Morning Call: pick of the papers

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

1. We can’t afford to ignore climate change (Financial Times)

As the Philippines recovers, fossil-fuel lobbies focus on the short term, writes Jeffrey Sachs.

2. Why even atheists should be praying for Pope Francis (Guardian)

Francis could replace Obama as the pin-up on every liberal and leftist wall, says Jonathan Freedland. He is now the world's clearest voice for change.

3. Steady at the helm there, Mr Cameron (Times)

If the PM is feeling the pressure from the Tory right, he needs to quell the ranks and steer the ship, writes Matthew Parris.

4. If Labour want to start apologising, it shouldn't be over economic migration (Guardian)

Jack Straw's admission of guilt over deciding to allow economic migration in 2004 is disingenuous, and sidesteps the real mistakes they made, says Deborah Orr.

5. A glasnost moment? Unlikely. The Chinese remember what happened to the Soviets (Independent)

Shining through the new document is Mr Xi’s determination to retain and bolster the Communist Party’s hold on power, writes Peter Popham.

6. The coalition is steadily coming undone (Independent)

Ed Miliband's pledge last month to freeze energy prices has not only dominated headlines, it has driven a wedge between the Tories and the Lib Dems, says Andrew Grice.

7. Is the economic recovery built to last? (Times)

Instead of a Germanic economy built on manufacturing, our recovery risks resembling Spain’s property boom, says Stephen King.

8. The lessons gone unlearnt at Westminster (Daily Telegraph)

The fallibility of MPs Nadine Dorries and Nadhim Zahawi is regrettably familiar, writes Vicki Woods.

9. A bet against London is no sure thing (Financial Times)

There is far more to the British capital than hot money and hot air, writes Tim Harford.

10. Why does a brush with death make people turn to religion? (Daily Telegraph)

Sir John Tavener’s final broadcast brought home with force the truths of faith, argues Charles Moore.

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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