Morning Call: pick of the papers

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

1. Labour can turn NHS scandal into success (Daily Telegraph)

Ed Miliband’s response to the Francis report on the Mid Staffordshire scandal could be the first step towards a Labour victory in 2015, says Mary Riddell.

2. Same-sex marriage vote: on the wrong side of history (Guardian)

The passing of the bill in the Commons was the latest climax in a disintegrating crisis of Conservative party credibility, says a Guardian editorial.

3. Cameron has sown needless discord (Daily Telegraph)

With the vote on gay marriage, the Prime Minister bounced his party into a reform for which there was no popular pressure, argues a Telegraph leader.

4. Japan can put people before profits (Financial Times)

The key to a better-balanced economy is to take surplus profits away from a corporate oligopoly, writes Martin Wolf.

5. Trident is no longer key to Britain’s security (Daily Telegraph)

Like-for-like renewal of our nuclear deterrent is neither strategically sound nor economically viable, write Des Browne and Ian Kearns.

6. It’s human to dread change and fear loss (Times) (£)

Good conservatives understand the value of tradition, but know when to welcome gay marriage or shopping malls, writes Daniel Finkelstein. 

7. Tory metrosexuals won the gay marriage vote – but at what cost? (Guardian)

 I agree that gay marriage is right, says Simon Jenkins. But the true test of tolerance lies in its treatment of intolerance – and we failed that test.

8. The Bank of England's new Governor is about to face a grilling, but what will the markets make of him? (Independent)

Mark Carney is eager to look for new policies to promote growth, writes Hamish McRae. Whether he can succeed is another issue.

9. Britain is a proud monarchy, and as such it must treat its former sovereigns with the respect owed to the office they held (Daily Mail)

The government  should grasp this moment to light the imagination of the nation, by holding a state funeral for Richard III at Westminster Abbey, says Andrew Roberts.

10. Ageing taxpayers owe the iPod generation (Financial Times)

Tax reform is crucial for Britain’s youth, writes Nick Bosanquet.

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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