PMQs review: Cameron wrongfoots Miliband on the banks

After being surprised by Cameron's commitment to banking reform, the Labour leader struggled to regain his poise.

Even before Ed Miliband got to his feet at today's PMQs, David Cameron had seized the advantage. Noting that Tristram Hunt and David Miliband were among those who would fall foul of Labour's new policy of banning unqualified teachers, he quipped: "another example of brotherly love". 

Things didn't improve much for Miliband after that. He challenged Cameron to say whether the government would use the banking bill to introduce new criminal penalties for bankers (anticipating an equivocal response) but was wrongfooted when Cameron simply replied: "we will be using that bill to take these important steps". After that, the Labour leader's subsequent (and pre-scripted) declaration that "if the government doesn't put down the amendments, we will" fell entirely flat. 

Miliband did have a smart statistic to hand, noting that bonuses had risen by 64 per cent in the last year, principally due to bankers deferring them in order to benefit from the 50p tax cut, but this only offered Cameron an opportunity to launch attack after attack on Labour for being at the wheel when Northern Rock issued 125% mortgages, when Fred Goodwin received his knighthood and when the boom turned to bust.

Bonuses, he pointed out, were 85 per cent lower now than in 2007-08, demanding that Labour finally apologise for its mismanagement. Miliband and Ed Balls have, of course, repeatedly admitted that Labour was wrong to regulate the banks so laxly but one can hardly blame Cameron for seeking to make them do so again.

Miliband declared at one point that he wasn't going to "take lectures from the guy who was the adviser on Black Wednesday" but his history lesson will resonate less with the public than Cameron's. That the Tories were calling for less, not more regulation at the time is, politically speaking, irrelevant. It is governments, not oppositions, that get the blame. 

Today's session was also notable for Cameron's refusal to deny that the government is considering increasing interest rates on student loans taken out in the last 15 years. After Vince Cable and Danny Alexander rejected the story as "false", this offers Labour a chance to go back on the attack.

Asked whether he had ever had any discussions with Lynton Crosby "about plain packaging of cigarettes or the minimum pricing of alcohol", Cameron replied: "I can tell you that Lynton Crosby has never lobbied me on anything", an answer likely to come under considerable scrutiny. But his pay-off was sharp; the only thing the pair discussed, he said, was "how we destroy the credibility of the Labour Party" but Crosby was not doing "as good a job as the party opposite". 

David Cameron and Ed Miliband walk through the Members' Lobby to listen to the Queen's Speech at the State Opening of Parliament on May 8, 2013. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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Can Philip Hammond save the Conservatives from public anger at their DUP deal?

The Chancellor has the wriggle room to get close to the DUP's spending increase – but emotion matters more than facts in politics.

The magic money tree exists, and it is growing in Northern Ireland. That’s the attack line that Labour will throw at Theresa May in the wake of her £1bn deal with the DUP to keep her party in office.

It’s worth noting that while £1bn is a big deal in terms of Northern Ireland’s budget – just a touch under £10bn in 2016/17 – as far as the total expenditure of the British government goes, it’s peanuts.

The British government spent £778bn last year – we’re talking about spending an amount of money in Northern Ireland over the course of two years that the NHS loses in pen theft over the course of one in England. To match the increase in relative terms, you’d be looking at a £35bn increase in spending.

But, of course, political arguments are about gut instinct rather than actual numbers. The perception that the streets of Antrim are being paved by gold while the public realm in England, Scotland and Wales falls into disrepair is a real danger to the Conservatives.

But the good news for them is that last year Philip Hammond tweaked his targets to give himself greater headroom in case of a Brexit shock. Now the Tories have experienced a shock of a different kind – a Corbyn shock. That shock was partly due to the Labour leader’s good campaign and May’s bad campaign, but it was also powered by anger at cuts to schools and anger among NHS workers at Jeremy Hunt’s stewardship of the NHS. Conservative MPs have already made it clear to May that the party must not go to the country again while defending cuts to school spending.

Hammond can get to slightly under that £35bn and still stick to his targets. That will mean that the DUP still get to rave about their higher-than-average increase, while avoiding another election in which cuts to schools are front-and-centre. But whether that deprives Labour of their “cuts for you, but not for them” attack line is another question entirely. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to domestic and global politics.

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