As I reported today, the Treasury is looking seriously into the idea of adopting German-style “mini jobs”, a scheme long championed by free market Conservative MPs. The model is that workers can earn up to €400, or £314, tax free each month, while their employers benefit from flexible labour with minimal bureaucracy: they pay a flat rate of wage taxes, insurance and pension contributions.
It is easy to see why companies and jobseekers might be clamouring for the government to pick this up, but there is actually a serious political case as well. Tories who were frustrated by the Liberal Democrats’ opposition to radical labour market reforms put forward by Adrian Beecroft have been calling for ministers to come forward with some new deregulation measures for some time.
The Lib Dems themselves are keen not to be seen as too obstructionist on this issue given the drive for growth, and party officials have assured me that they are not pushing back against the mini jobs idea. Could this be the middle way? Read more
Ed Miliband took us all by surprise this morning when he went on the Andrew Marr show with a genuinely new proposal to reform party funding. The individual cap on donations should be set at £5,000, he said, way below Cameron’s preferred level of £50,000, and half of Sir Christopher Kelly’s proposal of £10,000.
Significantly, the Labour leader said this cap would include union donations. But, as always with this debate, the stumbling block is what happens with the levy – the automatic £3 that members of some unions pay to Labour as part of their subscription fees. At the moment, members may opt out of making such payments, but the Tories want them to back Sir Christopher’s proposal of having to opt in instead, something likely to have a significant impact on Labour’s coffers.
The row now turns on how much Labour actually makes from one-off union donations, which would be included under Miliband’s proposed cap, against how much it makes from the levy, which wouldn’t. Read more
Most of the exchanges at PMQs today were fairly predictable in the light of yesterday’s autumn statement. Ed Miliband accused the prime minister of having failed to meet his fiscal plan; the prime minister accused Labour of wanting to borrow even more.
But there was a fascinating undercurrent running throughout this session, one that took us back to the politics of the 1970s and 80s.
It began with Miliband’s first question. Perhaps surprisingly, given links to the unions are often perceived as one of Labour’s weak points, he went straight in on the strike action by public sector workers taking place across the country today. Not only that, but he identified overtly with those on strike: Read more
Welcome to the Westminster blog’s live coverage of chancellor George Osborne’s autumn statement. One of the most eagerly anticipated statements since the coalition government took power was expected to offer a gloomy prognosis on the economy. Michael Hunter and Gordon Smith from the FT main newsdesk covered the statement live from 12.30 with additional comment from FT colleagues.
14.10 Thanks for joining us. You can find much more, including the full text of the chancellor’s speech and comprehensive analysis, including video interviews, at www.ft.com/autumn2011. Read more
My favourite episode in the satirical TV programme The Day Today was when the Chris Morris presenter – styled loosely on Jeremy Paxman – goads various politicians into declaring a world war.
I was reminded of the clip this morning when I saw the Times’ splash predicting a campaign of strikes for the Easter: “Unions plot campaign of strikes for Easter.” Read more
Jim yesterday spotted the extraordinary number of spoiled ballots among the trade unions and affiliated organisations. More than 36,000 ballots were wasted — about 14.6 per cent of the votes cast in this section of the electoral college. The reason is that the voters simply failed to tick a box saying they supported Labour.
An absurd rule, I know. But did it make a difference? There was talk last night among some of the Ed Miliband camp suggesting this was an important factor. One aide claimed the campaign had managed to reduce the spoiled ballot rate in the unions backing their man. The ground campaign apparently handed out thousands of “how to vote” cards making clear that they vote wouldn’t count unless they ticked the box at the end. One Ed aide claimed the effort won them up to 6,000 extra votes. If true, it made a big difference to the result. Was it another Florida hanging-chad moment? Read more
I revealed this morning that the TUC has revoked an invitation to Vince Cable to address it’s autumn conference in Manchester after a decision last week by some of the big unions who are angry about public sector cuts. The general secretaries have also agreed to host a big rally next spring – comparable with the Stop the War demonstration – to protest about mass redundancies.
The Vince move has prompted concerns within the moderate end of the movement, however. Some more thoughtful characters are worried that Vince may be one of the ministers who would resist attempts by more rightwing colleagues to crack down on the movement. Antagonising Vince could be counter-productive, they fear. Read more
Unison has become the second big union to back the younger Miliband in the labour leadership contest, following the GMB’s decision to do so last week. Unions carry a third of the vote in the leadership contest, and with two of the biggest now supporting Ed, he is starting to be talked about as a very credible challenger to his brother David, who remains favourite.
Ed said: “To have received the backing of a union representing millions of frontline workers is a real boost for my campaign to lead our party.”
But the big one is still to declare. That is Unite, the combined mega-union which has among its members the BA cabin crew.
It has been assumed that since Charlie Whelan, a former Brown adviser and close friend of Ed Balls, is Unite’s political director, the union would back Balls. But as the Guardian’s Michael White points out, Unite is not particularly, erm, united – and at least one of its general secretaries, Derek Simpson, supports Ed Miliband. If Unite do swing behind Mili-E, his campaign will have all the momentum. Read more
As Britain’s largest union Unite should have considerable influence over the leadership contest; unions make up a third of the total voting. Although unions don’t have single bloc votes they can tell members who they favour.
The unions, Ed Balls, the Taxpayer’s Alliance, Tim Montgomerie and Guido have all come out against a rise in VAT.
The possible flaw in their argument is taking the tax rise in isolation. They’re assuming every option for spending restraint is an alternative. The brutal fact is we’re probably going to implement all the cuts they can think of, dream up a few more, and raise taxes. That’s how big the hole is. Read more
There seems to be a growing appetite to cut the cost of public sector pensions. A year ago, it was basically off the cards — no party would have dared take the political risk. But the coalition are now slowly making the case. There is a strong chance of a levy being imposed, if the government holds its nerve.
The stats in the OBR report today, which for the first time breaks out the annual cost of public sector pensions until 2015, are genuinely concerning. Read more
Today’s meeting of Labour’s NEC (national executive committee) should set some kind of timeframe for the leadership contest. Some MPs have been claiming that the whole thing could be wrapped up within five weeks of today. “Short and sharp,” says one. But I’m told that it’s more likely to run through until August with the result announced at autumn conference. This would give the party time to regroup and give potential leaders full consideration. (They each need a list of 29 MP supporters to stand). This all still needs to be thrashed out, however. Read more