Morning Call: pick of the comment

The ten must-read pieces from this morning's papers

1. If the Tories have a secret plan for power, they're keeping it quiet (Daily Telegraph)

Despite their boasts about being prepared for government, says Benedict Brogan, there are some anxious faces in the party's high command.

2. The fault line in Haiti runs straight to France (Times)

Ben Macintyre says that the destruction by the earthquake has been aggravated, not by a pact with the devil, but by the crippling legacy of imperialism. He looks back at Haiti's colonised history.

3. If Britain wants change that counts, there's an election it can vote in today (Guardian)

Timothy Garton Ash says that ideological differences between the parties are hugely exaggerated. What matters most is to transform the system. He writes about political reform and the Power 2010 campaign.

4. We have learnt the wrong lessons from Iraq (Financial Times)

Fresh from his appearance at the Chilcot inquiry, Alastair Campbell says that the government must improve strategic communication, as winning the war in Afghanistan requires maintaining public support.

5. This is a terrible reverse, but don't write off Obama (Independent)

There is discontent about the US economy, says Matthew Norman, but it is expected to improve dramatically by 2012, and Barack Obama foresaw this backlash before his election.

6. Lessons of a Mass revolt (Guardian)

Harold Evans agrees that although many voters oppose health reform, Obama's rejection in Massachusetts is mainly because millions are still out of work.

7. Bank of England independence is a cause of immense frustration for Gordon Brown (Daily Telegraph)

Mervyn King's latest criticism of the handling of the recession was a body blow to the PM, says Edmund Conway.

8. Family values have the Tories in a twist (Independent)

A mighty roar calls for our governments to praise the family. Steve Richards doesn't see how or why they should -- it is time for a debate about the limits and scope of government.

9. Review the sell-off of great British companies (Financial Times)

Will Hutton and Phillip Blond question the dominant logic of the past 30 years that mergers are good for the companies involved, for the economy and for consumers, and they call for British assets to be protected.

10. Memo to medics: it's about emotions as well as tumours (Guardian)

Zoe Williams looks at the latest disagreement among breast cancer experts, which shines a light into the grey areas of the NHS's screening programme.

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There are risks as well as opportunities ahead for George Osborne

The Chancellor is in a tight spot, but expect his political wiles to be on full display, says Spencer Thompson.

The most significant fiscal event of this parliament will take place in late November, when the Chancellor presents the spending review setting out his plans for funding government departments over the next four years. This week, across Whitehall and up and down the country, ministers, lobbyists, advocacy groups and town halls are busily finalising their pitches ahead of Friday’s deadline for submissions to the review

It is difficult to overstate the challenge faced by the Chancellor. Under his current spending forecast and planned protections for the NHS, schools, defence and international aid spending, other areas of government will need to be cut by 16.4 per cent in real terms between 2015/16 and 2019/20. Focusing on services spending outside of protected areas, the cumulative cut will reach 26.5 per cent. Despite this, the Chancellor nonetheless has significant room for manoeuvre.

Firstly, under plans unveiled at the budget, the government intends to expand capital investment significantly in both 2018-19 and 2019-20. Over the last parliament capital spending was cut by around a quarter, but between now and 2019-20 it will grow by almost 20 per cent. How this growth in spending should be distributed across departments and between investment projects should be at the heart of the spending review.

In a paper published on Monday, we highlighted three urgent priorities for any additional capital spending: re-balancing transport investment away from London and the greater South East towards the North of England, a £2bn per year boost in public spending on housebuilding, and £1bn of extra investment per year in energy efficiency improvements for fuel-poor households.

Secondly, despite the tough fiscal environment, the Chancellor has the scope to fund a range of areas of policy in dire need of extra resources. These include social care, where rising costs at a time of falling resources are set to generate a severe funding squeeze for local government, 16-19 education, where many 6th-form and FE colleges are at risk of great financial difficulty, and funding a guaranteed paid job for young people in long-term unemployment. Our paper suggests a range of options for how to put these and other areas of policy on a sustainable funding footing.

There is a political angle to this as well. The Conservatives are keen to be seen as a party representing all working people, as shown by the "blue-collar Conservatism" agenda. In addition, the spending review offers the Conservative party the opportunity to return to ‘Compassionate Conservatism’ as a going concern.  If they are truly serious about being seen in this light, this should be reflected in a social investment agenda pursued through the spending review that promotes employment and secures a future for public services outside the NHS and schools.

This will come at a cost, however. In our paper, we show how the Chancellor could fund our package of proposed policies without increasing the pain on other areas of government, while remaining consistent with the government’s fiscal rules that require him to reach a surplus on overall government borrowing by 2019-20. We do not agree that the Government needs to reach a surplus in that year. But given this target wont be scrapped ahead of the spending review, we suggest that he should target a slightly lower surplus in 2019/20 of £7bn, with the deficit the year before being £2bn higher. In addition, we propose several revenue-raising measures in line with recent government tax policy that together would unlock an additional £5bn of resource for government departments.

Make no mistake, this will be a tough settlement for government departments and for public services. But the Chancellor does have a range of options open as he plans the upcoming spending review. Expect his reputation as a highly political Chancellor to be on full display.

Spencer Thompson is economic analyst at IPPR