15/01/2014 03:18 GMT | Updated 25/01/2014 16:01 GMT

Mehdi's Morning Memo: The Osborne Ultimatum

Bloomberg via Getty Images
George Osborne, U.K. chancellor of the exchequer, gestures during a speech at Sertec Group Holdings Ltd., in Birmingham, U.K., on Monday, Jan. 6, 2014. Osborne set out his plan to ease the burden on families while reiterating his goal to shrink the deficit as he says tax cuts will have to be funded by spending reductions. Photographer: Jason Alden/Bloomberg via Getty Images

Here are the five things you need to know on Wednesday 15 January 2013...


Can the Tory leadership shut down the Europe issue and appease its backbenchers? The chancellor will have a try today. From the Guardian:

"George Osborne will today deliver a stark warning to Britain's European partners that the UK will leave the EU unless it embarks on whole-scale economic and political reform.

"The chancellor's comments come as the Tory leadership tries to regain the initiative on Europe, after 95 MPs signed a letter calling for the dismantling of the core principles of the EU.

"In a speech to a conference organised by the pro-reform Open Europe thinktank and the Fresh Start group of Tory MPs, Osborne will say: 'There is a simple choice for Europe: reform or decline. Our determination is clear: to deliver the reform, and then let the people decide.'"

The Times has the story on its front page - and includes a rather remarkable put-down of the PM from a senior Lib Dem source:

"Europe will suffer an 'ongoing economic crisis and continuing decline' unless welfare spending is slashed across the EU, George Osborne will warn today.

"The Chancellor's intervention comes as a senior Tory calls for pro-Europe Conservatives to break cover and make the case for keeping Britain inside a reformed EU.

"Nicholas Soames said that Europhile Tories had "only themselves to blame" for allowing their Eurosceptic colleagues to dominate the debate. David Cameron is privately being compared to the former Prime Minister Neville Chamberlain by Lib Dems frustrated that he keeps giving in to the demands of Eurosceptics."


The row over Europe, of course, is also a row over immigration. From the FT:

"David Cameron has shelved a government report on EU migration after Theresa May, home secretary, failed to provide evidence to support her case for imposing tighter restrictions on immigrants. Ms May, whose department was responsible for drafting the report, claimed last month that there was "abuse of free movement" rules and that some migrants were attracted by 'access to benefits'. She has struggled to prove her contention that limiting EU migration would be good for Britain... Mr Cameron has ordered a delay in publication of the Home Office report until after the European elections in May, after Liberal Democrats and civil servants complained that the draft was not based on evidence and was overtly political. One official close to the process said: 'They can't bring themselves to publish the report before the European elections because they would have to admit that freedom of movement is a good thing.'"

Evidence-based policy-making, eh? Or perhaps not. The paper adds: "The government's discomfort on the issue was compounded yesterday when Robert Chote, head of the Office for Budget Responsibility, told MPs that the UK's fiscal position would be worse if net migration were lower, because more immigrants were of working age."

Oh dear. Meanwhile, an awful, awful migration-related story on the front of the Guardian:

"Home Office officials are being rewarded with shopping vouchers for helping to ensure failed asylum seekers lose their attempt to stay in the country, new documents reveal.

"Official guidance obtained by the Guardian shows that immigration staff have been set a target of winning 70% of tribunal cases in which asylum seekers are appealing against government decisions that they should leave the UK."

Sick stuff...


Can Labour leader Ed Miliband, fresh from his confrontation with the energy companies and payday lenders, take on and beat the biggest 'vested interest' of them all - the banks? From the BBC's Nick Robinson:

"I understand the Labour leader is preparing to unveil proposals designed to increase competition between banks by forcing the so-called "big five" - HSBC, Barclays, Royal Bank of Scotland, Santander and Lloyds - to sell more of their branches and promote the growth of new banks capable of challenging them.

"Ed Miliband will make his plan public in a major speech on Friday which will argue that what the party calls a "living standards crisis" can only be addressed by making long term structural changes to the British economy."

Bashing - sorry, reforming - the banks is a no-brainer: in political terms, it wins votes; in economic terms, it's a must if another financial crash is to be avoided. The FT reports:

"George Osborne will face more pressure over bank bonuses today, as Labour demands that he blocks state-backed Royal Bank of Scotland from paying staff bonuses worth twice their salaries.

"Labour will argue that heavily lossmaking RBS should not be permitted to pay the bonuses - twice the normal level permitted by a new EU law - at a time when ordinary families are facing a "cost-of-living crisis".

"The opposition is seeking to exploit the political dilemma facing Mr Osborne, who is in effect the bank's main shareholder - the taxpayer holds an 81 per cent stake in RBS - and who has the right to veto the plan."


Watch this video of 15 funny teleprompter fails.


Yesterday, the French president Francois Hollande did a big press conference in the Elysee Palace in front of a large group of journalists and all of his government ministers. He wanted to talk about the economy, the rest of us wanted him to talk about his alleged affair with an actress. French journalists, luckily for him, weren't too keen to press him on the latter.

As the Telegraph's brilliant sketchwriter Michael Deacon writes on the paper's front page:

"IF Francois Hollande treats his women the way he treats his press conferences, I feel rather sorry for them. He starts slowly. Excitement builds and builds. Steadily, he keeps going. And going. And going. For what feels like ages. Until … hang on a minute. All of a sudden it seems to be over. And as far as you can see, he is the only one who got anything out of it. You, in fact, nodded off several minutes ago."

He continues:

"Monsieur Hollande started by talking about his plans for the economy. A minute passed. Then a second. Soon five had gone, then 10, then 20, then half an hour. On and on he talked... Throughout this lecture, the French journalists remained politely silent. They didn't so much as raise a hand. How odd it all felt. Of course the economy was important. Monsieur Hollande's top priority was to tackle it. All the same, it was hard to help feeling that – comment dit–on en Français? – il y avait un éléphant dans la salle."

There were only one or two obtuse questions on the whole saga from the French press, to which Hollande replied:

“I’m sure you’ll understand my answer. Every one of us can go through difficult periods in our personal life and that is our case. They are painful moments, but I have one principle, which is that private matters are dealt with privately, within a respectful intimacy. Therefore it is neither the time nor the place to do so.”



A huge scoop from my HuffPost colleagues in the US:

"The mastermind of the Sept. 11, 2001, terrorist attacks now says that the use of violence to spread Islam is forbidden by the Quran, a major shift away from the more militaristic view he had put forward previously.

"Khalid Sheikh Mohammed's thinking is detailed in a first-of-its-kind 36-page manifesto obtained by The Huffington Post. In a departure from his previous stance... KSM, as he's known in intelligence circles, instead seeks to convert the court to Islam through persuasion and theological reflection, going so far as to argue that 'The Holy Quran forbids us to use force as a means of converting' and that reaching 'truth and reality never comes by muscles and force but by using the mind and wisdom.'"

Huh? Perhaps he's just getting soft in his old age. Nonetheless, as the HuffPost report goes on to note:

"The tone of his manifesto is such that, at times, it can be easy to forget its author has admitted to his role in murdering thousands of people.

"But that's exactly the way KSM wants it. 'Before you start reading, forget and neglect the writer or author's name,' he asks toward the beginning of the document."

Er, sorry, KSM, no can do...


From the Sun/YouGov poll:

Labour 37

Conservatives 34

Ukip 13

Lib Dems 9

That would give Labour a majority of 32.


Mary Riddell, writing in the Telegraph, says: "Ed Miliband should come clean – the rich will have to pay more."

John Rentoul, writing in the Independent, says: "I put Ed Miliband's love letter to the middle class through Google translate, but it still doesn't make sense."

Simon Jenkins, writing in the Guardian, says: "Hollande's private life is the least of his problems."

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