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The MP for Worcester for more than 30 years has died after a long battle with cancer

The former Conservative cabinet minister Peter Walker, who was MP for Worcester for more than 30 years, has died after a long battle with cancer.

The 78-year-old peer, who was a close ally of Edward Heath and went on to serve in Margaret Thatcher’s government, died early today at St Richard’s hospice, Worcester, his family said.

He was, they said, “a true one nation Conservative” and a passionate supporter of the hospice movement for which he had campaigned strongly.

Walker was the main founder of the Tory Reform Group between his two spells in cabinet and went on to be one of the key “wets” of the Thatcher years, showing a remarkable gift for political survival.

He had been elected to parliament in 1961 after being the youngest national chairman of the Young Conservatives, and was a founder of Slater Walker, a bank that was later to be involved in one of the worst financial crises of the 1970s.

Under Heath, he was successively minister of housing and local government, the first environment secretary in the world and then trade and industry secretary.

Although shadow defence secretary when Heath’s Tories were out of power, Walker did not serve under Thatcher when in opposition. However, he was then a senior minister at the Ministry of Agriculture and was later energy secretary for a spell that included the bitterly divisive miners’ strike of 1984-85. His last three years in the cabinet were spent as secretary of state for Wales between 1987 and 1990. He was made a peer after he left the Commons in 1992. His son Robin was elected MP for Worcester for the Tories in last month’s general election.

He leaves his wife Tessa, five children and five grandchildren.

Originally published here

Acting Labour leader tells Cameron during prime minister’s questions: ‘You weren’t straight with pensioners, you weren’t straight with families, you weren’t straight on VAT’

David Cameron today defended measures outlined in the first coalition budget, amid opposition claims that the government is “not being straight” about the impact for pensioners and families.

The acting Labour leader, Harriet Harman, pressed the prime minister on the amount of extra money set aside to restore the earnings link to pensions next April – a year earlier than planned under Labour – and accused the Conservatives of “broken promises” over VAT.

Today’s prime minister’s questions were dominated by the emergency budget unveiled yesterday by George Osborne.

The chancellor said his budget would hit the richest harder and protect the most vulnerable.

But Harman said the decision to bring forward the restoration of index-linked pensions gives pensioners “nothing extra” because no money had been set aside to pay for it.

And she said elderly people would be “worse off” once the impact of the 2.5 percentage point VAT rise next January was taken into consideration.

Cameron rejected her charge, saying the government’s new “triple lock” system, guaranteeing an annual rise in the basic state pension in line with earnings, prices or 2.5% – whichever is the greatest – would give pensioners the income “to live with dignity in retirement”.

Cameron said an expected increase in retail price index (RPI) inflation meant the pension would increase.

He said this contrasted this to Labour’s plan, which he said was to raise benefits by “less than CPI [consumer price index, a slower-rising rate excluding housing]“.

Harman retorted that the government had not set aside “one single penny” for pensioners. Prices were due to go up more than earnings next year, so bringing forward the earnings link “doesn’t give pensioners anything extra”.

The prime minister responded: “The pension will be uprated by RPI, which is likely to be higher than earnings next year. In terms of how much money we are putting in the state system during this parliament – £1bn. In 13 years, Labour did not restore the link to earnings. We have done it in two months. “

Harman also pressed him for reassurances that families on a joint income of £40,000 will not lose their tax credits.

The prime minister did not answer directly, saying: “What we are doing is making sure that the lowest earning families get the most money.”

He said child poverty had risen by 100,000 since 2004 and repeated that he was still waiting for an apology for the “mess” left by Labour.

The chancellor has earmarked the welfare budget for an £11bn reduction in spending – more than a third of the £32bn total. Child benefit will be frozen, and the government will eventually save almost £6bn a year by linking all state benefits other than pensions to the slower-growing CPI rather than RPI.

Harman said: “What the electorate detest is broken promises. People will want to know how your budget will affect them. You weren’t straight with pensioners, you weren’t straight with families, you weren’t straight on VAT.

“When the chancellor got up to present his budget he proclaimed: ‘I’m not going to hide hard choices in the small print of the budget documents, you’re going to hear them straight from me …’

“But isn’t the truth, that was his first promise? And he broke it even before he sat down.”

Cameron said: “You talk about broken promises. We remember ‘no more boom and bust’. What happened to that promise? We remember ‘prudence with a purpose’. What happened to that?

“The fact is the Labour party have got absolutely nothing to say about the biggest problem facing this country, which is a massive budget deficit. They might be adopting Greekonomics, but we’re sorting out the problem.”

The prime minister faces more questions on the budget tonight as he takes part in a special BBC Question Time session with his deputy, Nick Clegg, hosted by the BBC political editor, Nick Robinson.

Earlier today, Osborne signalled that further cuts to the welfare bill are envisaged to relieve budget pressures on other government departments.

He insisted that the drive to shrink the state to below 40% of GDP was not “ideological”.

Simon Hughes, the Lib Dem deputy leader, said he expected Lib Dem MPs would support the coalition budget.

He told the BBC’s Daily Politics programme: “I think it can be sold. Of course there’s unease. There’s unease on three fronts. Because none of us – not one single party – wanted to put up VAT. But that has become a choice that was inevitable.

“Anything that reduces benefits for the vulnerable, or might reduce them, is difficult … And then the next issue is the spending cuts, where we all have a commitment to make sure that impacts least on the vulnerable and the needy.”

Originally published here

Prime minister adopts combative tone as he rounds on previous government for leaving Britain with deficit bigger than that of Greece

David Cameron used his first major speech at the Commons dispatch box today to attack the former Labour government for leaving the country in “an appalling mess”.

Speaking in the Commons after this morning’s Queen’s speech, the prime minister adopted a combative tone as he began his address by rounding on Labour for leaving the country with a deficit bigger than that of crisis-hit Greece.

Cameron more than once referred to the handover note left to his ministers by Liam Byrne, the former chief secretary to the Treasury, who quipped that there was “no money left”.

The prime minister’s comments followed acting Labour leader Harriet Harman’s response to the Queen’s speech, in which she outlined how Labour planned an “effective” opposition role following the monarch’s unveiling of the coalition government’s 18-month legislative programme earlier today.

Based on the principles of “freedom, fairness and responsibility”, the programme includes plans for a wholesale reform of schools, a shake-up of the welfare system and measures to “accelerate” the reduction of the budget deficit.

Cameron took to the dispatch box to quip that there was “something missing” from her speech: “Not one word of apology for the appalling mess that has been left in this country. Nothing to say about leaving Britain with a deficit that is bigger than Greece’s. Not a single idea for getting to grips with it. Until they learn what they got so badly wrong I’m not sure people are going to listen to them again.”

The prime minister said the note from Byrne was “13 words that sum up 13 years of complete cavalier arrogance with the taxpayers’ money”.

He rounded on David Blunkett, the former cabinet minister and MP for Sheffield Brightside, when challenged on how the new government’s decision to scrap child trust funds for poorer children squared with the coalition’s commitment to fairness and social responsibility. In a nod to the many millionaires in the cabinet, Blunkett asked if it was fair for a government that was “asset rich” to take away funds from those who were “asset poor”.

Cameron fired back that the decision was Labour’s fault: “You broke the nation so badly that it’s schemes like this that can’t be continued with.”

Labour meanwhile had the novel experience of sitting on the opposition benches for the first time in 13 years in the Queen’s speech debate.

Harman promised “effective” opposition to the government’s legislative plans as she poured scorn on the coalition forged between Cameron and Nick Clegg, the Liberal Democrat leader and deputy prime minister.

Labour’s acting leader said that her party would not oppose for the sake of opposing during debate on the measures put forward by the Conservatives and Lib Dems.

But she warned that neither would the opposition “pull our punches” in showing where ministers are going wrong.

Harman mocked the coupling of the Conservatives and Lib Dems, just weeks after the two parties had set out manifestos made up of conflicting policies. She also suggested the leadership’s backbenchers were sceptical about the alliance. “While the happy couple are enjoying the rose garden, the in-laws are saying they are just not right for each other.”

Harman promised Labour’s support for measures that would help to secure the economic recovery, endorsed waste-cutting measures and supported planned voting reforms. But she rounded on a number of proposals outlined today, including the plan to elect “individuals” to hold police forces to account.

She also made clear Labour’s opposition to plans to change the law so that 55% of MPs – not just a plain majority – would be needed to bring down a government and trigger an election.

Harman added that it was “morally unacceptable” to cut the number of parliamentary seats and redraw constituency boundaries on the basis of an electoral register “from which three and a half million people are missing”.

Harman concluded by saying that the new government had a “great privilege and a heavy duty”.

Simon Hughes, the Liberal Democrat MP for Southwark North and Bermondsey, asked Cameron for an assurance that “his government” would do better than Labour in building council housing and affordable housing.

Cameron joked to the MP, regarded as being on the left wing of the Liberal Democcrats: “I hope before long he will be referring to it as “‘our government’ rather than ‘his government’,” before giving the requested assurance.

On international affairs, Cameron committed the government to the military mission in Afghanistan. In comments that appeared to override claims by his defence secretary, Liam Fox, that Britain was merely in the country for national security reasons, Cameron said: “This is a vital year for Afghanistan’s future. We have had a troop surge in southern Afghanistan; there are now about 44,000 American forces fighting alongside around 9,000 British soldiers. What we need now is a political surge with more effective and accountable government, a reformed Afghan police force and proper reconciliation at the centre. This government will play a leading role in helping to bring that about.”

Cameron also made clear he intended to increase the pressure on Iran amid evidence of Tehran’s intention to acquire a nuclear bomb.

“For the last six years we have pursued a twin-track policy offering engagement but being prepared to apply pressure. I believe it is time to ratchet up that pressure and the timetable is short. This government has a clear objective to ensure stronger UN and EU sanctions against Iran.”

He said measures ought to include restrictions on trade finance, asset freezing and action against banks holding funds for the regime in Tehran.

The new government was also given notice by the Commons Speaker, John Bercow, that key statements by ministers should be made to the house “before they are made elsewhere”.

“If they do otherwise, then I, and I’m sure the house, will expect to hear explanations and apologies as necessary,” Bercow said.

Originally published here

• Rolling coverage of the state opening of parliament and the Queen’s speech setting out the new government’s proposed programme of legislation
• Read Andrew Sparrow’s summary

3.43pm: Cameron is taking more interventions. In response to a question on hunting, he says there will be a free vote. And, in response to a question from Denis MacShane about the Tories’ allies in the European parliament, who were dismissed as “nutters” and “homophobes” by Nick Clegg, Cameron says that he has been waiting for a chance to address this.

He says that in the European parliament Labour is allied with the Lithuanian Social Democratic party, one of whose MPs said homsexuality was a disease. And Labour is also allied with the Polish Self-Defence party, whose leader once said: “Hitler had a really good programme.”

He also takes an intervention from the Liberal Democrat Simon Hughes. Hughes asks for an assurance that the coalition will not neglect social housing. Cameron says he will take the issue seriously. The question was not significant, but it did show us what it will look like when Cameron starts coming under attack from Lib Dem leftwingers.

3.33pm: Cameron moves on to policy. And he takes his first intervention as prime minister, which comes from David Blunkett. Blunkett asks why an asset-rich cabinet is abolishing the child trust fund, given that half of the child trust fund money goes to the poorest children.

Cameron says he has had to abandon the scheme because the government cannot afford it.

The right honorable gentleman has to understand, in the words of the outgoing chief secretary, “we’ve run out of money” … Of course the child trust fund, when thought up, was a good idea. But today it means a new child being born, we are borrowing money from that child, then putting the money into that child’s bank account. You broke the nation so badly it’s schemes like these [that can't be afforded].

3.24pm: David Cameron starts with an unexpectedly churlish note. He says that Harman should have apologised for the dire state of the economy.

Then he moves on to the conventional tributes. He says that Peter Lilley met his wife when she was campaigning for a “yes” vote in the 1975 referendum on Britain’s membership of the EEC and that, as someone who has just jumped into bed with an ardent Europhile (ie, Nick Clegg), he might seek some advice from Lilley.

He says that Don Foster was the first Liberal to propose or second the motion on the address since 1939, and that the last person to do so ended up joining the Conservatives.

He also compliments Harman on her speech. He says she should be standing for the Labour leadership. With her husband, Jack Dromey, deputy general secretary of Unite, he would be able to deliver two million votes, Cameron says.

3.19pm: Harman says Labour is opposed to the proposal to change the law so that 55% of MPs – not just a plain majority – would be needed to bring down a government and trigger an election. And she attacks the Liberal Democrats for wanting to hang on to “short” money, the subsidy available to help opposition parties in parliament.

Some say the Liberal Democrats like to be all things to all people. But even they can’t be both in government and in opposition. They can’t fudge this one. They are in government. They can’t claim short money. Now people are familiar with the notion of clinging on to the trappings of power. But the Lib Dems are the first party to seek to cling on to the trappings of opposition.

Harman also says she is strongly opposed to the government’s plans to give anonymity to men accused of rape. She says that some rape victims only contact the police when their attacker is named.

And that’s it. It wasn’t a brilliant speech, but the passage on the Lib Dems was terrific.

3.10pm: Harriet Harman is speaking now. She starts with a tribute to servicemen killed in Afghanistan. MPs seemed to be expecting a joke at the start, but the tribute sounds prime ministerial.

After complimenting Peter Lilley and Don Foster on their speeches, she says she is proud of Labour’s record and she thanks Gordon Brown for his service. It’s a fairly perfunctory tribute. Brown does not seem to be in the chamber.

Now Harman is moving on to the heavy policy stuff. She says she agrees with the position taken by Vincent Cable before the election, when he argued that now was not the time to cut spending. And she has a good passage about the coalition.

Before the election, the leader of the Tory party, now the prime minister, was telling us all that the Lib Dem polices were simply unaffordable. At the very same time the Lib Dem leader, now his deputy, warned that the Tory tax and spending policies could only be paid for by increasing VAT or cutting frontline services. It is the combination of the two of them that worries me.

While the happy couple are enjoying the rose garden, the in-laws are saying they are just not right for each other. We keep telling them that you can’t pay couples to stay together. It’s clear that it will take more than three quid a week tax break to keep this marriage together.

3.00pm: Foster moves on to discuss the coalition. He says that one consequence is that dictionary writers will need to change the way they work.

No longer can the definition of futility be listed as “serving on a Lib Dem policy working group”.

And that’s it. Foster was funny too.

2.54pm: Don Foster starts with a tribute to Peter Lilley. He recalls a story about the time when Lilley was a cabinet minister. A poll showed that only 2% of the population recognised who he was. Lilley replied that that was higher than the proportion of the public that he was able to recognise.

Foster says he entered parliament when he defeated a Tory (Chris Patten) in Bath. Now he is sitting on the benches with Tories, he says.

Now he is talking about Lib Dem leaders. He tells a nice (but well-worn) story about receiving a copy of his diaries from Paddy Ashdown. Foster looked in the front, but did not see a dedication. So he looked himself up in the index, where he found a note saying: “Knew you would look here first. Best wishes.”

2.53pm: On the subject of coalition, Lilley recalls John Major’s remark about having “bastards” in his cabinet because it was better to have enemies inside the tent pissing out than outside pissing in. (Major was quoting Lyndon Johnson.) Lilley says that David Cameron has summed up the same idea, but rather more delicately, with his phrase “we’re all in this together”.

He also says that Cameron hosted a reception for all ministers at Downing Street last night where, by tradition, the Queen’s speech was read out “for those ministers who don’t subscribe to the Sunday Telegraph”.

That’s it. A short speech, but a good one – with two or three genuinely good jokes.

2.45pm: The debate is starting, with Peter Lilley moving the motion for an address to the Queen.

He says he was keen to speak, but not as keen as the colleague invited to take part in a BBC debate for a fee of £25. The MP said he would be delighted – and sent off a cheque for £25.

Lilley says the address is normally seconded by an oily young man on the make. But today it’s a Liberal Democrat.

This means Lilley is the first MP who has to decide whether a Lib Dem is an “honorable friend” (the term MPs use for MPs from the same party) or an “honorable member” (the term for opponents). Lilley says he will get round this by referring to Don Foster as an honorable ally.

Lilley congratulates David Cameron for forming a coalition.

I know some of my closest friends find coalition difficult to stomach. But if anyone imagined that, like King David, we could have hidden in the cave of Adullam, refusing to take up the mantle of government until all challenges to our authority disappear, they are mistaken. A coalition of the losers would have been a monstrosity. To govern alone, an impossibility. And a loose agreement falling short of coaliton, an absurdity.

2.34pm: After Peter Lilley and Don Foster (see 1.53pm) have spoken, Harriet Harman will take the floor. Jim Pickard has some advice for her.

2.27pm: Here’s the verdict on the Queen’s speech from our Comment is Free panel, Polly Toynbee, Tom Clark and Julian Glover. Polly predicts a fierce battle over electoral reform.

The referendum on an alternative vote and House of Lords reform are the strongest sign of Liberal influence: these certainly would not have been there otherwise. Expect fireworks, though, when Alan Johnson adds in an amendment for real proportional representation, which the Liberal Democrats will have to back and the Tories will fight with every weapon they can muster.

1.58pm: My ingenious colleague Simon Rogers has turned the Queen’s speech into a wordle. “Forward” appears very prominently, but that’s because the Queen kept talking about the government bringing forward measures.

1.53pm: At the start of the Queen’s speech debate two backbenchers propose and second the motion for an address to the Queen. Normally they both come from the governing party. But, in the spirit of the coalition, the first speech will be delivered by a Tory, Peter Lilley, and the second by a Liberal Democrat, Don Foster.

1.44pm: My colleague Michael White told BBC News there were 18 Tory MPs who remained in the Commons and chose not to walk to the Lords to listen to the Queen. There are normally several Labour MPs who boycott the Queen (like Dennis Skinner), but Michael said he had never seen so many Tories staying in the Commons.

1.38pm: The Queen’s speech said the government was committed to increasing development spending to 0.7% of gross national income by 2013. But Douglas Alexander, the shadow international development secretary, has pointed out that there was no reference to putting this target in legislation, even though the coalition agreement said last week that the 0.7% target would be enshrined in law.

1.31pm: The Liberal Democrats have put out a press notice listing 23 Lib Dem policies that were contained in the Queen’s speech.

For those interested, here they are:
• Making the tax and benefits system fairer and simpler, including a significant increase in the personal allowance and an ambition to increase it to £10,000
• Restoring the earnings link to pensions
• Greater freedoms for teachers over the curriculum
• Measures to improve energy efficiency in homes and businesses
• Support for low carbon energy production
• Financial services regulation to learn the lessons of the financial crisis
• Fixed-term parliaments of five years
• A referendum on the alternative vote
• The right to sack MPs guilty of serious misconduct
• Reform of party funding
• Moving towards a wholly or partly elected House of Lords, elected by proportional representation
• A bill to restore freedoms and civil liberties, through the abolition of identity cards and repeal of unnecessary laws
• Giving greater powers to councils and giving neighbourhoods and communities more control over planning and housing decisions
• Ending child detention
• Fair compensation for Equitable Life victims
• Enabling the creation of a national high-speed rail network
• The modernisation of the Royal Mail
• Flexible working and promotion of equal pay
• Strengthening the voices of patients and the role of doctors in the NHS
• A commission on long-term reform of social care
• Cutting quangos and government bureaucracy
• Implementing the recommendations of the Calman Commission
• A referendum on further powers for the Welsh assembly.

1.27pm: Sir Paul Stephenson, the Metropolitan police commissioner, has confirmed that Brian Haw was arrested this morning on suspicion of obstructing the police (see 9.01am and 9.28am). According to the Press Association, Stephenson said that the police could not do anything about “Democracy Village”.

We need to make sure that the Met does our job and does not undertake other people’s responsibility. It certainly looks a bit untidy but that land is owned by the Greater London authority and it is for them and the mayor to decide what they want to do with it. It is not for the cops to decide what should and should not be done on private property.

1.20pm: Vincent Cable has been explaining why he wants to go ahead with the part-privatisation of the Royal Mail.

We need to deal with the longstanding problems facing Royal Mail – the dependence on finance from the taxpayer, the deficit in the pension fund, the dramatic decline in the number of letters being sent. These fundamental challenges are becoming more thorny and deep-rooted. Letting them grow is not in the best interests of consumers, businesses or Royal Mail’s employees. We are looking at all of the issues and options with a fresh pair of eyes, but are clear that an injection of private capital is important.

1.12pm: Michael Gove has got now a second bill. At 12.21pm I said that Gove had only one bill in the Queen’s speech and that the bill allowing parents to set up “free schools” wasn’t mentioned in the 82-page Cabinet Office briefing pack about the legislative programme. But less than an hour after the Queen left the building, Downing Street emailed journalists with an updated briefing note which does mention an education and children’s bill that will cover “free schools”. Earlier I said that “free schools” were no longer a priority. That still seems to be true. The notes on the education bill suggest that it is mostly to do with introducing the “pupil premium” and the government does seem much more keen to talk about its academy plans. But the idea has not been dropped, and Gove has got his second bill.

The Downing Street email also includes a new press notice about the health bill. The 82-page pack did not have much to say about that. The new press notice shows that someone has at least decided what will go in the bill. It will create an independent NHS board and cut health quangos.

Downing Street has also released more information about the freedom (great repeal) bill, making it clear that the bill will extend the scope of the Freedom of Information Act.

According to Downing Street, the new information was released late this morning – and not as part of the original press pack – because it was not ready earlier.

The full notes are now available on the Downing Street website.

12.46pm: Boris Johnson’s office has issued a statement about the legal action he is taking to clear “Democracy Village”, the protesters’ campsite on Parliament Square (see 9.28am).

Parliament Square is a world heritage site and top tourist attraction that is visited by thousands of people and broadcast around the world each day. The mayor respects the right to demonstrate – however, the scale and impact of the protest is now doing considerable damage to the square and preventing its peaceful use by other Londoners including those who may wish to have an authorised protest.

Greater London authority officials are now applying to the high court to begin legal proceedings for trespass.

12.39pm: Billy Hayes, the general secretary of the Communication Workers Union, has pledged to fight the postal services bill. In a statement, he said it would place the Post Office network “in grave danger”.

Privatising public services is deeply unpopular. Breaking up Royal Mail Group and flogging parts to private companies will damage services and lead to price hikes for customers. It’s old politics dressed up in new language.

12.28pm: We’re used to MPs tweeting from the chamber now, but Liz Kendall, the new Labour MP for Leicester West, seems to have achieved a first. As Paul Waugh reports, she’s used twitpic to post a picture from inside the Lords chamber after the Queen’s speech.

12.21pm: So, what do we make of that? Here are a few thoughts.

• “Free schools” are no longer a priority. According to the Sunday Telegraph, there were plans to include an education and children’s bill in the Queen’s speech, alongside the academies bill. The Sunday Telegraph said the education bill would be the vehicle for introducing “free schools”. But it’s not in the list. The academies bill is important and Downing Street says that Michael Gove briefed the cabinet on it this morning. As Patrick Wintour and Nicholas Watt report in the Guardian today, Gove is looking at whether he can introduce “free schools” without legislation. At one stage the Tories suggested that introducing “free schools” would be their most important public service reform. Now education remains the priority, but extending academies has become the flagship policy. Is the government now acknowledging (as the Lib Dems used to assert loudly during the election campaign) that allowing parents to set up their own “free schools” would only benefit a small minority?

• Vincent Cable seems to have won a battle to get Royal Mail legislation into the programme. In the draft Queen’s speech obtained by the Sunday Telegraph, there was no bill for the part-privatisation of the Royal Mail. But there is a bill in there now.

• Tax changes will be extensive. The Queen’s speech documents released today show that the plans to increase the income tax allowance, funded by an increase in national insurance rates, will reshuffle £9bn. That’s a substantial redistribution and there are likely to be some significant winners and losers. The government says “most people would be better off relative to the previous government’s plan, and, relative to no changes, all low and middle employees would pay less tax and [national insurance] overall”.

• Some bills are going to require a lot more work. The Cabinet Office notes suggest that the government is a long way off publishing a health bill. And it has virtually nothing to say about the provisions relation to service personnel that will be in the armed forces bill.

11.43am: The Queen has finished now. I’ll link to the main text when it’s available. But here is the full list of bills and draft bills in the Queen’s speech. There are 22 bills, one more than was suggested in the document leaked to the Sunday Telegraph, and one draft bill. The “new” one is the bill allow the part-privatisation of the Royal Mail. That will be seen as a victory for Vince Cable, the business secretary, who will pilot the postal services bill through the Commons.

• Office for budget responsibility bill. Sets up the OBR to take responsibility for producing budget forecasts, meaning the chancellor
– who under the current arrangements is in charge of producing his own
forecasts – won’t be able to twist the figures.

• National insurance contributions bill. Raises income tax
allowances, so that “most people would be better off relative to the previous government’s plan”, funded by a rise in national insurance. Reallocates tax worth around £9bn.

• Welfare reform bill. Simplifies the welfare and benefits system, improving work incentives and “removing the confusing complexity of
the benefits system”.

• Pensions and savings bill. Implements the findings of the review of the state pension age being conducted by the government. Currently the state pension age will increase to 66 after 2024. The review will propose bringing that forward. The bill will also restore the earnings link from 2012.

• Financial reform bill. Gives the Bank of England control over macro-prudential regulation in the City. Not clear yet what will happen to the fate of the Financial Services Authority.

• Equitable Life bill. Pays compensation to savers who lost money when Equitable Life came close to collapse.

• Airport economic regulation bill. Promotes competition in the airport market, possibly breaking up the BAA monopoly.

• Postal services bill. Allows the sale of part of the Royal Mail, in line with the plans originally drawn up by Lord Mandelson. The exact proportion being sold has not been specified.

• Energy bill. Promotes energy-efficiency measures in home by introducing a “green deal” charging system, with incentives to suppliers and households to save energy. The bill may also regulate emissions from coal-fired power stations and create a Green Investment Bank.

• Academies bill. Allows more schools to become academies, giving them more freedom from Whitehall.

• Health bill. Replaces the “top-down approach” with “the devolution of power and responsibility to doctors and patients”. Andrew Lansley, the health secretary, will set out more details of his vision in the next few weeks.

• Police reform and social responsibility bill. Makes the police more accountable through “directly elected individuals”. The bill will also create a dedicated border police force, ensure health and safety laws do not stand in the way of “common sense policing” and overhaul the Licensing Act.

• Public bodies (reform) bill. Cuts the number of quangos, with a view to saving £1bn a year.

• Decentralisation and localism bill. Gives more power to councils and neighbourhoods. Also gives residents the power to instigate
referendums and veto excessive council tax increases.

• Local government bill. Stops the creation of unitary councils in Exeter and Norwich.

• Parliamentary reform bill. Introduces fixed-term parliaments, gives voters the right to recall MPs found guilty of serious wrongdoing and sets up a referendum on the alternative vote system.

• Freedom (great repeal) bill. Restores freedoms and civil
liberties and repeals “unnecessary” laws.

• Identity documents bill. Abolishes the identity card system and destroys the national identity register.

• Scotland bill. Implements the final report of the Calman commission, giving more devolution to Scotland.

• European Union bill. Ensures that there is a referendum on any future plan to transfer power to the European Union.

• Armed forces bill. Renews the legislation giving the armed forces a legal basis, as well as improving provisions for service personnel.

• Terrorist asset-freezing bill. Gives the government firm powers to seize assets from terrorists, following a supreme court decision
that quashed the previous legislation in this area.

• Draft parliamentary privilege bill. Clarifies the law relating to parliamentary privilege.

11.39am: The Queen is speaking now. She starts by saying that the government’s legislative programme will be based on “the principle of freedom, fairness and responsibility”. That seems to be the slogan of the coalition government. These three principles were mentioned in the coalition agreement published last week. But, as Nick Robinson points out today (see 11am) some of these values can be contradictory.

11.33am: MPs are processing to the Lords now. David Cameron is with Harriet Harman. He’s talking, and she’s expressing polite interest. Nick Clegg walks alongside Jack Straw, and they seem to be getting on. William Hague is with David Miliband, who seems to wish he was with someone else.

11.30am: The Yeoman Usher is heading to the Commons chamber now. Black Rod normally does this bit, but he fell ill last week.

11.24am: The Queen is about to arrive. I’ve just been reading the Cabinet Office information, which is embargoed until 11.30 and I’m afraid I haven’t been giving the ceremony my full attention so far. But I’m tuned in now, in time to see the Speaker, John Bercow, going through central gallery and heading into the Commons chamber.

11.00am: Nick Robinson on his blog says there is a tension between “fairness” and “responsibility” – two of the key themes in the coalition government’s Queen’s speech.

In welfare and prisons, private companies, charities and other local bodies will be paid by results for what they do – again, it’s argued, encouraging innovation and improving results. All this can be defended on the grounds that it will give greater freedom and responsibility to those running public services and the users of them.

However, critics will be quick to point out that it may lead to bigger differences between good and bad public services – that term “two-tier” will no doubt return to the political lexicon. They will argue that de-centralised services often waste money – on, for example, high salaries in academies and foundation hospitals – and siphon it away from poor areas to richer ones.

10.41am: Channel 4 News is also running a Queen’s speech live blog. They’ve got a poll on what music the Queen should enter parliament to. Don’t Stop Me Now is level-pegging with the Sex Pistols’ God Save the Queen.

10.10am: Nick Clegg was on BBC Breakfast this morning. According to PoliticsHome, he said that the Queen’s speech would be about “giving people more say about their lives”. He also had a message for Liberal Democrats unhappy about the policies the party has had to drop.

I don’t think compromise is betrayal.

9.36am: The Telegraph has got a useful guide to all the ceremonial nonsense that accompanies the Queen’s speech. You can also find out more from the Queen’s Body Guard of the Yeomen of the Guard. To my surprise, I discovered that the Yeomen of the Guard have got their own website.

9.28am: I’d love to know what the Queen makes of “Democracy Village” when she comes past in her carriage. For years there was just Brian Haw. But Parliament Square now looks like a proper, full-blown campsite. It’s a wonder that tourists aren’t turning up with their tents. Personally I’m not bothered, but others are more fastidious. Last week the Telegraph published an editorial saying that Parliament Square looked like a “shanty town” and that it had become “the venue of choice for every grievance-monger and fruitcake under the sun”.

According to Iain Dale, Boris Johnson is taking legal action today to get the campers evicted. This seems to run counter to the spirit of the coalition agreement released last week which said the coalition government would “restore rights to non-violent protest”. (Labour passed legislation to try to remove Brian Haw from Parliament Square, but he used a legal technicality to defeat attempts to evict him.) Dale says that Johnson decided to act when he heard the protesters were urinating against the statues. But there could be another explanation for his move. If David Cameron takes a stance on an issue, Johnson can often be relied upon to say the opposite.

9.01am: Brian Haw, the peace protester who has been camping in Parliament Square since 2001, has been arrested this morning, according to the BBC. The Metropolitan police won’t confirm that, but they will say that two people were arrested this morning at Parliament Square on suspicion of obstructing the police. There is a large peace camp on the square now – the Guardian published a guide to the so-called “Democracy Village” last week – and police officers have been searching it this morning.

8.29am: Parliament is all scrubbed up. It’s the state opening, and MPs, peers and officials and getting ready for the arrival of the Queen. She delivers her speech at 11.30am and then the Commons adjourns until 2.30pm, when MPs start to debate the new government’s legislative programme.

After opening speeches from two backbenchers, we’ll hear from Harriet Harman and then David Cameron. It’s a day that’s heavy on ceremony and theatre, and often relatively light on surprise and hard news. But, in political terms, there are still two things worth watching closely.

First, what is the government going to tell us about its legislative programme? The contents of the Queen’s speech are often trailed in advance – bills don’t emerge without planning and consultation – and this speech will probably contain even fewer surprises than usual, because the Sunday Telegraph obtained a copy of a late draft.

The paper published a list of 21 bills that are supposed to be in it. But we will still learn something. At 11.30 the Cabinet Office will release an 80-odd page document with information about the government’s legislative plans. This is a brand new government and we still know relatively little about how it is going to conduct its business. By this afternoon, we’ll know more.

Second, what is Cameron going to say? Today he is making his first big appearance at the dispatch box as prime minister. And the speech he will deliver at around 3.30pm will be the first substantial speech he has delivered since he won (or almost won) the general election.

These speeches are often forgettable. They are expected to contain a lot of jokes, and prime ministers use them to present a broad overview, rather than to announce anything new. But it’s the nearest equivalent we’ve got to the State of the Union address delivered by a US president and what Cameron has to say should tell us something about how he intends to lead the country.

As usual, I’ll be blogging all the developments throughout the day.

Originally published here

The latest news and analysis and minute-by-minute coverage of Alistair Darling’s budget statement, the Commons debate and reaction

4.32pm: I’m just back from a briefing with senior Tories. I’ll post the main points in a moment.

3.59pm: One department is not announcing cuts/savings. The Ministry of Defence has put out a press release saying its budget is going up in real terms.

3.45pm: Here are the figures we’ve had about departmental cuts/savings so far.

• The Ministry of Justice will save £343m. Measures include: cutting the cost of senior civil servants by 20%; saving £27m from MoJ quangos; abolishing 19 court boards; and “rationalising” the London estate from 18 buildings to four.

• The Department for Health will save £4.3bn. Measures include: saving £1.5bn by cutting procurement costs; saving £555m by reducing sickness absence; saving £60m by using energy more efficiently; and saving £100m from the IT programme.

(If Andrew Lansley announced plans to take £4.3bn from the NHS budget, I’m pretty sure Labour would be screaming blue murder.)

• The Department for Environment, Food and Rural Affairs will save £194m. Measures include saving £25m by cutting spending on consultants and saving £100m by cutting spending on items like finance and human resources.

• The Department for Work and Pension will save £350m. Measures include saving £180m by getting better value out of major contracts and saving £40m in property costs.

• The Department for Communities and Local Government will save £200m. Measures include saving £130m from back office, procurement, consultancy and marketing costs.

3.32pm: When is a cut not a cut? When it’s an efficiency saving. Government departments have just started pumping out the press releases giving details of their “smarter government savings”.

This is money that they were going to spend on something but which they are now not going to spend. So, in that sense, they are cuts. But the government has not decided what to do with the sums it is saving. This will be determined in the spending review (if Labour wins the election). The money could be spent on something else. Or it could be used to cut the deficit. At this stage we don’t know.

I just heard a fellow journalist say to a government press officer: “You do realise that these are going to be reported as cuts, don’t you?” The press officer seemed a bit alarmed. But there may be some uncertainty in government as to whether to present these as cuts or not – because no one is entirely clear whether or not cuts are popular. As I mentioned earlier (see 11.04am), and as Patrick Wintour has written about in more detail on his blog, the polling evidence on this is very mixed.

I’ll post some more details about the cuts/savings in a moment.

3.19pm: Ed Balls and Vincent Cable have just been doing a joint appearance on BBC News. It was a bit of a love-in, or at least from one side. Balls criticised Cameron and Osborne, but made a point of paying a compliment to his Lib Dem opposite number.

At least with Vince, or this government, you’ve got people who know what they are talking about.

Sucking up to the Lib Dems: we’re going to see a lot more of this, from both main parties, as the election campaign goes on.

3.15pm: The Conservative party’s attempt to crowd source the budget seems to be running into a few problems. Jim Pickard has more details on the FT’s Westminster blog.

3.09pm: Estate agents like the stamp duty announcment. This is from a Press Association report.

Peter Bolton King, chief executive of the National Association of Estate Agents, said: “For thousands of first-time buyers the dream of getting on to the property ladder was slipping out of reach.
“This announcement has added a new rung to the property ladder, one within reach of thousands of young families.”
But he added that the group still believed more stamp duty reform was needed.
The Home Builders Federation said the move provided a “huge boost to the housing market” and a “massive fillip to hard-pressed first-time buyers”.
The Royal Institution of Chartered Surveyors said the reduction in stamp duty could help to push annual housing transactions back over the one million mark for the first time since 2007. But it added that greater reform was still needed.

The PA story also reveals that the stamp duty increase on homes worth more than £1m is a tax on southerners. Some 81% of homes in this price bracket are in London or the south east of England.

3.05pm: Brendan Barber, the TUC general secretary, liked the budget. He said:

This was a measured budget that took no risks with the recovery and showed that the government’s handling of the recession is working. Better than expected tax income and lower unemployment has given the chancellor scope to extend the jobs guarantee for young people and provide some extra money for tackling poverty.

Support for business, a green investment bank and for industrial policy are welcome steps in rebalancing the economy away from finance. We welcome the decision to maintain this year’s planned increase in spending, but there are real concerns that cuts planned for future years will damage public services. Instead the chancellor should have put more emphasis on raising tax from those who benefited most from the boom years, through a Robin Hood Tax on financial transactions and limits on tax breaks for the rich.

This was a good budget. The chancellor not just acted responsibly, but with a real sense of social justice and the need for government to help create a better, fairer and more sustainable economy.

3.03pm: Miles Templeman, director general of the Institute of Directors, said this:

The chancellor’s GDP forecasts are too optimistic and there is still no sign of a credible deficit reduction plan, but we certainly welcome the specific measures to support small and medium-sized businesses.

(By IoD standards, that’s quite positive.)

3.02pm: Derek Simpson, the joint leader of the Unite union, is on message today (which is not always the case). Here’s his verdict:

The last budget before the election shows leadership and responsibility during difficult times. Alistair Darling has focused on support for the young, growth, investment and jobs when Tory doom-mongers who spend their time talking Britain down would rather slash and burn our public services and leave working families to sink or swim. The establishment of a green investment bank is welcome, it will support British manufacturing when the Tories don’t even have an industrial policy.

3.00pm: Here’s Richard Lambert, the CBI director-general.

With the election just weeks away, this was a clever, political budget. However, anxiety remains on how the deficit is going to be paid down, and the growth forecasts for 2011 and beyond are still on the optimistic side.

There was more support for business than might have been expected, with a series of modest but helpful changes. The doubling of entrepreneurs’ CGT relief will help investment in small businesses and the extra money for science places at university will be welcomed by industry.

However, it is the fiscal decisions over the next 12 months that will really determine the UK’s economic future.

2.57pm: I’m going to hoover up some reaction now from the wires. Here’s Dave Prentis, the Unison general secretary, complaining about plans to take £20bn out of public services.

Not all jobs are front-line but they are essential. Just where does the Chancellor think the axe should fall? We saw what happened when hospital cleaners were cut, with dirty hospitals and the rise in MRSA and C difficile.

Cutting cleaning staff has cost not only lives, but billions of pounds in expensive drugs, longer hospital stays and in treating ongoing health problems. Should we cut porters and leave patients waiting for hours to be taken for urgent tests, or pharmacy opening hours so patients have to wait till the morning to get their drugs?

Local government workers have delivered efficiency savings year on year and cutting their budget will be counter-productive. Drastic budget cuts will have a knock-on effect on jobs and services. It makes no sense to add local government workers to the dole queues.

2.47pm: (Graeme Wearden writes) UK government debt came under pressure following the budget. The trigger appears to be an
announcement from UK Debt Management Office that Britain will try to
sell £187.3bn of gilts in the next financial year. The DMO admitted
that this will be “a serious operational challenge”.

Gilt yields, a measure of how much it costs the UK to borrow from the
financial community, rose as high as 3.99% from 3.91% earlier today,
before recovering slightly to 3.94%. This means the cost of servicing
the national debt has gone up, and suggests less appetite for British
bonds.

The pound, which fell during Darling’s speech, then hit a low of
$1.4877 against the dollar. That’s is sterling’s lowest level since
March 2nd.

Alex Edwards, senior corporate dealer at UKForex, told me that the
market didn’t like Darling revised economic forecasts. The chancellor
said that he expects the UK economy to grow by between 3% and 3.5% in
2011, down from a previous forecast of 3.25% to 3.75%.

“Overall his budget hasn’t been good for the pound,” said Edwards,
predicting that sterling could slip lower towards the $1.4800 figure by
the end of the day.

The price that investors pay to protect themselves against a potential
British debt default also rose, from 76 basis points, to 78bps,
according to data from Markit. This means investors pay $78,000 pounds
to protect $10m worth of UK debt.

On a brighter note – bank shares have rallied – Royal Bank of Scotland
is up by 2.2% and Lloyds is 1.7% higher. We think this is partly due
to relief that there was no unilateral clampdown on the banks. The new
lending targets announced by Alistair Darling also haven’t caused
alarm.

The housebuilders have also seen their shares rise – with traders
predicting that the stamp duty changes will encourage more first time
buyers into the market. Bellway is leading the FTSE 250, up 5.4%,
followed by Barratt and Persimmon.

And curiously, shares in cidermaker C&C have risen by 4.5% despite the
increased duty on cider. Perhaps the City is anticipating a surge of
interest? There’s been a lot of outrage on Twitter about the change.

2.45pm: Liam Byrne, the chief secretary to the Treasury is on the BBC. Nick Robinson wanted to know why we’re having to wait until 3pm until we learn more about the spending cuts. Byrne did not have much of an answer.

2.31pm: Where do we stand now?

It was the most political budget Darling has ever produced. Upbeat news on the economy (if an 11.8% budget deficit can ever be described as upbeat) and measures for pensioners and motorists that will play well in the papers, without frightening the bond markets. But I can’t see any kind of “game-changer” in the package. And I don’t think it creates any new dilemmas for the Tories. David Cameron will come under pressure to explain whether or not he will support all the measures that Darling has announced. Most of them he probably will support. (We’ll find out more when the Tories brief later today.) Cameron is still telling us remarkably little about how he will slash the deficit. But the government has not told us much about its plans to cut spending either, which partly lets Cameron off the hook.

2.26pm: Apparently we’re getting more details about the efficiency savings coming from government departments at 3pm.

2.10pm: More details from the red book. In addition to the big chunks of money going to pensioners and motorists (see 1.52pm), the other most significant items, in money terms, are:

• Extending the young person’s guarantee – ie, guaranteeing the under-24s work or training if they have been unemployed for six months – will cost £475m. This is described as “reprioritised spending”. From what I have seen so far, it is not clear what is being cut to fund this.

• Extra money for universities. This is worth £385m.

• Investment in transport. This is worth £385m.

• The stamp duty cut. Darling is abolishing stamp duty for first-time buyers on properties worth up to £250,000 for two years. This will cost £230m.

The increase in stamp duty on properties worth more than £1m, from 4% to 5%, will raise £90m. It might sound like red-meat socialism, but in budgetary terms, it will only raise peanuts.

• Tax cuts for small business. The temporary increase in relief for small businesses is worth £210m. There are other tax cuts for business too, but that one is by far the most significant.

2.08pm: Lord Mandelson has just told the BBC that he will announce details of spending cuts in his department this afternoon.

Looking at the red book, I see that Darling has found £230m by “reprioritising spending” from Mandelson’s department and from the department for transport.

1.52pm: I’ve just opened a copy of the red book, the Treasury document containing all the budget details. Darling said there would not be a giveaway budget, but the measures announced today effectively amount to a £1.4bn giveaway. That’s to the cost to the Exchequer for 2010-11.

The single most expensive item is described as “age-related payment to pensioners households”. That’s worth £600m. Darling did not say much about this in the speech, but reading the notes I see that it will involve extra payments worth £100 to households with someone aged over 80 and £50 to households with someone over the female state pension age (currently 60, but about to increase in April).

The decision to phase the fuel duty increase is the next really expensive item in the package. It costs £550m.

So, who are the big winners? Pensioners and drivers.

1.49pm: There’s a good summary of the key budget announcements on our website.

1.44pm: Cameron mentions “the ticking tax bombshells” timed to go off after the election.

And he’s got a strong passage attacking Brown, comparing him to the Captain of the Titanic and Richard Nixon, amongst others.

No one has yet thought of a question to which the answer is five more years of this prime minister.

1.40pm: Cameron says that in four years’ time the deficit will be almost as big as it was when Denis Healey went to the IMF.

A credible plan requires action now, Cameron says. But Darling did not provide one.

Another joke:

This prime minister will never get a medal for courage, although it has to be said that most of his cabinet get mentioned in Dispatches.

The Channel 4 programme. Geddit? Cameron’s speech is strong on knockabout, but thin on substance.

1.38pm: Cameron says Brown got one forecast right. He quotes something Brown said to bankers in the City. I’m paraphrasing, but the gist of it was: “What you’ve done for the City of London, we as a govenrment intend to do for the country as a whole.”

1.38pm: The full text of the chancellor’s speech is available here.

1.35pm: Cameron says the government has still borrowed more than any government in history. With reference to Labour MPs leaving the chamber, he says “the taxis for hire are on their way out of the chamber”.

He promises to tell us things not in the budget. The red book shows that the trade deficit is up. Business investment has fallen. The deficit this year is the worst anywhere in the OECD except for Ireland. This year the government will be spending more on debt interest than on education.

1.32pm: That’s it. Lots of politics in the budget, but nothing sensational. A new tax on £1m mansions. And a tax deal with Belize. I can’t tell whether or not this will have an impact on Lord Ashcroft – and I don’t think he’s likely to help us. With luck, we might get some more guidance on this later on.

Cameon has just started. I’ll focus on him now.

1.30pm: Darling says he will pay the winter fuel payments for another year.

From April next year, pensioners will not pay tax on the first £10,000 of their income.

1.26pm: Darling turns to tax avoidance. Labour MPs shout “Ashcroft”.

Britain will sign agreements to combat tax avoidance with three new countries: Dominica, Grenada and Belize (where Ashcroft used to be based). Labour MPs love this, although there is no indication from what Darling says that this that will have any impact on Ashcroft personallly.

Darling says he will sign these withing the next few days. He contrasts this with the 10 years it took the Tories to find out whether Ashcroft was a non-dom.

1.25pm: Darling says the cost of this investment (see 1.21pm) will be repaid “many times over” by the gains to be had from an educated workforce.

1.21pm: Darling will set up a £35m university enterprise capital fund.

Britain needs to invest in education. But universities must make efficiency savings. Darling will provide £270m for a modernisation fund, producing an extra 20,000 places.

1.19pm: An investment bank, controlling £2bn of equity, will be set up to fund green transport and energy initiatives. Some £60m will be spent helping ports develop for the manufacture of wind turbines. (This is something Nick Clegg proposed earlier this year, I seem to remember.)

1.19pm: Darling will provide £100m to pay for repairs to local roads.

1.13pm: Back in the chamber, Darling announces the creation of a UK New Fund for Growth. It will provide £500m for SMEs.

There will also be £200m for a growth capital.

Darling says he will cut business rates for a year from October. Some 345,000 small businesses will pay no tax at all, he says.

He will double entrereneur relief for capital gains tax.

1.13pm: (Graeme Wearden writes) The City’s early reaction to the budget is that the pound fell to a two-week low of $1.4898 after Darling announced the latest borrowing forecasts. It also lost a bit of ground against the euro, to €0.8953 vs 0.8931 earlier today. The FTSE, though, has clawed back all its losses. Financial stocks are now up – presumably on relief that Darling has not announced any new bank taxes (yet).

Fellow reporter Elena Moya is watching the bond market. She reports
that UK gilt yields rose slightly, to 3.93%, from 3.91% before. In
general terms, this means that investors are dumping UK government
bonds, pushing prices lower, yields higher. This mean UK will have to
pay more to borrow from the financial community.

Manoj Ladwa, senior trader at ETX Capital, has also commented on the
stamp duty changes. “The property market is being given a much needed
shot in the arm after the Chancellor doubled the stamp duty threshold
to £250,000. Although this is above the average price of a house in
the UK, wealthy Londoners looking to move will be up in arms as stamp
duty on £1m plus houses rises to 5%.”

1.11pm: Darling says banks need to lend more to small businesses. RBS, the state-owned bank, will lend more to small and medium-sized businesses (SMEs).

1.06pm: The next spending settlement, from 2011 onwards, will be “the toughest for decades”.

At the pre-budget reform Darling committed departments to finding savings worth £11bn. Details of those will be published today, including savings by relocating civil servants from London.

In the long term he wants to relocated a third of civil servants. Today he can announce the Ministry of Justice is moving 1,000 staff out of London, saving £41m.

He will also stop people living in the most expensive houses being eligible for housing benefit. (That’s a sop to the Daily Mail, which is often running stories about asylum seekers in plush London mansions.)

Asset sales will also make a “significant contribution” to reducing debt.

1.04pm: Spending will increase in real terms by 2.2% next year, Darling says.

He will protect spending on frontline services. He mentions various guarantees that will be honoured.

Over £4bn from the reserve will be allocated for Afghanistan, he says.

1.00pm: Darling now turns to tax.

The 50% rate of income tax will come in next month for those earning more than £150,000. Those earning more than £100,000 will pay more because some allowances will be removed. These decisions were announced last year.

He has no further announcments on VAT, income tax or national insurance.

But duty on cider will be increased by 10% above inflation from Sunday. And definitions will change, so strong ciders are taxed more heavily.

Tobacco taxes will also rise by 1% above inflation.

12.59pm: Immediate cuts to spending would be wrong, Darling says.

To go faster would involve “taking a huge risk with people’s jobs,” he says.

12.55pm: Darling says he now has data on tax revenues for last year. Tax receipts in December, January and February were better than expected. VAT receipts were £3bn higher than expected.

Borrowing this year will be £11bn than expected, at £167bn.

Next year it will be £163bn, he says.

By 2013-14 debt will be £100bn lower than forecast last year.

The deficit will fall from 11.2% to 5.2%, he says.

The structural deficit will fall by more than two thirds. This will remove “the bulk” of the structural deficit by the end of the next parliament. He uses the word bulk deliberately, because removing the bulk of the structural debt is Tory policy.

Even at its peak, debt will be in line with the average for G7 economies.

12.54pm: Next month’s fuel duty increase will be staged. It will rise by 1% in April, 1% in October and 1% January.

12.53pm: Darling has revised downward his growth forecast for next year. He is now predicting growth between 3% and 3.5% for 2011.

12.52pm: Darling says the ISA limit will rise from £7,200 to £10,200.

12.50pm: Darling wants to help first-time buyers. From midnight tonight, he will double the stamp duty allowance, from £125,000 to £250,000, for first-time buyers for two years. This means nine out of 10 first time buyers will not pay stamp duty.

To pay for this, stamp duty on properties worth more than £1m will rise to 5%.

That’s the first really big surprise so far. Labour MPs are delighted. They think this will prove awkward for the Tories.

12.48pm: Darling says he will extend the youth employment guarantee until March 2012. This is the scheme that ensure that anyone under 24 will get a job or training after they have been unemployed for more than six months.

12.46pm: Key points so far:

• A £2.5bn growth package
• Moves to allow everyone to open a bank account. 1m people to benefit.
• £2bn raised already from the bonus tax

Chancellors always save the best stuff until the end. So the bank announcement, which was briefed earlier this week, does not seem to be seen as a key initiative.

12.46pm: Darling says the claimant count – ie, the number of unemployed claiming benefits – is lower than it was in 1997.

That has not happened by chance. That has happened because of the choices we made.

12.43pm: Darling says the car scrappage scheme has increased car sales by 30% over the last year.

There was a cost. But the cost of not acting would have been greater.

If he had listened to those who opposed these moves, Britain would still be in recession.

(There seems to be more Tory-bashing – ie, “things would have been worse under the other lot” – than there normally is in a Darling speech. He’s not a natural partisan.)

12.41pm: Darling says we cannot continue with a situation where banks are rewarded for behaving badly.

He is in favour of an international levy of some kind.

But he is not in favour of “going it alone” (ie, the Tory plan). That would cost thousands of jobs.

Today he is announcing plans to ensure everyone can have a bank account. That will up to 1m people will be able to open accounts in the next five years.

12.38pm: Improved global financial regulation must be the key priority, Darling says.

The latest figures from Northern Rock show it is “returning, steadily, to normality”.

The government will sell its shares in RBS, Lloyds and Northern Rock in such a way as to ensure that taxpayers get all their money back.

The bonus tax raised £2bn, more than twice as much as forecast.

Those receiving bonuses will also pay income tax on what they get.

12.36pm: Darling says the prospects for the world economy are much better than they were a year ago.

But the economy is still fragile. He mentions various EU countries in recession, or with no growth. What happens there impacts on the UK.

12.34pm: Darling says the economy is at a crossroads. It will set out a route to recovery.

At its heart is a £2.5bn growth package, paid for by switching spending in some areas and the extra proceeds from the tax on bank bonuses announced last year.

First big announcement: a £2.5bn growth package. In the old days, before £50bn bank bailouts etc, £2.5bn used to be seen as a lot of money.

12.33pm: Darling says “the right calls were made” during the recession. Borrowing is lower than forecast last year.

The task is to bring down borrowing in a way that does not damage services.

12.32pm: Darling is about to start.

12.29pm: Brown says winter fuel payments are at a record level. (Yesterday Cameron accused Labour of lying about Tory plans because the Labour party has been suggesting the Tories would abolish winter fuel payments. Cameron says he will not scrap them.)

12.18pm: Here are Brown and Darling together on the front bench.

12.16pm: Asked by a Tory MP if he can assure the House that Byers, Hoon and Hewitt will not be offered peerages, Brown says that the question represents an “own goal” and that the standards that he will apply will be higher than those applied when Lord Ashcroft got his seat in the Lords. But he does not actually rule out sending any of the trio to the upper house.

12.13pm: Nick Clegg says this parliament will go down as “the most corrupt in living memory” because Labour and the Tories blocked reform.

Brown says he will make ministers sign a contract saying they will comply with advice from the advisory committee on business appointments.

Clegg says Brown has had 13 years to clean up parliament. He mentions some attempts to reform parliament pushed by the Lib Dems.

Brown says Clegg had prepared his second question before he had heard the answer to the first. He says there will be a compulsory register of lobbying.

I think there is a need, if I may say so, for humility on all sides of this House.

12.11pm: For what it’s worth, I thought Cameron won. He seemed to be going through the motions – PMQs won’t be on the news today, so it doesn’t really matter – but Brown’s attempt to pretend he was not blocking the release of Treasury information was particularly unconvincing.

12.05pm: Cameron says the Treasury has lost its four-year battle to persuade the information commission not to release details of the sale of Britain’s gold reserves under the Freedom of Information Act. Will the information now be published?

Brown says Cameron has to do better than that. He should be asking questions about the future.

Cameron asks why Brown spent four years fighting release of the information. Will Brown now release the information.

Brown says it’s a matter for the information commissioner.

Cameron says that Brown is trying to say the information commissioner was blocking release of the information. He must be “taking people for fools”.

Cameron asks about his policy relating to the dividend tax credit (ie, the £5bn tax on pension funds). Will he publish information relating to that decision?

Brown says he is happy to defend that policy.

Cameron asks Brown again if he will publish government information about that decision.

Again Brown defends the decision.

Cameron accuses Brown of “dithering”.

How much longer are we going to have to wait until we get rid of this useless bunch of ministers … Tell us when the election is going to be.

Brown says Cameron is wrong on, well, just about everything. (He reads out a long list.)

12.04pm: Cameron starts. He refers to the picket line outside the Treasury. Will Brown today say that he’s in favour of crossing that picket line?

Brown starts with congratulations to Cameron on the news that he’s expecting another child. He says he is in favour of people going to work.

11.58am: (Graeme Wearden writes) Back in the City, the pound has dropped by more than half a cent thismorning to around $1.4945. Trading’s been light – with speculators closing their positions while they wait for the speech. A “giveaway”budget could easily put sterling under real pressure.

Richard Turner, corporate dealer at UKForex, told us that: “There’s a
chance for volatile moves should Darling come up with some surprise
giveaways. Although he’s already mentioned he won’t, he may not be
able to resist some vote grabbing expenditures.”

11.49am: As usual, here’s a plug for some of the other budget live blogs that are up and running.

The BBC

The Daily Telegraph

The Times

Touchstone/Left Foot Forward

The Financial Times’s Westminster blog

The Spectator’s Coffee House blog

11.45am: Do taxes always go up after an election? The Institute for Fiscal Studies produced a useful graphic on this recently and the answer seems to be yes.

Like the Conservatives after 1992, Labour has tended to announce relatively big net tax increases in the months following its general election victories. This can be seen in the Budgets of July 1997, March 1998, April 2002 and the PBR of 2005. We have also seen relatively large tax increases announced since the outbreak of the recent financial crisis (PBR 2008, Budget 2009 and PBR 2009). But with the exception of the increases in income tax from April 2010, which will only directly affect one adult in 50 (those fortunate enough to have an income above £100,000 a year), most of the pain will not be felt until after the 2010 general election. For example the forthcoming 1ppt rise in all rates of National Insurance Contributions is not scheduled to come into force until April 2011.

The last chancellor not to do this was Nigel Lawson. As the IFS figures show, he cut taxes before the 1987 election, but then cut them again – by more – immediately afterwards.

11.42am: This Darling’s third budget. After the last two, Labour’s poll ratings fell. This chart shows you exactly how that happened.

11.37am: Here’s Alistair Darling doing his stuff on the steps of Number 11.

11.26am: At the Downing Street lobby briefing this morning, the prime minister’s spokesman said that when the cabinet met today Darling told colleagues what happened to his North Korean finance minister counterpart. He was recently was shot by firing squad for mucking up the currency. The remark was received with “genial gales of laughter”, the spokesman said.

Darling also got a round of applause from fellow cabinet ministers after his presentation. A colleague points out that the same thing probably happened to the chap from North Korea before he fell out of favour.

11.21am: (Graeme Wearden writes) The City is in sombre mood this morning ahead of the Budget. Traders say they are waiting to see what the speech actually contains before making any significant moves. But a
solid start, the FTSE 100 index is down by around 30 points at 5642.
Bank shares are lower, with traders speculating that Darling could announce a new tax on the sector.

David Jones, chief market strategist at IG Index, believes the budget
could be the catalyst that sends shares falling:

If fiscal reprimands go much beyond rhetoric and the global bank levy, the implications of which the markets have already had plenty of time to absorb, we may see something of a sell-off in the sector. And given
that markets already feel at bursting point after the impressive March
rally, it wouldn’t be altogether surprising to see a minor jolt
downwards turn into a slightly wider-scale sell-off, with investors
booking their profits.

The other factor weighting on shares is that Portugal’s credit rating
has just been downgraded by Fitch, from AA to AA-. Fitch said it is
concerned about Portugal’s budget plans, and warned that it might cut
the rating even further unless its economy improves.

Portugal’s annual borrowing hit 9.3% of its GDP last year. Given that
the UK’s own deficit for 2009 probably breached 12% of GDP, Fitch’s
move underlines how closely all the ratings agencies will be watching
the budget. Can the UK hold onto its AAA rating?

11.04am: Earlier I said that the polls show that the parties are much closer on economic competence than they were last year. There are two sets of polls out today that, in some respects, appear to bear this out.

A PoliticsHome poll shows that Labour’s ratings on the economy have gone up since January. In January only 36% of respondents were willing to give Labour some or a lot of credit for their handling of the economy. Now that figure is up to 41%.

And in the Mirror an Ipsos Mori poll shows that Alistair Darling beats George Osborne as the person viewed as likely to make the most capable chancellor (23% compared to 21%). Vincent Cable beats them both (with 32%).

Ipsos Mori also asked people if they agreed with the Conservative argument about debt being the biggest threat to the economy and the need to start cutting the deficit now, or the Labour argument about immediate cuts putting the recovery at risk. Put like this, the Labour argument is more popular, by 56% compared to 32%. But YouGov has been asking this question in a different way. Without mentioning parties, it has been asking whether spending cuts should start “sooner rather than later” or “not too soon”. According to YouGov figures released yesterday, “sooner rather than later” (the Conservative position) is ahead, by 45% compared to 36%.

In other words, it’s difficult to work out what people think. It depends how you ask the question.

10.58am: The BBC is saying Darling will “significantly increase the duty on strong ciders and alcopops”.

10.37am: Downing Street has posted a picture of Brown discussing the budget this morning with Darling. It’s on flickr. As you can see, Jack Straw (who’s also featured) won’t be keeping a copy for the family album.

10.29am: Nick Clegg has been on Sky with his thoughts about the budget.

This should be a budget of honesty about the state of the government finances. It should be a budget of fairness, putting money back in the pockets of people who desperately need a break. I fear that it will be neither. This is a fag-end Budget for the tail-end of a Labour government.

10.00am: I wouldn’t normally advise anyone to listen to Alistair Darling talking about the budget on YouTube, but this clip, which the Treasury posted yesterday, contains a rare example of the chancellor issuing a public rebuke to Gordon Brown. It’s veiled, but it’s definitely a rebuke. He talks about what happened “as we came through what have been the most difficult circumstances in excess of 60 years”. In other words, Darling is saying: “I was right when I gave that interview two years ago and you, Gordon, were wrong.”

Darling made his orginal comment about the recession being the worst for 60 years, which prompted Downing Street to unleash “the forces of hell”, in a Guardian interview with Decca Aitkenhead. She’s written another piece about him today and it’s very good. I particularly liked this anecdote.

Colleagues all talk about his qualities of decency, pragmatism, calm, and absence of ego. “On one of our first cabinet away days,” a former colleague recalls, “we were all going round the table giving our great strategies for the future. Everyone was trying to be terribly clever. When it came to Alistair’s turn he just said look, most people are not at all interested in politics, they just want us to do the job properly.”

9.53am: The Daily Telegraph’s main story is about income tax allowances being frozen. It says this will raise more than £1.4bn for the Exchequer.

Mr Darling attempted last year to play down the impact of freezing tax allowances as inflation was actually negative. However, inflation has now begun rising sharply which means the freezing of the tax bands is set to become a major financial issue. Inflation is currently running at three percent.

All of the main income tax bands will be frozen for the next year – including the tax-free allowance and the level at which higher-rate tax becomes payable.

This so-called “fiscal drag” means that people pay proportionately more tax on their earnings, after receiving a pay rise. Most pay deals are linked to inflation. Income and other tax allowances typically rise in line with inflation.

If keeping pace with inflation, the tax-free personal allowance should rise from £6,475 to £6,669. However, by freezing the rate at £6,475, the Treasury will raise an additional £1 billion and every taxpayer will pay an extra £40 in tax.

The rate at which higher-rate tax is paid will also be frozen at £43,875. However, it should increase to £44,995. The Treasury will make an extra £450 million as a result – £489 for every higher-rate taxpayer, according to accountants.

9.46am: I credited Norman Smith with the phrase “phoney budget” (see 8.58am), but I see that a headline writer in the Times used it first. It appears above an article written by another Norman – Lamont, the former chancellor. Lamont does not actually use the phrase himself in his piece, but he articulates the same idea.

There is much speculation about today’s budget. It is a waste of time because the budget is a pretend one. It will never be implemented.

If there is a Conservative government, there will be a different Budget after the general election. If there is a Labour government with Liberal Democrat support there will also be a different budget.

Even in the unlikely event of a Labour overall majority, the budget will be supplemented by other measures. Within a week or two, parliament will be dissolved and legislation will be passed to allow the continued collection of taxes. That is about all that will survive from today.

9.42am: In the Guardian it’s a budget for growth. In the FT it’s about payback time for the banks. But in the Times it’s a budget about nuclear and green power.

One of the main thrusts of Mr Darling’s pre-election statement will be to promise a range of inducements where government will act as a catalyst for private sector projects.

In one the Treasury will plough £1 billion from asset sales into a green investment bank, to be matched by a similar sum from the private sector. The bank would act as a key investor in important infrastructure projects such as nuclear power stations and wind farms as Britain seeks to replace 50 per cent of its power generation over the coming 20 years. Small and medium-sized businesses are also expected to be offered a range of inducements to help them to expand.

9.38am: The Financial Times’s main budget story is headlined: “Banks face ‘payback’ time in budget.” Here’s an excerpt:

The chancellor’s pre-election Budget on Wednesday will see him use tactics to force the banks to repay society for the damage they inflicted on the economy over the past two years. Lord Myners, City minister, set the tone on Tuesday when he said: “The taxpayer rescued the banking system 18 months ago. The time now is for payback.”

9.20am: David Cameron recorded a clip for the broadcasters earlier as he was leaving home this morning:

What it’s going to show is that Labour have made a complete mess of our economy and they haven’t got any plans to clear it up. That’s going to have to wait for the next government. That’s what this budget is going to be about.

The choice is between a government which has completely run out of steam, completely run out of ideas, is not being honest about the mess we’re in and has got no plans to clear it up, and a Conservative Party that’s got the energy, the dynamism, the leadership to get the economy moving again. That’s what we need, is to get this economy growing, get things going again. And that’s what our budget will do straight after the election.

Cameron was in his cycling gear. He also cycles into the Commons on a Wednesday. He says it helps to get the “blood flowing” and to prepare him for PMQs.

On the way Cameron presumably had to cycle past the Public and Commercial Services union picket line at Carriage Gates, the main entrance used by MPs when driving into the Commons. It wasn’t much of a picket line when I came in; I just saw two union members. And it did not stop Alan Johnson, the (ex union leader) Home Secretary who had just driven in when I arrived.

8.58am: Today we’re getting the budget. Rather, we’re getting a phoney budget. I’d love to claim credit for the phrase, but I’ve pinched it from Norman Smith, who used it on the Today programme at 6.30am. He was referring to the fact that Alistair Darling’s statement won’t say much about the really big decisions about the public finances (ie cuts) that need to be taken. We won’t learn about those until after the general election. If the Tories win, they’ve promised their own emergency budget within 50 days. And even if Labour win, it’s likely that they will amend the budget in the summer. That’s what happened in 2005. So, in some respects, today’s statement isn’t really a budget at all. It might be better to think of it as the unveiling of the economic section of Labour’s election manifesto.

But, even if it’s just a manifesto “offer”, as politicians say, it’s still important. Last year the Tories were “winning” on the economy. In the media most commentators seemed to think that Gordon Brown was in denial about the need for spending cuts, and the polls showed the Tories clearly ahead on economic questions. But Brown changed his stance, and now the polls suggest that voters are finding it much harder to decide who is right over taxation and spending. Today Darling has a chance to shift opinion once again. We need to find out what he’s got to say and then try to assess how two crucial audiences are going to react.

First, the public. Darling has been saying that it won’t be a giveaway budget. But the BBC is reporting that he is going to abolish stamp duty on the sale of homes worth up to £250,000. Nick Robinson has just been on Today saying that this is still a rumour, but I’m sure that if it was a rumour that was wrong the Treasury would not be letting Robinson keep broadcasting it. This will probably be popular – which is why the Conservative party has already proposed it. But politicians don’t just have to produce polices that are popular; they have to ensure that their ideas are credible too. David Cameron will be replying to Darling’s statement, and, in trying to work out who’s winning the battle for public opinion, credibility could count even more than popularity.

Second, the markets. The government is borrowing extraordinary large amounts of money and if the people doing the lending decide that Darling is not serious about paying it back (not literally – they know the Treasury is not going to default – but they do worry about the government not curbing the deficit) they’ll let us know very quickly. My colleague Graeme Wearden, a business writer, will be contributing to the blog today with reaction from the City. A positive reaction won’t win the election for Labour. But a negative election could prove very damaging.

The budget statement will come at 12.30pm. But I’ll be covering all the developments this morning, including a review of budget stories in the papers, and I’ll also be reporting prime minister’s question time here at 12.

8.58am: Today we’re getting the budget. Rather, we’re getting a phoney budget. I’d love to claim credit for the phrase, but I’ve pinched it from Norman Smith, who used it on the Today programme at 6.30am. He was referring to the fact that Alistair Darling’s statement won’t say much about the really big decisions about the public finances (ie cuts) that need to be taken. We won’t learn about those until after the general election. If the Tories win, they’ve promised their own emergency budget within 50 days. And even if Labour win, it’s likely that they will amend the budget in the summer. That’s what happened in 2005. So, in some respects, today’s statement isn’t really a budget at all. It might be better to think of it as the unveiling of the economic section of Labour’s election manifesto.

But, even if it’s just a manifesto “offer”, as politicians say, it’s still important. Last year the Tories were “winning” on the economy. In the media most commentators seemed to think that Gordon Brown was in denial about the need for spending cuts, and the polls showed the Tories clearly ahead on economic questions. But Brown changed his stance, and now the polls suggest that voters are finding it much harder to decide who is right over taxation and spending. Today Darling has a chance to shift opinion once again. We need to find out what he’s got to say and then try to assess how two crucial audiences are going to react.

First, the public. Darling has been saying that it won’t be a giveaway budget. But the BBC is reporting that he is going to abolish stamp duty on the sale of homes worth up to £250,000. Nick Robinson has just been on Today saying that this is still a rumour, but I’m sure that if it was a rumour that was wrong the Treasury would not be letting Robinson keep broadcasting it. This will probably be popular – which is why the Conservative party has already proposed it. But politicians don’t just have to produce polices that are popular; they have to ensure that their ideas are credible too. David Cameron will be replying to Darling’s statement, and, in trying to work out who’s winning the battle for public opinion, credibility could count even more than popularity.

Second, the markets. The government is borrowing extraordinary large amounts of money and if the people doing the lending decide that Darling is not serious about paying it back (not literally – they know the Treasury is not going to default – but they do worry about the government not curbing the deficit) they’ll let us know very quickly. My colleague Graeme Wearden, a business writer, will be contributing to the blog today with reaction from the City. A positive reaction won’t win the election for Labour. But a negative election could prove very damaging.

The budget statement will come at 12.30pm. But I’ll be covering all the developments this morning, including a review of budget stories in the papers, and I’ll also be reporting prime minister’s question time here at 12.

Originally published here

The BNP leader seems to have abandoned the people of the North West for a bigger goal – the parliamentary seat of Barking

Nick Griffin, the leader of the BNP, has decided to run for a parliamentary seat in Barking. Too many puns, not enough time.

But my first thought is: what about the people of the North West region he wanted to represent in Europe? They’ve already been ditched in favour of Griffin’s bigger dreams, exposing him as the power-hungry politico that he accuses members of the Westminster establishment of being.

My second thought is: what about poor Richard Barnbrook?

The BNP’s sole London assembly member came third in Barking at the last general election and had fancied running again. In fact he even unveiled massive posters claiming “Barnbrook for Barking” only weeks ago, with one picture in the style of Superman.

Bizarrely, there’s no mention of the fact that the leader of the BNP has decided the area would suit his own plans to represent the people of Britain, and pushed out Barnbrook. The latter will now run for leader of the council in Barking instead.

And what will the election be about? Barnbrook said he would fight to clean our streets of knife crime, a nice but unfortunate sentiment given he was recently caught lying about murder claims in the area.

Griffin, on the other hand, wants to fight on the bread and butter issues: housing and education. Last time, they circulated a leaflet in the area called “Africans for Essex”, claiming that the council leader was paying £50,000 to Africans to move into the area to buy votes. It was a blatant lie.

On the surface, Griffin’s decision looks like a good once since that part of east London is seen as a stronghold for the BNP. But there are good reasons why the BNP will be even less successful this time.

First, Griffin is clearly banking on his increased media profile to give the BNP a boost. At the press conference he said “people vote for someone they recognise … and respect”. But his last media appearance, which brought a tonne of coverage, brought no bounce to the BNP.

Second, BNP councillors elected in the area since 2005 have received tonnes of bad press. That alone should depress some enthusiasm for their claims to improve the local area.

Third, the Conservatives are widely expected to win the next election. Given the party’s hardline immigration stance – voters passionate about that issue are likely to vote Tory or not at all.

Fourth, the area has since 2005 become more racially mixed, which usually depresses BNP votes. Most BNP votes come from areas that have very low percentages of ethnic minorities.

A factor in favour of Griffin, however, is the local Labour MP Margaret Hodge. Her voting record was in favour of the war in Iraq, student top-up fees, ID cards, foundation hospitals and a range of issues that traditional Labour voters oppose. A percentage of them will stay at home. Her record for claiming expenses brings her down further and will be used by Griffin.

But worst of all she has repeatedly pandered to the BNP’s talking points, once claiming the political class was not engaging on the issue of race (unless of course you read the entire rightwing press), and another time blaming new migrants for housing shortages (which also turned out to be untrue). With his narrative of white victimhood already legitimised by the sitting Labour MP, Griffin only has to repeat her words to point out that the only obvious solution is the BNP.

Either way, Griffin is looking ahead. The people who elected him as an MEP can get stuffed, clearly.

Originally published here