The “big society”: new doubts emerge

Cameron’s “big society bank” may begin with reserves of as little as £60m.

David Cameron's "big society" wasn't much of a hit with the voters or the Tory party (one MP memorably described it as "complete crap"), but today's the day when he finally launches the project, promising "the biggest, most dramatic redistribution of power" ever seen.

Four "vanguard communities" (and what a peculiarly Leninist phrase that is) will be given the power and the money to run transport services, take over local assets such as pubs and set up broadband internet networks.

All of this will be financed through the creation of a "big society bank", using money raised from dormant bank and building society accounts. Alone among the press, the FT raises a sceptical eyebrow:

The British Banking Association has estimated there is probably £400m sitting in dormant bank accounts, which Mr Cameron wants to use for the bank's reserves. However, his advisers say a combination of foot-dragging by high street banks and the need to track down owners of dormant accounts means only a fraction of that sum will find its way into the new bank's coffers in time for its launch.

The bank is now expected to begin with reserves of as little as £60m, hardly enough to enable the voluntary sector to replace the "dead hand of the state".

On the Labour side, Ed Milband (who has just managed to raise £8,000 in 24 hours after an Obama-style appeal) has attacked the "big society" as a fig leaf for savage spending cuts. "People in the voluntary sector know that, for all the talk of a big society, what is actually on the way is cuts and the abandonment of community projects across Britain," he said. That may be the case, but the most persuasive critique remains a pragmatic one: in this ever more hectic age, who has time for the "big society"?

Cameron's hope that the "big society" will replace Big Government is reminiscent of the old Marxist belief that the state will "wither away" as a result of victorious socialism. We all know how that turned out. Cameron has a long way to go to convince us that his vision is any less utopian.

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George Eaton is political editor of the New Statesman.

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Why relations between Theresa May and Philip Hammond became tense so quickly

The political imperative of controlling immigration is clashing with the economic imperative of maintaining growth. 

There is no relationship in government more important than that between the prime minister and the chancellor. When Theresa May entered No.10, she chose Philip Hammond, a dependable technocrat and long-standing ally who she had known since Oxford University. 

But relations between the pair have proved far tenser than anticipated. On Wednesday, Hammond suggested that students could be excluded from the net migration target. "We are having conversations within government about the most appropriate way to record and address net migration," he told the Treasury select committee. The Chancellor, in common with many others, has long regarded the inclusion of students as an obstacle to growth. 

The following day Hammond was publicly rebuked by No.10. "Our position on who is included in the figures has not changed, and we are categorically not reviewing whether or not students are included," a spokesman said (as I reported in advance, May believes that the public would see this move as "a fix"). 

This is not the only clash in May's first 100 days. Hammond was aggrieved by the Prime Minister's criticisms of loose monetary policy (which forced No.10 to state that it "respects the independence of the Bank of England") and is resisting tougher controls on foreign takeovers. The Chancellor has also struck a more sceptical tone on the UK's economic prospects. "It is clear to me that the British people did not vote on June 23 to become poorer," he declared in his conference speech, a signal that national prosperity must come before control of immigration. 

May and Hammond's relationship was never going to match the remarkable bond between David Cameron and George Osborne. But should relations worsen it risks becoming closer to that beween Gordon Brown and Alistair Darling. Like Hammond, Darling entered the Treasury as a calm technocrat and an ally of the PM. But the extraordinary circumstances of the financial crisis transformed him into a far more assertive figure.

In times of turmoil, there is an inevitable clash between political and economic priorities. As prime minister, Brown resisted talk of cuts for fear of the electoral consequences. But as chancellor, Darling was more concerned with the bottom line (backing a rise in VAT). By analogy, May is focused on the political imperative of controlling immigration, while Hammond is focused on the economic imperative of maintaining growth. If their relationship is to endure far tougher times they will soon need to find a middle way. 

George Eaton is political editor of the New Statesman.