Rolling coverage of all the day’s political developments as they happenNo 10 to write to Ipsa demanding rethink on MPs’ 10% pay riseDavid Miliband to speak at IoD conference in London IFS accuses government of being ‘misleading’ about impact of cutsOsborne finds £4.5bn from cuts, efficiencies and asset sales 4.38pm BST If I’m sounding a bit foreboding about what might go wrong, it’s not because I see anything going wrong. But we will be very lucky if we have no global shocks hitting us, we’ll be very lucky given that we’ve had five years of growth since 2010, with only a minor blip not a recession in 2012, another five years. Ten years of uninterrupted growth would be pretty well a post-war miracle. That does not happen in the real world.Alex Salmond seems to think women should be seen not heard His attitude belongs firmly in the 19th centurySalmond can dish it out but he can't take it!Some of the things that David Cameron is asking for I can support ... There are other points where we have a different opinion, but we have always been able also to pursue a Europe at different speeds, to find opt-out solutions for example. 4.07pm BST Ukip is opposed to the sale of the government’s remaining stake in Royal Mail. This is from Paul Nuttall, its deputy leader.Under EU state aid rules the UK government is strictly forbidden from helping the Royal Mail with taxpayers’ money and this means that in future it could go bust and completely disappear.This final part of the privatisation means we will be left with a completely destroyed Royal Mail, once a proud British institution that did so much more than just deliver letters. We can thank the EU for that. 3.53pm BST In the Commons debate, as soon as George Osborne announces his cuts/savings, Labour’s Chris Leslie stood up to say that he should be announcing something as significant as this in a proper oral statement. Osborne replied by saying it was odd for Labour to criticise him for making a spending announcement in the Commons chamber. Leslie has now put out a statement with a more polished version of the same critique. He said:Nobody disagrees with sensible efficiencies because spending does need to fall in unprotected areas, but why is the chancellor hiding the detail? George Osborne needs to spell out urgently who is paying the price in this chaotic process. This is a shambolic approach to planning public services, ripping up his own ‘long-term plan’ set out just weeks ago in the March budget. Savings need to be made through proper reform not short-term salami slicing.The Tories’ botched privatisation of Royal Mail in the last parliament short-changed taxpayers by hundreds of millions of pounds. The government now needs to explain how it has learned the lessons of last time so that the same mistakes aren’t simply repeated. 3.49pm BST John Swinney, Scotland’s deputy first minister, says George Osborne’s new cuts will take £170m from his government’s budget and are “completely and utterly unacceptable”. In a statement he said:This cut of around £170m to the Scottish budget this year is completely and utterly unacceptable. The Scottish parliament has already agreed our budget for this year and that should be respected, not slashed as part of George Osborne and David Cameron’s ideological obsession with austerity.The people of Scotland made perfectly clear in the recent UK election that they rejected the Tories’ plans for more and harsher cuts, yet the UK government is planning to inflict £170m of even deeper austerity on Scotland this year. 3.44pm BST John Mann, the Labour MP and a member of the Commons Treasury committee in the last parliament, told BBC News that he was opposed to George Osborne selling the government’s remaining stake in the Royal Mail without a consultation.The [feedback] that I get is that the public prefers a universal system and will not be happy to have [the royal name] claimed by a private company. 3.29pm BST The Lib Dems say George Osborne’s cuts announcement shows that, without the Lib Dems in government, the Tories are lurching to the right. This is from the Lib Dem MP Tom Brake.Without Liberal Democrats in government, Osborne has taken the first opportunity to lurch recklessly to the right.Tory plans to balance the books will be met by excessive spending cuts and don’t ask the wealthiest to pay a penny extra to save the services we all rely on. 3.26pm BST A Ministry of Defence spokesman said the £500m amounted to 1.5% of the overall defence budget. It will not lead to the UK dropping below its present Nato commitment to spend 2% of GDP on defence.The spokesman said: “This agreement will not impact on the baseline defence budget, manpower numbers or current operations. The UK will continue to spend 2% of GDP on defence in this financial year.” 3.22pm BST The Department for Communities and Local Government, whose key responsibilities are housing and local councils, has been asked to cut £230m from its nearly £8bn budget this year.Some of these ‘savings’ will in fact be money raised by selling land for housing developments, though the department has not yet said how much it hopes to raise. Nor is it clear whether land can be sold competitively in such a short time frame, unless sales are already underway - in which case this is not a new announcement. 3.19pm BST Sadiq Khan, who is seeking to win the election to become Labour’s candidate for London mayor, has condemned George Osborne’s decision to sell off land around King’s Cross. He said:London is facing a chronic housing crisis, with land being bought and sold at a premium. The chancellor and the government should not be making a fast buck out of land they own but handing this over to the people of London so we can build affordable housing to buy and rent for future generations – anything else will be a betrayal of Londoners. 3.16pm BST The Environment Department has already suffered some of the steepest cuts across Whitehall, with a 30% cut in 2010 against the government average of 19%, followed by a further 10% in 2013, leaving observers wondering what’s left to axe. Under the plans announced today, it’ll have to save an extra £83m in 2015-16, or nearly 4% of its £2.1bn budget.The only named project for the axe is £250,000 for research on urban seagulls, along with other similarly-designated “low priority” work. Further savings are expected from efficiencies, a spokeswoman said. 3.12pm BST The latest round of savings imposed on the Ministry of Justice, amounting to £249m off the annual budget, is likely to come from delaying capital projects and underspends in legal aid.Having sliced around £800m a year - about 10% overall - off the annual MoJ budget during the last parliament, lawyers and prison governors believe resources have already been cut to the bone. 3.10pm BST David Sparks, chair of the Local Government Association, told the World at One that George Osborne’s announcement amounted to “an opening shot in another war on local government”.The announcement in parliament of a 5% cut, when it is translated into the real world of local government, is a 7% cut in real terms. And it is also in addition to the 40% cut we have had over the last five years. Local government has been disproportionately singled out for cuts and we thought we had got away from that. This is an opening shot in another war on local government. 3.06pm BST Given that some on the political right wing wanted the Department of Culture, Media and Sport to be axed altogether ahead of the general election, its employees will be relatively pleased with the £30m cut to its annual budget of £1.2bn. With Ukip’s manifesto pledge to scrap the DCMS no longer even a pipedream, the 2.5% overall cut will fall hardest on arms-length funding bodies or quangos. This is especially so as the number of departmental civil servants has been cut in recent years to fewer than 500. 3.04pm BST The TUC says that George Osborne’s decision to accelerate cuts is dangerous. This is from the its general secretary, Frances O’Grady.The chancellor failed to meet his deficit targets in the last parliament because he chose cuts over investment for growth, and he’s about to make the same mistake again. Despite the OECD warning this week that fast cuts are a danger to growth, he’s rushing ahead and putting education and innovation in the frontline for some of the largest cutbacks.This is the wrong plan. We need an investment-led approach to deliver the strong recovery needed for wage rises, productivity gains and higher living standards. But the chancellor’s plan for fast and extreme cuts will hold back growth, and it will slash the tax credits and vital services that workers and their families rely on. 3.00pm BST While the headline cut sounds extreme, there is some chicanery here. The department ostensibly has the biggest savings to find at £545m - but will generate £345m of this by selling off land around King’s Cross valued at £345m. More than half of the remaining £200m will be in reduced “contingency”, cutting by £124m the financial buffer for overspend or things going wrong - although presumably a true contingency would render the spending necessary again. London gets its budget further cut, by £31m, which TfL will have to find in its day-to-day spending - possibly forcing the next mayor to push up fares. £16m is saved by not subsidising further regional air links - the kind of money that has kept planes going to Newquay and Dundee (whose flights stay protected). Cycling takes a hit: £23m of the money promised to boost cycling cities won’t be spent. Nor will £5m pledged to keep train stations spruce, or another £1m earmarked for Sheffield’s tram trains. 2.59pm BST This morning Number 10 said it would be writing to Ipsa urging it to reconsider its plan to increase MPs’ pay. Chris Grayling, the leader of the Commons, has written on behalf of the government. The letter probably did not take him long to draft, because it is very short. Here it is.Dear Sir Ian [Kennedy, Ipsa chair]Thank you for your letter of 2 June, informing me of the launch of IPSA’s statutory review of MPs’ Pay. 2.55pm BST The Department for Work and Pensions will have to make a £105m cut this year, which comes in addition to the £2 billion savings to the department’s running costs made between 2009/2010 and 2014/15.These “efficiency savings” will be to departmental spending rather than cuts to benefits payments and are separate from the planned £12bn of welfare cuts, the details of which are yet to be revealed by the government. 2.42pm BST Here’s a Guardian video of Ed Miliband speaking in the economy debate. 2.24pm BST Ed Miliband started his speech with a nice, self-deprecating story about how his son told him he “used to be famous”. (See 1.18pm.) Guido Fawkes has posted the quote in full on his blog.In the time since the election I can report to the House that I have found some small consolations of losing. Spending time with my two boys, who feel that they have thier dad back. Though I confess that my eldest, who’s just turned six, did bring me further down to earth last week. He suddenly turned to me out of the blue and said ‘Dad, if there’s a fire at our house I think we’ll be ok’.I said ‘why’s that Daniel?’ 2.18pm BST Here is the department-by-department breakdown, from the Treasury press release, showing how George Osborne is achieving £3bn from cuts and efficiency measures.Education (non schools) - £450m 2.03pm BST And here are more details of the £3bn in “cuts” announced by George Osborne.I’ve put “cuts” in inverted commas because that is a pejorative term and the Treasury is quite deliberately avoiding it. Its press notice is headlined “Chancellor announces £4½ billion of measures to bring down debt”, and it describes these measures as “savings”. 1.56pm BST The chancellor has announced a total of £4.5bn-worth of “measures to bring down debt”, including savings and asset sales, to take place in the current year: 1.33pm BST Here are more details of the sale of the government’s remaining stake in Royal Mail from the Treasury press release.The stake currently has a market value of c.£1.5 billion. The Department for Business, Innovation and Skills (BIS) will sell its remaining holding of shares, completing the privatisation begun with an Initial Public Offering of shares in October 2013.The government has appointed Rothschild to advise BIS on the transaction. The government holds a 30% stake in the company, with the remaining 70% held by a combination of employees (10%) and private investors. 1.31pm BST Here is the Treasury news release with details of the sale for the government’s remaining stake in Royal Mail, and the new departmental cuts. 1.27pm BST Miliband says fighting an election is winning is some achievement. But how Cameron uses this mandate will determine his legacy.He says Cameron does not have to worry now about fighting another election. 1.25pm BST Miliband says the low-paid need social protection.He says people should read some of David Cameron’s early speeches. In a speech to mark the anniversary of the Scarman report, Cameron said that we should not think of poverty just in absolute terms and that relative poverty mattered too. 1.23pm BST Miliband says in-work poverty is a specific problem.I would say this is now the scourge of our time. 1.21pm BST Miliband says the OECD said recently that high inequality harms economic growth and social mobility.People used to think inequality was necessary for growth. 1.19pm BST Miliband quotes the passage from Disraeli’s Sybil that prompted the notion of one nation Conservatism.This issue still applies, he says. 1.18pm BST Miliband says losing has had it consolations.He has been able to spend more time with his sons. And recently his six-year-old son said they would be save if there was a fire. Why, he asked. Because, when they rang the fire brigade, they would come because Miliband “used to be famous”, Miliband’s son said. 1.16pm BST Ed Miliband is speaking now.He says he takes full responsibility for Labour’s defeat. 1.15pm BST Osborne has also announced extra cuts to public spending this year. 1.11pm BST Osborne says the government will sell its remaining stake in the Royal Mail. 1.10pm BST Osborne says government departments kept spending under budget in the last parliament. 1.09pm BST Osborne is now turning to public spending.As with any challenge, the sooner you get on with it, the better. 1.03pm BST Here’s Ed Miliband listening to the debate. 1.01pm BST Osborne says Labour has taken the unusual step of erecting the headstone before completing the post mortem.Referring to Chris Leslie’s interview in the Observer at the weekend, he says Leslie has now abandoned most aspects of his party’s platform. 12.57pm BST Osborne says we learnt yesterday that the UK has now the third highest employment rate of all the major economies. 12.55pm BST Here is a live feed of Osborne’s speech. 12.51pm BST Osborne says MPs will vote on the Queen’s speech tonight. He says at one point people thought there would be a minority government, which might not be able to win this vote. But now, thanks to the British people, he is confident of winning the vote.Osborne also says it is good to see Ed Miliband in the chamber. He says Miliband is expected to speak later, and he commends Miliband for coming to the House of face MP. He also says that no one doubted Miliband’s “personal integrity”. 12.47pm BST George Osborne, the chancellor, is speaking now.He says the government’s programme will bring security for working people.We were elected as the party for working people and we will govern as a government for working people. 12.46pm BST Chris Leslie is winding up now, with a soundbite.[George Osborne] is cold and calculating. He is the iceberg chancellor, with hidden dangers beneath the surface. 12.40pm BST Ed Miliband is in the chamber for the economy debate. Colleagues tell me that he is expected to speak in the debate. If he does, it will be the first time he has spoken in public since he resigned.Ed Miliband looking very combative, a couple of rows back from the front bench, before Osborne begins to speakEd Miliband is back in chamber for Osborne's speech pic.twitter.com/yblVIsTR1q 12.38pm BST The IFS produced its assessment of the impact of spending cuts on the basis of the plans already announced by the Conservatives. (See 11.41am.) Their assessment did not include the figures that George Osborne is set to announce within the next few minutes.Here is the IFS chart saying what’s coming. I’ve taken it from the IFS slide presentation (pdf). 12.30pm BST Leslie tells Osborne he should publish a Treasury risk analysis of the impact of leaving the EU.Leslie describes the benefits cap as “necessary”. 12.26pm BST My colleague Patrick Wintour says George Osborne will announce cuts worth £200m to local government, alongside the expected 5% cuts to non-protected departmental budgets.£200m cuts to local government alongside the 5 % cuts to other non protected departments this year due to be announced George Osborne. 12.24pm BST Chris Leslie, the shadow chancellor, is opening the Queen’s speech economy debate.In a reference to George Osborne’s leadership ambitions, Leslie says that very few people serve two full terms as chancellor and that people will be glad that Osborne is not planning to do that himself. 12.20pm BST In the Commons earlier Andy Burnham, the shadow health secretary, said the government was scrapping its 18-week referral-to-treatment target.Raising a point of order, he said:During this exchange, news has reached me that the secretary of state is in Liverpool announcing the scrapping of the 18-week target, presumably because they know they can no longer meet it.You have expressed your own concern forcibly in your own way and it’s on the record. It would not be appropriate to ask the minister to respond because we can’t have interrogation through point of order and the continuation of debate. 12.09pm BST On the Daily Politics Lord Forsyth, the Conservative peer, said that MPs should accept their proposed pay rise.Tory Lord Forsyth says "of course" MPs should accept payrise; should "bite the bullet" though he admits "difficult presentationally"Lord Forsyth on MPs taking pay rise: "Of course they should." Otherwise MPs will be people who "couldn't find a job anywhere else" #bbcdp 11.58am BST The Queens speech economy debate is due to start in about 10 minutes.George Osborne, the chancellor, will be speaking, and he is expected to announce some details of proposed spending cuts.Hearing that Osborne is about to announce five per cent cuts to all non-protected budgets this year. Statement coming at twelve.George Osborne is seeking to cut the budgets of most government departments this year by an extra 5 per cent in a move that raises the chances of Britain missing a crucial Nato target for defence spending. The Treasury has told each ministry, with the exception of health, education and international development, to find savings amounting to £3 billion or more before the budget on July 8. 11.41am BST And here is the statement from Carl Emmerson, the Institute for Fiscal Studies’s deputy director, about the briefing the IFS and the Institute for Government presented this morning.Here are the main points he made.The cuts that the government announces later this year in next month’s Budget and the following Spending Review may turn out to be deliverable. But they certainly will not feel like is just 1% being taken out of each area of spending, nor will it require merely “£13 billion from departmental savings” as the Conservative manifesto described. While not inaccurate, these numbers give a misleading impression of what departmental spending in many areas will look like if the manifesto commitment to eliminate the deficit by 2018–19, largely through spending cuts, while not cutting spending in many areas, is to be met.As this IFS observation published last week points out, finding the sought after £12 billion of cuts in just two years will not be easy. Cuts of this scale amount to almost 10% of unprotected benefits. Finding such a reduction without cutting child benefit, which has been pledged this week, would mean that even more significant cuts would likely be required to spending on one or more of tax credits, housing benefit and disability & incapacity benefits.To meet its overall spending target, even delivering the £12 billion of cuts to social security spending would still leave the government needing a slight acceleration of cuts to departmental spending, compared to what we have seen since 2010–11. As shown in the figure, the cuts would need to increase from the 2.0% a year seen over the five years from 2010–11 to 2015–16, to 2.2% a year over the three years from 2015–16 to 2018–19. This would give a total cut of £23.8 billion across all departments between 2015–16 and 2018–19. That’s on top of the £2.2 billion of cuts taking place in 2015–16 and the £49.2 billion of cuts delivered between 2009–10 and 2014–15.The coalition government was successful in keeping (broadly) to the spending plans set out in 2010. However it was helped by lower-than-forecast nominal growth in private sector wages, which made it easier (at least economically) to constrain the public sector pay bill.There are further reasons to think the next phase of cuts will be harder to deliver than those achieved since 2010. Presumably efficiencies that were easy to identify and to deliver have already been made. Similarly programmes judged to be low-value have already been scrapped. And, from next April, public sector employers will find the cost of offering their staff public service pensions rises as reduced National Insurance payments for contracting out end (£3.3 billion) and new scheme valuations push up the required employer contribution rate (£1.1 billion). On top of this, new spending commitments – such as the extension of free childcare (costed by the Conservatives at £350 million), the new tax-free childcare scheme (£0.8 billion), the removal of the cap on higher education student numbers (£0.7 billion) and the Dilnot social care funding reforms (£1.0 billion) – will further increase the cuts required elsewhere. Meanwhile demand for some public services – including social care – continues to rise as the population grows (and ages). 11.25am BST My colleague Heather Stewart has been at the Institute for Fiscal Studies and Institute for Government’s briefing about the spending review. She has been tweeting the highlights.Carl Emmerson @TheIFS: Conservatives' welfare cuts target implies 10% a year cuts to "unprotected" areas - ie outside pensioner benefits.Carl Emmerson cites cuts that cd meet target. eg. cutting child element of tax credits saves £5bn but wd increase child poverty by 300,000.Carl Emmerson @theifs Cam's claim we just need to save £1 in every £100 "seriously underestimates the size of the challenge that we face".Julian McCrae from @instituteforgov: greater pressures on spending now than in 2010. eg. public concern about NHS is growing. 11.01am BST The Institute of Directors is not an organisation known for its keen interest in international development. But someone there had the bright idea of inviting the head of the American aid organisation, the International Rescue Committee, to speak at its annual conference in London in October. And he has accepted.The IRC chief is, of course, David Miliband.After a general election campaign which focussed narrowly on domestic issues, now is the time to look up at the global trends affecting business. With a referendum on Britain’s membership of the EU due before 2017, Greece lurching from crisis to crisis, and conflict on Europe’s borders, it couldn’t be a better time to review what globalisation means in 2015. There are few people better placed than David Miliband to explore these issues, and we are delighted he will be joining us at the IoD’s annual convention. His time as foreign secretary and work with the IRC give him a unique perspective on the challenges of the modern world, and what they mean both for established businesses and entrepreneurs. 10.45am BST We have not heard much from the polling companies since the election, but ComRes has been in touch this morning, with the results of the first poll it has conducted since polling day.It gives the Tories a 12-point lead. But what’s more interesting than the result is the methodology. ComRes has developed a new voter turnout model, which is intended to better assess how likely respondents are to vote. Like other polling companies, ComRes used to use a form of turnout weighting before the general election which involved asking people how likely they were to vote. If someone said 10 (out of a scale for 10), their “vote” counted for twice as much as someone saying their chance of voting was 5 out of 10.This is the first poll using the new ComRes voter turnout model. The model simulates the likelihood of each respondent to vote based on their age and social grade. This has been calculated using actual general election turnout data on a constituency level and matches it with the known age and social grade profiles of the constituencies taken from the census. This will provide a more accurate reflection of the actual voting public. The polls at May’s general election tended to overestimate Labour’s support. At ComRes our review has uncovered that much of Labour’s backing was coming from groups that were less likely to actually turnout and vote than others. We’ve used this, along with official turnout data to build a voter turnout model which more accurately predicts who is more and less likely to vote, to ensure we’re getting the most accurate reflection of the voting public. The new Labour leader would do well to learn similar lessons, and concentrate on targeting those groups who are actually going to vote and where Labour has struggled in the past. 10.11am BST Here is a chart from the latest Ipsa document (pdf) showing how MPs’ pay compares to the pay of other senior professionals.These figures are based on MPs’ current pay. 10.05am BST IPSA first proposed a large pay rise for MPs in a long report in July 2013.I covered the contents in great detail on a blog at the time. Here is the post explaining in detail why Ipsa said MPs should receive £74,000 a year.We remain of the view that it is right to increase MPs’ pay to £74,000 for all the reasons we set out in December 2013 and which we summarise above. Subject to any new and compelling evidence arising from this review, we therefore intend to implement the determination as currently drafted, with a one-off adjustment in MPs’ pay to £74,000 and subsequently linking it to changes in average UK earnings for the remainder of this Parliament. The increase would be backdated to 8 May 2015. 9.45am BST Angus Robertson, the SNP’s leader at Westminster, is also saying he would refuse to take the proposed pay rise for MPs.SNP's @AngusRobertson will donate MP pay rise to charity. Labour leadership contenders will too. No wonder No10 submitting fresh IPSA letter 9.45am BST I’d be interested to know what readers think about the candidates for the Labour leadership. I have seen people discussing this BTL for a few days now, but I would like to hear more views because I’m thinking of posting a round-up of reader opinion at some point in the future (if it’s doable and worthwhile).I’m particularly keen to hear from people who are party members and planning to vote, but others are welcome to contribute too. 9.23am BST So I guess Philip Blond won’t be signing the change.org online petition opposing the proposed pay rise for MPs. 9.20am BST Philip Blond, head of the ResPublica thinktank, thinks Ipsa should be paying MPs even more.Well done to @ipsaUK but in order to preserve democracy and make sure Parliament is not just the province of the already wealthy - pay moreIndeed the wish to pay MP's less is a wish to emasculate democracy and deny it to successful talented people https://t.co/wYgIm9DOYXThis inverse biding war by labour & lid dem leadership candidates on MPs pay is deeply depressing:- raising the barriers to political entry 9.13am BST There will be an urgent question in the Commons this morning on health.An Urgent Commons Question has been granted to @andyburnhammp at 1030am to ask Jeremy Hunt for a statement on the NHS 'success regime'. 9.02am BST We start the day with a mini U-turn. Earlier this week Downing Street indicated it would not be writing to the Independent Parliamentary Standards Authority again re-stating its opposition to the proposed 10% pay rise for MPs. But this morning, with public opposition to the planned pay hike getting stronger, Number 10 has changed its mind, and decided that someone will be putting pen to paper. A source said:We’re writing a letter to Ipsa to reiterate we stand by the detailed submission we had already made to them last year saying we think this rise is wrong.Thursday's Telegraph front page: MPs' pay rise splits Cameron Cabinet #tomorrowspaperstoday #bbcpapers pic.twitter.com/WCRvyw3vz7 Continue reading...
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