Daily Archives: June 24, 2010

Jo Johnson

An orgy of internal elections to select committees reached its climax this afternoon with a stunning outcome for members of the new intake. I haven’t yet had time to go through the Labour results but, on the Conservative side, the class of 2010 dominates the membership of even the most prestigious select committees, such as foreign affairs, treasury and public accounts. Whereas almost all candidates from the 2010 intake won a place for their first choice, many older MPs will be disappointed: several committees – including business, innovation and skills – had attracted over 25 candidates for 4 places. Read more

Analysts are starting to work through the implications of the looming squeeze on departmental spending. Whitehall is bracing for job cuts, but the raw numbers are still quite stark.

Take defence. George Osborne promised to spare the MoD from part of the 25 per cent cuts. But even a flat cash settlement — of 10 to 15 per cent cuts — would place heavy strain on the budget.

Malcolm Chalmers at RUSI has calculated what a 15 per cent cut would mean for personnel.

If, as our central scenario suggests, total real spending on personnel falls by around 13%, total personnel numbers would therefore have to fall by around 15% by 2014. Total personnel numbers would then be reduced from 283,000 to 240,000. If spread proportionately, this would lead to a 30,000 cut in military personnel numbers, together with a reduction in civilian personnel numbers of around 13,000.

At a time of war, announcing 43,000 job cuts is politically toxic. The MoD is no stranger to shedding staff — the size of the Defence Equipment and Support group in Bristol has fallen by more than 10,000 over the last few years. But the squeeze on numbers this time will be of a different order. Given around 40 per cent of the budget is staff costs, there is little alternative. Read more

Vince Cable valiantly continues to argue that the £1,000 increase in the income tax threshold is part of the Lib Dem “progressive” strand of this week’s Budget – evidence that George Osborne listened closely to the Lib Dems’ determination to protect the poor when framing his austerity package.

Before he pushes the case too far, Cable would do well to have a quiet word with his departmental (Tory) colleague David Willetts.

Politicians (and the media) have short memories. Increases in the income tax threshold used to be a favourite policy of the Conservative right: people would keep more of their own money and would be less dependent on state benefits, the argument ran. And, the poor would benefit. Read more

Jim Pickard

A slim but distinguished figure was yesterday waiting in the foyer of Deutsche Bank yesterday; none other than Lord Mandelson, former business secretary. Apparently he was kept waiting for at least a quarter of an hour.

This morning I called the peer to make sure there isn’t a Mandy doppelganger wandering around the streets of the City of London. Read more

The departure of General McChrystal from the top military job in Afghanistan will undoubtedly strengthen the arguments of those in Whitehall who have concluded that Britain is fighting alongside the US in an unwinnable war.

It will also likely stir further doubts in David Cameron’s mind about the conflict. The prime minister is said to believe that British troops should not stay a moment longer than is necessary to avoid a open rupture with the US; that means that as soon as the Americans start coming out – and Mr Cameron hopes that will be in mid-2011 – so too will be the British. Read more