PMQs Preview - 26th January 2011

This is not going to be a long post. In fact I wrote that sentence just to beef it up a bit. Because PMQs tomorrow is only going to be about one thing: today's shock 0.5% GDP contraction. Balls has already launched a pretty effective broadside on Osborne tonight, claiming that the 0.7% GDP growth in the previous quarter was a legacy of Labour's spending plans and that these are the first set of figures that reflect the Conservatives' economic policies.

Surely even Ed Miliband can make this stick tomorrow. For all their bluster Cameron and Osborne know that the weather did not cause all this damage alone - and that blaming the snow is a line that won't play well in the House. Expect their VAT hike to take a beating. Despite this, Balls' record under Brown and the resignation of Alan Johnson late last week should give Cameron something to hold on to, even if Miliband can just point to Coulson and previous Tory calls for more financial deregulation. It should be fun... 

Weekly Round-up - 23.01.11

This week will certainly be remembered for the two dramatic resignations that came on Thursday and Friday. Alan Johnson's decision to resign, taken late Thursday afternoon, was a shock because despite his rather embarrassing inability to master his economic brief he still retained the confidence of Ed Miliband. His decision to leave for personal reasons - it appears his wife is filing for divorce -will mean that the attacks on Miliband's personal judgement which will inevitably come next week will not be as effective. But the Labour leader will still have to answer some awkward questions now that Ed Balls, the man that he deliberately snubbed last year, is his new Shadow Chancellor.

We were also treated, early on Friday morning, to the resignation of Andy Coulson, David Cameron's Director of Communications. This was not a total surprise - it had been a question of when not if - but the timing was a little unexpected. The case against Coulson personally has a lot of circumstantial evidence but has so far lacked concrete proof. He had quite accurately realised that he had committed the cardinal sin for a press officer and become the story, but that had been true to some extent since he was hired. While it was excruciating to see an opportunistic Ed Miliband question Cameron's judgement just hours after his own inept Shadow Chancellor had walked, the PM will quite rightly face some hard questions next week about his decision to hire the former NotW Editor. As a final point, it is worth noting that without question both Johnson and Coulson chose to use the appearance of Tony Blair at the Chilcot inquiry as cover for their resignations.

The rest of the week was dominated by unemployment figures that made particularly depressing reading for young people, and the official launch of Andrew Lansley's NHS reforms, which - although well-intentioned and if successful will radically improve the way the NHS operates - represent an unusual gamble by the PM.

Johnson's resignation: good or bad for Miliband?

I have long argued that Labour could make life a lot harder for the Tories if they put Ed Balls or Yvette Cooper in the Shadow Chancellor's role. Now that Balls is there, expect him to make the brief his own and really push Osborne on every decision. While the Conservatives will no doubt mock Balls's closeness to Gordon Brown and lambast Miliband for his decision to hire Johnson for a job he was never suited for, after a couple of weeks this will die down and the Tories will be left facing someone who is ruthless and totally on top of his brief.

But while it's not good news for the Tories, and it definitely is good news for Ed Balls and Yvette Cooper - who will no longer be wasted shadowing William Hague - I'm not too sure that it's good news for Ed Miliband. He didn't put Balls into that role for two reasons: they have different ideas about what Labour's economic policy should be, and Miliband thought Balls would become too powerful as Shadow Chancellor. Both of these problems still exist.

Ed Balls has a different economic agenda to Miliband. It was evident in the leadership election and it is still there now. Miliband clearly had problems controlling Johnson as well, but Balls is different because unlike Johnson, he actually has a plan of action and knows what he's doing. Johnson was never really a threat even when he disagreed: Balls could be. It's not surprising that Balls has said that he is fully supportive of Darling's deficit reduction plan, because he has to show that they're on the same team. But he will deviate soon enough.

Balls is convinced his economic approach is right, and won't be worried by Tory attacks on Labour for being unwilling to tackle the deficit. Public support for that is falling anyway, and Miliband's half-hearted attempts at moderation will disappear. 2011 will not just see the pressure increase on the coalition: there will be equally as much pressure on the Labour Party to oppose cuts everywhere: across every department and across every county. Balls will heed all these calls, and Miliband won't have the political clout to stop him.

But this isn't necessarily a bad thing for Labour. The two worked closely for a long time under Gordon Brown and will have seen the chaos that was his relationship with Tony Blair. They will work hard to avoid that happening again. Even if Miliband is initially weakened personally, the Labour Party as a whole will undoubtedly be strengthened by having a competent Shadow Chancellor in the midst of the most dramatic changes to Government in over a decade. And that in turn will strengthen Miliband's claim that the Labour Party has a plausible, alternative agenda to the Coalition and that they can win in 2015. 

PMQs Review - 12th Jan 2011

As I predicted, bankers' bonuses dominated PMQs today. What I didn't expect was that Ed Miliband would actually manage to make some of his attacks stick. His first question was his best, pointing out that the Conservatives still had their election pledge to cap bonuses at £2,000 on their website and that Cameron had spectacularly failed to implement it. (Someone at CCHQ should get an earful for this, given that it was raised during the emergency questions to Osborne yesterday.)

Cameron's reply was weak on substance but high on flair, setting the tone for a very personal PMQs. Miliband probably could have pushed on with this line of questioning but he is still too unsure of himself to deviate from what was pretty defined series of questions. Even so, his next question was good, asking Cameron about the amount of money that his Bankers' Levy would raise, and comparing that figure to Labour’s Bankers' Bonus tax.

The PM gave a very long, technical answer to this question which seemed to flummox Miliband. This was a real shame, because Cameron was being a little creative with the facts. He argued that his Levy would raise £2.5bn this year, more than the £2.3bn Labour's tax generated. Miliband argued that Cameron's Levy would raise £1.3bn, and said Labour's Bonus Tax raised 3.5bn.

It was Miliband who had his facts straight. The crafty maths that the Treasury used to get the £3.5bn down to £2.5bn – by making guesses about how much NI and income tax they'd lost in lieu – and the fudged statistic that the Levy would raise £2.5bn – it will in 2012, but not in 2011 – were frankly embarrassing. But fortunately for the PM, it was here that Miliband really let himself down. He stuck to his script again and failed to make it clear just how wrong Cameron was. This was a huge opportunity missed.

He ended up asking a lengthy question demanding more transparency, which gave Cameron the opportunity to turn to Labour's record in Government, and there was little substance to the rest of the session. Cameron scored an easy hit by reminding the House that Miliband had been at the Treasury during Labour's period in power and, in particular, when they had awarded Sir Fred Goodwin a knighthood.

Throughout PMQs it was Cameron who landed the better jokes. The best was an excellent quip that Labour had 'a shadow chancellor who can’t count and a Labour leader who doesn’t count'. He also made frequent references to Johnson’s mathematical shortcomings and claimed 'there’s no point Wallace [Miliband] asking Gromit [Johnson] about that one'. He also suggested that Ed Miliband should switch with his brother: that he should go on TV and let David run the Party.

Yet at times the whole thing threatened to get a bit too personal Cameron said of Miliband that: 'He was the nothing man when he was at the Treasury and he is the nothing man now he's trying to run the Labour Party.' For his part, Miliband commented that Osborne was a 'poisonous fungus'. Cameron tends to get personal when he's in a tight spot, and Miliband was just responding in kind – but it didn't look great for either man.

Bankers' bonuses worked for Miliband today not because he got the best of Cameron but because he pushed an argument that will resonate with the electorate. Miliband had a big opportunity to really punish the PM but he still lacks the confidence to deviate from his script and so Cameron was able to fudge his response, make a few jokes and stop Ed Miliband from winning it, but he was never on strong ground. A good defence by Cameron and a promising start to the year by Ed Miliband.

A very entertaining score draw.

PMQs Preview - 12th January 2011

So, at long long last, PMQs is back. And with it comes the very first PMQs Preview here at Woodman’s World. So after a relatively busy festive period, what issues are likely to dominate the first session of the new year?

This morning I was pretty sure that bankers’ bonuses would be Ed Miliband’s main focus. But watching today’s emergency questions to the Chancellor and seeing Alan Johnson and a host of other MPs fail to land a solid blow on George Osborne I’m not convinced it’d be a good idea for the Labour leader.

If Miliband does use this line, he better have a long list of retorts for Cameron when the PM – as he undoubtedly will – reminds the House of the scale of bonuses under the previous Labour government. A few choice quotes from Mandelson – 'haven’t the rich suffered enough' or 'We are intensely relaxed about people getting filthy rich' spring to mind – or maybe a quick mention of Sir (with emphasis on Labour’s knighthood) Fred Goodwin’s £14million bonus...

Today we found out that the decision on retaining control orders, which expire in March and was due this Thursday, has been delayed by another week or two. It’s clear that the Government is struggling to come to a decision. Given that Labour created them and took a strong line on law and order, this is a topic Miliband should focus on. Not only can Labour point to a strong, or at least unambiguous, record, but it can also make political capital from the confusion in Government – both within the coalition and in the individual parties.

Some of the detail has leaked to the BBC this evening, and Ed Balls has been quoted already as saying that the process has 'descended into a shambles', and that it is designed to 'keep the coalition together rather than exclusively about what is in the national interest'. A Labour attack on this would also tie neatly with a dig at Ken Clarke’s prison reforms and the plan to allow inmates the vote, which are making lots of Tories very unhappy.

One other option for Miliband is the EU Bill, which is being debated tonight and is likely to pass despite unease on the Conservative backbenches. The big problem with the Bill is this: it was designed to appease eurosceptic Tory backbenchers and it has failed. Indeed, this is the group which has been most vocally opposed. Labour is on risky ground with Europe after the shambles of the Lisbon Treaty but they could still make the Tories uncomfortable with a couple of well-targeted questions.

Anyway, that’s what I’d do – although previous experience suggests that it might well not be what Miliband does. The main thing is that he avoids bankers’ bonuses, because it’s worse for Labour than the Conservatives. Besides, any debate even touching on economics is likely to encourage Cameron to bring up Alan Johnson’s National Insurance gaffe earlier this week.

Other things to watch out for include the sluggish Q4 growth at the end of last year and the 50p tax rate, as well as comments on the 'nuclear option' outlined by Vince Cable before Christmas. I wouldn't expect to hear anything on Eric Illsley or David Chaytor from either party. 

'Progressive' argument obscures real threat from inflation

We are four days into 2011 and already I've heard the words 'progressive' and 'regressive' so many times my head is spinning and I'm starting to feel nauseous. Sadly, I can see this being a trend that continues throughout 2011 as Labour seeks to label everything the Coalition does as 'regressive'. 

What's even more upsetting is that the real issue here is being missed. Retailers are going to put up prices by as much as 5% or even 8%. This isn't to make profit, it's to readjust their costs to factor in inflation. These price rises were coming VAT rise or no VAT rise. 

So the real story here is not the tired old tale about the profligate Labour Government and the austere Coalition reducing its deficit, but about the huge risk the UK faces in 2011 from inflation which some economists at the Bank of England fear could see the CPI top 4%. 

4%! And that's just the CPI. The RPI was already at 4.7% in November. So despite recent support for their economic measures from a group of leading economists - who believe that the UK is in for a slow period of growth in 2011 rather than a double-dip recession - the threat of inflation still looms large. It is the most pressing economic problem facing the country, and the Government must start concentrating on finding some way to reduce inflation. 

p.s. If you want to look at whether the VAT rise is progressive or regressive then look no further than this well-researched article by the BBC's Business Reporter Laurence Knight.

This is no time for a novice!

Now where have I heard that line before...?

Shadow Cabinet - Reaction

I think putting Alan Johnson into the Shadow Cabinet role was a pretty shrewd move by Red Ed. He's already said he broadly agrees with Darling's deficit reduction plan, which chimes with Ed's position. Furthermore, it keeps Ed Balls away from the job, and ensures that Balls doesn't become some Gordon Brown figure circa 2000, formulating his own economic policy independently of the leader. Given how off piste Balls' message on the deficit is that's an own goal avoided for Labour.

Yet this is by no means a great shadow cabinet, and it certainly doesn't chime with Ed's call to a 'new generation' given the prominence of Balls, Cooper, Johnson, and Harman, as well as other former ministers like Hain, Burnham, Flint and Benn.

I doubt the Tories will be unduly worried with this cabinet. They already know how difficult what they are trying to do is and they have just had a pretty successful conference period. They'll be more focussed on getting the Spending Review announcements sorted for later this month. That said, Theresa May will probably be a little concerned at facing off against Ed Balls, given his reputation. I can't wait to see Caroline Flint square off against Eric Pickles. That will definitely be entertaining!