Mandelson’s Policy Network Being Wound Down

Policy Network, the organisation presided over by Peter Mandelson that he once claimed was “part of the alternative to Government”, is being wound down according to Chairman Lord Riddle. Policy Network received core funding from billionaire Lord Sainsbury and he is withdrawing funding from centrist Labour organisations. Progress similarly has had some post-Sainsbury difficulties.

The organisation’s Chairman Lord Riddle admits in a qualification to the accounts that

The company’s main donor has indicated that the year ending 31 December 2017 will be the final period that funding will be available. He has indicated that at the end of this period he is prepared to fund any reasonable costs associated with down scaling the company, including the cost of redundancies and the early settlement of property and other leases.

The ability of the company to continue as a going concern is dependent upon this final tranche of funding being secured. The Directors are currently assessing whether the company can continue on a scaled down basis without the support of the main funder and are confident that they will be able to do so. As a result the accounts have been prepared on a going concern basis.

Policy Network won’t be missed much. One Blairite tells Guido that they didn’t really do much beyond “What next for social democracy” events and pamphlets. A spokesman however claims they are “very confident that, working with partners and new supporters, its work will go on, taking forward the important agenda that Lord Sainsbury has so generously supported for so long.”  Policy Network was a Blairite’s redoubt, something that is no longer necessary now Blair has his own eponymous think-tank… 

The Sun’s Corbynista Columnist

Consider this left-wing nonsense:

“The Government should be prepared to redistribute more through the tax system: from the wealthy to working families with modest incomes. They should be prepared to increase taxes on accumulated wealth so they can cut taxes on income. They could raise more money through inheritance tax.”

In a country where the top-marginal rate of tax is 60%* is the pressing policy challenge a lack of redistribution and too low rates of taxation? After managing to keep a mere 40% of your justly earned income this wonk wants to increase the tax burden on your savings. If you then want to pass on your savings to your children he wants to tax the cash all over again…

Which left-wing Corbynista policy wonk is responsible for this nonsense? Nick Timothy, author of that Conservative Party manifesto and Theresa May’s former right-hand man for policy, proposed this in The Sun this morning. How he thinks social mobility will be increased by taxing people more heavily is not clear. Margaret Thatcher correctly identified that many of her opponents would “rather have the poor poorer, provided that the rich were less rich.”  Levelling down is the worst form of social mobility…

*According to the Taxpayers’ Alliance a salary of £110,000 will, including employers’ NI, see you on a marginal rate of 66.6%.

BBC Hypes Gloomy Brexit Report By EU-Funded Think Tank

The second main story on BBC News all day has been a report by an American think tank warning that “nearly all” the possible outcomes of Brexit will see the UK worse off than staying in the EU. Of course the Rand Corporation, which published the report, is funded by the European Commission, the European Parliament and the European Union Research Executive Agency. Not that the Beeb thought to mention that…

Guido has read the Rand report so you don’t have to. It is filled with flaws and biases – for example it says the Brexit bill will be up to €75 billion (fact check: it’s between £35-39 billion). The report looks at many types of supposed models for Brexit, but it bizarrely doesn’t assess the outcome of the UK signing trade deals with multiple countries, one of the main reasons for leaving: “We did not explore the… model in which the UK would complete FTAs with numerous countries”. This is the government’s plan, why is it not included in the study?

Then there is the model Rand say they have used to determine their figures – it is the same as the infamous Treasury model that wrongly predicted a calamitous aftermath of a Leave vote. Debunked…

The report admits that “research for this study was completed as of 15 September 2017”. Eh? Quite a lot has happened since September – not least talks moving onto phase 2 when just a few months ago Remainers said they were doomed. Maybe if the study was up to date they’d have got the Brexit bill right…

And remember how the Beeb noted that “nearly all” of the outcomes were dire? What their coverage didn’t mention today is Rand’s finding that if the UK agrees FTAs with both the EU and the US we would see double the amount of GDP growth than any one of the so-called soft Brexit scenarios. Odd that this finding was missing from the BBC’s own coverage…

UPDATE: And the Rand report finds almost no difference in terms of GDP impact between the EEA minus or CETA plus models.

No Deal Brexit + Slashing Tariffs = Reduced Prices

The top line of this morning’s Resolution Foundation report is that lower income households would be stung in the event of a No Deal Brexit should we revert to WTO tariffs. This is a false premise: in a No Deal scenario it is far more likely that the government would unilaterally cut or decline to impose tariffs. Ministers have repeatedly privately said they would propose a policy of unilateral tariff reduction – or even unilateral free trade with tariffs set at zero – in the event of No Deal. The Resolution Foundation looked at this scenario too and found that in a No Deal Brexit where the UK slashed tariffs household spending would be reduced by £130 a year. Look at all those cheaper prices above…

Of course this finding is nowhere to be found in the headlines of the Remainstream media, despite being the far more likely outcome in the event of No Deal. There you have it from a centrist think tank: No Deal means cheaper prices. Brexit is about breaking free into global markets, not putting up protectionist barriers to trade…

Freedom-Hating Obesity Charity: Ban Sugar

Tam Fry of the National Obesity Forum is addicted to banning. He wants to ban chocolate bars containing more than 250 calories, because he has decided that is a “quite sufficient snack for anybody“. A typical Mars bar contains 260 calories. Two Twix fingers is 286 calories. A Milky Way has 264 calories. Tam would ban them all. 

The nannying nonsense doesn’t end there. Fry also wants a blanket ban on products with added sugar for hospital inpatients. And the serial banner has come up with a catchy slogan for his crusade: “Sugar is the new tobacco: ban it”. The UK’s leading anti-obesity campaigner calling for sugar to be banned. He’ll have to pry Guido’s 274 calorie Bounty bar from his cold, dead hands…

CPS Refresh Sees Leadership Change

Tim Knox, one of the nicest guys in Westminster, is moving on from the think-tank founded by Margaret Thatcher and Keith Joseph, the Centre for Policy Studies:

“After over 20 years at the CPS, it is time to seek new challenges and opportunities. I am so grateful to the many colleagues, authors, supporters and board members of the CPS whose efforts on my behalf have been extraordinary.”

Robert Colvile, formerly of The Telegraph who took over the CPS backed CapX (after a brief stint at Buzzfeed), is coming in as acting director. He wants to make the case for free markets to a new generation…

Tory MPs and Think Tanks Pan May Announcements

Conference has barely begun and Tory MPs and right-leaning think tanks and pundits are already kicking off about Theresa May’s announcements on tuition fees and Help to Buy.

Kate Andrews of the Institute of Economic Affairs:

“The Prime Minister is right to address the plights of young people leading up to Conservative Party Conference, but pledging over £10billion worth of uncosted policies will only burden them more down the road, as they face an increasing national debt and – inevitably – higher taxes. While May plans to temporarily put a bit more cash back in the pockets of young graduates, the party must acknowledge that the current university funding system – and lack of competition within it – needs a complete overhaul if student debt is to be tackled. Propping up the Help to Buy scheme only distorts the housing market more, which is already in a perpetual state of crisis. If May is serious about getting young people on the housing ladder, the answer is clear: liberalise the housing market and build more homes.”

Sam Bowman of the Adam Smith Institute:

“Reviving Help to Buy is like throwing petrol onto a bonfire. The property market is totally dysfunctional because supply is so tightly constrained by planning rules, and adding more demand without improving the supply of houses is just going to raise house prices and make homes more unaffordable for people who don’t qualify for the Help to Buy subsidy… Reviving Help to Buy is an astonishingly ill-judged move that may prove economically and politically disastrous for the government.”

The view from ConHome and Unherd:

MPs Guido has spoken to are wondering why May has chosen to engage on Corbyn’s territory with policies that are just Labour-lite. Colleagues are asking why there are no ambitious announcements on house-building and student debt rather than this damp squib. Not to mention the £12 billion of unfunded spending. A lot of work to do on policy over the next few days…

UPDATE: The government’s side of the story articulated well by James Cleverly:

Policy Exchange Pinch SpAd to Head Relaunch

Guido hears Gavin Williamson’s SpAd Rupert Oldham-Reid is departing to become Policy Exchange’s new director of research and strategy. PX is relaunching its domestic policy work after spending the last couple of years focusing on extremism, counter-terrorism and foreign policy. Oldham-Reid has been with the Chief Whip for the past year, before which he was a wonk at the Charity Commission and Centre for Social Justice. There is obviously a policy vacuum on the centre-right at the moment, it has often been said that Theresa May doesn’t have a think tank and the ideas currently exciting voters are coming from the left. Polling today revealing widespread public support for mass nationalisation shows the work that needs to be done. PX is talking up its relationship with Theresa May, whether she is bold enough to embrace new vote-winning policies is another question…

IEA: Brexit Britain Should Commit to Unilateral Free Trade

Guido hears today’s new Institute of Economics Affairs report on trade policy has been well-received by ministers. It argues that no deal with the EU on trade would not be a disaster for the UK, recommending Britain commits to a policy of unilateral free trade with the rest of the world, eliminating all barriers to imports regardless of whether other countries impose tariffs on their imports from the UK. It would then be up to the EU if it wanted to impose tariffs, which would hurt EU consumers by raising prices. In such a scenario, the IEA report concludes the UK would likely be given tariff free access to the single market:

“There are many myths being perpetuated about trade policy – and more specifically about the UK’s relationship with the EU – that must be debunked. Many people believe that disaster will befall us if we do not forge a deal with the EU. In fact, we could unilaterally eliminate all import tariffs, which would give us most of the benefits of trade, and export to the EU under the umbrella of the WTO rules. Then we can seek free trade deals with all major trading partners, including the EU.”

If a bad deal is offered by the EU, the UK should say thanks but no thanks, walk away and unilaterally set tariffs at zero…

Male Tory MPs Got Most Social Media Abuse

Broken down by party and gender, male Conservative candidates were the group who received the highest percentage of abuse in their mentions, followed by male UKIP and Labour candidates, and female Conservative candidates. Analysis by a research team from the University of Sheffield based on tweets from the general public; replying to tweets made by MPs, candidates at the election and other prominent politicians. They sampled just under 840,000 tweets sent in the month before the general election between 8 May 2017 and 8 June 2017.

Unsurprisingly Jeremy Corbyn and Theresa May received the most Twitter abuse. Sadiq Khan in the aftermath of the terror attacks was the third most abused politician on Twitter from morons with misguided anger.

Boris Johnson and Jeremy Hunt were the male Tory MPs who received the most abuse – according to the researchers Boris got some 8 times as much abuse as Diane Abbott. Jeremy Hunt also got more abuse than Diane . Even Tim Farron got more abuse…

This research tallies with Guido’s sense that Twitter has since the Corbyn ascendancy become more vitriolic from the left. The right just grin and bear it. The left whines about it. Twitter has improved anti-abuse systems, AI software now filters a lot of the abuse automatically. Most incoming hate-tweeters are muted and shouting at no-one. There is no denying that a lot of abuse is racially and sexually charged in a personalised way. It is an unpleasant fact of life for anyone in public life with a sizeable social media footprint…

Hat-tip: Buzzfeed

New Project Fear Report Admits It Contains “No Facts”

A new report by The UK in a Changing Europe is getting a lot of play on the BBC and the Remain media this morning. Goes without saying that the authors are EU-funded sockpuppets. The report is continuity Project Fear, predicting “legal morass and economic disaster” in the event of a no-deal Brexit. What you won’t read in the broadsheet write-ups is its admission that its own analysis is pure speculation and not based on fact. In their own words: “The analysis that follows is necessarily speculative… [there are] no facts about the future… [the analysis] requires a significant amount of speculation”. Wait, it gets worse…

The report uses the above table in its economic section to substantiate its claims. The table is ripped off from the discredited Treasury analysis from the referendum. The report itself admits these numbers are fantasy: “Of course, it turned out the Treasury was crying wolf over the short-term impact of a vote to leave”. Why is a report using debunked figures being taken seriously?

Change Britain point out that the report makes a number of misleading and exaggerated claims. It attempts to scaremonger about the impact of no deal on aviation, ignoring the fact that the EU is under an obligation to extend the SES to non-member states. Then there is the Euratom red herring. The report says “a no deal Brexit may mean that the UK has no established safety procedures and systems for the operation of nuclear power plants”. Of course the government is introducing a Nuclear Safeguards Bill to deal with withdrawal from Euratom.

As Gisela Stuart notes, the report “takes a misleadingly pessimistic view… and fails to acknowledge measures which will allow for continuity in the event of no deal”We’ve been here before, this is the same old stale gloom rehashed… 

Saudi Arabia “Foremost” in Funding UK Extremism

A new report from the Henry Jackson Society finds that Saudi Arabia is “foremost” among the sources of foreign funding and support for Islamist extremist ideology in the UK. The study examines the ways in which the Saudi and other foreign governments stoke Islamist thought and activities in Britain. It finds that:

  • Saudi Arabia has spent at least £67 billion promoting Wahhabi ideology abroad in the past 30 years;
  • A number of Britain’s most serious Islamist hate preachers sit within the Salafi-Wahhabi ideology” and have studied in Saudi Arabia as part of scholarship programmes, or have been provided with extreme literature and material within the UK itself;
  • In 2014 it was estimated that Britain’s Salafi Mosques had a collective capacity for a 44,994 strong membership;
  • In a minority of cases, institutions in the UK that receive Saudi funding are also run directly from Saudi Arabia;
  • Saudi textbooks are used in a number of the UK’s independent Islamic schools;
  • There have also been “numerous cases of British individuals who have joined Jihadist groups in Iraq and Syria whose radicalisation is thought to link back to foreign funded institutions and preachers“.

The report calls for a public inquiry in order to understand the foreign backing for Islamist extremism in the UK:

“What is publicly known about the foreign funding of Islamist extremist activities in the UK almost certainly does not represent the full extent of what has happened in recent years… Given that there is a clear lack of information and understanding about this subject, both among policy makers and the public, the government should start to address this issue by launching an official and public inquiry into the subject.”

May has been suppressing a government report on funding of extremism for over a year – likely because it reveals Saudi culpability. She could begin by making those findings public…

What Austerity? Public Spending Down Just 0.2% Since 2009

There’s a renewed focus on the politics of ‘austerity’ in the wake of the election, with some senior Tories using the result to proclaim “austerity is over” and endorse even more borrowing, taxes and spending. This fiscal truth bullet is much needed: research from the TaxPayers’ Alliance shows that public spending is just 0.2% lower than in 2009-10. When you look at the actual numbers for 2016-17, it is clear ‘austerity’ never really happened…

  • In 2016-17 public spending was a mere £1.3 billion lower than it was in 2009-10.
  • Day-to-day public spending was £14.3 billion higher than it was in 2009-10. This is an increase of 2.1 per cent.
  • Per household, public spending was £1,121 higher than it was in 2007-08: £28,529
  • Spending on welfare for pensioners was 12.1 per cent higher than it was in 2009-10.
  • In 2010-11 and 2015-16 there were real-terms budget increases for international development and health.

Some departments have faced more efficiencies than others, but overall the level of public spending has barely been touched since 2009. A reminder to the Gavin Barwells of the government not to take leave of their senses and embrace Labour’s fantasy economics – they will always be able to promise more free stuff…

Wonks Pan Mayism: Job Losses, Higher Inflation, Living Beyond Our Means

Red Theresa’s manifesto means job losses, higher inflation and Britain living beyond its means for a quarter of a century, say the experts:

Institute of Economic Affairs:It’s concerning that we may be seeing the advent of a Conservative Party which fails to understand that economic and social problems are more likely to be eased by free market solutions than by increased state intervention, however well-intentioned… An increased burden of regulation and further government interference in price and wage setting will raise costs, undermine competition and reduce labour market flexibility, resulting in job losses and higher inflation. The delayed timetable for eliminating the budget deficit suggests that the Conservatives’ commitment to fiscal discipline is continuing to weaken.”

Centre For Policy Studies: “According to the Conservative Party’s fiscal target reported in the press today, the UK is set to reach a budget surplus by 2025-26. This will mean that the UK has lived beyond its means for a quarter of a century… this fiscal target is disappointing. It should be seen as a ‘worst case’ scenario. The next government must aim to achieve a budget surplus at an earlier date.”

Confederation of British Industry: “The Conservative manifesto has an Achilles heel – in a global race for talent and innovation UK firms risk being left in the starting blocks because of a blunt approach to immigration.”

Institute of Directors: “Businesses will worry that interventions will disrupt the normal flow of commerce… interventions in the labour market must be handled delicately, with trade-offs for businesses. Any new employment regulations must be consulted on in depth to ensure that they do not have unintended consequences. The manifesto states that the Party does not believe in ‘untrammelled free markets’, but they must also recognise that governments have limitations.”

Privately Tory MPs and Cabinet ministers know it, too…

May’s Energy Price Controls Savaged By Experts and Her Own Cabinet

Theresa May’s interventionist energy price cap has whacked share prices this morning: Centrica is trading at the lowest level for 15 months. The wonk world is savaging the policy:

Adam Smith Institute: “Freezing energy prices was a very bad idea when Ed Miliband proposed it. Yet two years after the electorate rejected it Theresa May is putting forward the same idea and rebranding it a ‘cap’. The facts on the ground haven’t changed, yet just like workers on boards and the living wage, Red Ed’s Zombie Policies are on the march.”

Institute of Economic Affairs:Introducing a cap on household energy prices would be a clumsy and counterproductive government intervention that could have an adverse effect on the energy market. A cap would likely backfire with companies finding some way around them: either by pushing prices higher now in anticipation of the cap or by increasing their lower prices to offset the cap at the top”

Centre for Policy Studies: “The claim that an energy price cap will save households £100 a year is by no means a guarantee. In fact, an intervention of this kind could be detrimental to competition in the market, meaning that this reform could end up doing more harm than good.”

Taxpayers’ Alliance: “Crude diktats such as this suggest that the government simply doesn’t understand the consequences of these ill-thought-out policies.”

Social Market Foundation: “Energy companies will inevitably recoup the costs of this cap elsewhere, which may mean higher prices for people who have shopped around and switched tariff to get themselves a better deal.”

CBI: “A major market intervention, such as a price cap, could lead to unintended consequences, for example dampening consumers’ desire to find the best deal on the market and hitting investor confidence.”

Market analysts RBC Europe: “This decision by May is clearly as much a political as it is an economic one. This intervention could create a worse deal for customers on average.”

Here were members of Theresa May’s Cabinet attacking Ed Miliband’s price cap in 2015:

Michael Fallon: “We have not seen intervention in industry on a scale like this since the 1970s when they tried to control the price of bread.”

Boris Johnson: “Miliband says he will imitate the catastrophic policies of the emperor Diocletian, by imposing a price freeze on energy bills for the 20 months succeeding the election.”

Don’t buy the Tory spin, this is the same sort of market intervention that caused the Tories to claim PM Miliband would lead Britain into a Venezuelan dystopia… 

CPS Corporation Tax Report Reveals Labour Black Hole

This morning’s Centre for Policy Studies report will be worth noting when Corbyn responds to the Budget later. Their new research out today finds that reducing corporation tax from 28% to 20% has helped increase growth and profitability leading to a rise in receipts by 28% since 2011. Labour’s policy is to increase corporation tax to 21.5% to fund £15 billion of extra spending per year. Yet the CPS finds that such a hike would only raise £5 billion, leaving Labour with a £10 billion funding gap. 

Labour have pledged to spend the corporation tax money 11 times already: on the adult skills budget, supporting British steel, ending public sector pay restraint, reintroducing EMA, scrapping tuition fees, extending pension credit, reversing Universal Credit changes, pensions triple lock, social care, the NHS and PIPs. And now the experts say it won’t raise anything like as much as they need. Ammo for the Tories when Corbyn gets up to respond to Hammond…

Gove SpAd Henry Newman New Open Europe Director

Guido understands former Michael Gove SpAd Henry Newman has been appointed as the new Director of the Open Europe think tank. He replaces acting directors Raoul Ruparel, who left last year to work for David Davis, and Stephen Booth, who becomes Director of Research. Brainbox Newman is a sound hire, he has a very strong knowledge of Whitehall and is respected in the Lobby. Before advising Gove he worked for Francis Maude at the Cabinet Office during the reform of trade union Pilgrims. Open Europe is drying out, under Newman expect them to embrace leaving the EU and promote a liberal, outwardly-looking Brexit. Congratulations…

Bank of England Must Stop ‘Depending on Kindness of Strangers’ to Bolster Economy

We’re fast approaching the eighth anniversary of UK interest rates being lowered to 1%. This is unprecedented, as is QE. This “unconventional monetary policy” is having severe economic consequences, argues Brian Sturgess for the Centre for Policy Studies in Stop Depending on the Kindness of Strangers.

In the foreword, Sir Martin Jacomb writes: “The idea that credit should be cheap, that savings are pointless, and that borrowing levels do not matter, is contrary to common sense. Harm is being done to individuals, to businesses and to the next generation.”

Sturgess warns these policies have failed to stimulate economic growth and encouraged ‘zombie capitalism’ and the rebuilding of corporate balance sheets ahead of productive investment, among multiple other side effects, contributing to the kind of unfairness that Theresa May and Donald Trump have both highlighted. It’s time to grow up and return monetary policy to normal, or we could be in for even greater pain.

Content produced and sponsored by the Centre for Policy Studies.

IEA Wonk Could Be Trump’s EU Ambassador

Institute of Economic Affairs advisory council member Dr Ted Malloch is being interviewed by Donald Trump this week for the role of his EU ambassador. Theodore Roosevelt Malloch, to give his full name, is a distant relative of President Roosevelt who Maggie Thatcher once dubbed a “global sherpa” thanks to his decades of work at various economic conferences and institutions. It’s good news for Britain if Anglophile Malloch gets the job, he tells City AM:

“In the UK, Brexiteers can take heart from the victory of another anti-establishment figure. His political sympathies for Brexit could lead him to prioritise a trade agreement with the UK once the country leaves the EU. It will also ensure a stronger US-UK Special Relationship.”

And his views on Brussels are sound too. He told Brexit Central last year:

“The elite that dominates EU decision-making is managerial, bureaucratic and socialist,” he says, “with a view to higher taxation and redistribution of wealth — all qualities the EU elite tout proudly, despite growing populist sentiment among an increasingly economically pressed middle class in virtually every EU-participating country. The US and the UK have cast their lot in the same direction and the Anglosphere will not only survive but thrive…

Would they want the United States to join anything like the EU — a federal superstate that curtails sovereignty? Of course the answer is NO! We wouldn’t want that in any way, shape or form. And the British already decided not to become part of the flawed euro currency and the European Central Bank. So here’s an interesting and novel alternative no pundit is yet suggesting, and I say it only half facetiously: why not hook up our horses together?”

Make the special relationship great again…

Gloomy Wonks are EU-Funded Europhiles

Britain will be “older, more unequal and blighted by Brexit”, according to a gloomy new report from the IPPR think tank. Apparently there will be a decade of disaster and misery caused by the Leave vote. Two things the Guardian didn’t include in their write-up: The IPPR was formerly run by the head of the Remain campaign Will Straw.[…] Read the rest

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Quote of the Day

Angela Rayner on Labour’s economic policy (via Speccie):

“It is a bit of a sh*t-or-bust strategy…”

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