Cyprus’s banks are to remain shut until at least next Tuesday as the cabinet meets in emergency session after a eurozone bailout was rejected.
Theresa May voices anger that some departments face cuts while others don’t, as PM chastises two ministers, say sources
David Cameron has presided over one of his most fiery cabinet meetings when a group of ministers demanded an end to “ringfenced” spending and two ministers were criticised for failing to promote growth measures.
The so called National Union of Ministers, led by the home secretary, Theresa May, voiced anger that their departments are on course to face further cuts while others are exempt.
The chancellor of the exchequer, George Osborne, is expected in summer to announce a further round of cuts when he outlines a spending review for the 2015-16 financial year.
May, who has been joined in the past by the defence secretary, Philip Hammond, and the business secretary, Vince Cable, is annoyed that her department is facing further cuts while the education, health and international development will be protected. “The National Union of Ministers were in fine voice,” one government source said. Another added: “Theresa really got stuck in.”
Osborne briefed the cabinet on the setback he suffered last week when a ratings agency deprived Britain of its triple A status. The chancellor told ministers that Moody’s judgment – that it had downgraded Britain in light of the longer than expected time to stabilise the public finances – showed the need to press ahead with his deficit reduction plans.
But nerves at the lack of economic growth were highlighted when he joined forces with Cameron to lambast the communities secretary, Eric Pickles, for a lack of progress on introducing enterprise zones. “Eric Pickles got it in the neck,” one source said.
Osborne challenged Pickles over the slow pace of setting up enterprise zones in December. But Cameron joined in the criticisms at Tuesday’s cabinet meeting.
Maria Miller, the culture secretary, was also criticised for the slow rolling out of broadband in urban areas. Fast broadband is meant to be one of the main features of new enterprise zones.
Downing Street tried to put a positive on the discussions as it highlighted two announcements:
• Oliver Letwin, the cabinet office minister, announced that he has identified 1,300 regulations out of 4,000 that have been examined that can be “scrapped or substantially reduced”. He is examining a further 2,500 regulations as part of his “red tape challenge.
• The government is a third of the way towards meeting its target of releasing public sector land big enough for 100,000 new homes by April 2015.
The prime minister’s spokesman said that Nos 10 and 11 are satisfied with the progress on enterprise zones. The spokesman said: “The latest figures are that about £150m of private sector investment has already been attracted by the enterprise zones.
“What is important is we continue with their implementation. Just as with all the other aspects of the government’s growth agenda clearly urgency is very much required. The prime minister’s view is the government has been doing the right thing and we need to keep up that momentum.”
Of Tuesday’s cabinet discussion, the spokesman said: ” It was an opportunity for secretaries of state to update on progress. So, for example, in the context of broadband the secretary of state for culture media and sport was able to explain how 100,000 homes and businesses a week across the UK are now getting access to superfast broadband. It was an opportunity for secretaries of state to explain how they work together.”
Japan’s new prime minister Shinzo Abe unveils his cabinet line-up as he begins the task of economic revitalisation.
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In tough times it is only right that the EU budget be trimmed, but the left must never forget the benefits of membership
Politics is often a rough trade, everyone knows it and the public despises its practitioners for it. It was ever thus, back to ancient Greece and Rome. Whenever two people form a party they must compromise; the bigger the party, the nearer to power, the more compromises are required. MPs of all parties are whipped through lobbies to vote for things that make them queasy.
So it was on Wednesday night that a mournful cadre of Labour MPs found themselves voting with a rabble of 53 Tory Europhobics for whom cutting the EU budget was another triumphant step towards EU exit. Liberal Democrats could, for once, claim the moral high ground as they strode off to vote, as usual, with David Cameron. Labour MPs found themselves ribbed and ridiculed by their new friends, with “Welcome on board!” and “Glad we’ve converted you!” from the likes of Mark Reckless, Douglas Carswell and Bernard Jenkin. Not surprisingly, some Labour MPs looked hang-dog after they had sat through speeches such as theirs.
Tory rebel Mark Pritchard has said, while “brave forces are spilling their blood in Afghanistan … are we going to continue to ask families throughout this country to stop putting new shoes on their children’s feet in order to pay for the very large Mercedes fleet in Brussels?” Sammy Wilson of the DUP denounced the “arrogance” of “the Bisto bureaucrats who think that the gravy train is still running”. Bill Cash said: “They are saying, ‘We are going to go off and have a federal Europe.’ Well, let them have it!” Many of these ultra-rightists who called out for “More, more!” when George Osborne cut state spending, now wept crocodile tears contrasting the plight of shoeless children at home with “an obese Brussels that needs to go on a diet like everyone else”.
Labour stands accused of “rank opportunism”. John Smith did the same over Maastricht: oppositions rarely miss an exceptional chance to defeat the government of the day. But there was special relish on this occasion: Cameron and his party deserved to be devoured by the Eurosceptic monster they created. William Hague’s 2001 battle cry that Britain was turning into “a foreign land” has led to the selection of more extreme Tory MPs ever since, the entire party infected with the Euro-virus. Why should Labour rescue them from themselves?
The symbolism of Labour running with the Europhobic pack was excruciating, but what matters most is the substance of the issue itself. Labour’s motives may be mixed – but nonetheless they are on the right side on this. The people of Europe enduring the hardest of times cannot let the EU keep the only protected budget: a public vote across all 27 nations would surely want a cut. Brussels risks looking even more remote if it fails to respond to people’s suffering by cutting its own cloth. Labour may be populist, but public opinion is dead right on this.
To be a strong pro-European has never meant supporting whatever Brussels does. Few can justify the extravagant parliament travelling between Brussels and Strasbourg. There is no need for 27 commissioners, each with their own cabinet. Even the reformed common agricultural policy still pays most cash to the wrong farmers – the Queen and big landowners. Every organisation, public or private, needs constant vigilance over its accounts. Finding waste in Whitehall or Brussels is only a good excuse for demolishing those institutions to those ideologues who want to do that anyway.
There is one far more serious charge: the EU’s economic austerity has become a “death spiral of deficit cutting“, according to Jonathan Portes of the National Institute of Economic and Social Research, which this week computed the total impact on growth sucked out of the 27. This is a gigantic failure of its first great economic test. However, that’s the one charge against the EU these Tories would never make.
The cost of membership is not high: we pay a net 1% of GDP, the same as France, 85% of it redistributed to poorer countries. What we get back in trade is far greater: let’s hope we never get the chance to measure exactly what we lose in cash, influence and trade if we quit. Emma Reynolds, Labour’s shadow Europe minister, who worked in Brussels and for Robin Cook before returning to her native Wolverhampton as MP, has no trouble spelling out to her constituents the trading benefits to Jaguar Rover and the aerospace industries where many work. This multilingual pro-European MP plainly enjoyed Wednesday’s vote no more than the rest – but how could she look her city in the eye while it faces 30% cuts, with low to middle incomes stagnated for years past and years to come, according to the Resolution Foundation report this week?
Telephones were buzzing today with the shadow cabinet calling every pro-European to impress on them their deep pro-EU credentials. I’ve been inundated with old articles, speeches and pamphlets dusted down and emailed to prove their various authors’ eternal Europhilia. The truth is that there would be little embarrassment over this week’s vote if indeed Labour had been roundly supporting the European idea over all the Blair-Brown years.
But the state of national opinion bears witness to their lack of any attempt to make the pro-Europe case – except for the tireless former Europe minister Denis MacShane. Tony Blair, a French speaker and committed European, wrote a shameless “no surrender” article in the Sun to appease Murdoch on the eve of the 1997 election. He never made speeches at home to explain the value of membership. Every Brussels meeting was a “fight” to defend “British red lines”. So any Blairites incensed by this week’s vote might pause to consider that British anti-Europeanism is also his legacy. Brown was even less inclined to challenge attitudes pumped out by our 80% Europhobic press.
That pusillanimous record, along with Labour’s vote this week, puts a heavy onus on both Eds and all the shadow cabinet to start speaking out for Britain’s membership. Today I spoke to several who were earnestly pledging that they would. A referendum hangs in the air, though it looks unlikely other countries want any treaty that risks triggering one in any country. Lib Dem and Tory manifestos in 2015 will carry some referendum pledge. If Labour is obliged to offer one too, then it had better start making an earnest pro-European case at every opportunity from now on.
The government may not implement a change in the tax status of married couples promised by the Tories, Cabinet minister Ken Clarke says.
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Senior cabinet members will meet later to formulate a policy for dealing with the UK’s future energy demands, amid calls for a review of current prices.
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The Cabinet Office says it is no longer worried the internet will be overloaded during the Olympic Games.
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In a dramatic call for a rethink on the economy, the ex-Tory favourite claims rhetoric has not been matched by real action
Richard Branson, whose support for Tory economic plans was enthusiastically trumpeted by George Osborne in the runup to the last general election, has dramatically turned on the coalition for failing to promote growth.
Britain’s most famous business tycoon said ministers’ rhetoric on reinvigorating the economy had not been matched by action. He demanded that the government show more support for small and medium businesses which were “the engines of any healthy economy”.
In an outspoken intervention, the founder and chairman of the Virgin Group called for a renewed focus from ministers on bringing unemployment down and promoting the country’s entrepreneurial spirit.
Branson told the Observer: “To get that growth, we need to get behind the small and medium-sized businesses that are the engines of any healthy economy. They need investment and finance, and that comes from the big banks. The politicians talk of encouraging lending;
Although a cabinet minister has become a casualty, and the conflict between the Quebec Liberal government and student protesters remains unresolved, Premier Jean Charest may emerge as the winner in the dispute, some observers say.
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Hollande govt to be dominated by moderates, Aubry out
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