Liberal Democrat Leaders Say Fair Taxation Is Key To Cutting Deficit

Danny Alexander outlines plans to kickstart economy by ensuring money hoarded by Labour is spent on infrastructure.












Liberal Democrats should fight the next election by aspiring to lift those earning less than £12,500 out of paying income tax, says Danny Alexander.

The Liberal Democrats should fight the next general election by aspiring to lift anyone earning less than £12,500 out of paying income tax, Danny Alexander said.

The chief secretary to the Treasury, a close ally of Nick Clegg, also set out the "next steps in our plan for growth", including a pot of £500m drawn from "unallocated funds" across Whitehall. Later, in an interview with the BBC's Andrew Neil, Alexander said these funds had been taken from savings found across government and did not amount to a stimulus.

Although this money comes from within the "spending plans", he said, the cash will now be disbursed with more urgency to kickstart infrastructure projects currently struggling for credit, with the hope of galvanising private spending.

It is the third indication from the Lib Dems in the past week that they intend to concentrate efforts on accelerating capital projects, which marks a subtle shift in emphasis towards greater public spending, without busting the headline deficit reduction plan.

Clegg made a speech on the subject last week, announcing that Alexander was now in charge of 40 projects across Whitehall, ensuring they are implemented rather than delayed.

They are pressing because they believe that if government funds already allocated can be spent rather than hoarded – which they believe was the case under the last Labour government – modest upfront sums "gear" up to become substantial amounts of fresh capital.

The business secretary, Vince Cable, also evoked the policies of Franklin D Roosevelt in the 1930s when he called for a "New Deal-style stimulus" for capital investment in an interview on Saturday with the Guardian. In his Q&A with Neil on Sunday evening at the party conference, Alexander refused to back Cable's language, but said he preferred to express it as the government "straining every sinew" to get the economy growing more.

As well as further schemes to drive capital investment, and the aspiration of the party going further in its bid to take the low paid out of tax, Alexander also set out measures to increase tax revenues.

He repeated a pledge made in last year's conference speech that there would be a clampdown on tax evasion, with 2,250 HMRC staff working on evasion and avoidance. He said the government was already raising £2bn in this way this year, which he pledged would rise to £7bn annually by the end of the parliament.

In one month's time, an "affluent team" will begin looking at the 350,000 wealthiest taxpayers who each earn more than £2.5m a year, in addition to the 5,000 who are already monitored: "These are the people who pay or should pay the 50p rate of tax," he said in his speech on the first morning of conference.

"My message to the small minority who don't pay what they owe is simple – I agree with the chancellor. We will find you and your money and you will pay your fair share," he said.

He was sanguine about the 50p rate of tax – which Tory colleagues expect will be dismantled if a review winding up in January shows it yields little revenue. Once Alexander had said he believed it was "cloud cuckoo land" the rate would be discarded despite Tory colleagues regarding him to agree he was not ideologically committed to it should it emerge to be unlucrative.

Tories say the debate behind the scenes is turning not on whether the 50p tax rate stays or goes but rather on what amount the replacement levy raises – the sum the previous Labour government intended it to raise when they introduced the tax; or the amount the 50p rate has actually brought in. The question then becomes what tax on the wealthy be brought in its stead.

Alexander said: "Fair taxation of the wealthiest is key to our deficit reduction plan. Of course, if a better way can be found to raise the money from this group, I will be willing to consider it."

Later in his interview with Neil, Alexander talked about ensuring the "tax burden" on the wealthy remained high.

Earlier in the day, Clegg also made it clear the party's negotiations on the 50p rate would not see them martial an ideological commitment to it, but rather they would accept its replacement by some other form of levy on the well-off.

He told the BBC's Andrew Marr programme: "It stays unless we can first make more progress on lowering the tax burden on people on low and middle incomes, and secondly making sure as the chancellor himself has said we can find other ways the wealthiest can pay their fair share."

In Birmingham, Alexander's speech was remarkable for placing an emphasis on how to push ahead with another aspect of the Lib Dem income tax policy, at the other end of the scale.

He told the conference hall: "In the next parliament, I want us to go further; our aspiration should be that someone working full time on the minimum wage should pay no income tax at all. An income tax threshold of £12,500 – think what that would do to work incentives, think what it would mean for basic fairness. Let's put that on the front page of our next manifesto."

The coalition agreement pledges that both parties in government will raise the income tax threshold to £10,000 by the end of the parliament and it is one of the policies the party is proudest of.

The policy has received support on the centre-right of the political spectrum with Tories sympathetic to its aims of cutting tax for the less well paid, but it has been criticised for being poorly targeted; in its original form this was a tax cut enjoyed by all, regardless of income.

The policy also has its Tory critics within the cabinet who fear a policy that removes people from paying tax would sever the relationship between government and the people.

Now the Lib Dems have committed themselves to raising the tax threshold still further, putting on the record an early indication of how they might seek to differentiate themselves from the Conservatives towards the end of the parliament.

Alexander's speech was occasionally heckled by one audience member with a shout of "rubbish" when Alexander criticised the Labour policies of Gordon Brown – a reminder that some delegates in the hall do not agree with the party leadership's decision to back plans to eliminate the structural deficit by the end of the parliament.

The coalition is currently trying hard to devise policies that will stimulate the British economy without busting either of the two targets they hope to hit at the end of the parliament – eliminating the structural deficit by 2014-2015 and bringing down the debt-to-GDP ratio.

While insistent they will not resile from the so-called "plan A" both on and off the record, the new imperative is to find ways of using existing capital spending commitment to encourage the private sector to part with their capital and increase the amount of capital in the economy.

On Friday, the business secretary Vince Cable, published a pamphlet for the CentreForum thinktank in which he suggested that alongside a new round of quantitative easing, he also believed new infrastructure projects were necessary including new roads built as toll roads.

This would have the advantage of encouraging the private sector to embark on a capital investment with a certain revenue stream not coming from the public purse.

Insisting his proposals amounted to a radical Keynesian package – using language and ideology not associated with the Conservative chancellor, George Osborne – Cable said that in the face of a stagnating economy ministers had to "pull all the levers available to government. We are not powerless."

Cable said: "It was four years after the Great Crash that Roosevelt came in and several years before they could do anything. Dams started being built 10 years after the Great Crash. What I have set out is a Keynesian approach to a demand crisis, but operating in a new world in which governments are highly constrained by these very febrile international financial markets. We constantly have to pay attention to them."

Now Alexander will disburse a "Growing Places fund", which he hopes enable the creation of local infrastructure across England.

"£500m to deliver key infrastructure and unlock development and create jobs. Providing a one-off upfront capital investment to kickstart developments that are stalled due to cash flow problems or lack of confidence.

"Putting local areas in the driving seat, enabling local government to invest in the key strategic infrastructure projects that they have identified as priorities and getting people into work."

Alexander said: "As Liberal Democrats, our judgments about what needs to be done should be driven by the liberal economy we want to build – sustainable, balanced, competitive, fair. To get there we must break down the vested interests – the enemies of growth that stand in the way of future prosperity."

"Too many businesses are being held back by congested roads, slow railways, inadequate broadband. Now more than ever, we need to get on with this work."

Hugh Grant: style watch

OK, so Italian politics has its problems, but at least they know how to dress. Hugh Grant, on the other hand, here lends weight to the old style adage that British men can't do casual.

When it comes to rocking a three-piece suit with a pocket square, the Savile Row gent still leads the world, but a certain type of British man still flounders as soon as let off the strictest dress code leash.

The trouble with this outfit is that the messages are mixed: was he trying to look smart but didn't have time to pull himself together and tuck his shirt in, or was he aiming for casual and put a suit jacket on as an afterthought? I suspect he was aiming for the kind of rakish dishevelment that Bill Nighy has made his own. But to pull that off takes effort.

Only the most perfectly fitted jacket looks good rumpled. Lucky for Hugh he's only addressing the Lib Dem conference. He'd never make it at London fashion week.

UK Politics: Recovery Postponed

Dismal growth prospects have sharply redrawn Britain’s political landscape, write George Parker and Elizabeth Rigby.











Political cover: David Cameron, right, seen with Nick Clegg, has come to realise how useful his junior coalition partner is in protecting him from his own party's ranks - not least over issues such as Europe, tax and health.

This week Britain’s cabinet was confronted with a bleak political picture. In cold and precise terms, George Osborne, chancellor of the exchequer, told colleagues in Downing Street on Tuesday that UK growth prospects were deteriorating and did not look like they were coming back soon. The significance of his analysis is only slowly being grasped by Britain’s political classes: everything has changed.

“The reality we face is stark,” confirmed Nick Clegg, deputy prime minister, in a speech on Wednesday that reflected the growing sense of foreboding around the coffin-shaped cabinet table. “There is now little margin for error,” he added. One minister confirmed that Britain was facing “a terrible situation”; another said it felt like 2008 when the financial crisis hit.

Much has changed during Britain’s long and dismal summer. Mr Osborne confirmed to ministerial colleagues that the eurozone crisis, shrinking export markets, the US slowdown, high inflation and rising commodity prices had all taken their toll, draining demand from an economy already sapped by the biggest fiscal consolidation of any major economy.

The riots that ravaged British cities last month may have been little more than mass copycat looting, but images of burning buildings and police struggling to regain control of the streets were reminiscent of the conflicts that scarred cities across the country during the brutal recession of the 1980s.

As Britain’s politicians prepare for the annual party conference season, the implications of economic slowdown – and the possibility of another recession – are slowly becoming clearer. The economy will dominate debate and shape strategy; a new phase in politics is opening up.

To understand the scale of the shift, consider the outlook at the start of the year. The Treasury was drawing up plans to start selling its stakes in banks, nationalised during the crisis, in 2012 in a sign of confidence returning to the City of London.

Government advisers talked confidently of next year’s Olympic Games in London as “a pivotal moment” – a shining light on the horizon – when austerity Britain would regain its verve. (Queen Elizabeth’s diamond jubilee would further lift the spirits.) All parties expected to fight the 2015 general election against a backdrop of plenty that would have followed a few years of tough-but-necessary choices.

Now the bank sales have been shelved until after the election and few in the cabinet mention shining lights. Party strategists have suddenly stopped talking about “spending the proceeds of growth” in the second half of the parliament.

Of course, the picture could change dramatically again, but for now Mr Osborne’s grand political plan – two years of pain, three years of recovery – seems in doubt. Ministers admit that come the election, the economy may still be mired in low growth and few now expect the independent Office for Budget Responsibility’s forecasts to be achieved. As recently as March, the OBR forecast growth of 1.7 per cent this year, 2.5 per cent in 2012 and 2.9 per cent in the two years before the election. Current consensus forecasts see 1.3 per cent growth this year and 2 per cent next year.

The strains were showing in the Conservative-Liberal Democrat coalition even before the economic outlook worsened; now the two sides will have to march together through what could be almost four years of economic hardship, punctuated by public sector strikes over the cuts.

Pressure is also mounting on David Cameron, prime minister, to do something to cheer the rightwing of his Conservative party, which has applauded the government’s tough economic message but feels badly let down on other issues, including Europe, tax, schools and immigration.

Tim Montgomerie, editor of ConservativeHome, an activists’ website, says Mr Cameron has been able to contain this unrest by pointing to the coalition’s success in sticking to its central mission: “sorting out the mess” in the public finances left by his Labour predecessor Gordon Brown. “That could change if the economy goes wrong and the coalition gets the blame,” Mr Montgomerie says.

Mr Cameron is drawing up a growth strategy built around delivering big infrastructure projects, cutting red tape and reforming planning laws. But he is under growing pressure from some in his party to emulate Margaret Thatcher and administer the type of radical economic shock therapy that she delivered as prime minister in the 1980s. Suggestions include cutting the 50p top rate of tax, scrapping European Union labour laws, reintroducing selective grammar schools and engaging in ambitious supply side reforms.

Tory MPs have been scrambling to put their advice to Mr Cameron down in writing before the conference season. David Davis, who ran against the prime minister for the party leadership, has co-edited a book – The Future of Conservatism – claiming that Tory ideals have been “significantly diluted” by what he once dubbed the “Brokeback coalition”.

Priti Patel, one of five new Tory MPs to contribute to After the Coalition, another book, says: “Being in coalition should not be an excuse for holding back on many critical issues such as sentencing, immigration and Europe. David Cameron is in charge and with a Conservative majority in cabinet there is no reason why the status quo should become the default option.”

. . .

The grumpy mood on the Conservative benches is reinforced by a suspicion that Mr Cameron – who describes himself as a “liberal conservative” – is using the Liberal Democrats as cover for refusing to deliver a more rightwing agenda. Indeed one Tory official admitted the coalition had been “brilliant for us” because it allowed Mr Cameron to stick to the centre ground.

The prime minister is also blamed by some Tory MPs for a big review of parliamentary constituency boundaries – almost everyone is affected; some will lose their seats altogether – while others complain that the well-heeled Mr Cameron is remote and disconnected from the grassroots. “We’ve been taken over by a Bullingdon Club clique,” complained one senior Tory MP, referring to Mr Cameron’s past membership of a plummy-yet-boorish Oxford university drinking club. “It’s almost Edwardian.”

Mr Cameron’s team rejects this as an inaccurate caricature, pointing out that the prime minister has been dining with MPs and visiting the House of Commons tea room regularly – a classic manoeuvre to try to quell unrest in the ranks. But he knows that the ongoing economic gloom – manifested in rising unemployment and falling living standards – will only make party management harder.

Nevertheless, Mr Cameron appears unperturbed for now. That is in part because he believes he can win the 2015 election even if the economy is in the doldrums – provided he can blame external factors and claim that he had taken the tough action on the deficit to ensure things were not even worse. Clinging to the mantle of “economic competence” has become yet more essential to the prime minister.

Under Ed Miliband, the Labour opposition has so far failed to regain its reputation for economic credibility, which suffered under what Alistair Darling – the party’s last chancellor – has admitted was a period of “chaos and crisis” during the last years of Mr Brown’s government.

One coalition minister says: “All our feedback tells us that people don’t like what we are doing but they attach no credibility to the alternative. I think people have made up their mind about the Labour leadership.”

Mr Miliband must give a strong performance at his own party conference to reassure the doubters, fleshing out an alternative economic Plan B that does not simply remind voters that it was Labour which presided over the surge in borrowing in the first place.

Shaping Labour’s economic strategy is Ed Balls, a former Brown lieutenant, who has long argued that the coalition’s rapid deficit-reduction plan would hobble the economy. He talks of a “growth crisis” and told the BBC this week: “The evidence is clear that I was right and they were wrong.” But being right may not be enough.

Lord Mandelson, former Labour business secretary, says his party must recognise “the economy will not be growing quickly and real incomes will not be rising” at the next election. Writing in a new pamphlet called The Purple Book, he argues Labour must develop policies for tough times, including plans to modernise public services, to keep taxes low and to keep the economy competitive.

. . .

For Mr Clegg the economic downturn presents a major political challenge as he prepares for his Lib Dem party conference in Birmingham next week. Members of his centrist party have been prepared to go along with the coalition’s tough fiscal plan on the understanding that things would be better by 2015. Now what?

The deputy prime minister is determined to stay the course; he believes there is a big political prize in securing a record of economic competence in government. But Lib Dem strategists admit they were betting on fighting the next election in good times and are having to rethink.

“The Tories can get away with an election in bad times, because they can say they are still trying to clear up the mess left by the socialists,” says one party strategist. “It’s harder for the Lib Dems, we are a party which thrives on optimism – that may be in short supply.”

To raise morale, Mr Clegg has sharpened his party’s identity in the coalition, fighting to water down “Tory” health reforms, opposing the removal of the 50p tax rate or the introduction of private profit into the schools system. Like Mr Osborne, he needs to show that the coalition has a strategy for growth to counter the downturn.

But Mr Clegg has always warned his party not to think of itself as an “internal opposition” in government. His allies say he needed to “turn up the dial” in differentiating himself and his party from the Tories following dismal local election results – and defeat in a referendum on electoral reform, a core Lib Dem issue – in May. But, they predict, he may turn the dial down again once the conference season is out of the way. “The next year is going to be very tough,” says one ally. “We’ll have to knuckle down and get on with the job.”

Europe: Sceptical genies brood in the bottle

In Brussels every crisis is an opportunity to further European integration. But at Westminster, particularly among most MPs in the Conservative party, the eurozone crisis offers a chance to move in the other direction. For them the current euro troubles are a rare opportunity to take Britain further from the centre of a European project they detest.

For David Cameron, prime minister, turmoil in the eurozone is thus not only an economic danger, but a political one too. Once the Tories were split on Europe; now almost the whole party is eurosceptic. (This week at least 100 MPs discussed a new “moderate” agenda to reclaim powers from Brussels.)

Mr Cameron’s problem is managing this visceral dislike of Europe. “I was told never to seek a meeting with David to discuss Europe,” says one Tory minister. “He thinks that even wanting to talk about Europe is swivel-eyed.”

The prime minister – who describes himself as “a very practical eurosceptic” – fears that when the Tory party talks about Europe, it starts to sound like a strange cult, out of touch with voters’ real concerns such as health and crime.

Tory MPs see the negotiation of a possible new European Union treaty to reinforce eurozone integration as their moment. They want Britain to use its veto to take back powers from Brussels on issues such as criminal justice, employment policy or immigration. Their hopes were raised last week when George Osborne, chancellor, said such a treaty was “on the cards” to pursue the “the remorseless logic” of monetary union: closer fiscal union. He knows that the tighter the core of the EU, the less likely Britain would ever be part of it.

Mr Cameron hopes that the crisis can be addressed without treaty change – a view shared by Herman Van Rompuy, EU president.

Tory demands for the repatriation of powers would strain coalition relations with the pro-European Liberal Democrats, who say Britain should be helping to solve the eurozone crisis.

So far Mr Cameron has managed to hold his party and the coalition on Europe. But many Tory colleagues believe he is hiding behind the Lib Dems as an excuse for not delivering the European policy they demand.

Liberal Democrats Vow To Fight Rightwing Policies Of 'Ruthless' Tories

Nick Clegg signals combative approach to coalition describing PM's party as political enemies who must be taken on.












Nick Clegg speaking at the Liberal Democrat party conference.

Nick Clegg's Liberal Democrats have vowed to face down "ruthless" and "extreme" forces in the Tory party to protect the British people from right-wing policies that would widen inequality and benefit the rich.

At a rally on Saturday night to open his party's annual conference in Birmingham, Clegg underlined the Lib Dems' newly combative approach to the coalition, describing David Cameron's party as "political enemies" who must be taken on when necessary in the national interest. After a traumatic year during which the Lib Dems' popularity has plummeted and their leader has been accused of abandoning his party's principles, Clegg struck a markedly more assertive note.

While trumpeting his party's successes so far in influencing health and tax policies, he said it was more prepared than ever to "fight tooth and nail" for what was right. "We are prepared to be awkward," he said. "We are not here to make things easy. We're here to put things right."

In an interview with the Observer, his deputy Simon Hughes goes further, telling the Conservatives they have no mandate to drive through a rightwing agenda. Hughes says the Tories have shown themselves to be "ruthless" operators in the first 16 months of the coalition over the referendum on electoral reform and boundary changes and says the resurgent right of the party is "extreme" on issues such as Europe and tax.

He says Tories must come to their senses and realise that they did not win the last election – and that they rely on the Lib Dems for power.

"Not only did they not win but they got a third of those who voted," he said. "The Tory party is not the dominant party in British politics that it used to be. It is absolutely not the dominant force in Scotland and Wales that it used to be. The Tory right have forgotten that."

In a rebuff to Conservative hardliners he adds: "There is absolutely no majority in parliament for your views. If there is a coalition government in the national interest then extreme remedies and answers are not appropriate."

The comments are bound to infuriate Cnservatives as the conference season opens. Many Tories are beginning to resent profoundly the way the Lib Dems are already watering down Tory changes on health and education and blocking Cameron from developing a more hardline approach on Europe.

Clegg and his ministers are now convinced they can claw back some of their pre-election popularity if they can demonstrate that they are reining in the Conservatives and stamping their own mark on government. Deep division between the coalition partners will surface in Birmingham over tax, welfare, health, pensions and last month's riots.

The party leadership will announce it will veto the abolition of the 50p tax rate for people earning over £150,000 – a key demand of the Tory right – unless and until other measures, such as a mansion tax, are imposed. It will also unveil plans to exempt the first £12,500 of earnings from tax, raising the target from its current level of £10,000.

Hughes says the party has to make the fight against wage inequality in the private sector a key theme. He said he is pushing hard for measures to limit the gap between the highest and lowest paid staff in the private sector. "The differentials are obscene and you really cannot just stand by," he said. "Liberal Democrats have to be clear. If Labour is really relaxed about the stinking rich, some of us are not relaxed about it."

Hughes also insisted that reform of party funding was essential to stop the Conservatives running ruthless campaigns – as they had against electoral reform. "The Tories can be nastier – with a result – if they are allowed to collect more and more money legitimately," he said.

On tax, he said the UK properties of wealthy non-domiciled individuals should be hit. "It would be entirely reasonable to say that if someone is not domiciled in this country but has six mansions they should be paying more into the system." Danny Alexander, the chief secretary to the Treasury, will announce the commitment of £600m to boost infrastructure projects and will attack bankers who fail to lend to businesses. "Our judgments about what needs to be done should be driven by the liberal economy we want to build," he will say.

On Saturday night, the Lib Dem equalities minister, Lynne Featherstone, dismissed suggestions that Cameron had been a major force behind the move to legalise gay marriage when she claimed ownership of the policy. "Conference, this is a Liberal Democrat policy," she said.

Clegg said his party had shown courage entering a coalition that was now shaping policy by "cutting taxes, not for the rich, but for millions of people on low and middle incomes". The Lib Dems could have "bottled" the chance to govern but instead "rose to the challenge", he said, "and we did it knowing it meant working with our political enemies and almost certain short-term unpopularity".

The party leadership was celebrating the failure of former health spokesman Evan Harris to force a vote on the NHS. The Lib Dems believe they are making more progress to dilute the reforms behind the scenes.

Only 26 Per Cent Of Public Now Have Confidence In MPs

The number of voters who believe MPs are dedicated to doing a good job for the public has almost halved in three years, a survey shows today.












Research commissioned for the Committee for Standards in Public Life found only 26 per cent now have confidence in their elected representatives compared with 46 per cent when the last study was carried out in 2008, before the expenses scandal.

The proportion thinking that most MPs are competent also fell by 10 percentage points from 36 to 26. The committee's chairman, Sir Christopher Kelly, described the findings as "worrying". He is putting the finishing touches to his committee's report into funding political parties, due next month. Plans include a £10,000 cap on individual donations with parties being compensated through tax relief on smaller contributions.

Sir Christopher said yesterday: "The results of this survey make stark reading. Previous surveys have shown that public confidence in those holding public office has been on a long term decline since 2004. The 2010 results suggest that the rate of decline may have increased. I am struck by the common themes that run through many of the issues we see. High ethical standards do not just happen. They require leadership and the development of a strong ethical culture in which people understand what is expected of them. Overwhelmingly, the scandals we have seen in recent years could have been prevented."

Sir Christopher said his report on party funding would look at "complex and controversial" issues.

"The public are concerned about very large donations, whether from activist groups, large companies, trade unions, or individual donors," he said. "People generally assume that substantial donations are made for self-interested reasons and a third of respondents believe that politicians 'very often' do special favours for people and organisations who give large donations."

Autumn Of Strikes Edges Closer

Unions have moved closer to an autumn of strikes as the Government was warned it faces a huge campaign of civil disobedience over spending cuts and "attacks" on workers' rights.













Millions of public sector workers could be taking industrial action in protest at planned changes to their pensions, possibly on November 29, when the Government announces its autumn financial statement.

An announcement could made within days of widespread ballots for action, heralding the biggest outbreak of industrial unrest for decades.

Plans to co-ordinate industrial action will be discussed at the TUC on Wednesday, but sources said a large number of unions were now moving towards balloting for strikes.

At the conference on Monday, delegates agreed to consider a legal challenge against the coalition, alleging breaches of international labour law, and to campaign against "anti-union" legislation.

Officials lined up to attack the Government over its spending cuts and moves to strengthen laws against strikes and other forms of union action.

Paul Kenny, leader of the GMB union, said that if the Government brings in more laws, it would be in response to strikes against public sector pensions, which he warned looked set to be joined by millions of workers.

He said: "Bad laws have to be broken. Civil disobedience in protest at erosion of civil liberties and freedoms have a place in our history. Millions of people inside and outside of trade unions can and will fight. If going to prison is the price to pay for standing up to bad laws, then so be it.

"We will give politicians the biggest campaign of civil disobedience their tiny minds have ever seen."

Len McCluskey, general secretary of Unite, said unions should not "meekly accept" anti-union laws, adding: "If tax avoidance is lawful and unpunished, let's plan for anti-union law avoidance in the same spirit."

David Cameron: Eton College Should Run A State School

David Cameron wants his old school – Eton College – to set up and run an academy funded by the taxpayer.












The Prime Minister confirmed that he met representatives from the £31,000-a-year boarding school this week to discuss taking over a state secondary.

Eton joined several other leading private schools at a Downing Street reception on Thursday staged to drive forward the Coalition’s flagship education reforms.

It is the latest in a series of attempts being made by the Government to court the independent sector as part of an expansion of the academies programme.

Earlier this summer, Nick Gibb, the Schools Minister, also addressed a meeting of the Headmasters’ and Headmistresses’ Conference, which represents 250 leading fee-paying schools, over the issue.

The move is likely to infuriate teaching unions who are already opposed to academies which they see as the effective “privatisation” of state education.

But talking to the BBC, Mr Cameron insisted that the sponsorship of academies represented a “great way” for independent schools to fulfil their “charitable purpose”.

Asked if he wanted his former school to formally join the programme, he said: “Yes, I would like all private schools to engage in this agenda and if you look at most private schools many of them already run bursaries for children from less well - off backgrounds and partnering state schools.

“To me all private schools have always had a charitable foundation, a charitable purpose, and that's a great way to deliver that.”

He added: "The truth is the problem has been not enough good school places in our country...so anyone who can play a role in that - private schools included - is welcome through my door to talk about how we drive up standards."

Tony Little, the Eton headmaster, said that the Eton had close relations with local state schools and was examining "several possible routes" for greater involvement and "ruled nothing out".

An expansion of academies is being seen as central to the Government’s attempts to drive up standards of state education.

Under reforms, schools are given almost complete freedom to run their own policies on admissions, the curriculum, teachers’ pay and the shape of the academic year.

Top state schools are automatically given the right to apply for academy status.

Ministers also want the worst schools to make the switch under the leadership of a third party sponsor – usually outstanding state schools, charities, education companies and entrepreneurs.

Some 28 independent schools are also helping to run academies, including Sevenoaks, Dulwich, Wellington, Marlborough, Malvern, Winchester, Uppingham and Oundle.

But ministers are keen to get more independent schools involved.

Mr Cameron joined Eton at 13 and left in 1984. Lord Waldegrave, the former Conservative Cabinet Minister is currently the provost of Eton and attended Thursday’s meeting.

Support Grows For Keeping 50p Tax Rate

Politicians from Labour and the Liberal Democrats joined forces with trade unions to argue for a retention of the 50p top rate of income tax after 20 leading economists called for it to be scrapped “as soon as possible” in a letter to the FT.










Alistair Darling, the chancellor who introduced the rate in 2009, and Tim Farron, the Lib Dem president, said on Wednesday that lowering the top rate of tax would be unfair while the economy was still in difficulty.

Mr Darling said: “This has got to stay in place until we get out of the crisis. It would be grossly unfair to remove it. In the long run you have got to keep your tax rates internationally competitive which means something like the two rates we used to have. To remove it today would be grossly unfair. If they do not pay their taxes then it is poorer people who are going to pay.”

He was supported by Mr Farron, who said scrapping the 50p rate would be “phenomenally immoral and send an appalling message to the overwhelming majority of hard-working people in this country”.

Ed Balls, Labour shadow chancellor, also weighed in: “If we really are all in this together then the right priority to boost the stalled economy now should be temporarily reversing the VAT rise, which is costing families with children around £450 a year. This temporary tax cut would help to kick-start the recovery and give a much needed boost to millions of people regardless of their income.

“If the chancellor really wants to know how effective the top rate of tax is he should immediately ask the Office for Budget Responsibility, not just HMRC, to produce a report genuinely independent of government.”

Their warnings came after the Trades Union Congress also took issue with the suggestion of an immediate tax cut for top earners.

Brendan Barber, general secretary of the Trades Union Congress called the economists’ opinion “monstrously unfair”, adding: “At a time when cuts are biting hard and ordinary people are suffering the biggest squeeze on their living standards in years, the last thing we need is a handout to the wealthiest in our society.”

But DeAnne Julius, the former member of the Bank of England’s monetary policy committee and one of the signatories of the letter, defended her position to the BBC, saying many hedge funds had already moved to Switzerland and that, if marginal rates were raised on a small number of highly mobile people, “You end up not collecting the tax that you’d hoped to.”

“Only by returning to an internationally competitive tax regime will Britain enjoy long-term sustainable economic growth,” the economists say in their letter.

The signatories include many figures not usually associated with conservative causes, such as Bob Rowthorn of Cambridge University, and two former members of the Bank of England’s policy committee, Ms Julius and Sushil Wadhwani.

George Osborne, chancellor of the exchequer, is already facing pressure from the Tory right and CBI employers’ organisation to scrap the “temporary” top tax rate.

The Treasury believed that the 50p rate, introduced by the former Labour government in April 2010 on annual taxable incomes above £150,000, would eventually raise £2.7bn a year. Combined with restrictions on income tax relief for pension contributions and the abolition of the income tax personal allowance for people with annual incomes above £100,000, last year’s tax increases on the rich were designed to raise £7bn per annum.

The economists dispute these estimates, arguing the 50p rate “punishes” wealth and entrepreneurship. “It is often portrayed as a justified tax on the rich, but the economic damage it causes means that it is against the interests even of ordinary workers who don’t pay it,” they write.

Last month Mr Osborne said “there’s not much point in having taxes that are economically inefficient”. He added that the rate was uncompetitive internationally and targeted wealthy people who were already paying taxes on their capital gains.

Government officials, however, have suggested that the top rate is unlikely to be scrapped until 2013 at the earliest, when a pay freeze affecting millions of public sector workers is due to be lifted.

Nick Clegg, Liberal Democrat leader, will insist the 50p top rate can only be scrapped if other measures, such as a property or “mansion” tax, are introduced to ensure the wealthy pay their “fair share” towards cutting the deficit. The Lib Dems will also insist that the 50p rate’s abolition is accompanied by accelerated moves to raise the annual tax threshold to £10,000.

Other leading economists are more sceptical. Paul Johnson, director of the Institute for Fiscal Studies and not a signatory of the letter, said it was much too early to give up on the 50p rate: “The Treasury has been taking a punt on whether [the 50p rate] will raise money. It is taking a risk, but it is not a stupid punt.”

A Formula For The Break-Up Of Britain

When the Barnett formula was devised in 1978, it was meant to share annual Government spending equitably between the countries of the United Kingdom according to their populations.


















Unjust: Joel - now Baron - Barnett has advocated scrapping the funding formula he devised for Scotland

In the intervening decades, it has become nothing less than a grossly unfair tax on the English to subsidise lavish public services in Scotland.

This is because the formula has not changed, though the population of England has risen sharply over those 33 years, while that of Scotland has remained static.

The result is that the Scottish subsidy has grown to such an extent that even Lord Barnett, the former Labour cabinet minister who invented the formula, thinks it is unjust and should be scrapped.

New figures which we reveal today show that public spending is now £1,624 per person higher in Scotland than in England, up 15 per cent in just a year.

This equates to the average English family being forced to pay more than £400 a year to fund Scottish services, and that the figure is sure to go on rising.

The scale of the handout allows the Scots to enjoy benefits the English can only dream of – free prescriptions, residential elderly care, university tuition, primary school meals, hospital parking, and most recently cancer drugs.

The injustice is palpable and, unless rectified, it presents a real danger to the integrity of the Union.













Danger to the integrity of the Union: Scottish National Party leader and Scottish First Minister Alex Salmond wants full independence.

Recent opinion polls show fewer than a third of Scots in favour of independence. But in England, a clear majority believe it is time for them to go it alone.

If the Barnett formula is not reformed, resentment south of the border can only grow and it may soon be the English, not the Scots who demand the break-up of the United Kingdom.

Is it too cynical to suggest that is precisely what Scottish Nationalist leader Alex Salmond wants?

Harsh but fair

Even the leader of Britain’s prison governors has now joined the shrill chorus of liberal protest over tough punishments meted out to those involved in this month’s riots.

In an extraordinary and intemperate attack, Eoin McLennan-Murray accuses magistrates of indulging in a ‘sentencing frenzy’, likening them to ‘sharks when there’s blood in the water’.

He said guidelines were being flouted and defendants unfairly treated.












Flashpoint: Riots across London and other cities of England in earlier this month were among the worst scenes of civil disobedience in recent history.

There is no doubt that magistrates and judges have taken a robust approach. Of more than 1,400 people brought before the courts in connection with the mayhem, around 70 per cent have either been given jail terms or remanded in custody awaiting sentence — far more than is usual.

But what did Mr McLennan-Murray expect magistrates to do? Put them back on the streets to wreak more havoc?

Offences included aggravated burglary, robbery, violent disorder, assault, arson and even murder.

In their own right these are all serious crimes, but against a backdrop of indiscriminate looting, destruction and anarchy they constitute a serious danger to the fabric of society.

So, understandably, the courts came down hard on perpetrators, in many cases handing out exemplary sentences.

If punishments are deemed too harsh, there is a perfectly sound appeal court system to moderate them.

And precisely what does sentencing policy have to do with a prison governor anyway? His role is surely to contain, and where possible rehabilitate offenders, not determine how long they should serve.

Perhaps Mr McLennan-Murray should just get on with his own job and let magistrates get on with theirs.

The Benefit Trap: Working Families Feel The Squeeze

Iain Duncan Smith's tax and benefits reforms are hitting the most vulnerable in society, say leading think tanks, and threaten to undermine any notion that work pays.









Low income families are becoming worse off and the prospect of work less attractive as government reforms of tax and benefits systems aimed at encouraging people back to work take effect.

The warning comes in the wake of a series of reports from respected think tanks that have analysed the impact of the reforms being led by work and pensions secretary Iain Duncan Smith.

Their findings reveal that an urgent rethink is needed, highlighting problems in the interaction of income tax and tax credits with other benefits.

‘Cuts to childcare tax credits could leave some parents losing 94p for every extra pound they earn,’ according to a report from the Resolution Foundation. It cites the example of a single mother on the minimum wage who would be just £3 a week better off if she decided to work four days a week rather than three.

Lone parents, 92% of whom are women, are worst hit by cuts, losing 8.5% of their annual income by 2015, according to The Fawcett Society. Its analysis was based on research undertaken by the highly regarded Institute for Fiscal Studies using the government's own models.

‘The government talks a lot about promoting responsibility and backing aspiration, but on the ground these cuts are actually stopping single parents from getting on,’ says Fiona Weir, chief executive of Gingerbread that represents lone parents.

‘It is unacceptable that single parents are bearing the brunt of cuts and this research proves again that the government must do more to support single parents, including further investment in childcare, training and employment support.’
Childcare costs

In the past, parents have been able to claim back up to 80% of childcare costs up to £300 a week, depending on income. For a family with two children or more this works out at a maximum of £240 a week. But since April the proportion these costs a parent can claim back has been reduced to 70 per cent and capped at £210 a week – a loss of £30 a week.

The Resolution Report calculates that almost 500,000 working families have lost an average of £426 a year in childcare benefit since April of this year, rising to an average of £600 a year in London, with some as much as £1,300 a year worse off.

According to the Daycare Trust’s 2011 annual survey of child care costs, the average yearly expenditure for 25 hours nursery care per week for a child under two is £5,028 in England, £5,178 in Scotland and £4,723 in Wales. This works out at around £96 a week on average.

But for parents working from 8.30am to 5.30pm childcare costs are nearly double at £172 a week, with some parents paying as much as £11 an hour for child care.

Cameron: Overseas Aid Is Taxpayers Money Not Yours!

David Cameron is wrong to insist that the £9 billion ‘overseas aid budget’ should be “ring fenced”. At a time when the people of this country are facing great hardship, it is foolhardy to believe that he will have widespread support for delivering UK taxpayers money to countries such as Pakistan and China.

Notwithstanding the huge amount of taxpayers’ money that is being committed in our name, we all know that a good deal of this money is squandered, you only have to look at some of the brand new 4×4 vehicles that are driven my Government officials in some African countries, while their people starve. More often than not, these vehicles are paid with using foreign aid; this is hardly a success story. Furthermore, whilst some of these countries can rely on foreign aid, they are not being encouraged to stand on their own two feet.

Everyone has to tighten their belts at times such as these and our Government should be no different. I full accept that investment in health and education must be maintained, although I would qualify that statement by insisting that there should be a root and branch review to ensure that we are receiving value for money. However, overseas aid is an area that can and should be cut, at least until this country is back on its feet…because like it or not, our finances are in a precarious position.

Cameron keeps telling us how we will all have to accept a period of “austerity”, which will include increased direct and indirect taxes. Okay, I accept that this is inevitable, but how dare he foist new taxes on the British people before he has taken a scalpel to expenditure on items such as overseas aid? Cameron needs to remember that there are many people in this country that live in squalor, often council owned high rise flats that are not maintained or are well past their sell by date. These people are forgotten, whilst huge sums are given away overseas.

How many times have we heard the ‘youths’ of today tell us that the reason there is so much petty crime and a gang culture is because they are “bored” and they have “nowhere to go”? Yet, youth and community centres are routinely closed down due to lack of funds…the result is that youngsters are left roaming the streets. As a consequence, people within the community are scared, they have to suffer petty crime and their quality of life is dramatically reduced. The priorities of this Government and for all intents and purposes, the next Government’s, are completely at odds with what is needed and wanted by the people of this country.

It is high time all politicians started to listen to the people of this country and not simply pay lip service. We are all tired of people at the top telling us what we want and what need, rather than listening to us!

Ed Miliband Attacks Cameron Over Child Benefit Cuts In Confident PMQs Debut

Ed Miliband today attacked David Cameron over the coalition's plans to slash child benefit in his first Prime Minister's Questions.

The new Labour leader claimed hundreds of thousands of families would lose out under the measures, aimed at helping cut the benefit bill.

Mr Miliband condemned the policy to axe the handouts for higher rate taxpayers as a 'shambles' and urged the Prime Minister to reconsider.

He claimed a family of three will lose £2,500 through the cut backs and suggested this was equal to a 6p rise in income tax.

The plan has caused outrage after it emerged stay-at-home mothers with partners earning just above the threshold will lose out but families with two working parents who are each on a salary just below the threshold will still receive the benefit.















Mr Cameron retorted that it was not fair to ask people who earned 'one sixth' of Mr Miliband's salary to pay tax to cover his child benefit.

But the Labour leader again shot back: 'It's nought out of two on straight answers' and denied he was 'defending the rich'.

'I am defending the deputy head teacher at a primary school, I am defending the police inspector, all of whom are asking a straightforward question,' he said.

And to cheers from his own benches, he quoted Mr Cameron's words at a Cameron Direct meeting during the election campaign.

A confident Mr Miliband demanded to know exactly how many families with one parent out of work would be affected by the cut.

Mr Cameron, with his deputy Nick Clegg nodding behind him, said higher-rate tax hit 15 per cent of taxpayers and admitted the decision had been 'difficult'.

But he insisted: 'As we deal with the deficit, we do have to ask better-off people to bear their fair share of the burden.'

He asked Mr Miliband to justify giving money to the more well-off, but the Opposition leader shot back: 'I may be new to this game but I think I ask the questions and he answers them.'

Mr Miliband criticised the PM for refusing to give a straight answer and insisted hundreds of thousands of families would be penalised.

'The question they are asking is this - why should a family on £45,000 when one parent stays at home lose their child benefit but a family on £80,000 where both partners are working keep theirs?

'It doesn't strike people as fair, it doesn't strike me as fair, does it strike the Prime Minister as fair?'































He said then: 'I am not going to flannel you, I am going to give it to you straight. I like child benefit. I wouldn't change child benefit.

'I wouldn't means test it, I don't think that's a good idea. I agree with the Prime Minister, why doesn't he?'

Mr Cameron insisted Labour had to face up to reality and their legacy to the coalition of the biggest budget deficit in the G20.

He accused Mr Miliband or having no alternative proposals and took his chance to quote back the new leader's words earlier this year.













He quoted former Labour Cabinet minister Alan Milburn who said 'in times of plenty, giving child benefit to high earners is a luxury we cannot afford'.

But Mr Miliband declared he should face up to the huge loss he was handing to families - with those with three children losing £2,500-a-year.

'If he wants to take people with him on deficit reduction, he has got to show that his changes are fair and reasonable,' he said.

The Prime Minister quoted Mr Miliband's own words back in July that: 'Whoever is the Labour leader will by the time of the spending review have to show they have an alternative plan.'

'Where is the alternative plan?', he demanded.

But Mr Miliband was unbowed, claiming he had shown how the Government had no defence for the policy.

'He cannot explain to families up and down the country why they are going to sustain this loss. This policy has been a shambles from day one.

'The rest of the cabinet knew nothing about it... I bet the PM wishes the BBC blackout had gone ahead.'

He added: 'Isn't it time the Prime Minister had the grown up sense to admit this - he's got it wrong, he's made the wrong decision. He should tell middle income families up and down Britain he will think again.'

Mr Cameron accused Mr Miliband of deciding to stand up for the 'squeezed middle' after years of taxing them while Labour was in government.

'It's a completely transparent political strategy to cover up the inconvenient truth that he was put where he is by the trade union movement,' he said.

Likening Mr Miliband to his predecessor, he added: 'It is just short-term tactics and political positioning. It's not red, it's Brown.'

It had been suggested Mr Cameron would be happier to face the younger Miliband brother than David, the former Foreign Secretary.

But today the 40-year-old former Energy Secretary showed he will be no easy ride as the Government battles to push through drastic spending cuts.

At the start of the session, the two leaders had both agreed they would be able to work together in the national interest on many issues.

Mr Cameron congratulated his new sparring partner but added: 'As well as wishing him well, I hope he does the job [of Opposition leader] for many, many years to come.'

David Cameron Denies 'War' With Single Parents Over Tax Breaks

David Cameron denied being "at war" with single parents today as he faced questions over planned tax breaks for married couples.









The Tory leader was accused of "discrimination" as he delivered a speech to members of lone parent charity Gingerbread.

Mr Cameron insisted the Government could not remain "neutral" on the issue of stable family units, and had to send a "long-term signal".

"My view is that there is an importance of trying to say that commitment and relationships and marriage are good institutions. They are good things," he said. "We shouldn't be completely neutral about them as a society.

"I think the tax system and the benefits system as well as helping people in the here and now as it should, also does need to think about what other long-term signals that we are sending out as a society.

"We should be sending long-term signals that are about commitment and the things that encourage commitment. It doesn't disadvantage other people, it's just saying that this is a good institution that society should recognise in such a way."

However, Mr Cameron also stressed that a Conservative Government would not ignore the difficulties single parents faced.

"Lone parents will not be on their own under a Conservative Government," he said. "There is not and never will be a war on single parents."

Apart from defending his party's proposals for tax allowances to be transferable between married couples, Mr Cameron warned that society was ignoring the role of extended families.

He said houses and flats were often being built too small for people to enjoy a family meal, or for grandparents to stay if necessary.

There had been reports that Mr Cameron's aides requested that media access to the event be restricted for fear that he would get a rough ride.

After his speech, one woman single parent demanded: "You talk about tax and that you are looking at providing tax cuts for married couples.

"Do you not think that is discrimination against someone who pays their tax bill every month, and someone who is going to find that my friend down the road who has managed to find Mr Right gets away with paying less tax than I do, just because I am raising my children by myself?

"Also don't you think that's perpetuating the stereotype that actually a married couple is better than a single family?"

Another woman was greeted with applause when she warned that politicians were reinforcing false stereotypes about single parent families.

"What is the Conservative Party going to do to help organisations like Gingerbread to help smash down the images and stereotypes that we have of lone parents?"

Mr Cameron replied: "I think we all have a role in trying to make sure that we portray things in a more reasonable way and a less black and white way."

Gingerbread chief executive Fiona Weir said: "While we welcome his strong message about stigmatising, we would like to see them reflect that through policies.

"He risks making single parents feel like second-class families."

Financial Secretary to the Treasury Stephen Timms accused the Tories of being in an "utter mess" over marriage tax breaks.

"He (Mr Cameron) says he's deadly serious about marriage and intends to spend billions on a tax giveaway to wealthier married couples.

"Then he tries to deny to an organisation of single mums that he intends in any way to discriminate against them.

"The truth is, his marriage tax allowance is unfair and unfunded - it would cost £5 billion and give 13 times as much to those at the top than those at the bottom."