History > 2015 > UK > Politics (I)

These children of Thatcher

are free to cut, cut, cut

– and they’re loving every minute

George Osborne and David Cameron have been waiting

for this moment – to take us back to a prewar, pre-welfare

government

Thursday 21 May 2015

11.51 BST

Last modified on Thursday 21 May 2015

15.29 BST

The Guardian

Polly Toynbee

Every new chancellor wants to set their own budget after an election. But George Osborne isn’t a new chancellor. He inherits his own 2015-16 plan, and yet last night he told the Confederation of British Industry he will reopen it to cut more, tearing up every departmental and agency budget after contracts are signed halfway through the year.

A question: what is there in his spending plans that he dared not announce to voters before the election? It was already a piece of remarkable democratic arrogance that David Cameron and Osborne refused to say where the £12bn of benefit cuts would fall – and dereliction on the part of all the broadcasting interviewers not to hammer hard enough on this one point with every minister in their studios so as to force them to reply. But we shall see now, too late, exactly where the axe is falling on all the unprotected departments.

The big question is why? Politically, the promise of a rapid deficit abolition, returning to surplus by April 2018, was a sharp challenge to Labour: beat that! Labour wouldn’t and didn’t because it’s brutal, needless and economically dangerous. Now that Osborne has won, he doesn’t need to do it either. Last time, he missed his target by half. He let the stock of debt rise far higher than it ever was under Labour. And he lost the AAA credit rating without which he said we’d become Greece – but the sky didn’t fall in. Markets would have slaughtered a Labour government for that, but markets forgive Conservatives almost anything. They would worry not one iota if Osborne again decided to slow down. A promise to keep the deficit falling would be ample.

The only reason Osborne is putting his foot on the accelerator is because he wants to and because he can. Who’s going to stop him now? This is a dash to shrink the state, squeeze everything, contract out what can’t be cut and return, as his own Office for Budget Responsibility said, to a prewar, pre-welfare state, bare-bones government. These children of Thatcher are ideologues to the core, often without even knowing it. They have breathed in from infancy a “common sense” assumption that the state is always wasteful, private and market always good, the collective worse than the individualist. As Thatcher said, you will always spend the pound in your pocket better than any government will. Now he tests that – possibly to destruction. All but the NHS, overseas aid and schools will be cut by a third, according to the Institute for Fiscal Studies. Whitehall itself could lose 100,000 staff. Expect more of the west coast mainline contracting-type fiascos as capability is lost just when civil servants need to be canny enough to outwit the gigantic corporations contracting so much.

Politically, within the government, this won’t all be easy either. Such deep cuts suggest state-shrinkers should be amalgamating departments – the Department for Business and Department for Culture, Media & Sport have long been under threat – for example by reuniting the Home Office and Ministry of Justice. But Cameron needs the jobs: patronage is key to keeping his tiny majority happy. How will his party handle deep cuts to defence, already below the 2% of GDP Nato demands? How will Michael Gove and Theresa May cut prisons and police again, as court delays lengthen and prisons burst at the seams? This time, permanent secretaries may be less acquiescent: many should say no, minister to cuts beyond what’s safe or sane. New ministers arriving full of bright ideas will find nothing happens and no one is there when they pull on levers to build the new infrastructure Osborne promises: create new apprenticeships, fix broadband and so on. His northern powerhouse councils may wake up to find that all they have had devolved to them is the axe and the blame – not just for social care but now for the NHS too. This government’s record for competence is slender. Gove’s record in education suggests there is a rhinoceros in a china shop at justice.

A government that has won an unexpected majority, casting its opposition into a state of existential crisis, can do whatever it damn well pleases. Five years is longer ahead than anyone can imagine. Last time, Osborne’s 2010 austerity budget stifled over 1% of growth at a stroke: expect similar results as the same experiment is repeated. Last time one reckless bungle followed another, including the omnishambles budget, forcing U-turns and embarrassments: expect many more in this triumphally reckless mood. Cameron’s government has nothing to fear – except its own errors.

These children of Thatcher are free to cut, cut, cut
– and they’re loving every minute,
G,
21 May 2015,
http://www.theguardian.com/commentisfree/2015/may/21
/thatcher-cut-george-osborne-david-cameron-welfare-government

Cameron's immigration bill

to include crackdown

on illegal foreign workers

David Cameron to promise bill in Queen’s speech
that will make ‘Britain a less attractive place to come
and work illegally’

The Guardian

Thursday 21 May 2015

07.46 BST

Patrick Wintour

Political editor
 

David Cameron will try to brush off embarrassing net migration figures on Thursday by announcing details of a new immigration bill to be included in the Queen’s speech, which will propose a new criminal offence of illegal working that will allow police to seize the wages of anyone employed unlawfully.

It has been estimated that the backlog of people in Britain who have overstayed their visas and whose whereabouts are unknown is around 300,000, but it is not known how many are working. Cameron managed to survive the general election even though he once urged voters to kick him out if he failed to bring net migration down to the tens of thousands.

The last official quarterly net migration figures showed net migration was 298,000 last year, 54,000 higher than when he made the pledge in 2010.

Cameron promised in the Tory manifesto to keep the pledge, although he has also said he would be adding new metrics to test whether migration was being reduced.

In practice, his success in this parliament will not depend solely on new legislation but also on deeper trends in the European labour market and any agreements reached on tightening social security entitlements within the EU – one of his key targets in his renegotiation of the UK relationship with the rest of the EU.

The last published figures covered the 12 months to September 2014 and showed that immigration rose from 530,000 the previous year to 624,000, while emigration remained stable at 327,000.

In his latest speech on immigration – clearly designed to address the latest figures – Cameron will promise that the Queen’s speech will contain an immigration bill designed to bring the whole of government into the battle to reduce migration flows. He will promise the bill will make “Britain a less attractive place to come and work illegally”.

Migrants with current leave to remain who are working illegally in breach of their conditions may be prosecuted under the Immigration Act 1971 and be liable on summary conviction to a six-month custodial sentence and/or an unlimited fine.

But ministers say there is a loophole for migrants who entered illegally or have overstayed their leave and are not therefore subject to current conditions of stay.

This new offence will address this gap and close a loophole whereby the wages of some illegal migrants fall outside of the scope of the confiscation provisions in the Proceeds of Crime Act, unlike those individuals who are working in breach of leave conditions.

The offence will apply to those who arrived illegally or those who entered the UK legally but then overstayed.

Cameron will say: “A strong country isn’t one that pulls up the drawbridge … it is one that controls immigration. Because if you have uncontrolled immigration, you have uncontrolled pressure on public services. And that is a basic issue of fairness.

“Uncontrolled immigration can damage our labour market and push down wages. It means too many people entering the UK legally but staying illegally. The British people want these things sorted.

“That means … dealing with those who shouldn’t be here by rooting out illegal immigrants and bolstering deportations. Reforming our immigration and labour market rules so we reduce the demand for skilled migrant labour and crack down on the exploitation of unskilled workers. That starts with making Britain a less attractive place to come and work illegally.

He will promise the bill will put “an end to houses packed full of illegal workers; stop illegal migrants stalling deportation; give British people the skills to do the jobs Britain needs”.

The main powers, many previously trailed but rejected by the Liberal Democrats, include new measures for councils to crack down on unscrupulous landlords and evict illegal migrants more quickly.

Banks will also be required to do more to check bank accounts against databases of people in the UK illegally.

The right to deport first and for the migrant to appeal later will be extended to all immigration appeals and judicial reviews. Satellite tracking tags will be placed on foreign criminals awaiting deportation so it is easier for Home Office officials to follow their location.

A new offence of illegal working will also be introduced to close a loophole that means people who are in the UK illegally cannot benefit from working and their wages will be given the same status as a proceed of crime so making it subject to seizure by police.

No businesses and recruitment agency will be permitted to recruit abroad without advertising in the UK.

In addition, a new labour market enforcement agency will established to crack down on the worst cases of labour market exploitation, such as workers being paid the minimum wage but then being housed in tied accommodation at extortionate rents.

Cameron's immigration bill to include crackdown on illegal foreign workers,
G, 21 May 2015,
http://www.theguardian.com/uk-news/2015/may/20/
immigration-bill-to-include-crackdown-on-illegal-foreign-workers

Conservatives' election win

met with relief by the City

After lifting of fears that Labour would impose mansion tax
and 50% tax rate, there was a boost for the FTSE 100,
sterling and estate agents in London

Friday 8 May 2015

22.46 BST

Last modified on Saturday 9 May 2015

00.36 BST

The Guardian

Larry Elliott, Jill Treanor and Hilary Osborne

Shares, sterling and demand for multimillion-pound London homes soared after Labour’s heavy defeat in the general election banished the threat of tougher regulation and higher taxes for the rich.

With the prospect of a mansion tax, 50% income tax and the abolition of non-dom status removed, investors piled into the City and the capital’s property market. More than £40bn was added to the value of the blue-chip FTSE 100 index as investors bought stocks that had been held back by fears of an Ed Miliband government.

Estate agents said that even while the last votes were being counted, they were being told by international investors to push ahead with deals for homes worth more than £2m that had stalled while the result was in doubt.

On a day when tens of billions of pounds were added to share values and the pound rose strongly against the euro, one London estate agent said prices at the top end of the prime property market could rise by as much as 20% this year and double over the next five years.

Two of Labour’s manifesto pledges – the end to non-dom status and an annual tax on properties worth £2m or more – had led to a marked cooling in demand for expensive property before the election.

A flurry of opinion polls in the last couple of days of the campaign appearing to show Labour gaining had left the City downbeat. But in scenes reminiscent of John Major’s victory in the 1992 election, news that the Conservatives had secured an unexpected overall majority changed the mood.

In the City, sterling started to rise on the foreign exchanges as soon as the result of the exit poll was published at 10pm on Thursday and the mood in the financial markets became more bullish throughout the night.

London shares opened sharply higher, with companies seen as politically vulnerable to a change of government most prominent in the rally. Sectors that Labour had earmarked for price curbs, tougher regulation or higher tax, such as energy and banking, saw shares rise by more than 5%.

By the close of business, the pound was up by 1.5% against the euro, while the FTSE 100 index was 2.3%, or 160 points, higher at 7,047. It was the largest points rise since July 2013. The FTSE 250 – regarded as a better barometer of British business because it includes fewer international businesses – jumped 2.8% and hit a record high.

“The election result means we don’t face weeks of political wrangling, which has been positive for all stocks,” said Laith Khalaf, senior analyst at stockbrokers Hargreaves Lansdown. “There were only two stocks on the Footsie which fell today: Glencore and Rangold Resources.” Both of those firms are international mining businesses. “There are certain sectors which have done particularly well as investors have reassessed their prospects.”

About £5.5bn was added to value of Royal Bank of Scotland and Lloyds Banking Group. “Euphoria returns to the City!” is how Nick Batsford, a former City trader, summed up the mood from the Square Mile watering hole Ye Olde Watling. “Lobster Thermidor is back on the menu! Buy shares in lap dancing bars! The City is safe for five years,” said Batsford, now the owner of TipTV, an internet television service that recommends investments.

There were cheers on City trading floors when the news came in from Morley and Outwood that shadow chancellor Ed Balls would be looking for a new job. Worries about Balls’s planned one-off bankers’ bonus tax to pay for a compulsory jobs guarantee disappeared overnight.

Labour had also been aiming to inject more competition into the banking sector by calling for new banks to be established and ensuring none got too big.

Even though the sector is still under investigation by the Competition and Markets Authority, bank shares rallied, especially those of the bailed-out Lloyds Banking Group and Royal Bank of Scotland. The Conservatives have pledged to press on with sales of the government’s shares in both banks.

RBS shares jumped 6.1%, adding £2.3bn to its stock market value, while Lloyds jumped 5.7%, adding £3.3bn to the value of the bank. The bank levy – imposed by George Osborne in 2010 – will remain in place, although Labour had planned to increase the tax on banks’ balance sheets by £800m.
Estate agents and housebuilders

Not long after the exit poll predicting Conservative victory, Becky Fatemi, managing director of central London agents Rokstone, started to receive calls from prospective buyers of the luxury homes on her books.

The prospect of David Cameron returning to Downing Street instantly removed the threat of the mansion tax on £2m properties. “The first five serious inquiries on properties started to come in just after midnight, and as of 10am this morning I have had over 50 inquiries on London property, via calls and emails,” she said.

“Of the 50 or so inquiries we have had, around 50% are from UK buyers, the balance from overseas purchasers; of these most are from the Middle East and Asia.” She expected to clinch deals on £30m of property by the day’s end.

Miliband had pledged to use the mansion tax to fund the NHS and promised to cap rent increases. The fact that neither of these policies would become a reality ignited share prices in estate agents and housebuilders, which were also buoyed by hopes that the previous government’s help to buy programme – aimed at homebuyers with 5% deposits on properties up to £600,000 – would fuel demand.

Shares in Savills leapt 9%, as did those in Foxtons, the London-only estate agents. Property website Zoopla gained 8%, while upmarket housebuilder Berkeley Group saw its value soar nearly 10%.
Energy companies

About £1bn was added to the value of Centrica, the owner of British Gas. When Miliband unveiled his plan to freeze energy company prices until 2017, the chairman of Centrica warned of “economic ruin” for energy firms. Now Miliband’s policy will not be enacted and the impact on energy company share prices was instant.

Centrica was the second biggest gainer on the day in the FTSE 100, rising 8%, while SSE added 5%.

Bookmakers

Ladbrokes was caught out by the Conservative victory, paying out £210,000 on a £30,000 bet by a Glasgow man who called the election correctly.

But the bookmaker secured its own victory because Miliband’s failure meant that his pledge to crack down on fixed odds betting terminals will no longer hit Ladbrokes. The bookie has more of the terminals – described as the “crack cocaine” of the betting industry – than any of its rivals and Labour had intended to give local councils the right to reduce the number of terminals. A near 10% jump in Ladbrokes’ shares added £96m to its stock market value.

Transport

The rail franchise market was going to be overhauled by Labour, which criticised the move to return the East Coast mainline from public ownership to a private company jointly owned by Stagecoach and Virgin Rail.

Miliband’s policies, while they fell short of full nationalisation, had sparked anxiety among transport company shareholders, but the worries ended and Stagecoach jumped 6.6%, adding £140m to its stock market value. Rivals Go-Ahead and National Express also benefited.
Trident contractors

Shares in Babcock International and BAE Systems jumped on relief that the threat to the nuclear submarine project had been neutralised after the Conservatives were given a strong enough majority to form a government.

The prospect of a Labour government supported by the Scottish National party had left a cloud over the £100bn project as the SNP wants to scrap it. The Conservatives have pledged to replace the four Trident nuclear submarines in a 30-year contract and have insisted there will be no further cuts in frontline defence. About £460m was added to the value of Babcock as its shares climbed more than 9%. The company was the biggest riser in the FTSE 100.

Outsourcing

The Conservatives are keen to save money by outsourcing public services to private companies. There was concern that Labour might bring some of the work back in-house. With that threat gone, the value of outsourcing specialists such as Capita, G4S and Serco all climbed. By the end of the day, Capita was worth £500m more than on polling day.
Sports Direct

Billionaire Mike Ashley was nearly £100m richer as a result of the election. Miliband had promised to end the worst abuses of zero-hours contracts, giving workers the right to a regular contract after 12 weeks. Sports Direct has 15,000 of its staff on such contracts and its shares jumped 4.5%, adding £95m to the value of founder Ashley’s shares.

Conservatives' election win met with relief by the City,
G, 8 May 2015,
www.theguardian.com/politics/2015/may/08/
general-election-2015-conservatives-win-city-reaction

Australian-born leader of UK Greens

blasts British voting system

‘We have a deeply unfair electoral system in Britain.
The Green party would have 25 seats
under a proportional system,’ Natalie Bennett says

Saturday 9 May 2015 01.39 BST

Last modified on Saturday 9 May 2015

02.18 BST

Guardian

Staff and agencies

Natalie Bennett, the Australian-born leader of the UK Green party, has given a scathing critique of the British electoral system after her party secured just one seat in Westminster despite winning more than a million votes nationally.

Speaking after the general election won by the Conservative party, Bennett said Britain needed to scrap first past the post voting – where the candidate can be elected on less than 50% of the vote – and introduce a preferential system like Australia’s.

“We have a deeply unfair electoral system [in Britain],” Bennett told the BBC.

“What we need, and what I suspect we’ll see, is a huge public campaign. The Green party, if we did have a proportional system, would have 25 seats.”

Bennett, who was born and educated in Sydney, acknowledged it would be tough to convince the major parties to support reform that diminished their own power and was like “getting the turkeys to vote for Christmas”.

A referendum on introducing a form of preferential voting to Britain was defeated in 2011.

But Bennett said change was needed because the first past the post system resulted in a third of British voters not voting in 2015 because they felt they could not make a difference.

The Greens won 3.8% of the vote on Thursday compared with 1% in 2010.

But even with 1.16m ballots the Greens still only retained former leader Caroline Lucas’s seat of Brighton Pavilion.

By contrast the Scottish National party secured 4.7% (1.45m) but because they were concentrated in Scotland won 56 seats in Westminster.

The UK Independence party (Ukip) sits at the opposite end of the political spectrum to the Greens but is also calling for first past the post to be scrapped.

Nigel Farage quit as leader of Ukip – at least temporarily – after failing to win a seat on Thursday but as he departed he labelled the current system an affront to democracy.

Ukip secured 12.6% of the vote nationwide (3.88m) but, like the Greens, has just one seat in the new parliament.

“We gained nearly as many votes as the SNP, the Liberal Democrats and Plaid Cymru added up together,” Farage wrote in the Independent newspaper.

“But only one Ukip MP has been returned to the House of Commons – a situation which most reasonable people would realise highlights the flawed nature of Britain’s electoral system.”

Analysts suggested under a proportional system Ukip would have won 83 seats in Thursday’s poll.

The influence of antipodeans on the UK election was seen at both ends of the political spectrum: while the Greens under Bennett had a dismal showing, the Australian campaign strategist Lynton Crosby orchestrated the Conservatives’ success.

AAP contributed to this report

Australian-born leader of UK Greens blasts British voting system,
G, 9 May 2015,
http://www.theguardian.com/politics/2015/may/09/
australian-born-leader-of-uk-greens-blasts-british-voting-system

David Cameron and Conservatives

Get Majority in British Election

 

MAY 8, 2015

The New York Times

By STEVEN ERLANGER

and STEPHEN CASTLE

LONDON — Prime Minister David Cameron and his Conservatives won a resounding victory in the British general election, with complete results on Friday showing that the party had secured an overall majority in Parliament.

The vote was a stunning disappointment for the opposition Labour Party and its leader, Ed Miliband, who had shifted the party away from the more centrist strategy it pursued in the late 1990s and early 2000s under Tony Blair. Mr. Miliband stepped down on Friday, opening up a new debate over the party’s direction.

The result defied pre-election opinion polls that suggested a tight race between the Conservatives and Labour. It returns Mr. Cameron to 10 Downing Street for a second term, with enough seats in the House of Commons to act on his agenda without having to rely on support from smaller parties.

He went to Buckingham Palace on Friday for the formal step of being invited by the queen to form a new government.

In a brief speech outside his official residence, Mr. Cameron promised to govern fairly for the whole United Kingdom and said: “The government I led did important work. It laid the foundations for a better future, and now we must build on them.”

The Conservatives won 331 of 650 seats in the House of Commons, a gain of 24 seats from the last election, in 2010. Their chief rival, Labour, was nearly wiped out in Scotland by the surging Scottish National Party and did more poorly than pre-election opinion polls had suggested it would in the rest of Britain. Several of Mr. Miliband’s top lieutenants lost their seats.

“Now the results are still coming in, but this has clearly been a very disappointing and difficult night for the Labour Party,” Mr. Miliband said in a quasi concession speech after being re-elected to his seat in the House of Commons.

“We haven’t made the gains that we wanted in England and Wales,” he said, “and in Scotland we have seen a surge of nationalism overwhelm our party.”

The results were also a disaster for Nick Clegg and his centrist Liberal Democrats, who have been the junior partner in a coalition with the Conservatives. Mr. Clegg hung on to his seat in the House of Commons, but he resigned as party leader after results that exceeded the party’s very worst expectations.

“It is now painfully clear that this has been a cruel and punishing night for the Liberal Democrats,” said Mr. Clegg, who had served as deputy prime minister in the departing coalition government under Mr. Cameron.

Nigel Farage, the leader of the populist, anti-immigration, anti-European Union U.K. Independence Party, lost his bid for a seat in Parliament, and his party won only a single seat. Mr. Farage on Friday followed through on his promise to step down as the party’s leader if he failed to win his race, a step that will deprive it of much of its visibility and volume.

The final results were something of a shock to a nation that had been conditioned by months of opinion polls suggesting a near tie between the Conservatives and Labour to expect days or weeks of negotiations as the two parties would have to cobble together a viable coalition.

Asked on Friday why he thought the nation had returned the Conservatives to power, one Londoner, Peter Hamlin, 62, replied, “I think the general feeling is that maybe they had a hard job to do and they kind of did it O.K. and maybe it is time to give them a shot and maybe a shot on their own without liberals getting in the way of their policies.”

There was discouragement among Labour supporters. “I was really disappointed,” said Tom Sears, 32, who works at the London Zoo, “People like myself won’t suffer but I worry about people who suffer cuts.”

Speaking in his electoral district after his re-election, Mr. Cameron said it was “clearly a very strong night for the Conservative Party.”

With all the constituencies reporting, Labour had won 232 seats, a decline of 26 from the 2010 results. In another humiliating blow for Labour, Ed Balls, who speaks for the party on economic issues and is one of its most influential figures, lost his seat of Morley and Outwood to the Conservatives.

“Any personal disappointment I have at this result is as nothing as compared to the sense of sorrow I have at the result that Labour has achieved across the United Kingdom,” Mr. Balls said after the result was announced.

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The Scottish National Party won 56 of 59 seats in Scotland, rolling over Labour. In 2010, the Scottish nationalists won only six seats.

Nicola Sturgeon, the party’s leader, said on Friday that the “tectonic plates in Scottish politics have shifted.”

The success for the Scottish party, which favors independence for Scotland, was met Thursday night on Glasgow’s streets with the intermittent cheering and jeering reminiscent of soccer fans celebrating their favorite club.

Many in Glasgow seemed to think that another independence referendum appeared inevitable, despite the defeat of the pro-independence camp in a referendum last year.

For Mr. Cameron, the results appeared to be a vindication after a campaign in which opinion polls consistently showed Labour running even with the Conservatives.

The campaign had centered primarily on domestic issues, including the budget austerity imposed by the Conservatives and funding for the National Health Service, but Mr. Cameron had also played up fears that a Labour government, reliant on support from the Scottish nationalists, would drive the country leftward and risk the nation being splintered.

Ed Miliband, the leader of Britain’s opposition Labour Party, offered his resignation on Friday a day after Thursday’s general election. By Reuters on Publish Date May 8, 2015. Photo by Facundo Arrizabalaga/European Pressphoto Agency.

Even if he is able to govern without a coalition partner, Mr. Cameron will start his second term facing immense challenges, not least in holding off calls from Scotland for independence and in managing pressure from inside his own party for Britain to leave the European Union.

Mr. Cameron has promised to try to renegotiate terms of Britain’s membership in the 28-nation European Union and to hold a referendum by the end of 2017 on whether Britain should remain in the bloc.

The results are also likely to fuel calls for a change to Britain’s electoral system, to better represent national voting patterns.

The Scottish National Party, which fielded candidates only in Scotland, benefited from the British electoral system, in which parties compete in 650 districts but the votes of those not elected count for little.

With the Scottish National Party winning 56 seats, Labour was reduced to just one in Scotland. The Conservatives and the Liberal Democrats also held one seat each. The Scottish party is forecast to become the third-largest in Parliament, with less than 5 percent of the nation’s votes.

“The Scottish lion has roared this morning across the country,” said Alex Salmond, former first minister of Scotland and former leader of the Scottish National Party, after being elected to Parliament in Westminster.

The U.K. Independence Party had been expected to draw many more votes across the rest of Britain. After the party he led won just the one seat, Mr. Farage called for a reconsideration of the voting system to give more representation to supporters of smaller parties.
 

Katrin Bennhold contributed reporting from Glasgow.

David Cameron and Conservatives Get Majority in British Election,
NYT,
MAY 8, 2015,
http://www.nytimes.com/2015/05/09/world/europe/
david-cameron-and-conservatives-emerge-victorious-in-british-election.html