when living standards are falling, growth is weak and deficit reduction has stalled families and businesses will think the Chancellor is not living in the real world."


Osborne also used his Mansion House speech to announce that the outgoing governor of the Bank of England, Sir Mervyn King, is to become Lord King.

The Mirror's headline is: "Lord King of Money Bags." The paper reports:

"Sir Mervyn King is retiring with a gold-plated, taxpayer-funded pension worth £6.3million... [he] has not had to pay a penny into his non-contributory pension pot during his 22 years at the Bank. But his pension could pay him an astonishing £233,000 a year.

"And he will enjoy bumper annual increases in the value of his pot - unlike millions of ordinary Britons whose retirement packages have been hit by Government cuts."

The Independent's Ben Chu analyses the ups and downs of "The King's Reign".


From the BBC:

"Commons Deputy Speaker Nigel Evans has said he 'refutes all allegations' after being arrested on suspicion of three counts of indecent assault."

"The 55-year-old answered bail following his arrest in May on suspicion of rape and sexual assault, and was told that he faced the additional allegations.

"All the allegations involve men in their 20s.

"... The new indecent assault allegations are claimed to have occurred in Blackpool and London between 2003 and 2011."


Here comes the (inevitable) U-turn! From the Telegraph front page:

"MPs might not get a vote on military intervention in Syria, David Cameron has said.

"The Prime Minister told MPs that he stood by a 'big commitment' to allow them a vote on arming Syrian rebels and British use of force in the country. But he added that, if necessary, he reserved the ability to act without the sayso of the House of Commons.

"Asked yesterday whether he would have to seek MPs' consent before intervening in Syria's civil war, Mr Cameron said 'obviously, governments have to reserve the ability to take action very swiftly on this or on other issues'.

As the paper notes, however, the PM's remarks "appeared to contradict an earlier assurance given by William Hague, the Foreign Secretary":

"Mr Hague said there would be a vote on the issue of arming Syrian rebels and was later seen to nod as John Bercow, the Speaker, warned that a decision not to hold a vote on a substantive motion would be undemocratic and inappropriate. Mr Cameron told the Commons that in certain cases the Government had to reserve the ability to intervene in Syria without coming to Parliament."


From the Huffington Post:

"Scottish first minister, Alex Salmond, has given an impassioned interview in which he attacks... well everyone really.

"He cuts David Cameron no slack, accusing him of bending over backwards to the will of Ukip and Tory backbenchers over the proposed EU referendum.

"Speaking to the New Statesman he says: "He’s done this in order to appease Nigel Farage!

"... The much derided 'bedroom tax' also gets a hammering with Salmond claiming it could have 'the same galvanising effect as the poll tax'."


Ahead of his appearance on BBC1's Question Time tonight, watch this video of comedian/actor Russell Brand take over, and mock, MSNBC's 'Morning Joe' breakfast news show in the United States.


Is there an Italian branch of UKUncut? From the Daily Mail:

"Horizontal stripes could make a surprise appearance on the catwalks next season - after designers Domenico Dolce and Stefano Gabbana were sensationally handed jail sentences in Italy.

"The fashion heavyweights behind the Dolce & Gabbana empire have been sentenced to 20 months in prison each, for hiding hundreds of millions of euro from Italy's tax authorities.

"A Milan court convicted Domenico Dolce and Stefano Gabbana, who count Victoria Beckham and Kate Moss among their clients, of failing to declare taxes on royalties of about €1billion."

Tax evasion costs Italy around €200billion a year.


Royal Mail has been kept busy by the education secretary and his Labour shadow. From the Telegraph:

"Michael Gove has described the Labour Party's education policies as 'confusing, uncertain and incoherent'.

"The Education Secretary hit out at his shadow, Stephen Twigg, after a major policy reversal this week when Labour dropped its blanket opposition to free schools.

"... In a letter to Mr Twigg yesterday, Mr Gove wrote: 'I am sure your speech was the result of a well–thoughtthrough reflection on schools policy… Labour schools policy is a confusing, uncertain and incoherent assemblage of sops to the trade unions and local authorities which reflects poorly on the intellectual rigour and moral courage of the current Labour front bench in comparison with all previous Oppositions, confirms the risible weakness of the Labour leadership in the face of vested interests, and risks undermining the hard work of all those great teachers who are driving up standards in schools today.'

"... Replying to Mr Gove last night, Mr Twigg wrote: 'I am delighted to see the attention you are paying to Labour Party policy, but might I suggest focusing more attention on your own policies?

"'I fear, however, that you will continue to while away the hours sending letters to me, writing forewords to the Bible and dreaming up new names for GCSEs.'"

"Mr Gove then replied to Mr Twigg's letter, listing 29 of his achievements since taking office."

How mature the two of them are...


From 'call Clegg' to Clegg calls. The Telegraph reports:

"A disabled pensioner launched into a five–minute tirade against a cold–caller asking her about voting intentions, only to be told she was talking to Nick Clegg.

"Not realising who was on the other end of the line, Trish Mills, 68, complained that she had no parking space outside her home, and said she would not to vote for anyone who would not support her in her row with her local council in St Austell, Cornwall.

"Only after several minutes of her ranting did the caller sheepishly admit: 'This is Nick Clegg speaking, the Deputy Prime Minister.'

"The Liberal Democrat leader assured the mother of five that he would help her, and details of her case have been passed to the St Austell MP Stephen Gilbert."


From the Times:

"The Environment Secretary will make the 'moral case' for GM crops today in a speech calling for the EU to relax restrictions on the technology.

"Speaking at the Rothamsted Research Institute in Hertfordshire, Owen Paterson will say that the Government 'owes a duty to the public to reassure them that GM is a safe, proven and beneficial innovation'... The bold show of support for GM was broadly welcomed by scientists and farmers, whose stance has shifted in favour of GM in recent years. However, Mr Paterson still faces opposition from some quarters... Mike Childs, head of policy, research and science at Friends of the Earth, compared ministers' backing for GM to 'peddling snake oil'. 'Despite decades of research, there are still no miracle crops to tackle the challenges agriculture faces, such as climate change, soil degradation, water shortages and growing demand,' he said."


He may have changed it Gideon to George, as a teenager, but the president of the United States still can't get the hang of the chancellor's first name, it seems.

"Music fan Barack Obama kept getting George Osborne’s name wrong after mixing him up with one of his favourite soul stars — Jeffrey Osborne.

"The President explained his confusion to the Chancellor as he apologised for calling him 'Jeffrey' three times at the G8 summit of the world’s wealthiest nations.

"A witness dubbed the series of slips 'a visibly crushing blow' to the Chancellor."

But Obama made some other amusing remarks, too:

"In a second diplomatic gaffe on the same day, Mr Obama said Nick Clegg was more attractive than David Cameron. He told the Deputy PM: 'It’s good to see the better looking half of the Coalition.'"


From today's Sun/YouGov poll:

Labour 38

Conservatives 32

Ukip 13

Lib Dems 10

That would give Labour a majority of 76.


@StewartWood I am so happy. I just got mistaken for Zac Goldsmith MP in the coffee queue.

@PickardJE On a New Labour trip to the White House, George W Bush lazily looked at people's nametags before hailing "Peter Haarn."

@ShippersUnbound Huge congratulations to my former lunch partner @elliottdelhi the new Times political editor. And in No 10 I can hear a man weeping...


Peter Oborne, writing in the Telegraph, says: "The Tories will never triumph with five chairmen at the helm."

Rafael Behr, writing in the New Statesman, says: "The 'dead puppy' problem: or why both Labour and the Tories fear winning the next election."

Chris Giles, writing in the FT, says: "Britain’s banks are still a danger to the real economy."

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