The five things you need to know on Monday June 22, 2015...
1) WELL-FAIR STATE
It was Ali G who put the question most famously to Tony Benn a few years back: “iz it called welfare coz it’s well fair?” Well, David Cameron is in Runcorn today setting out just how he wants to reframe the entire welfare debate so the system is fair to both the taxpayer and claimant. You could say he’s going to be tough on welfare and tough on the causes of welfare.
On one level this is just softening up ahead of the £12bn in welfare cuts that George Osborne and IDS are agreeing in the Budget and spending review (and note how harmonious they sounded in the Sunday Times yesterday). But while the Treasury has got its cash savings, IDS has won No10’s ear for his bigger vision that welfare is about reform not just money. Or, as he’s put it many times, it’s about ‘saving lives’ not just ‘saving money’. Some in the Treasury used to roll their eyes at IDS’s evangelical zeal but no longer it seems.
That’s why the PM in his speech today will stress that he wants to tackle the bigger issues that get people onto long-term welfare in the first place: family breakdown, poor education and skills. “The wrong track..is to ignore the causes and simply treat the symptoms of the social and economic problems we face.”
The PM’s language includes a real hint that tax credits are firmly in his and IDS’s sights (and given pensions, child benefit and disability benefit are ruled out they haven’t much choice). “There is what I would call a merry-go-round: people working on the minimum wage, having that money taxed by the government and then the government giving them that money back — and more — in welfare. It’s dealing with the symptoms of the problem: topping up low pay rather than... helping to create well-paid jobs in the first place.”
Will we get Osborne going for the option of cutting tax credits to 2003 levels, saving £5bn per year but leaving 3.7 million low-paid families losing up to £1,400 per year? If you cut tax credits, how will families make ends meet? The Times reports that some Tories want businesses to get tax breaks to offer the living wage, which would remove any need for top-ups from the state. Others suggest that in a booming jobs market, people will take on more than one job to make up the shortfall in credits.
What is politically interesting here is how Cameron is using his election victory to carve out space on welfare. As often, winners get to write the history. And the PM believes he can use Labour’s weakness (witness candidates’ wariness to criticise the lowering of the benefit cap) to challenge Gordon Brown’s assumption that no government would dare tinker with tax credits because they are so entrenched for so many households.
The PM’s speech is just before lunchtime. And it’s DWP Question time at 2.30pm. We will find out more then.
2) GREXIT PREP
So, has Brussels blinked? Or has Athens? Ahead of tonight’s emergency summit, much of the legwork (and phone work) appears to have been done in the last 24 hours in a frantic round of diplomacy. Brussels offered new terms as long as the Tsipras government could come up with a package of its own on pensions and tax rises.
It was left to Martin Selmayr, head of the Commission’s Cabinet, to Tweet (how else?) the news yesterday that Athens had indeed come up with a plan that was a “good basis for progress at tomorrow's EuroSummit." He warned that it would be “eine Zangengeburt". That’s German for "forceps delivery".
Despite all the talk of a run on the banks, Tsipras is perhaps just getting what he wanted all along, having scared the hell out of the EU establishment. Away from the EU summit, the real meeting is by the ECB as some suggest the only way for Athens to avoid an IMF default is if the ECB today raises the ceiling on short-term debt the Greeks are allowed to sell.
What would Grexit mean for us in the UK? Well, the Express and others have picked up on the contingency plans being worked up in the Treasury, including airlifts of stranded holidaymakers, possible riots in the streets. The bigger issue however, as one minister told James Forsyth in the Mail on Sunday, is the threat of lots of Greeks flocking to the UK for work.
Still, the Chancellor is in remarkably sanguine mood. He hosted a barbecue at Dorneywood yesterday and is said to have been in chillaxed form. No.10 and No11, while not wishing for a Grexit, believe that it would strengthen their hand over EU renegotiation: if Greece was kicked out of the euro, the Germans would try even harder to keep the UK in, goes the logic.
3) BREXIT PREP
The Telegraph has paid Business for Britain a decent sum to conduct a major piece of research into Brexit. And it gets its money’s worth with a splash today which reveals that the 1,000-page BfB report advises David Cameron to quit the EU unless he can get substantial changes in Brussels. The study, which is a bit like Alex Salmond’s White Paper setting out Scotland can quit the UK, is based on years of research and runs to a million words.
One of its key findings is that the EU’s different economies are diverging, not getting closer. It adds that the eurozone is itself doomed and that Grexit is just the beginning of the end. Number 10 were only told of the new report last night so it will be interesting to see their response today. Mats Persson, the former Open Europe chief and now Cam’s lead EU reform brain, may want to cherry pick bits of the BfB report.
The real political problem for the PM is how to handle his restive backbenches, some of whom are very wary of the smoke signals coming out of No.10 in recent days that Cameron will arrive in Brussels this Thursday with a deliberately vague game-plan. Eurosceps know Cameron won’t want to give away his hand, but they do want a clearer picture by the Tory conference.
Steve Baker tells the FT: “If the referendum is to be in the autumn of 2016, then we will need a fairly clear idea about what the terrain of the debate will be by this conference”. Liam Fox says it will be “necessary to reveal a bit more of what we are negotiating” by October. That will give the PM a year to really hammer out a deal, with many in Whitehall and Westminster pencilling in the autumn of 2016 for the referendum.
BECAUSE YOU READ THIS FAR...
Check out the Tweet that’s causing a stir in the US and Israel overnight. Judy Shalom, wife of interior minister Silvan Shalom tweeted: “Do u know what Obama Coffee is? Black and weak”.
Following outrage, she swiftly deleted it and then wrote: “President Obama I shouldnt have written the inappropriate joke I heard. I like people no matter about their race and religion.” No, really.
4) NURSING A GRIEVANCE
The Indy, i and the Mirror all splash on blood-curdling warnings from the Royal College of Nursing that tough new immigration rules will fuel a critical shortage of nurses in Britain, “cause chaos” in hospitals and cost the NHS millions.
The RCM, whose chief Carter was on the Today prog, says that up to 3,365 nurses currently working in Britain are likely to be affected by new rules to force migrants from outside Europe to earn £35,000 or more if they are to be allowed to stay on after six years working here. Not surprisingly, nurses rarely receive such salaries.
Oxford Uni’s Migration Observatory warned of the major flaws in David Cameron’s plans as he unveiled them during his second PMQs of this Parliament. The Department of Health points out that the independent Migration Advisory Committee recommended against adding nurses to the Shortage Occupation List. In other words, it’s upto the NHS to train more home-grown nurses. But the RCN says cuts to training places have made that more difficult.
5) GOVE-RNMENT TRANSPARENCY
Michael Gove is planning a crackdown on the UK’s freedom of information laws to make it tougher to retrieve confidential material, the FT reports. One wonderfully Govian change being considered is to allow officials to count “thinking time” when calculating how much it costs to retrieve information. Another move, sparked by the Prince of Wales spider letters case, is to simply make it easier for ministers to veto releases.
At the moment, the public can ask for information as long as finding it does not cost more than £600 for a government department, or £450 for another public body. But the government has suggested either lowering that limit or including extra items in that cost.
Freedom of information campaigners have long seen Gove as a notorious figure after the FT revealed in 2011 that he had his own personal email account (titled Mrs Blurt, in a joke about his wife) to get round FoI rules.
COMING UP LATER
Who says Tweets don’t change anything? Taylor Swift has forced Apple Music into a swift U-turn on plans not to pay artists anything for a three-month trial. The firm Tweeted its decision "@taylorswift13 ’s tweet today solidified the issue for us, we decided to make a change." She shook it off, indeed.
The Mail splashes on an exclusive that the Royal Mail is trialling a scheme to send us all more junk mail based on our internet shopping searches.
The Times has a story that the Met police is dealing with the consequences of Theresa May’s move to cut stop-and-search in London. More ‘targeted’ stops are now going to be used after youth knife crime rose by a quarter in some parts.
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