Morning Call: pick of the papers

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

1. Miliband the illusionist must conjure up more with less (Daily Telegraph)

The Labour Party must convince the voters that saving money can produce social dividends, says Mary Riddell.

2. It's time the Tories learned to love the unions (Guardian)

Nostalgia for a tussle with the unions still excites some, writes David Skelton. But modern Conservatives need to befriend, not alienate them.

3. Austerity loses an article of faith (Financial Times)

The UK industrial revolution shows the Reinhart-Rogoff thesis on debt is not always right, says Martin Wolf.

4. Even if he loses, Alex Salmond will still win (Times)

Whichever way Scotland votes on independence, the First Minister will wrest more power away from Westminster, writes Alice Thomson. 

5. Shaker Aamer and the dirty secrets of the war on terror (Guardian)

The scandal of Britain's last Guantánamo inmate encapsulates the barbarity of a mutating conflict without end, says Seumas Milne.

6. Sovereign Scots may have to drop sterling (Financial Times)

Edinburgh should try to secure monetary union with England, but it would probably fail, argues John Kay.

7. France's meltdown is a stark warning to anyone who wants Red Ed as PM (Daily Mail)

Labour is promising precisely the same policies as Hollande’s socialists, writes Daniel Hannan.

8. If Abenomics works, Britain's leaders will look like monkeys (Guardian)

George Osborne should abandon the tribal morality of austerity and, like Japan, print money not for banks but for people, says Simon Jenkins.

9. A state-sector version of Eton is long overdue (Independent)

But it is not clear that the practicalities of the Durand scheme have been thought through, says an Independent editorial.

10. Our US protector is looking the other way (Daily Telegraph)

The free-riding nations of Europe are making a big mistake by slashing their defence budgets, argues David Blair.

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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.