George Osborne’s planned financial services levy is a lamentable failure according to international benchmarks. The IMF has called for any banking tax in Britain to be set at £6 billion. Last week, Left Foot Forward highlighted the socially regressive nature of the £2.5bn tax which will mean banks contributing 50 per cent less than families (child benefit and tax credit cuts) to the government’s fiscal consolidation programme.

The Chancellor has dismissed the idea of a financial transaction tax, (‘Robin Hood’ campaign), and appears reluctant to curb excessive banking sector profits and remuneration without international support.

That leaves as his only option the banking levy, which will raise £2.5bn 2013/14. The IMF, however, has argued that Britain’s financial industry should be taxed to the tune of £6bn. The exact applicable tax rate has yet to be finalised by Mr Osborne. To compound matters his plan has already been dumbed down.

The original plan was to have a £20bn threshold, with tax applying on the entirety of a bank’s balance sheet (i.e inclusive of the £20bn). Now instead of this threshold, every institution will have a £20bn allowance that will not be taxed. The banking levy will affect only liabilities above that level.

The forecasted revenue from the levy is pitifully low when compared to the costs of the banking sector bailout. According to a recent IMF report of financial sector taxes, the yet to be recovered fiscal cost to the UK is 6.1 per cent of GDP (as of end-2009).

However, this figure grossly underestimates the actual cost and exposure of the entire crisis to the UK. It is believed in most advanced and developed nations it could have been as high as 25% of GDP.

Mr Osborne’s planned levy of £2.5bn, which equates to roughly 0.2 per cent of GDP in the UK, is a clear illustration of this government’s abdication of any notion of social fairness. It simply cannot be right that a recession, caused by a collapse in the financial sector and markets, places such a disproportionate share of the burden on the public.

To reduce the iniquitous Comprehensive Spending Review fiscal consolidation settlement, the burden on the financial sector can be drastically increased with the adoption of a financial activities tax (a tax on remuneration, profits and bonuses) or a financial transaction tax (a Tobin tax or the Robin Hood campaign).

Net direct costs of recapitalisation and asset purchases is estimated to average 2.8 per cent of GDP or $877 billion for the richest G20 economies. The table below highlights the recovery rate for the advanced nations of the G20. It currently records a recovery rate of 21 per cent. This illustrates the extent to which the global financial sector has escaped its moral dues.

To his credit, the Chancellor has been pushing for an international financial activities tax, which will be on the G20 agenda next month. If his government genuinely believes in ‘fairness’, they must push hard not only for an additional financial sector tax, but one that truly prices their actions past, present and future.

President Obama said the United States would “spare no effort” and “will not waver in our fight to defeat Al-Qaeda” as he addressed the media following yesterday’s worldwide terror alert encompassing the US, Britain and the Middle East; here, Left Foot Forward’s Matt Owen, a graduate of the University of East Anglia’s American Studies department, looks ahead to the President’s big electoral test next week, with polls predicting defeat for the Democrats in Tuesday’s midterms

“When we promised during the campaign ‘Change You Can Believe In’, it wasn’t ‘Change You Can Believe In’ in eighteenth months, it was ‘Change You Can Believe In’ that we’re going to have to work for… It’s not going to happen overnight.” – Barack Obama’s plea for patience on Jon Stewart’s The Daily Show this week summed up the mood in the Democrat camp.

With a midterm drubbing on the horizon, the President was defiant in defending his two-year record, but he exuded the unmistakable air of a politician in damage-control mode.

November 2nd is shaping up to be a tough day for the Democrats. A recent New York Times/CBS News poll produced the following conclusion:

“Critical parts of the coalition that delivered President Obama to the White House in 2008 and gave Democrats control of Congress in 2006 are switching their allegiance to the Republicans in the final phase of the midterm Congressional elections… Republicans have wiped out the advantage held by Democrats in recent election cycles among women, Roman Catholics, less affluent Americans and independents.”

In line with this, the usually highly-accurate FiveThirtyEight political calculus website forecasts that the Republicans will take the House of Representatives 232-203, while the Democrats will narrowly retain the Senate with just 52 seats to 48. Obama’s ongoing calls for those voters who catapulted him to power in 2008 not to abandon him now are earnest enough, but really the President knows, like everyone else, that next Tuesday’s political die is more-or-less cast.

What really matters now is how his administration reacts to what is likely to be a day of heavy losses, and how it goes about trying to prevent Obama from becoming the “one-term wonder” that some of his detractors are already branding him as. Assuming, then, that Tuesday does pan out as forecasted, and the Democrats do lose control of the House and suffer near-parity in the Senate, what will it mean for the Obama administration?

Well, for one, they can console themselves with the fact that this is hardly the first time an incumbent has taken a beating at the midterms, and that such a beating does not inevitably lead to a failure to win a second term. Ronald Reagan came to power in similar circumstances to Obama in 1980 – in possession of a huge majority, a disaffected electorate, and a heavily ailing economy – and suffered major losses at the midterms, before winning re-election in the biggest landslide in American history in 1984.

Indeed, Allan Lichtman, presidential historian at American University, recently stated that the two Presidents are, in electoral terms “mirror images of each other”. Similarly, fellow Democrat President Bill Clinton managed to turn things around and win re-election in 1996 after his party was slaughtered in the midterms two years prior.

Past presidential comebacks such as these do offer the Democrats some reason for (cautious) optimism. But how will Obama have to change his current approach if he is to produce his own feat of electoral turnaround? To ask such a question is to move into the realm of pure speculation, but there are a number of commentators, such as the political thinkers over at Time magazine, who think that it is exactly the most recent of these past successes stories that offer Obama his best chance of a revival:

“The Clinton game plan circa 1994 shows how a young Democratic President, seen as overreaching and lurching leftward two years into his term, can move back to the political centre, reconnect with the opposition, reclaim his momentum and successfully maintain his agenda.”

Vague as this sounds, it is probably broadly correct in highlighting what Obama will have to do to revive his flagging presidency. ‘Moving back to the centre’ – that is, adopting an agenda that makes it harder for various foaming-at-the-mouth Fox News anchors to dub him a “socialist” – is the right move at a time when the prevailing opinion is that he has ‘lurched leftward’ up till now.

By pursuing more of a cross-party approach, Obama will be able to revive the mercurial art of political triangulation which served Clinton so well in the nineties, and which the current incumbent praised in his book The Audacity of Hope for “tapp[ing] into the pragmatic, non-ideological attitude of Americans”.

In essence, without a filibuster-proof majority in the Senate or control of the House, Obama will probably have to become nothing short of a hard-nosed pragmatist who is unafraid to cross party lines if he wants to save his presidency. He will also, of course, have to hope and pray that the economy begins to revive itself, and that the recent slight improvements in unemployment rates are not simply a flash in the pan.

Make no mistake; Obama’s rock-bottom approval ratings and the approaching Republican gains represent a clear rejection of his political agenda. Even amongst many of his most ardent supporters, his presidency has been a great disappointment. There are painful echoes of Bill Hicks’ take on the US presidency in how utterly (as well as utterly unsurprisingly) Obama has pandered to the powerful vested interests whose donations put him in office two years ago.

However, it’s not all bad news for the Democrats. The weakness of the Republican 2012 presidential field; the fact that, as The New York Times identified last week, Obama may well benefit from having an enemy (in the form of a Republican House) to both do political battle with and heap blame on; the vote-splitting potential of the right-wing populist Tea Party movement… there are numerous reasons why the likely midterm drubbing might not be such a disaster for the Democrats. There is still a very long way to go until the presidential election of 2012.

It won’t be easy, and it will require a political backbone that, thus far, Obama hasn’t proven he possesses. However, there remains the chance that, whether he’s earned it or not, come 2012, enough of the electorate will still trust the embattled incumbent when he declares that his hitherto uninspiring brand of ‘Change’ is something they can continue to believe in.

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• The government’s unfair housing benefit cuts were attacked from all sides this week. Mayor of London Boris Johnson spoke out against the “Kosovo-style social cleansing” that the cuts might bring, with poor people forced to leave inner cities, while Ed Miliband this afternoon vowed to force a vote in parliament on the plans.

Echoing his plea in yesterday’s Daily Mirror for conscionable Lib Dems to help Labour crush the worst cuts, he told the Scottish Labour conference: “A week from Tuesday we will force a vote in the House of Commons on housing benefit. Our appeal is to all MPs of conscience. Join us, vote against these unfair and unworkable changes and force the government to think again.”

On Left Foot Forward, we have looked in detail at what the proposals will mean, with Declan Gaffney explaining how the changes to the welfare system will “affect all those who may need support at any point in their working lives”. Our full impact assessment spreadsheet can be downloaded here. Will Straw, meanwhile, looked at the Tories’ political strategy with David Cameron’s “conjuring trick” seeking to focus attention on the £20,000 cap which “will affect a small number of people and saves just £65 million (3%) of the £2bn earmarked for housing benefit cuts”.

• Europe came back to give David Cameron another headache this week. Eurosceptic backbenchers are up in arms over the prime minister’s inability to deliver a Brussels budget freeze, bemoaning the 2.9 per cent rise as a ”failure dressed up as a victory”, refusing to buy Cameron’s “I have in my hand a piece of paper” spin about a magic letter signed by 13 heads of government opposing a 5.9 per cent rise that was never likely to happen.

As the leader of Labour’s MEPs Glenis Willmott explained in an article for Left Foot Forward, for all his bluster, Tory MEPs did not table a single amendment to significantly cut the European Union budget. She wrote: ”Labour MEPs voted against the overall call for a budget increase and against a host of outrageous calls to increase spending. It was left to Labour members to propose cuts of more than €1bn to wasteful agricultural subsidies.”

Right wing bloggers also questioned the Tory leader’s tactic of blaming Labour for “voting for higher budgets”. As Dizzy Thinks pointed out yesterday, Labour MEPs actually voted against the budget, while today he wrote: “The bottom line as it were is that the three main British political parties in the European Parliament voted against the 6% rise in the EU budget, but not having a dividing line doesn’t make particularly interesting copy now does it? Much better to spin it.”

• There was some welcome good news on the economy this week, with economic growth beating expectations. As Left Foot Forward’s Tony Dolphin reported, the UK economy grew far more rapidly than expected, up 0.8% – confounding expectations of a 0.4% rise. The growth was led by a surge in activity in the construction sector. Questions persist, however, about the long term impact of the cuts on growth.

Following last week’s Comprehensive Spending Review (CSR), it was announced that state funding for degree courses in arts, humanities, and social science subjects would end, while Left Foot Forward reported that the scrapping of Regional Development Agencies would result in an 80 per cent funding cut to the regions, and looked at how the freezing of the science budget – representing an 8.9% real terms cut – could hit the UK’s global reputation in research and development. And today, the latest Bank of England lending figures provided more evidence the housing market has lost momentum.

Progressive of the week:

Boris Johnson, who spoke up for the capital this week against the coalition’s regressive housing benefit cuts, devised by a Cabinet of millionaires, which would lead to, in his words, “Kosovo-style social cleansing” of the poor from inner London. He said: “What we will not see, and will not accept, is any kind of Kosovo-style social cleansing of London. On my watch, you are not going to see thousands of families evicted from the place where they have been living and have put down roots.”

Regressive of the week:

Vince Cable, who yesterday chickened out of a visit to Oxford University, citing “police advice” – yet the police gave no such advice and did not tell him to pull out of the visit. During the election campaign, you couldn’t move for Lib Dems swanning around campuses signing pledges not to raise tuition fees; now, it appears they’re running scared, unable and unwilling to look students in the eye and explain their u-turn. Nick Clegg is due to visit Oxford on Wednesday, November 17th – the question is, will he have the balls to turn up, all alone, without David Cameron by his side…

Evidence of the week:

Data undermining Tory claims about Britain’s “bloated welfare system” – as a percentage of GDP, welfare is still lower than at any time from 1979-97. Left Foot Forward’s Duncan Weldon unearthed a chart from the UK Public Spending website which showed that, while Britian’s welfare spending is rising, it is lower than it was throughout the Tories’ term in office. Furthermore, as Will Straw points out, “any broad definition of welfare spending includes popular tax credits such as the child tax credit, working tax credit, and pensions credit and universal benefits including child benefit and the winter fuel payment”.

Our guest writer is Paul Sellers, a policy officer at the TUC

The TUC will meet the Low Pay Commission (LPC) on Monday to discuss next year’s National Minimum Wage (NMW) rise. We will be asking for an increase of 3.5 per cent on all the rates, which would increase the adult NMW next year by 21p to £6.14. The NMW needs to increase every year in order to ensure that the earnings of low paid workers do not fall behind.

Despite the cuts and continuing unemployment, this modest boost can be achieved without generating any adverse effects on employment and job creation.

The LPC, which advises the government on the NMW, has managed to recommend NMW increases throughout the recession – 3.8 per cent in October 2008, 1.2 per cent in 2009 and 2.2 per cent in 2010. The LPC is now considering the rates to apply from for October 2011 to September 2012 and will make its report to government early next year.

The commissioners have the tough job of trying to work out what the economy will be doing some months after their final recommendation.

The Treasury’s October round up of independent economic forecasts suggests that:

• Inflation will fall next year, but RPI is still likely to average 3.5 per cent throughout 2011;

• Growth should continue at 2.0 per cent or above;

• A small net increase in the number of employee jobs is expected.

It is reasonable to expect the government to believe their own projections for the economy, and as evidence suggest that people spend nearly all of their NMW increases in their local economy, this modest increase in purchasing power will be good for the wider economy.

The TUC’s objective is to persuade the Low Pay Commission to recommend the highest sustainable rate for the NMW. But we recognise that this is still short of a living wage. There will still be plenty of room for trade union bargaining and campaigning. It should not be forgotten that this government contains ministers who once believed that any minimum wage would destroy jobs, yet the minimum wage has already helped hundreds of thousands of families without any negative side effects.

Its success shows that the UK economy can easily cope with sensible labour market regulation that makes life at work fairer, whatever kneejerk attacks on red tape they provoke. At a time when directors’ pay and bankers bonuses make it look as if the crash never happened, it is right to press for a reasonable increase in living standards for the working poor.

At PMQs this week, David Cameron asked “are we happy to go on paying housing benefit of £30,000, £40,000, £50,000?” and described the cap of £20,000 as the “key change“. The Prime Minister continued this narrow focus today:

“Paying over £20,000 a year for the housing benefit of some families is too high. I do not think taxpayers who pay their taxes will understand why we are being so extravagant.”

This £20,000 cap – one of nine housing benefit reforms announced by the Coalition – is an insignificant part of the coalition’s package. It will affect a small number of people and saves just £65 million (3%) of the £2bn earmarked for housing benefit cuts.

A number of papers and journalists have fallen into Cameron’s trap and devoted their coverage to this measure. For example, the Evening Standard, who are cautious about the reforms, made the following erroneous claim:

“Under the reforms, there would be a £400-a-week cap on housing benefit for a four-bedroom home. It is estimated that this could lead to 82,000 households in the capital having to move, raising fears of a Parisian-style shift of the poor to the periphery.”

The New Statesman make the same mistake: “In London, where rents are significantly higher than in the rest of the country, the £400-a-week cap will force as many as 82,000 families out of the capital – the largest population movement since the Second World War.”

This is wrong and perverts the debate making those who oppose the wider package look out of touch with public opinion. The 82,000 number comes from research by London Councils. They estimate that the entire package will lead to 82,000 families being “at risk of losing their homes“. The main problem is the reduction in Local Housing Allowance falling from the median of local rents to the 30th percentile. Just 17,000 families are affected by the cap.

In July, the National Housing Federation carried out a related study which looked in detail at the 10% cut to housing benefit for the long-term unemployed. They found that, “Brutal cuts in housing benefit … will put more than 200,000 people across Britain at risk of homelessness”. Understanding the problems with the entire package, rather than being blinded by Cameron’s rhetoric, is critical to understanding this debate.

That said, the problems with the Coalition’s approach do not mean that there is no case for reform. Some of the Government’s measures should be supported. A cap on housing benefit itself is a good principle to bring in for future housing benefit recipients. Similarly, increasing the age limit for the shared room rate from 25 to 35 (saving £215m) is a sensible measure and, so long as it’s only a temporary austerity measure, the switch to CPI indexation from 2013-14, which saves £390m, is a reasonable way to reduce the deficit. There is also a case for trying to improve the allocation of properties to family size. Finding a solution to the problem of elderly couples remaining in properties fit for a full-sized family is important. But the Coalition’s arbitrary approach is too much stick and not enough carrot.

But these are sticking plasters to the wider problem of housing shortages in the UK. Over 30 years, public subsidy has moved from bricks and mortar to individuals and, although not an easy task, it is reversing this trend that should be the focus of progressive energy in the years to come.

This guest post is jointly written by Daisy Blacklock and Jim Milnes of the Dress to the Left blog

Economics writer Paul Mason has pointed to a powerful implied critique of the Spending Review in an IMF document published this month. Speaking as guest lecturer at a seminar for the New Political Economy Network on Monday night, Mason called for a “forensic” analysis of what he described as “the large theoretical variability” of the outcome of George Osborne’s fiscal tightening proposals.

Drawing on projections approved by the Office for Budget Responsibility in June’s Emergency Budget, Mason, author of Meltdown: the End of the Age of Greed, led talks with his deconstruction of the government’s economic forecast.

The coalition’s Spending Review is built on the theory of “expansionary fiscal austerity” which gained favour after the experience of Canada and Sweden in the early 1990s. This assumes that, while a medium sized deficit/fiscal stimulus can boost growth, where it becomes too large it becomes a drag on growth, and cutting it will stimulate growth.

Mason pointed to the IMF’s conclusion:

“The idea that fiscal austerity triggers faster growth short term finds little support in the data.”

According to the OBR, by 2014 – when by Osborne’s timetable the rebalancing process will be complete – government spending as a proportion of GDP will have disappeared altogether, to be replaced by exports. Consumer spending as a proportion of GDP will have fallen by a third.

Mason added:

“Leaving aside all political rhetoric and getting to the undisputed economic conundrums, the question is, what are you going to have to do to make this work? Because it’s going to happen. This is pure macroeconomics.”

While Mason acknowledged that the coalition’s preferred model, provided by Policy Exchange, draws on a survey of history as thorough as the IMF’s, he said Policy Exchange lacks the most developed computer model of the world economy in existence, the GIMF, which allows the IMF a wider picture, if not a clear forecast.

He pointed to the fact that the IMF’s model of the long and short term impact of fiscal tightening considers the global context, with the downward pressure on growth reduced if you can devalue your currency, boost exports and cut interest rates to gain competitive advantage.

He explained:

“These are the variables: is the interest rate 0%? Well, it nearly is. So you can’t cut the interest rate. Does everybody else cut? Well they are, above all in Europe. Not in America, not in China, but in Europe there is fiscal austerity.

“Does the currency depreciate? Well, it is. It’s already depreciated by 18%, and probably will continue to do so. The other problem is, does everybody else attempt depreciation? Yes, they are.”

Where the IMF and Policy Exchange models agree is in the long-term need to reduce the deficit as a proportion of UK GDP. The question is – which is the best model?

Figures released today by the Bank of England suggest households’ demand for borrowing remained weak in September. Net lending secured on dwellings (i.e. mortgage borrowing) increased by only £0.1 billion in the month and was just 0.8 per cent higher than in September 2009. This annual growth rate has been stuck at just under one per cent for the last 15 months.

Meanwhile, the number of loans approved for house purchase was 47,474 – just below its average in the first eight months of the year, but 15 per cent down on September 2009. This is the latest in a string of indicators that suggest the momentum has gone out the housing market in recent months.

It follows yesterday’s news from the Nationwide that house prices fell by 0.7 per cent in October and have fallen in three of the last four months. Prices are now only 1.4 per cent higher than at the end of 2009 and if they fall in November and December at the same pace as in October, they will not have increased at all during 2010.

Other lending to households – in the form of personal loans and credit cards – is also growing at a sluggish, sub-1 per cent, annual pace.

In the medium-term, the fact that households are reluctant to take on more debt can only be seen as a positive development. Over the decade to 2007, UK households took on an enormous amount of extra debt (its ratio to personal disposable income increasing from around 100 to 170 per cent) and this helped fuel a housing bubble, which – when it burst – added to the depth of the recent recession.

But in the short-term context, with the government being determined to cut back its own spending and borrowing and rely more on private sector demand as a source of growth, these figures are a little worrying.

They suggest consumer spending will continue to increase at only a modest pace (especially when next year’s increases in VAT and national insurance contributions are taken into account), putting even more onus on private investment spending and exports to boost the growth of output and jobs. The Office for Budget Responsibility thinks this is exactly what will happen. Others are more sceptical; I have my own doubts about the OBR’s forecast, but I hope they are misplaced.

The freezing of the £4.6 billion budget for scientific research could mean a cut of 8.9 per cent in real terms – though it could have been a lot worse. “It’s not as bad as we were expecting” was the general consensus among scientists at a Young Fabians policy network event this week on the impact of the Comprehensive Spending Review in on research and development and science.

Stephen Gruneberg, chairman of the Labour Finance and Industry Group, said that there continues to be an “implied threat” over the heads of scientists – budgets for scientific research in departments other than the Department for Business, Innovation and Skills (BIS) and the Department for Health are not ring fenced and are still awaiting their fate.

In addition to the budget the freeze, the government’s decision to close regional development agencies represented as a major blow to small and medium sized enterprises, according to Professor Evan Parker from the Department of Physics at the University of Warwick. There were also worries Britain would slip down the global league table.

Professor Parker added:

“We are looked to by the scientific world. We are respected for academic excellence, and until recently, we had very well financially supported research and development by the government.

“If we are to keep our global position in pioneering R&D, Westminster politicians must keep up with counterparts such as China, Singapore and even other European member states such as France.

“Germany is now increasing its science budget by seven per cent. President Obama has committed three per cent of American GDP to scientific research – a doubling of the budget as part of the economic stimulus package.

“The general public too must recognise the necessity of financial support and scientific industries to retain pressure on the government to continue adequate financial support.”

The immigration cap that the coalition plans to expand shortly was described as the most worrying direction that the government is going in. Parker said the arbitrary cap on the number of economic migrants from outside the European Union being allowed into the country to work was bad for businesses, for the economy and for scientific R&D:

He explained how:

“… this policy will block and deter the best of the scientific world from working in the UK.”

The teaching of science was also criticised, with John Unsworth, chair of Scientists for Labour, suggesting reforms to the A Level system to encourage young people to study a mixture of arts and scientific subjects, and Imran Khan, director of the Campaign for Science, saying:

“Uninspired and uninspiring teachers are failing to capture children’s imaginations and are therefore turning them away from the sciences from a young age. We also have concerns for the coalition’s academy policy, which will give schools complete autonomy from the national curriculum…

“Imagine a world without vaccinations or the internet. Imagine a world without electricity or aeroplanes. Imagine a world without science.”

As the Government faces increasing resistance from business, universities and unions over its plans to cap skilled immigration, a study by the UK Border Agency (UKBA) reveals only a quarter of skilled migrants (Tier 1) were confirmed in skilled work and 29 per cent of skilled migrants were working in low-skilled jobs. The data, however, has been wildly misinterpreted by right wing newspapers, such as the Daily Mail.

It is important to understand the change to skilled immigration caps against the backdrop of the pre-capped Points-Based System (PBS) introduced by the Labour government. The independent Migration Advisory Committee has already done some detailed work in this area, but analysis has always been limited by the lack of data about what happens to migrants who come through the PBS once they arrive in the UK.

So additional data about the outcomes of the PBS is welcome, and yesterday the UKBA published details of a new study of migrants coming to the UK via Tier 1 (highly skilled) of the PBS. Unfortunately the data which the study is based on is weak.

The way in which the report has been trailed and messaged rather suggests the Government is more interested in making the political case for its flawed cap policy than in improving understanding of how the immigration system is working.

The Daily Mail have used the UKBA study to claim that “just a quarter of immigrants allowed into the UK because they are ‘highly skilled’ is actually in a top job”. This is misleading.

The UKBA study is based on a sample of just under 1,200 Tier 1 migrants who applied to bring dependents to the UK in June 2010 – this sample therefore excludes migrants without dependents, and it is not clear how representative it is.  Almost half of the sample was ‘unclear’ – meaning that no data could be extracted about employment.

Although the study did find that only a quarter of the Tier 1 migrants in question were in confirmed high-skilled work, it found that only 29 per cent were in low-skilled work – not the 75 per cent the Daily Mail headline might imply. With almost half the sample returning unclear data, it seems difficult to conclude much from this.

It also seems strange to try, given that better data exists - an evaluation of Tier 1 published in December 2009, based on a more representative questionnaire, in which only 2.4% of respondents provided insufficient details on their employment, found that 14.9% of Tier 1 migrants were managers or senior officials, 36.4% were in professional occupations and 14.5% were in associate professional or technical occupations.

Overall, 70% were in skilled work, while only 20% were in unskilled work. This was despite the fact that the data for this study were collected in the first quarter of 2009, during the depths of the recession.

It is also important to note that, of the 29% of Tier 1 migrants in the new study who were found to be in unskilled work, almost half were on the Tier 1 ‘post-study’ route for foreign students graduating from UK universities. In the face of one of the toughest graduate employment markets that the UK has seen for decades, it is perhaps not surprising that this group has struggled to find highly-skilled and highly-paid work.

Finally, it is important to note that, although Tier 1 migrants do not need a job in order to come to the UK, they do need one to stay. Tier 1 visas are initially issued for two years; migrants wishing to stay in the UK longer than this need to demonstrate that they are earning at least £25,000 (and usually more). The 29% of migrants identified as being in low-skilled work in the UKBA study will not be able to stay in the UK unless they acquire highly-skilled, or at least highly-paid, jobs.

Damian Green is of course right to say that “highly skilled migrants should do highly skilled jobs”, but he’s on shaky ground in implying that highly-skilled migrants coming to the UK under Tier 1 are entering the low-skilled job market in significant numbers over a sustained time period.

This looks very much like an attempt to justify a drastic reduction in Tier 1 visa numbers under the proposed cap, but excluding the ‘brightest and the best’ from the UK will not help the unemployed, and it could undermine the economic recovery.

Information obtained through Parliamentary questioning on Prime Ministerial business has revealed a striking pattern amongst No 10 special advisers meeting with Rupert Murdoch’s News International (NI) newspapers and media outlets. The data, cataloguing external meetings held between special advisors and the media, and ministers and the media, show a clear pattern of preference towards Rupert Murdoch’s media empire.

The most high-profile example is Andrew Coulson, Director of Communications at No. 10, who had external meetings with News Corp outlets on four occasions from May 27 to August 14 – 50 per cent of all his declared meetings in that period.

In May, the release shows that David Cameron met with Rupert Murdoch soon after the election (where Murdoch was alleged to have snuck into No 10 via a back door). The data was obtained by Tom Watson MP, who submitted requests for “office external meetings, overseas travel, hospitality and gifts” received by all government ministers and special advisers.

From May 13 to July 31, all registered special advisors at No 10 had 11 meetings with NI outlets – whilst only meeting with Channel 4 once in that period, the BBC six times, The Guardian five times, The Daily Mail and Mail on Sunday five times, and only had an external meeting with the Telegraph, a traditional Tory paper, twice.

The information reveals that No 10. currently houses 19 special advisers, despite pledging to reduce their numbers in the run-up to the election to ‘cut the cost of politics’. Elsewhere – at the Department of Culture, Media and Sport, ministers met NI papers and outlets on three occasions between May 13 and July 31, on top of one lecture and one additional lunch.

Kenneth Clarke MP, Secretary of State for Justice, received hospitality at The Times on June 24, and again on July 7. His Minister of State, Lord McNally also had lunch with The Times on July 26. At Nick Clegg’s office, special adviser Lena Pietsch met with The Times on one occasion and over at the Department of Transport, special adviser Paul Stephenson met the media on four occasions in July – meeting The Sun once.

At the Department for Communities and Local Government, there was one external meeting between Eric Pickles and NI, this time with the News of the World. Francis Maude and Baroness Warsi (at the Cabinet Office) held external meetings with The Sunday Times and News of the World during the same period. Foreign minister David Liddington received two hospiltality dinners from NI newspapers in July and special adviser David Hass had a lunch courtesy of The Sun on July 29. At the Home Office, special advisers Nick Timothy and Fiona Cummingham met with NI outlets on three occasions in May.

There were no meetings between between ministers or special advisers and NI at the Department for International Development (DfID), while the following departments have, as yet, not released details of their ministerial and special adviser meetings: are the Department for Energy and Climate Change, the Department for Environment, Food and Rural Affairs, the Ministry of Defence, the Northern Ireland Office, the Scotland Office and the Wales Office.

Crucially, the Department for Business, Innovation and Skills has also  yet to release its external meetings – the department, with minister Vince Cable, that will ultimately make a decision on the NI takeover of BskyB.

Tom Watson MP, who requested the information, was critical of the way in which No 10 released the data on special advisers and ministerial meetings. He said that the information was being released intentionally late to minimise wider coverage and scrutiny. He said:

“It makes it hard for lobby journalists to write the story. We’re going to publish every document we find but the House of Commons library have not been given them yet. Some departments have published their lists and we’re tracking them down for you. Hope you find it useful.”

• All the data is available on Tom Watson’s website.