As Tom Watson points out, politicos of all colours should read Dave’s 10 pledges, laid out in a newspaper* today. As we get closer to the general election Tory policy will get much closer scrutiny than before. Here are a few thoughts:

1] Freezing council tax for two years.

Given that we have been in a period of RPI deflation and very low CPI inflation this isn’t as radical as it sounds. All of Labour’s London councils have promised to freeze council tax next year. Yet I interviewed John Denham over a week ago and he wouldn’t be drawn on making a similar promise for the UK as a whole.

2] Reassessing 2.6m people on incapacity benefit.

The government is already doing this - although it’s not exactly happening swiftly. How could the Tories set a more ambitious timeline?

3] Replacing Human Rights Act with a new British Bill of Rights - to strengthen Britain’s traditional liberties

Nice in theory, but what does this mean?

4] a] Cutting the number of MPs by 10 per cent, b] slashing quangos, c] cutting ministers’ pay by 5 per cent.

a] Will having 590 MPs instead of 646 MPs really make such a great difference? Will it mean some having to sit on more than one select committee and do more scrutiny work - will they become overstretched. The idea is to save money but won’t this be a drop in the ocean?

b] The Tories have promised to set up no fewer than 17 new quangoes of their own. And where they have promised to demolish quangoes (eg the FSA) most of the functions will simply be moved into a different body (eg the Bank of England).

c] The ministers’ pay cut is such an obvious (while populist) policy it was bizarre that Labour hadn’t already announced it. I asked a cabinet minister in Brighton why they hadn’t pre-empted Cameron on this, given Labour may only have 7 months to suffer the lower wages: He seemed utterly affronted at the concept.

5] A new “Military Covenant” with the troops to make sure they are better treated and properly equipped.

This has been pushed for months by Jon Cruddas, leader of the “Soft Left”. It’s one of several of his smart ideas which have been ignored by the leadership.

6] Tax changes such as a] reforming inheritance tax and b] rewarding marriage and families in the tax and benefit system

a] But how quickly in the first term will the increase in the IHT tax threshold (to £1m) take place? This policy was great pre-crash but not so cunning post-crash. I suspect it will be kicked into the long grass for several years.

b] A vote-winner among natural Tories, but what about the rest of the electorate? And when will the “rewards” come? The money will supposedly come from welfare reform - an area where many smart politicians have come unstuck over the years.

7] Tackling the national debt

The big one, where Cameron’s candid outlook left Gordon Brown looking shifty and evasive throughout the summer

8] a] Protecting the NHS and b] Giving school heads the final say on exclusions

a] All well and good but the implications for other departmental budgets - if the average cut across Whitehall is 9.3 per cent over 4 years - is grim. They could see spending cut by a typical 14 per cent or more.

b] Out of 8,130 children excluded last year, only in 60 cases was a head’s exclusion overturned on appeal

9] Suspension of ratification of Lisbon Treaty, referendum and No campaign

Potentially popular in much of Middle England but leaves Cameron open to the charge that he will lessen the UK’s influence in Europe

10] More police officers, doubling magistrates’ sentencing powers, “make sure knife offenders can expect to go to jail”

Labour point out that the detail of Tory knife policy includes “community punishments” as well as jail terms for offenders

* Yes of course it’s the Sun. D’oh.

Tribune is running a news story claiming that Gordon Brown is preparing for a “massive climbdown” this weekend over the right of unions to vote on policy motions at conference.

You may remember that Brown in 2007 changed the rules so that votes at conference became merely symbolic. Unions could propose motions but not vote on them. “Now the motions enter the policy-making apparatus …basically the process means that they end up getting defused,” says one union source. The real policy business goes on behind closed doors; for example at the “Warwick” gatherings.

Here is Tribune’s story:

“This would overturn Mr Brown’s reform just after becoming leader which reduced debate to a discussion on “issues”, with a vote being replaced by reference to the policy-making National Policy Forum.

Mr Brown is reported to have thrown in the towel in the face of overwhelming pressure from the unions, but has won agreement to effect the change next year to avoid a row at the last conference before the next election.”

I’d not yet convinced that these “concessions” are entirely real. The union source tells me: “Every so often they dangle this carrot, ‘next conference it will be better, it will be different’”, he says.

In case you’re interested, here are the union motions “contemporary issues” for next week:

Continue reading "Will Brown give unions more say at conference?"

For my money Chris Giles has provided the best explanation of the baffling blizzard of public spending numbers.

The FT’s economics editor points out that current expenditure will indeed rise (slightly) every year to 2013/14, as promised by the prime minister.

But as Chris explains:

“Current expenditure includes the salaries of vital public service staff, paper-clips and, crucially, also the interest payments on government debt and social security costs.”

If you also factor in capital spending cuts you end up with the really painful numbers - ie the 8.6 per cent real terms cut in departmental budgets (or 13.9 per cent if you exclude health and overseas aid).

Meanwhile our political editor George Parker today questions how Gordon Brown tied himself in knots over the question of spending cuts:

“Privately cabinet ministers despair of the prime minister’s propensity to court political trouble by refusing to acknowledge the truth or by trying to avoid difficult questions. As one senior Labour figure put it: ‘He never learns.’”

I suspect this quote by Brendan Barber may appear in tomorrow’s headlines:

“Last time we suffered slash and burn economics we had riots in the streets here in Liverpool. I make no prediction that this would happen again, but it would take us back to the days of a deep North-South divide and once again hollow out whole areas of the economy.”

In an earlier blog today I described how rising unemployment could stop the (GDP) recovery feeling like a recovery.

Throwing out statistics about how the technical recession may have ended could provide little solace to those who have lost their jobs.

Expectations are for a Gordon Brown “recovery” speech on Tuesday when he faces the TUC Conference in Liverpool.

For all the (slightly) better economic/financial data out there, there is still an obvious dichotomy that Britain faces. Do you define the downturn by GDP figures (the formal definition of recession beging two quarters of contraction) or on unemployment figures?

With the dole queue set to grow for years to come, it’s a vital question.

Brendan Barber, head of the TUC, made the point this morning on the BBC’s Politics Show:

I don’t think that’s a real recovery until we begin to see unemployment coming down, and I fear that we, we’re a long way off that.

Alan Johnson was on similar ground, albeit in a slightly garbled way:

I don’t think we’re through the worst of the recession, I, I mean it’s a matter, I think Alistair Darling has led us through this, with Gordon Brown, in, in, absolutely calling every single turn of this the right way. When, when we look at this now, there.. I don’t think we can say that we won’t get any more bad labour market figures, I don’t think we can say that we’re in a situation now where manufacturing is going to recover completely, what we can say, I think, is we’ve seen the early signs, in the construction industry, in consumer confidence, in my own constituency here we’ve seen that the, that the increase in unemployment has kind of levelled off. Now I’d like to think that’s the early signs, but I think there’s a long way to go and what I think the British public need to do as we approach the next Election is listen to the various … plans of the parties for how to get through this…

Of course, no minister wants to prematurely call the recovery. Spotting green shoots is a risky business, as Baroness Vadera found out earlier this year.

Precisely how Mr Brown will address this question on Tuesday will be fascinating to watch. I suspect there will be more rather more about how Labour prevented a financial catastrophe than premature optimism about the imminent future.

According to Sky the speech will include this:

Today we are on a road towards recovery - but things are still fragile not automatic and the recovery needs to be nurtured. People’s livelihoods and homes and savings are still hanging in the balance, and so today I say to you: don’t put the recovery at risk.

“Road towards recovery” is a phrase which covers all options pretty well. It could be a swift road - but also a long and winding one with many potential setbacks etc etc

A brief passage in George Osborne’s last Andrew Marr interview stands out: In it, the shadow chancellor heaps praise at the feet of the world’s central banks for preventing financial meltdown.

“But we say the most effective form of stimulus is monetary policy, is the low interest rates, which both here and around the world I think have been the most effective tool at bringing the world back from the brink of depression.”

A statement of the obvious, you might think. But was Osborne playing up the actions of Mervyn King and others to belittle those of Gordon Brown? A Tory MP suggests that this strain could grow louder as the party seeks to rob Brown of the credit for halting the apocalypse.

For some time now I have been asking the Treasury for an explanation of Alistair Darling’s Budget claim that government actions have saved “up to 500,000 jobs”.

My questions:

1] What research is this based on?

2] Is 500,000 at the upper end of a wider range of estimates; eg “350,000 to 500,000″?

3] How much of the 500,000 is down to political action and how much is due to the actions of the Bank of England - ie quantatative easing and interest rate cuts?

It’s been at least three weeks and the Treasury still hasn’t answered the question. Although they say they may provide more detailed analysis later in the autumn.

I haven’t had a chance to number-crunch today’s unemployment figures yet. But there was an interesting chart in the Audit Commission report - also out today - on how councils are faring in the recession.

For all the talk of the public sector cutting jobs and sharing the general pain, the figures seem to show a rather different story.

The chart on page 19 (based on ONS figures) shows a fall in employment of about 210,000 in manufacturing, 195,000 in distribution and hospitality and 180,000 in finance and business services.

Meanwhile there was a rise of about 170,000 workers in public administration, education and health.

This is likely to fuel the suspicion in some quarters that state-employed workers are cossetted from the downturn; a claim which is bitterly contested by the public sector unions.

Lord Myners gives short thrift today to Tory plans to kneecap the Financial Services Authority and transfer many of its powers to the Bank of England.

In an interview with City AM (the freesheet) the City minister says the central bank neither wants nor has the right skills for the job. He portrays the Bank as an ivory tower full of chin-stroking academics.

“They (Tories) have misjudged the competence and culture of the Bank of England. The Bank is a very academic institution. It is not actually about doing things,” he said.

“The Bank is good at looking at the wider picture but it does not want to be supervising and reflecting on individual banks. Do we want the Bank of England distracted by supervising building societies and insurance companies?”

I was going to blog on Monday about the flaws in George Osborne’s plans but Paul Murphy on FT Alphaville beat me to it. And here is another colleague, Paul J Davies, making a similar point.

Ultimately the reason why financial regulation often fails is because the smart guys aren’t working for the FSA or the SEC: they are making millions of pounds/dollars in the banks.

Chief executives of banks didn’t understand some of the financial products cooked up by youths with PhDs in advanced mathematics. How can we expect low-ranking regulators to be on top of these innovations?

This point is made in a shrewd letter to the FT today by Tim Price of PFP Wealth Management:

“As to the likelihood of the Bank attracting a sufficiently experienced and qualified staff, this gets to the absolute heart of the problem. Short of receiving infinite remuneration, no regulator will ever realistically be able to compete with the so-called “talent” on Wall Street and the City, even if that talent amounts to self-enrichment rather than wider wealth creation.”

See the FT’s Arena blog debate: should the FSA be scrapped?