A Lib Dem change of heart

March 3, 2011 8:11 pm by Alex Barker

Steve Webb, welfare minister, today announced curbs on government “crisis loans”, which are a lifeline to families unable to afford basic needs.

Demand is currently outstripping the Treasury funds available. So the emergency loans will no longer cover beds and cookers, the rates will be cut and an annual cap applied to payouts.

It’s interesting to compare Webb’s views as a minister to those he held while serving on the Lib Dem frontbench in opposition.

Steve Webb, Lib Dem welfare spokesman, in 2009:

“People who apply for crisis loans are desperate and have nowhere else to turn. Too often they cannot get through or are turned away when they should be getting help.

The government has got to practice what it preaches to the banks and make more cash available through these loans to help families through hard times.”

Steve Webb, welfare minister, in 2011:

“It is clear that the system is acting as a sticking plaster that isn’t addressing the real problems that people are facing.

We need to ensure that crisis loan support is correctly targeted at those who need it most and ensure we can still afford to pay Budgeting Loans. That’s why we’vetaken urgent action today to protect the budget.”

Posted in UK politics | Permalink

A startling welfare statistic

March 3, 2011 4:42 pm by Alex Barker

There are some quite astonishing stats on the proposed benefit cap, which from 2013 will stop families on out-of-work benefits from receiving more than £26,000 a year.

This one is my favourite. A third of those hit by the rule change are lone parents with five children or more.

Here’s the table from the dwp impact assessment, which breaks down the affected households

UPDATE: I should have included some more context. In total the Treasury saves around £225m from benefit payments to around 50,000 households. The average loss is around £93 a week. The 7,500 households hit hardest will lose at least £8,000 of annual income.

Posted in UK politics | Permalink

Big Lansley U-turn over NHS price competition

March 3, 2011 10:16 am by Alex Barker

A cracking scoop from Nick Timmins this morning on yet another important coalition policy retreat.

Andrew Lansley has — under some duress — ditched one of the most controversial aspects of his NHS overhaul: allowing hospitals to compete on treatment prices.

The health wonk community has been up in arms over the proposed change, warning that international evidence showed it would damage the quality of patient care. Currently more than half of NHS hospital services are covered by a fixed price, or so-called tariff.

Lansley is, characteristically, insisting that the U-turn was the plan all along, saying it is “simply wrong” to suggest he ever intended to introduce price competition. Unlike some of his cabinet colleagues, he is not one to eat his words.

Even if this was just a simple misunderstanding all along, the Lib Dems will be privately relieved that they were able to force Lansley to clarify matters.

This will at least take some rhetorical ammunition from Labour, who enthusiastically seized on the argument that the NHS is “too precious” to subject to market reforms.

But I don’t expect the Lib Dems will be taking too much comfort from the concession. The political dangers of handing responsibility for commissioning £80bn of care to family doctors remain considerable. This is unlikely to be the last retreat.

Posted in UK politics | Permalink

A warning shot for Clegg on university fees

March 2, 2011 1:31 pm by Alex Barker

If Nick Clegg every imagined the maximum £9,000 university fees would be levied in “exceptional circumstances”, Exeter is a wake-up call.

The university will be seeking to charge the full rate in 2012, a decision that shows £9,000 won’t just be the price for Russell Group institutions.

We have not yet seen what concessions Exeter will make in terms of accepting more state school pupils.

But the signs so far are not good. Britain’s vice chancellors are confident they’ll be able to jack-up their fees while doing little to change admissions.

Just take the example of Cambridge. Chris Cook, our education correspondent, got hold of their draft proposal on fees (from their rather obliging press office). It is hard to interpret their big concession as anything but pathetic.

The Cambridge internal document preparing for their 2012 submission on fees says:

“The Working Group therefore recommends that in its letter to OFFA, the University should agree to move annually from the current figure of 58% into a range of between 61% and 63%.”

Even at face value, if you accept the baseline of 58 per cent, then this is not a stretch. But just compare it to the access letter it agreed with OFFA in 2009.

“The University’s aim is to increase the proportion of suitably qualified UK national students from the state sector admitted by 2011 to a figure somewhere in the range between 60 and 63 percent.”

It is worth repeating: a range between 60 and 63 per cent. Cambridge basically reckons it can triple student fees and placate the government by adjusting the bottom of its target range for state school pupils by one percentage point. And the maximum target will remain at 63 per cent.

A big concession? Clegg and Cable should watch out: the top universities aren’t following the coalition script.

Tags: Admissions, Cambridge, Exeter, Student fees, Vince Cable
Posted in Coalition, Lib Dems, Nick Clegg | Permalink

Would Cameron have done the deal in the desert?

March 1, 2011 3:05 pm by Alex Barker

David Cameron’s opposition to the release of the Lockerbie bomber is plain. But he has a more nuanced position on Tony Blair’s deal to bring Gaddafi in from the cold.

Cameron is privately rather relieved he was spared having to take the decision. From his public statements, it seems he backs the principle behind the pact. But in hindsight he thinks Blair gave a bit too much away.

Cameron says it was “correct to encourage the giving up of weapons of mass destruction, but more parameters should have been put on the relationship”. In other words, this was a problem of execution, not principle. Cameron would have done business with Gaddafi on the right terms.

Now, beyond the Lockerbie issue, what does Cameron see as the shortcomings? He offered his fullest explanation in the Commons on Monday:

If we look at the whole terms of the deal done in the desert, we need to ask ourselves some serious questions about how widely it went and what sort of equipment was involved.

In short, the arms embargo was lifted to early. Given the mayhem we’re witnessing in Libya, this is not a hard conclusion to arrive at. But it does run against the grain of Cameron’s instincts, which are to promote trade and defence sales. If we don’t sell arms to Libya, a less scrupulous countries will — or so the logic goes.

Given the lessons he has drawn from the deal in the desert, Cameron has two options. He will either now adjust his foreign policy to adopt a more cautious approach to selling arms to dictators. Or he will stick to his instincts and just hope that he’s never put in the same position as Blair.

Tags: Arms sales, Colonel Gaddafi, defence, libya
Posted in Conservatives, Foreign policy | Permalink

Cameron: Britain may arm the Libyan rebels

February 28, 2011 5:01 pm by Alex Barker

There were some fascinating exchanges in the Commons after David Cameron’s statement on Libya. Here are some of the highlights:

– Britain may arm the opposition: Cameron said that his top priority was deposing the Gaddafi regime: “If helping the opposition would somehow bring that about it is certainly something we should be considering.” He added that he was “trying to establish contact with the opposition to find out what their intentions are”.

– Military action is a possibility: In Cameron’s words, “we do not in any way rule out the use of military assets”.

– Planning for a no-fly zone is underway: The military must be prepared to enforce a ban because no-one can predict what Gaddafi will do to his own people, Cameron said.

– But no-fly zones are no pancea: Even Cameron was willing to point out the limitations: Libya is a big country, a “vast amount of area” must be covered, it will require substantial military assets and even if it is successfully enforced, Gaddafi could still go on killing his own people.

– The LSE and Gaddafi: Although he sounded unimpressed by the London School of Economics decision to take money from the Gaddafi family, Cameron said: “let’s hope at least that the money can be put to good use”.

– The Speaker intervenes to defend the Duke of York In an extremely unusual intervention, the Speaker John Bercow chided Chris Bryant for asking whether Prince Andrew should continue as a trade ambassador, given his alleged links to the Gaddafi family. “References to members of the Royal Family should be very rare, very sparing and very careful,” snapped Bercow. “We have to be very careful in the handling of these matters.”

Tags: libya, No fly zone, Opposition forces
Posted in Conservatives, David Cameron | Permalink

Five reasons for Cameron to worry about Oman

February 28, 2011 12:33 pm by Alex Barker

A few weeks ago, we asked one senior British government figure whether the uprisings would spread to the Gulf. There are “no problems” yet, he replied.

The language was revealing (when exactly did Britain see democratic change as a problem?) But it is probably to be expected given Britain’s investment in the preserving the regional status-quo.

Take Oman. My colleague Simeon Kerr has a filed a fascinating dispatch from the Omani port where protests have erupted. At least one demonstrator has been killed.

When we passed through the capital Muscat with David Cameron this week, it certainly appeared defiantly placid. But even Oman, a sleepy sultanate on the tip of the Arabian peninsular, seems to have succumbed to the fever reshaping the Middle East.

Now why does this matter for Cameron?

1. A closer ally still: Cameron was embarrassed by the recent crackdown in Bahrain, an old UK friend. Oman is in a higher league — it has the closest diplomatic, security and trade relationship with Britain of any country in the region.

2. A British backed regime: Sultan Qaboos of Oman — a Sandhurst graduate and devotee of Gilbert and Sullivan — overthrew his father and consolidated power with the help of British troops, spies and kit. It remains an absolute monarchy.

3. A friend of the coalition: Cameron has deflected some fallout on Libya because it was Tony Blair who sealed the deal in the desert. Oman, on the other hand, is a coalition priority. William Hague has visited (twice I think). The Queen spent three days in Muscat celebrating the 40th anniversary of the Qaboos reign. Cameron was dining in the sultan’s palace only last week.

4. A friend of the defence industry: British exports include Corvettes (the so-called Omani frigate), hawk jets, Lynx helicopters, Challenger tanks…the list goes on. Oman has also promised to buy some Eurofighter Typhoons. The MoD was so sure the deal was going ahead, it cunningly booked £400m of proceeds, before Oman paid a penny.

5. A friend of the British military: There’s a strong presence in Oman. The most visible are the RAF personal based there as part of the “air-bridge” to Afghanistan. But there is also a lot more activity below the radar.

Tags: British foreign policy, Middle East, Oman, Sultan Qaboos, The Gulf
Posted in Coalition, Conservatives, David Cameron, Foreign policy | Permalink

Cameron won’t be selling bank stakes to Arabs just yet

February 22, 2011 6:58 pm by Alex Barker

There’s been some chatter in the City about David Cameron’s trip to the Gulf being part of a cunning plan to sell the taxpayer’s bank stakes.

There’s no doubt that several sovereign wealth funds in the region have the means. And I expect at some point the government will be testing their appetite for Royal Bank of Scotland or Lloyds stock.

But it certainly won’t be on this trip. The prime ministerial jet has just landed in Qatar. But his team say the visit will not involve courting potential investors in UK banks. “It just isn’t on the agenda. We are not going to raise it,” said one official travelling with Cameron.

The Treasury and UKFI insist you can’t settle on a plan for selling-down the government stakes without seeing the results of the banking commission, which reports in the autumn. It is a fair point. The fact that both RBS and Lloyds shares are still trading below the purchase price may, naturally, hold-up matters too.

What is generating this speculation? Some government insiders are pointing the finger at people around RBS, who like the idea of rapidly escaping the clutches of the state. The timing is also convenient; the bank’s results are out on Thursday.

Wishful thinking aside, there is some truth to this speculation. UKFI have discreetly sounded out sovereign wealth funds in the past (they wouldn’t be doing their jobs if they hadn’t). And the timing of the sell-off of Britain’s £46bn stake in RBS is under discussion.

But Cameron’s trip to the Gulf will not bring forward the privatisation date or even help in buttering up a big investor. There is a wait ahead and it will probably feel like a very long time, especially for RBS.

Tags: Banks, Lloyds, Privatisation, Royal Bank of Scotland
Posted in Conservatives, David Cameron, Deficit, UK politics | Permalink

Cameron: proud of defence sales

February 22, 2011 8:58 am by Alex Barker

Britain’s defence industry has no better friend than David Cameron, at least when it comes to exports.

Given the dramatic turn of events in the Middle East, the prime minister has certainly not opted for the path of least resistance.

We’re still at the beginning of this trip (as I write this I’m sitting in the Kuwaiti parliament). But it is already absolutely clear that he really does believe in commercial diplomacy – and that means promoting defence sales, come rain or shine.

Continue reading: “Cameron: proud of defence sales”

Tags: defence, libya
Posted in David Cameron, UK politics | Permalink

Another Cameron U-turn

February 18, 2011 11:25 am by Alex Barker

David Cameron actually made three policy concessions this week. At this rate, he may as well install a revolving door at No 10. It’s another Lib Dem victory of sorts, but they’re not really crowing about it.

Buried in the documentation for the Universal Credit is a softening of the plan to cut payments for disabled people in care homes.

The spending review proposal to axe the mobility component of Disability Living Allowance — raising around £130m — upset a lot of charities and many a Lib Dem.

Cameron has now endorsed a discreet climbdown. The measure will be delayed by a year, so it only begins to be implemented in 2013.

And there will be a review of how the principle is applied — which will effectively mean that it will affect a smaller group of people.

Cameron hinted at all this in PMQs. I suspect anyone who has spent the whole of their lives in a state care home will be able to carry on claiming the benefit. This may not be enough for the charities, but it is certainly a concession.

The Treasury, meanwhile, are making clear that any minister performing a U-turn should not expect fresh money to cover the budget shortfall.

It will be interesting to see what needs to be done to compensate for this week’s about-turns on docking housing benefit for the long-term unemployed (£100m a year), the cancellation of the woodland sell-off (up to £350m), and the disability payments (up to £130m a year).

Tags: Cuts, Disability Living Allowance, Mobility component, Spending review
Posted in Coalition, Conservatives, David Cameron | Permalink

The IDS crackdown on stay-at-home mums?

February 17, 2011 2:44 pm by Alex Barker

This is definitely the most curious policy included in the Universal Credit reforms. Why does IDS want to meddle with the mighty army of stay-at-home mums?

Under his plan, if mothers with working partners want to claim Universal Credit, they will face the same jobseeking regime applying to single-mothers. With a few important caveats, they’ll effectively be regarded as someone claiming Jobseekers Allowance.

This is a big change. It will mean that these mums (or stay-at-home fathers) will in future have to turn up at the Jobcentre to explain how they’re planning to return to work.

Once their children are aged seven, if they don’t turn up for their “work focussed interview”, they could even have their benefit docked.

For, say, the proud wife of a postman who stays at home because it makes economic sense, turning up at the Jobcentre could be quite a unsettling experience.

What is even more peculiar is the fact that IDS will be toughening the rules and threatening sanctions, while at the same time reducing the financial incentive to work.

Around 330,000 second earners will, after these reforms, face a higher marginal deduction rate. That said, these reforms will make it easier to work fewer hours — one of many positive benefits.

But I struggle to see the advantage of extending a conditionality regime on to stay-at-home mothers in working families. This will cost money, use up the scarce time of jobcentre advisors and be unpopular in many households. What is the point?

Continue reading: “The IDS crackdown on stay-at-home mums?”

Posted in UK politics | Permalink