PMQs review: Harman hammers absent Cameron

With the aid of some fine lines, Labour's deputy leader ridiculed the PM's EU panic.

With David Cameron still away in the US, it was Nick Clegg who manned the dispatch box at today's PMQs, but rather than targeting Clegg, Harriet Harman (who, as is traditional when Cameron is absent, replaced Ed Miliband) chose to concentrate her fire on Cameron. "Why is it that out of the last eight Wednesdays, the Prime Minister has only answered questions in this House once?", she asked. It was a strong stat, and Harman followed it up with another fine line: "He's been busy explaining to President Obama the benefits of Britain's membership of the EU, why is he able to do it in the White House but not in this House?" She went on to ridicule Cameron's dithering over the Queen's Speech EU amendment: "if the Prime Minister was here, would he be voting for the government, against the government or showing true leadership and abstaining?" 

In response, a loyal Clegg resisted the temptation to have fun at Cameron's expense and turned his guns on the absent Miliband, declaring that it was the Labour leader "who should be relieved that there isn't Prime Minister's Questions". Referring to Miliband's recent disastrous World At One interview, he quipped: "he denied that borrowing would go up under Labour's plans 10 times, who said that there isn't enough comedy on Radio 4?" 

As I predicted earlier, Tory MPs seized the opportunity to remind Clegg of his past support for a vote on EU membership, with two brandishing the 2008 Lib Dem leaflet calling for "a real referendum". In response, Clegg insisted that his position had not changed; he supports a referendum the next time that there is a formal change in Britain's relationship with the EU (the 2010 Lib Dem manifesto stated: "The European Union has evolved significantly since the last public vote on membership over thirty years ago. Liberal Democrats therefore remain committed to an in / out referendum the next time a British government signs up for fundamental change in the relationship between the UK and the EU."). 

The Deputy PM went further by stating the coalition's EU referendum lock, which sees a public vote triggered whenever there is a transfer of powers to Brussels, meant that it was a question of "when, not if" a referendum would be held. It was the clearest signal Clegg has ever given that he believes a referendum is now inevitable at some point in the next three-four years. 

In a notable attempt to narrow the distance between himself and Cameron, Clegg said that while the coalition's position on a referendum was clear, Labour had voted against the referendum lock. It's worth noting, however, that since then Miliband has explicitly stated that he would not repeal the legislation. With the negotiations over the post-crisis shape of the EU likely to significantly change Britain's relationship a EU, a referendum looks increasingly inevitable whichever party wins in 2015. 

Harriet Harman asked why "out of the last eight Wednesdays, the Prime Minister has only answered questions in this House once?" Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Photo: Getty Images
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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