Morning Call: pick of the papers

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

1. Osborne well knows that Tories tax wealth at their peril (Financial Times)

If there are shock and awe tax cuts, there must be shock and awe tax rises too, writes Paul Goodman

2. Unemployment matters more than GDP or inflation (Guardian)

Jobless figures are the one major economic indicator that measures people, writes Mehdi Hasan. And they demonstrate the toll in misery across Europe.

3. A billion reasons to close the stamp duty loophole (Daily Telegraph)

Stamp duty avoidance by the super-rich is a scandal that is costing the country a fortune, says Boris Johnson.

4. Mr Obama must take a stand against Israel over Iran (Financial Times)

The true danger lies in the refusal to allow a viable Palestinian state, write John Mearsheimer and Stephen Walt.

5. Who'll fight for man in street now, Cam? (Sun)

Hilton is a loss to a nation whose political elite has surrendered to unelected and unaccountable officials in Whitehall and Europe, says Trevor Kavanagh.

6. Whitehall still needs to sharpen up its act (Daily Telegraph)

The self-serving days of 'Yes Minister' may be over, but further Civil Service reform is vital, argues Peter Riddell.

7. I fear Cameron will prove to be little more than an empty suit (Daily Mail)

Steve Hilton's departure will reveal whether Dave has any political principles of his own, says Melanie Phillips.

8. What is 'soft power'? Tune in to find out (Times) (£)

Boosting the BBC World Service, not foreign aid, is the surer way to win the respect of the poor and repressed, argues Bill Emmott.

9. The police: a chance to modernise (Guardian)

This isn't privatisation: outsourcing routine jobs will save money for more urgent, difficult areas of policing, argues Ian Blair.

10. The God-given dignity to which the Cardinal is blind (Independent)

Cardinal O'Brien has not halted the onward march of aggressive secularism, but strengthened it, says Richard Coles.

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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.