Further Cabinet posts announced
Tories planning second budget ‘within weeks’ to tackle deficit
5.30pm update: The new Conservative government will be pressured into early talks on a new deal with Scotland, but its more immediate moves are likely to focus on a mini-budget and negotiations with Europe.
George Osborne is considering a second Budget in the coming weeks which is likely to outline in further detail his plans to cut the deficit and sustain the economic recovery.
The Conservatives made it an election pledge not to raise core taxes, such as income tax, National Insurance or VAT, during this parliament, so the Chancellor will seek to balance the books through cutbacks and by higher tax revenues from growth in the economy.
There has been no confirmation that another Budget will take place, although Eric Pickles, who served as secretary of state for communities and local government, has hinted that it is on the new government’s agenda. A Budget was held within weeks of the 2010 general election, but that was an emergency situation in view of the strain on the public finances at the time.
Mr Pickles was an early casualty in the Prime Minister David Cameron’s front-bench appointments. Scotland’s only Tory MP David Mundell is the new Scottish Secretary, while Sajid Javid becomes Business Secretary. Javid was Secretary for Culture, Media and Sport and Minister for Equalities. Amber Rudd becomes Energy Secretary.
The appointment of Mr Mundell ends the call from former First Minister Alex Salmond, now the MP for Gordon, for the post to be scrapped.
Ros Altmann has been named pensions minister replacing Steve Webb who lost his seat in last week’s general election.
Ms Altmann was previously director general of the Saga group, which offers a range of products and services for the over 50s.
She chairs the Lord Chancellor’s Strategic Investment board, and is a non-executive director of the press watchdog the Independent Press Standards Organisation.
Labour’s deputy leader Harriet Harman has also installed new faces following the loss of a number of big hitters last week. Chris Leslie has been promoted from Shadow Chief Secretary to the Treasury to Shadow Chancellor after Ed Balls lost his re-election bid. Shabana Mahmood moves up in the Shadow Treasury team to replace Mr Leslie.
Lord Falconer, a former Justice Secretary, takes on the Shadow Justice portfolio, replacing Sadiq Khan.
Hilary Benn becomes Shadow Foreign Secretary after Douglas Alexander fell to the SNP surge in Scotland.
Emma Reynolds takes over from Mr Benn as Shadow Communities Secretary and Ian Murray, Labour’s only MP left in Scotland, becomes Shadow Scottish Secretary.
Nicola Sturgeon, the Scottish First Minister, is looking to secure concessions for Scotland on more tax powers and control over welfare. However, full fiscal autonomy appears to have slipped down the list of demands and the Tories’ overall majority in the Commons has weakened the negotiating position of the SNP which had hoped for greater power in a hung parliament.
Even so, its 56 MPs are expected to be an active and, if necessary, belligerent voice, now that they represent the third largest party in the Commons. Ms Sturgeon will urge Mr Cameron to include in the Queen’s Speech some additional powers to those already outlined in the Smith Commission. He has made it clear there will be no second independence referendum.
Of immediate concern, he has contacted European Union leaders to begin renegotiation of Britain’s terms of membership ahead of a promised referendum.
“I’ve already made some calls to European leaders,” he told Channel Four news. “The renegotiation first, then the referendum before the end of 2017.”
Mr Cameron will campaign to stay in the EU, but is laying down a number of conditions, including changes on migration and benefits and the repatriation of certain powers to London.
The European issue, which has dogged the Conservative party for years, will be uppermost for Mr Cameron and may come to define this parliament.
His narrow majority of 12 seats is the smallest since Harold Wilson’s Labour government in October 1974 and he must keep eurosceptic elements under control if he is to avoid damaging splits and defections.
Immigration from eastern European states into Britain became an election issue and Mr Cameron will be mindful that more than three million Britons voted for UKIP which campaigned for tougher controls on immigration and withdrawal from the EU.
His predecessor John Major was tormented by Tory rebels during negotiations on the Maastricht Treaty in the 1990s.
Like Mr Major, Mr Cameron has appointed eurosceptics to his Cabinet in a bid to nip dissent in the bud. Philip Hammond and Michael Fallon have said they would vote to leave the EU if powers were not repatriated from Brussels and were among the first ministers to be reappointed as Foreign Secretary and Defence Secretary respectively.
Mr Cameron has also appointed the outspoken Michael Gove as justice minister to lead negotiations on the abolition of Britain’s Human Rights Act to stop the European Court of Human Rights overruling British courts.
European insiders warn that Mr Cameron will need to change his style of dealing with Europe. While a combative approach may be needed at home, he needs to be more collaborative with Brussels, said one.
The discussions with Europe will be tough and long, but concessions likely include restricting European migrants’ access to public services, including the health service in Britain without any changes to the Treaty.
Restricting the free movement of labour looks to be off the agenda.