Osborne can still prosper but he must choose between being Chancellor and general busybody

By Tim Montgomerie
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There's not much joy for George Osborne in today's YouGov poll for The Sunday Times (PDF). Two weeks ago ConHome revealed that Tory members had lost a lot of faith in the Chancellor and negativity is now widespread across the public. Just 18% think he is doing a good job and 58% think he is doing a bad job. That compares to a 34%/60% rating for David Cameron. Mr Osborne is also blamed for the U-turns. 31% of those who see the U-turns as a sign of weakness or incompetence blame him for them. That compares to just 18% who blame the Prime Minister and 15% who blame Nick Clegg.

When I revealed the downturn in support for the Chancellor a fortnight ago I also said that I still believed that he was the one man in the Cabinet who could turn things around:

"The Budget was not well handled but he remains one of the Government's most able ministers. All reports from trusted sources say he has a very good grip on the Treasury. He remains very capable of first deciding upon and then executing a change of course. If anyone can identify and then deliver the gear change that this Coalition needs it is him."

There have been signs in recent times that George Osborne is on serious manoeuvres. We have learnt that he is urging the Prime Minister to back a referendum on Britain's future relationship with the European Union. A much more pronounced Eurosceptic than David Cameron he is facing resistance from his former boss and now Foreign Secretary, William Hague. The Chancellor nonetheless believes that such a pledge is essential to solidify the Conservative Party's unhappy base vote. James Forsyth reports in today's Mail on Sunday that Coalition failure on immigration is a bigger drag on Tory fortunes. While that might be correct the issues aren't unconnected. Until we can control our border with the EU we cannot control our border full stop.

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Most EU leaders would give their eye teeth to be in Cameron's shoes, claims Matthew Parris

By Tim Montgomerie
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If you want some optimism this weekend I recommend Matthew Parris' Times column. There's no Times paywall for the Jubilee weekend and he argues that, despite the media froth, the Coalition is actually doing quite well. Most Eurozone leaders would, he writes, give their eye teeth for the troubles that this Government faces. While they are worried about economic catastrophe the worst facing Cameron et al are headlines about pasty taxes and a Leveson enquiry that is boring the nation to death.

Here is the meat of Matthew's argument:

"Our economy is broadly flat and likely to remain so. Disappointing, but remind yourself that there is something worse than a flat economy and in Spain and Greece they know it. Unemployment here remains stubbornly high. Depressing, but look at both the levels and the direction of unemployment in some economies across the Channel. Inflation in Britain remains a bit above target. Irritating, but thank heavens it has proved possible to maintain monetary stimulus without a more alarming price spiral. Put briefly and crudely, Britain’s domestic economic weather is dull but remarkably stable; most people have jobs; most jobs seem more or less secure; most people’s wages are flat or dipping slightly. And in the world beyond we see economies that are collapsing around people’s ears. We are not living in such interesting times. Others are. Two cheers for that.

Meanwhile, outside economics, we have a Government that in two short years has been incredibly productive. They have bitten the bullet on university financing and in schools policy turned an evolution into a revolution. Changes to social welfare, with universal credit, will prove a bigger revolution. A massive, Lib Dem-inspired hike in the threshold at which the lower-paid pay tax is an underpraised triumph. An almost untold story is the measured and modest way spending is being curbed, ministers showing steadiness under fire from the proponents both of the axe and the splurge. Almost as a sideline our Armed Forces and diplomatists have saved a revolution in Libya and planned an orderly withdrawal from a futile war in Afghanistan."

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First they came for Tim Chatwin...

Guido Fawkes's news that Sean Worth is to leave Downing Street to join Policy Exchange names the latest addition to a growing list.

And, yes, you read that correctly: Mr Worth, a special adviser, is going to Policy Exchange - not the other way round, as one might reasonably expect.

Which is the point.  We aren't halfway through this fixed term Parliament yet, but by my reckoning the following senior figures have left Number 10 already -

• Tim Chatwin (Head of Strategic Communications)
• James O’Shaughnessy (Head of Policy)
• Andy Coulson (Director of Communications)
• Steve Hilton (Senior Adviser to the Prime Minister)
• Peter Campbell (Research)

There have also been departures from the Policy Unit, and it is claimed that Andrew Cooper, the Head of Strategy, may return to Populus. 

But whether or not this turns out to be correct, three conclusions stand:

• Not all of this talent has been replaced.  In at least one case, there has been no replacement at all - that of the admittedly irreplaceable Steve Hilton. (I accept that Mr Coulson's exit was sui generis.)

• Downing Street has had difficulty recruiting, perhaps because of tensions between the Coalition partners.  It has been reported this is so in the case of Matthew Elliott (who has some good advice of his own for Number Ten.)

• This level of departure suggests either that there are a lot of personal differences or the lack of an agreed political strategy in Number 10.  In my experience the Downing Street operation consists of very pleasant people - though it is light on staff who like and (more importantly) understand party activists and Tory MPs.  I go for the latter explanation, which Mr Hilton's departure - and the manner of it - supports.

Jeremy Hunt's future

Labour Cabinet Ministers whose resignations were forced during the Blair years - and there were rather a lot of them - weren't usually cornered with a smoking gun or despatched by a golden bullet.  An inquiry into Peter Mandelson found that he hadn't acted improperly in relation to the Hindujas; another into David Blunkett didn't conclude that he'd sought special favours for a nanny; Stephen Byers rode out the storm over Jo Moore and Martin Sixsmith.  What made their positions impossible was that (rightly, in most cases) these were thought to be impossible: perception was everything.  In short, Tony Blair yielded to pressure - and fired them.

This is the position Ed Miliband and a big slice of the media are striving to put David Cameron in over Jeremy Hunt and the BSkyB bid.  And even more than usual, nearly everyone concerned has a vested interest.  The liberal left, in the form of the Guardian and much of the BBC, wants the brash, antipodean-flavoured, America-friendly and populist culture which Rupert Murdoch brought to Fleet Street kept out of television (and is succeeding): it wants a monopoly.  The traditional right, in the form of Murdoch's newspaper rivals at the Telegraph and Mail, is only a little less hostile.  Mr Hunt is a marked man.

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Overheard in the Treasury: Part Three...

David Gauke (Answers phone): Gauke speaking.

George Osborne: David, George here.  Now, about those charity tax plans -

(Line interrupted by loud cursing and smashing noises.)

(Long Pause.)

Gauke (To Private Secretary): Get me Boris's number, will you?

Overheard in the Treasury: Part Two...

David Gauke (Answers phone): Gauke speaking.

George Osborne: David, George here.

Gauke: Chancellor!  You must have seen Newsnight yesterday.

Osborne: Newsnight? Why? (Pause.) Was Boris on it?

Gauke: Er...No, Chancellor.  But I was.

Osborne: You were. Why?

Gauke (Stiffly): I was defending the, er, adjustment to the pasty tax that we discussed yesterday, Chancellor -

Continue reading "Overheard in the Treasury: Part Two..." »

Overheard in the Treasury: Part One...

Ring ring.  Ring ring.

David Gauke (Answers phone): Gauke speaking.

George Osborne: David, George here.

Gauke: Chancellor.

Osborne: Sorry to bother you, but...some bad news, I'm afraid.

Gauke: Sorry to hear it. Is it Boris again?

Osborne (Worried): Boris?

Gauke: Yes, Boris.

Osborne (Alarmed): What have you heard?

Gauke: Sorry?

Osborne: What's he done now?  Called for Britain to leave the EU?  Urged that Leveson be scrapped? (Voice rising.) What's his latest plot to deprive me of what one day should rightfully be mine...

Gauke (Puzzled): Nothing, as far as I know, Chancellor.  It's just that you said that there's bad news, so I assumed...

Osborne (Relieved): Ah.  Phew.  All well then.

Gauke: Yes, sure, Chancellor, but...what's this bad news, then?

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Increasingly pessimistic Tory grassroots think Labour government is likeliest outcome of next election

By Tim Montgomerie
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Earlier this week we published Tory members' views on party policy towards the European Union. In the same survey we also asked the respondents to predict the likeliest outcome of the next election and pessimism seems to have taken hold.

A TOTAL OF 51% EXPECT LABOUR TO BE BACK IN GOVERNMENT

• 23% expect an outright Labour majority
• 17% expect a Labour-LibDem coalition
• 11% expect a minority Labour government

49% EXPECT SOME KIND OF TORY GOVERNMENT

• 21% expect a Conservative majority
• 9% expect another Tory-LibDem coalition (a surprisingly low number in my opinion)
• 19% expect a minority Tory government.

This is a big drop from the end of March when 62% thought the Conservatives would still be in power.

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Andrew Lansley is right to reform doctors' pensions

By Matthew Barrett
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Today's announcement that the doctors will strike for the first time in 40 years has, understandably, caused a brouhaha. The British Medical Association balloted doctors, and found 79% of GPs, 84% of hospital consultants and 92% of junior doctors who responded, voted in favour of a one-day strike on 21st June. To offer some fairness to the BMA, turnout in the ballot was apparently 51%, so the usual low-turnout union vote charges cannot be made, and they had the good sense not to have their emergency doctors go on strike. However, the NHS will clearly be horribly affected. 

It's worth taking a look at why the BMA has seen fit to go on strike. At present, the average consultant retiring at 60 will receive a pension of over £48,000 a year for life, and a tax free lump sum of around £143,000, which equates to a pension of nearly £2 million. Even under Andrew Lansley's new proposals, a doctor can expect a pension of over £53,000 at age 65, and will remain amongst the best-paid workers in the public sector.

Andrew Lansley's argument for reform is that new arrangements are necessary, because people live longer. Now, for example, a doctor retiring at 60 can expect 29 years of retirement. This means they will draw a pension for nearly as long as they worked for the NHS - 36 years. In contrast, a doctor retiring at 60 in 1984 could only expect to live for 20 years after retirement, yet 1984's doctor, and the doctor of today would have paid similar amounts into their pension, but the extra 9 years cost approximately £440,000 to the taxpayer.

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Ken Clarke bids to end unjustified compensation payouts for terrorist suspects

By Matthew Barrett
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Yesterday, Ken Clarke announced the watering down of some elements of the proposed Justice and Security Bill, which has caused some controversy due to the parts of the Bill which would allow courts to hear cases in secret. Gone is the ability for the Government to hold sensitive inquests, such as those concerning troops killed overseas, in secret. 

However, certain controversial elements remain. Citizenship cases (for example, a suspected terrorist applying for a British passport) will be heard by the Special Immigration Appeals Commission, which can conduct cases in secret. Civil courts will also be allowed to go into private sessions when hearing intelligence material, if a request is made by a Minister. Some of these measures have been tightened up. Approval for a closed hearing would have to come from a judge, and can only be granted on the grounds of national security. The Intelligence and Security Committee will also be able to hold MI5 and MI6 to account, with only Ministers being able to refuse to hand over information.

A common sense change many people would think right to introduce is that now Ministers are exempt from demands for secret intelligence material from foreign courts.

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