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.

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: Parents Of Truants Face Benefit Cuts

Parents of children who regularly truant face having their benefits cut, David Cameron has warned, as he opened the first wave of the Government’s free schools.











In a keynote speech on Friday, the Prime Minister said the government's social policy review, set up in the wake of the recent riots, was considering the proposal.

Addressing the Norwich Free School, Norfolk, he outlined Coalition plans to ensure teaching was based on “excellence”.

Controversial reforms were needed to “bring back the values of a good education” because failure to do so would be “fatal to prosperity”.

Mr Cameron said more discipline and rigour were needed.

In his speech, Mr Cameron signalled a return to “elitism” in schools in an attempt to mend Britain’s “broken society” and secure the economic future.

He said discipline needed to be restored in schools, with teachers and heads being given the tools to do this but “restoring discipline is also about what parents do”.

“We need parents to have a real stake in the discipline of their children, to face real consequences if their children continually misbehave,” he said.

"That's why I have asked our social policy review to look into whether we should cut the benefits of those parents whose children constantly play truant.

"Yes, this would be a tough measure – but we urgently need to restore order and respect in the classroom and I don't want ideas like this to be off the table."

In his speech, Mr Cameron also championed the opening of the first free schools, state-funded institutions run by parents, charities and faith groups, independent of local council control. Some 24 have opened this month.

The Prime Minister attacked the “prizes for all” culture in which competitiveness was frowned upon and winners are shunned.

The comments marked the latest in a series of attempts to focus on education in response to the riots that shocked London and other English cities last month.

They follow the announcement by Michael Gove, the Education Secretary, of back-to-basics discipline in state schools.

He plans to give teachers more freedom to search pupils suspected of carrying banned items and to let them use reasonable force in removing the most disruptive children from the classroom.

Mr Cameron sought to move the debate on to standards, saying that a rigorous focus on the basics is needed to give young people “the character to live a good life, to be good citizens”.

The Prime Minister added: “For the future of our economy, and our society, we need a first-class education for every child. Of course, everyone’s agreed on that.

“The trouble is that for years we’ve been bogged down in a great debate about how we get there. Standards or structures? Learning by rote or by play? Elitism or all winning prizes?”

"Every year that passes without proper reform, is another year that tens of thousands of teenagers leave school without the qualifications they really need."

He added: "The most important value we're bringing back to the classroom is a commitment to rigour. Rigorous subjects, tested in a rigorous way.

"However well students perform in their exams, we cannot deny the reality of the past few years. The numbers of people taking core academic subjects - they went down.

"The voices from business concerned about the usefulness of some of our exams - they grew louder.

"We are determined to stop this slide - and already we're making an impact."

Mr Cameron made clear that he was in favour of elitism and not prizes for all.

He added: “These debates are over – because it’s clear what works. Discipline works. Rigour works. Freedom for schools works. Having high expectations works.

“Now we’ve got to get on with it – and we don’t have any time to lose.”

Free schools have provoked fury among teaching unions who claim they smack of elitism and represent an attempt to dismantle the state education system.

But Mr Cameron insisted free schools will “have the power to change lives”.

He also sought to link improvements in education to mending “our broken society.”

“We’ve got to be ambitious if we want to compete in the world,” he said.

“When China is going through an educational renaissance, when India is churning out science graduates, any complacency now would be fatal.

“And we’ve got to be ambitious, too, if we want to mend our broken society. Because education doesn’t just give people the tools to make a good living – it gives them the character to live a good life, to be good citizens.”

He added: "A free school is born of a real passion for education – a belief in its power to change lives.

"It's a passion and a belief this coalition shares. We want to want to create an education system based on real excellence, with a complete intolerance of failure."

The comments come days after Nick Clegg said that parents must take more responsibility. The Deputy Prime Minister insisted that teachers should be left to educate, and not be expected to act as “surrogate mothers and fathers”.

Childcare Costs Mean A Choice Of Debt Or Unemployment For Many Parents

Rather than facilitating work, the huge cost of childcare in the UK is a daunting obstacle – and government cuts worsen the bind.












David Cameron visits a nursery in London. His government's reduction of tax credits has made childcare even more costly for working parents.

I could understand why my bank manager was looking at me like that. It did sound a bit stupid. "You're about to start a job, and that means you need to extend your overdraft?" he said, dubiously. After years of scratching around as a student, I was finally about to draw a wage – but first, I needed to get myself just a bit deeper in debt.

I have two children, so before I could set foot in my office, I needed somewhere to put them, and childcare has to be paid for in advance. That's no minor outlay here in the UK, where we have the highest childcare costs relative to household income of anywhere in the world. A survey by the Daycare Trust and Save the Children explains how much of a barrier and a burden this can be, particularly to families on low incomes. Of the parents questioned, a quarter said that the cost of childcare had caused them to get into debt, but it's the poorest families (those with a household income of less than £12,000 a year) who experience the most crippling effects.

While the better off may have to compromise on swimming lessons or music tuition to cope with higher-than-inflation rises in nursery fees, the more impoverished are often forced to cut back on essentials such as food or heating to make up the difference. And sometimes, ends simply can't be met: a quarter of those in severe poverty said that they had given up work because of childcare costs. A third of them had passed on a job offer for the same reason, and a quarter reported that the expense of childcare had prevented them from taking up education or training.

Rather than facilitating work, childcare becomes a daunting obstacle, keeping parents out of the workplace – and the poorer a family is, the more likely it is to remain in poverty for the lack of money to cover nursery fees. Single-parent families without savings or access to credit are effectively shut out of work.

The government likes to talk about getting people off welfare and into the workplace. "Over the last decade, thousands of people were simply abandoned to a lifetime on benefits, and a staggering 1.84 million children are living in homes where no one works," said employment minister Chris Grayling last week. Rightwing analyses talk about the "lack of work ethic … helping to fuel levels of unemployment".

But it's practical, financial limitations more than nebulous psychological causes that are often keeping parents from becoming employees, and the government's actions so far seem likely to worsen the childcare bind. Working tax credit was sliced in this year's budget, so that it now covers only 70% rather than 80% of childcare costs – a huge difference in the finances of those who need help the most. As the cuts agenda combines with a sneering rhetoric of disdain for the unemployed, this just seems like one more way of keeping the poorest poor, from cradle to grave.

Priorities Questioned Over Defence Cuts

Nearly 2,000 armed services personnel are learning that their jobs are to disappear today.

At least half of the 920 Army jobs and 930 RAF roles are expected to face compulsory redundancies in the first round of defence cuts.












RAF pilots prepare for a mission over Libya.

The Gurkhas face the heaviest cuts, with 140 soldiers facing redundancy. No service personnel currently receiving the operational allowance will be forced to leave, however.

"Just as many RAF personnel will be thinking about returning home having performed heroics in Libya, ministers are drawing up their P45s," shadow defence secretary Jim Murphy said.

"People will be shocked and will wonder whether the government have got their priorities straight."

The defence cuts follow an eight per cent overall reduction in the MoD's budget in the comprehensive spending review.

Broader financial problems have forced defence secretary Liam Fox to seek a more fundamental rationalising of his department, leading to plans for over 22,000 jobs to go in total by 2015.

"The tough measures will bring the budget largely into balance for the first time in a generation," Mr Fox said.

"Extra money allocated for the equipment budget from 2015 will allow capability to grow in the second half of the decade."

The slow-burning nature of the cuts makes them politically sensitive, however. Around 1,600 redundancies in the Royal Navy are expected to be announced next month.

"This underlines the scale of the government's cuts in manpower. The frontline cannot be protected from cuts this deep," Mr Murphy added.

"Savings must be made, but in a world of uncertainty to many this will seem a worrying loss of important capability."

Thousands Of Charities Hit By Government Cuts

Thousands of charities and voluntary groups are facing budget cuts worth over £100m because of reductions in local government funding.

Some groups are having funding withdrawn altogether, the study of councils across England by anti-cuts website False Economy showed.

The cuts have totalled over £10m in the past year but the final figure is likely to be far higher because some authorities have not yet finalised their plans, said the report.

Many of the charities facing cuts deal with disabled people, children, the elderly and adult care, said False Economy.

The group's campaign director, Clifford Singer, said: "These cuts go deep into the voluntary and community sectors.

In practice the Big Society is looking more and more like a big con.

Trades Union Congress (TUC) general secretary Brendan Barber

"These are not just nice-to-have groups but organisations [which provide] vital services for older people trying to maintain independent lives, vulnerable children and abused women."

Adventure playground KIDS, based in Hackney in east London, offers services for children with disabilities and learning difficulties.

Organisers say councils are cutting back on funding the playground for vital services.

Alex Mills, national services manager for KIDS told Sky News: "There is no Plan B. If we don't get enough funding then we can't run services like this.

"We foresee that if local authorities look at only the short term by making small cuts here and there, then they aren't really looking at the long term, and the fact that they will have to invest thousands more pounds in the future to support these families who won't have this service right at the start.''












Simon Bierman takes his two sons to the playground most weeks and he is not convinced the group can survive on volunteers alone.

"The Big Society looks good on paper but the fact is that people have problems and pressures of their own," he said.

"Some of the kids here need professional help and that costs money."

Charity groups and trade unions are now rounding on David Cameron's Big Society idea, claiming that it is not working.

Trades Union Congress (TUC) general secretary Brendan Barber said: "These deep cuts to voluntary groups across the UK show that Government claims that charities can replace direct services currently provided by central or local government are false.

"It sounds great, but in practice the Big Society is looking more and more like a big con."

A spokesman for the Department for Communities and Local Government added: "The Government has provided a fair and progressive funding settlement for councils that protect frontline services and shield the most vulnerable.

"Councils have challenging decisions to make around how they prioritise spending but the Government is clear that councils must resist any temptation to pass on disproportionate savings to the voluntary sector."

Analysis: Defence Cuts In The Firing Line

Those in Westminster are fond of describing this or that report from a select committee as "damning" in its criticism of government policy.












On this occasion, it's deserved because the defence committee has essentially driven a coach and horses through the coalition's defence of the Strategic Defence and Security Review.

Maligned since its birth as driven more by cuts than capabilities, the Government has invested a huge amount of political capital in sticking firm to the controversial decisions made in last autumn's review.

The cuts will not affect our ability to defend ourselves and others, ministers claimed. Not so, says the committee.

It claims that post-2015 the Armed Forces will not be able to do all that is required of them, and there is mounting concern that they are already over-stretched.














The cuts ensure future projects, such as the new aircraft carrier and Joint Strike Fighter, can be completed, according to the Government.

The committee say uncertainty as to funding post-2015 combined with commitment to the Libyan campaign means a promised real-terms increase in the MoD's budget is "government aspiration, not government policy".

Even the PM gets it in the neck. His assurance of "full spectrum" defence capability is dismissed.

Phew. Talk about being in the line of fire.

The simple fact is that decisions taken in the heat of battle are often life or death. The decisions taken in the defence review are scarcely less significant.

And the accusation that the parallel cross-governmental Spending Review was as significant, if not more so, than the UK's strategic safety, is bound to lend further weight to calls for a reopening of the SDSR.

But will those calls be heeded?

After all, these criticisms have been made before - as has the MoD's defence of its position.

And the report has been released mid-week during the Parliamentary recess.

There will undoubtedly be anger, but it is unlikely to prompt a radical rethink - for now at least. However, there is growing concern within the coalition itself.

Plenty on the government benches have looked on with horror as Britain's Armed Forces have been reduced to a shadow of their former selves.

Several MPs are planning a push on the issue during party conference season, so it would be unwise to think this the end of the matter and simply a bad news day the Government must endure and then forget.

There will inevitably be calls for the defence review to be reopened. After all, good military strategy is both flexible and adaptive.

The defence committee has concluded the SDSR is neither.

PM Defends NHS Against Privatisation Claims

David Cameron has been defending his health service reforms against charges that they represent a gradual privatisation of the NHS.

But embarrassingly for the Prime Minister, he admitted a member of his own family had reservations about his plans while visiting a London hospital.











"My brother-in-law is a hospital doctor and he says 'You're giving too much power to the GPs, and hospitals will be disadvantaged'," he told a patient.

As MPs prepare to debate the Health and Social Care Bill, and as unions prepare to protest outside parliament, Mr Cameron argues that the reforms are essential.

The Prime Minister, in a letter to The Times, argues that without modernisation, the NHS will become unaffordable.

"Fail to modernise, and the NHS is heading for crisis," he writes, claiming that the Coalition government's proposals are simply about using more efficiently and effectively what already exists.

"GP-led commissioning, patient choice, payment by results and Foundation Trusts have all existed in one form or another over the past 15 years," he continued.

"The NHS has always worked with a range of social enterprises, charities and private companies. The difference is that we plan to make these changes effective right across the NHS."

Health unions, however, say the greatest threat to the NHS is the reform programme itself.

They claim most people oppose it, including many GPs, patients, clinicians, charities and MPs - who are also concerned that the Government is trying to rush through a complex Bill containing 280 clauses without sufficient scrutiny.

The public sector union UNISON conducted a survey of 2,000 adults which the union said revealed that 56% of Liberal Democrat voters oppose private firms providing NHS services, while only 46% of Conservative supporters support the move.

The Royal College of Surgeons has warned that patient care could be compromised if GPs, who would control £80bn of the NHS budget, start to focus on price rather than quality.

In the Commons, there is disquiet, once again, among Lib Dem MPs, and even some Conservatives are worried that the reforms might prove damaging.

Mr Cameron and his Health Secretary Andrew Lansley should be able to steer the Bill through parliament, but then the true test will come, with the health unions warning of dire consequences, no less than the destruction of the NHS as a universal service free at the point of delivery.

Health workers are expected to stage a protest outside Parliament during the debate.

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 Insists Huge Armed Forces Cut Is Modernisation

David Cameron has defended the decision to make 11,000 redundancies in the UK armed forces — potentially including some troops now on the frontline in Afghanistan.

The Prime Minister conceded that axing around 5,000 personnel from the Army, 3,300 from |the Navy and 2,700 from the |RAF would be “difficult” for those affected.













But he insisted the losses were necessary to “modernise and update” Britain's forces for future challenges.

Labour criticised the Government for announcing details of the cuts at the same time Mr Cameron has been suggesting the RAF could help enforce a no-fly zone over Libya.

Last autumn's Strategic Defence and Security Review set out plans for reducing the size of the Armed Forces by 17,000 in total.

Some of that number will be met by not replacing people who were retiring or leaving for other reasons.

But defence officials disclosed that 11,000 personnel still face being made redundant on a compulsory or voluntary basis.

Commodore Jonathan Woodcock told a briefing for journalists that the first tranche would be notified whether they were being made redundant in September.

No-one serving in Afghanistan at that time will be eligible to lose their jobs, but virtually all personnel currently serving in the country could be included, he said.

The reductions are due to be fully achieved by April 2015.

The Ministry of Defence stressed the changes would have “no impact on current operations”.













In the wake of media leaks that trainee pilots were being laid off, and the accidental sacking of soldiers serving in Afghanistan by email, Defence Secretary Liam Fox also promised that reductions would be handled with “sensitivity and care”.

No-one who is deployed on operations, preparing to deploy on operations, or recently returned from operations will be considered for redundancy unless they volunteer. Those recovering from injury will also be exempt.

However, Commodore |Woodcock confirmed that personnel currently serving in Afghanistan would be eligible, as almost all will have completed their tour by September.

Shadow defence secretary Jim Murphy said: “This is incredible. At the same time as planning a no-fly zone over Libya the Tory-led Government chooses today of all days to sack RAF personnel. The pilots will be stunned and the country will be confused.

“These are the very same people who would help enforce no-fly zones. The Government is losing its way on defence.”

However, Mr Cameron laid the blame on mismanagement by the former Labour Government.

“These were incredibly difficult decisions, but we had an inheritance of a defence budget that was overspent by £38bn and where decisions had been put off and put off and we were not modernising and updating our armed forces so they were able to cope with the modern challenges they were going to have to meet,” he said.

“We did not take any of these decisions lightly.”

David Cameron Accused Of Destroying NHS With Privatisation Plans

DOCTORS last night accused David Cameron of plotting to smash up the NHS as he sets out plans to rush through privatisation of the historic public service.













Critics fear the move will lead to closed hospitals, lengthy waiting lists, rationed medicines and a steep decline in the quality of care for patients.

And staff warn health reforms he will put before Parliament on Wednesday will spell the end of the NHS as we know it in a kick in the teeth for the dedicated staff who have worked ­tirelessly over the decades to provide free care for millions.

In a key speech today, the PM will say he wants more “competition” and “greater independence” for hospitals and schools. And in a worrying sign for thousands of workers, Mr Cameron is to claim he wants “one of the great legacies of this Government to be the complete modernisation of our public services”.

But experts fear the move is a cynical ploy to flog off large parts of the NHS to private medical firms who will put profit before health.

Mr Cameron was also accused of breaking his pre-election promise that there would be no more NHS “top-down” reorganisation.

Dr Clare Gerada of the Royal College of GPs said the shake up being pushed through by Health Secretary Andrew Lansley could “remove the letter N from the letters NHS”. Mr Lansley is planning to hand control of 80% of the NHS budget to groups of GPs or consortia who will be ­responsible for buying ­treatments, operations and drugs for their patients.

Strategic Health Authorities and Primary Care Trusts will be axed. In his speech today Mr Cameron will boast that 140 GP consortia are already poised to start work.

But a report by the NHS Confederation which ­represents doctors, ­administrators and medical groups, said the reforms were ­“extraordinarily risky”.

Shadow Health Secretary John Healey said: “This report is a big red warning light ahead of the ­Government’s legislation. The more health experts see of the plans, the harder they find it to say something in support.

“The NHS is David Cameron’s biggest broken promise to date. He made the personal pledge to protect the NHS and his Coalition Agreement could not have been clearer in saying, ‘We will stop the top-down internal reorganisations of the NHS that have got in the way of patient care.

“The policy aims of more patient involvement and clinical control of commissioning are sound but can be achieved by the evolution of Labour’s reforms, not Mr Lansley’s revolution of NHS organisation.

“The report is a comprehensive demolition job on the Conservative-led Government’s handling of the NHS. Ministers are putting unprecedented pressure on the NHS by forcing through this high-cost, high-risk internal reorganisation and breaking their promise to protect NHS funding.

“Everyone saw big improvements in the NHS with Labour, but many great gains for patients are being put at risk by this reckless reorganisation.

“The report confirms that those who run our NHS see the Government’s reorganisation plans as a cocktail of instability and uncertainty, laced with broken promises.”

Lib Dem Andrew George also attacked Mr Cameron’s planned changes. He said: “The structures the Government is putting in place put at risk the public sector ethos of the NHS.”

He claimed Mr Lansley was allowing private firms to “cream off” the best bits of the health service.

The Confederation warned that the Government’s plan to allow “any willing provider” to carry out NHS work would lead to the further privatisation of the service. It warns that the NHS will have to shrink to make space for private firms and says the “closure of existing services will be ­necessary”.

Mr Cameron will defend the changes, saying they will be carefully “worked through”.

David Cameron Accused Over School Policies By Disabled Boy's Father

David Cameron was accused today of seeking to segregate disabled children in the education system by the father of a boy with spina bifida who tackled him as he left a General Election campaign speech.














Jonathan Bardley, who confronted the Conservative leader with his wheelchair-bound son as he left the event in south London, voiced his concern about Tory plans to "end the bias towards the inclusion of children with special needs in mainstream schools".

He told Mr Cameron about the two-year struggle he had faced to get seven-year-old Samuel into his local mainstream school, and said the existing system was already biased against disabled children being educated alongside their able-bodied peers.

Mr Cameron insisted that, as the parent of a disabled child himself, he was "passionate" about helping them get the education that was right for them and would not do anything to make it more difficult for them.

But Mr Bardley said: "It is the wrong way to go. You are not representing the needs of children in mainstream education. You want to segregate disabled children."

The Conservative manifesto states: "The most vulnerable children deserve the very highest quality of care, so we will call a moratorium on the ideologically-driven closure of special schools.

David Cameron 'Sorry' Child Benefit Cut Was Not In Tory Manifesto

David Cameron was forced today to apologise to voters for breaking an election promise with his decision to withdraw child benefit from 1.2 million higher-rate taxpayers.














On a day of policy wobbles in the Conservative high command, the prime minister acknowledged the decision – announced on Monday by the chancellor, George Osborne – had led to a storm of criticism from those claiming that axing child benefit had damaged the party's commitment to family values and undermined the universalist base of the welfare state, which he had promised to preserve in the election.

"We did not outline all those cuts, we did not know exactly the situation we were going to inherit," he told ITV news. "But I acknowledge this was not in our manifesto. Of course I am sorry about that."

In what was rapidly becoming a test of the Conservative leadership mettle at the party's conference in Birmingham, Osborne also rushed out a letter to all MPs explaining that a decision that seemed to punish its core aspirational support should not be seen in isolation.

Osborne wrote: "I know some have pointed out that this approach will leave households that do not contain a higher rate taxpayer, but whose joint income is above the higher-rate threshold, still in receipt of child benefit. The only way to assess these joint income families would be to create a new complex, costly and intrusive means test that would spread right up the income distribution."

Cameron made his comments in the face of growing unease on his own backbenches at the anomalies thrown up by the blanket withdrawal of child benefit from anyone earning more £43,875.

The cut will mean a loss of £1,055 a year for one-child families and almost £2,500 for those with three children.

In an effort to assuage the anger of some middle-class parents, he used television interviews throughout the day to highlight the party's longstanding plans to introduce a transferable tax allowance for married couples.

"I have always supported the idea of supporting marriage through the tax system, specifically supporting the idea of a transferable tax allowance," he said.

When it was pointed out that the Tory pre-election plan to help married couples had been aimed only at basic-rate taxpayers, and would therefore not compensate higher-rate taxpayers for the loss of child benefit, government sources rapidly shifted ground.

The sources suggested the wording in the Lib Dem-Conservative coalition agreement left open the possibility of higher-rate taxpayers also being helped by the marriage tax allowance, which will be introduced by 2015.

The initial proposal had been calculated by the Institute for Fiscal Studies as costing £550m and was worth £120 a year – a figure far lower than the loss due to the removal of child benefit.

Extending the scheme to higher-rate taxpayers might push the cost as high £1bn, wiping out nearly all savings from withdrawing child benefit and rendering the exercise highly costly in political terms for zero financial reward.

However, Cameron was given a boost when a YouGov poll for the Sun showed 83% of voters backed Osborne's announcement on child benefit.

In his closing speech to the party conference tomorrow, his first as prime minister, Cameron will try to draw a line under the benefits controversy by offering a robust defence of the need to share the pain of cutting the deficit.

"As we work to balance the budget, fairness includes asking those on higher incomes to shoulder more of the burden than those on lower incomes. It is fair that those with broader shoulders bear greater load," Cameron will argue.

At the same time he will try to reflect the growing demands in his party at this conference not to ape Labour's definition of fairness, based on monetary transfers, but instead to develop a new, broader interpretation.

In what is likely to be one of the big arguments in his one-hour speech, he will say: "It is time for a new conversation about what fairness really means … you cannot measure fairness just by how much money we spend on welfare."

He will also say: "For too long we have measured success in tackling poverty by the size of the cheque we give people. We say let us measure success by the chance we give. Fairness is not just about who gets help from the state. The other part of the equation is who gives that help through their taxes.

"Fairness means giving people what they deserve – and what people deserve depends on how they behave."

Referring to the plan to cap welfare payments at £26,000 a year for workless households, seen by Tories as one of the great successes of this conference, he will say it is not fair to "take more money from the man who goes out to work long hours each day so the family next door can go on living a life on benefits".