Good morning. On Marr yesterday Douglas Alexander said Labour would do something radical with student fees in its manifesto next year. The papers reflect the idea, with headlines saying fees will be cut to £6000 if Labour return to power. The motivation is the growing realisation that the tuition fees policy is a turkey that is costing the taxpayer vast sums. Graduates in particular are getting clobbered. When we bang on about the iniquities of the 40p rate, spare a thought for the graduate who reaches the £25,000 income threshold for repayment, at which point he is hit with an inescapable 9pc surtax which pushes his marginal income tax rate up to 29pc. Ministers are lucky that so far there haven’t been riots in Whitehall. Ed Miliband trailed the idea of cutting fees in 2011. But what’s not clear is how Labour would address the matter of getting money to universities and where it should come from. Labour, it should be remembered, once favoured a graduate tax, in other words a mandatory lifetime levy on all graduates that means those who can repay in one go can’t. The other point to consider is what this means for the existing policy itself: the government, it seems, is presiding over a policy that is on the verge of collapsing under its own contradictions. Default rates are approaching unsustainable levels, and ministers must be wondering how they might ditch it.
That Labour is leading the charge speaks in part to internal pressures for policies that get attention and could help the party break out of the mess it has been in since the Budget. The weekend papers chronicled what sounded like an uprising against Mr Alexander as sections supremo, led by Michael Dugher and others who have told Mr Miliband they have had enough of the shadow foreign secretary. Polls show Labour’s lead slumping, which in turn deepens the spiral of despair in the Labour ranks. Mr Miliband urged his colleagues to avoid panic and stay calm. The papers have also pounced on rumours – denied – that the American community organiser Arnie Graff who is advising Mr Miliband has given up and gone home. And that’s just the beginning of what Labour can expect will be months of unrelenting scrutiny led by the Sun and the Mail, which have reverted to the Labour-bashing techniques of the pre-97 days. Developing policy – on tuition fees or anything else – while under intense pressure is always dangerous.
OSBORNE v CLEGG
There’s a row brewing between the Chancellor and Deputy PM. Nick Clegg has accused the Tories of trying to “steal” the Lib Dems’ taxation policies attacking the Conservatives where it hurts by saying “they know that they as a party have a problem in that they appear to be too preoccupied with the fortunes of those at the very top of society.” The comments rather neatly coincide with George Osborne’s upbeat speech today, which will be among the most optimistic he has delivered as Chancellor; Mr Osborne will say that Britain is “starting to walk tall in the world”. And, yep, he’ll mention increasing the tax-free allowance too, describing it as a “big moment in the history of our country’s tax system”. But all the rush to claim credit seems to rather ignore the splash in the FT. It explains why, despite the strong economic news, the recovery is not yielding the taxation revenues expected. “Treasury figures show a net £2bn tax cut in 2014-15, which will be reversed in 2015-16. Both changes are small compared with the coalition’s estimate that it has imposed £23bn a year net tax increases since the last election.” Either people are getting much better at dodging paying tax, or the OBR and Treasury have been very, very optimistic – or both. It all adds up to another reason why austerity is here to stay. In its leader, the FT pleads for politicians to be honest about the tough choices ahead (sounds familiar?) and suggests that helping Dfid would help. Many Conservative backbenchers would agree but, given Dave’s personal attachment to the hallowed 0.7% commitment, it ain’t gonna happen.
A CABINET MOLE HUNT
Whodunnit? There’s a mole hunt underway in response to the Saturday Guardian’s comments from a Cabinet minister that an independent Scotland would be able to keep the pound; on Today, Alistair Darling insisted that “The only way a currency union can work is if you have a single government”. The name doing the rounds – and few will be surprised by this – is Vince Cable. With polls tightening, there is also increasing anxiety among the Better Together camp. Alan Cochrane reckons that the problem isn’t that Alistair Darling has too much power, but that he has too little; while what Alex Salmond says, goes, Mr Darling is little more than first among equals. And rule by committee doesn’t seem to be working.
WARSI-CAMERON ROW CONTINUES
Baroness Warsi isn’t backing down. Fresh from irritating No 10 with her complaints about the number of Old Etonians in the inner circle, she has said that the number of women – currently five out of 33 – who can sit at the Cabinet table “needs to increase”. Lady Warsi reckons that “politics has a women problem”. She may have been vulnerable in a Cabinet reshuffle but, by speaking out, she has increased her profile and made it trickier to remove her from her post. Labour, which never misses a chance to attack Dave’s “women problem” will look at the blue-on-blue attack with glee.
ANOTHER BERTH FOR BORIS
The Mail diary asks if Tim Yeo’s South Suffolk seat is being kept free for Boris. There’s still no sign of a selection process to choose the de-selected MP’s successor, hence the speculation. All the gossip though says it’s to be K&C, and a deal has been done with Sir Malcolm Rifkind.
HAMMOND SPEAKS OUT
The weekend saw another warning about the extend of British defence cuts – this time from General Sir Richard Shirreff, the outgoing Nato deputy supreme commander, who said that the Armed Forces had been “cut to the bone” and plans to substitute regular troops with reservists are “one hell of a risk”. But Philip Hammond is having none of it: he says that such talk is “nonsense” and “We still have the fourth largest defence budget in the world.” Mr Hammond also told Conservatives who joined him in voting against gay marriage to “move on”. The Defence Secretary said that he and other Tories were left “shocked” by the “tumultuous” pace of change and would have preferred if it had “gradually taken root” but “people who have been opposed to this, people who’ve had concerns about it, will get used to it.” Given that he said gay marriage was “damaging” the Tories last November, Dave and co will appreciate the show of loyalty.
NIGEL LOVES VLADIMIR
Nigel Farage has hailed Vladimir Putin as an “operator” and the leader he admires the most – though “not as a human being” – in an interview with Alistair Campbell for GQ. The Ukip leader said that Mr Putin had been “brilliant” in handling the Syrian Civil War.
As if running the country isn’t tricky enough, Dave is also having homework trouble. “I do my best to help with their homework, but sometimes I find it quite testing. My children seem to have a lot of IT homework. I think I need to go on a few computer courses”. Michael Gove’s school reforms are obviously doing the trick.
TWO FOR BRUSSELS JOB
Worth noting, this. In case you missed it, In his column Matthew d’Ancona said the Downing Street short-list for the European commissioner’s job has been whittled down to two: Andrews Mitchell and Lansley. Can this be true? The former is still tied up in plebgate-related legal proceedings, and the latter is accused of not telling Number 10 what he was up to on health.
LABOUR’S CHALLENGE TO THE NHS
It’s a rare day when a politician dares to tell the truth about the NHS. The Labour peer Norman Warner, a colleague of Andy Burnham and Liz Kendall in government, argues for Reform that the NHS did not modernise in the Blair years in such a way that it will be able to cope with modern demands and an ageing population. What is now needed, he says, is a redesign of services on most hospital sites in England; a strict limit on funding for the NHS from general taxation; and new ways of funding the service, including new charges and means tests. Most radically, Mr Warner advocates a £10 a month ‘membership fee’ for NHS users (free for those lacking the means to pay), which is sure to go down just great with the Labour party faithful.
The Morning Briefing is edited by Tim Wigmore. Follow Tim on Twitter
Latest YouGov poll: Con 33%, Lab 40%, Ukip 11%; Lib Dems 10%
TWEETS AND TWITS
That kind of night:
@nickdebois: Bad news – found far too many constituent emails in “junk mail” box ..good news-insomnia meant they have all been done now
In the Telegraph
Boris Johnson – It’s elementary, Watson. Here’s why faith in the police is rising
Alan Cochrane – Don’t replace Alistair Darling – put him in charge
Charles Moore – A French view of the Great War’s terrors
Telegraph View – Scottish independence could be a risky business
Best of the rest
Chris Huhne – Nigel Farage’s vision of a better yesterday will fade in a brighter future
Ian Birrell – As gay people celebrate, the treatment of the disabled just gets worse
FT leader – Seeking clarity on public spending
Edward Luce – America’s democracy is fit for the 1%
0900 ESSEX: Chancellor George Osborne to give keynote economy speech.
0930: Bank of England releases its Money and Credit study for February.
1000 LONDON: The hacking trial continues. Charles Brooks will continue his evidence. Old Bailey.
1130 LONDON: Deputy Prime Minister Nick Clegg’s monthly press conference. Dover House, 66 Whitehall.
1300 LONDON: Nigel Farage takes part in YouGov debate on the emergence of radical right-wing parties across Europe. Royal Institute of International Affairs, Chatham House.