Oliver Letwin drafted in to rescue George Osborne

By Melissa Kite, Deputy Political Editor
Last Updated: 11:31PM GMT 15 Nov 2008

Mr Letwin has been drafted in by David Cameron to draw up a key plank of the Tory fightback on the economy as concerns over Mr Osborne's performance intensify, The Sunday Telegraph has learned.

The plans, to be announced in the next 10 days ahead of the Alistair Darling's pre-budget report, are likely to focus on cutting Whitehall bureaucracy and other spending which does not boost the economy. Infrastructure projects such as school building will remain untouched.

Mr Letwin, chairman of the Conservative research department, is devising cuts to get public spending beneath Labour figures, senior sources said.

It is the latest action plan from the Tory leadership in the face of growing demands from within the party for a sharper economic rescue package to rival Labour's.

The decision of Labour MPs to advocate tax cuts, and heavy hints from Gordon Brown that he will unveil a substantial package of cuts in the pre-budget report, have plunged the Conservatives into a major rethink.

The fact that Mr Letwin, Mr Osborne's predecessor as shadow chancellor, has been charged with drawing up the spending cuts will fuel the impression that Mr Osborne is being sidelined as the party's ratings on the economy falter.

After weeks of damaging headlines, Mr Osborne courted further controversy this weekend by warning that Mr Brown's borrowing strategy could lead to a "collapse of sterling". Such comments breach the protocol that senior politicians do not comment on the strength of sterling in case they precipitate a crisis.

Yesterday Lord Kalms, a former Conservative treasurer and founder of the Dixons retail empire, called for Mr Osborne to be replaced with David Davis, the former shadow home secretary. He told The Daily Telegraph: "I am informing everyone who will listen that change needs to happen."

The comments are damaging for Mr Osborne, who has fought hard in recent days to rescue his reputation which was battered by the Deripaska affair. He moved to silence his critics, who claim that he has been outmanoeuvred by Mr Brown, with the announcement of a £2.6 billion tax break plan for companies last week, but it met with a mixed response.

Desperate to regain the initiative, Mr Osborne was mindful that a turning point for the party last year, when it was flagging, was his announcement at the party conference of cuts in inheritance tax.

He devised a tax cut, which was briefed to this newspaper last weekend as "ingenious", and announced it in full the following Tuesday. The party offered a £2,500 National Insurance break for companies for every new worker taken on who has been unemployed for more than three months. David Cameron said the £2.5 billion scheme would pay for itself by reducing unemployment benefit.

The CBI responded by saying it would help some small businesses keep people in work, but the British Chambers of Commerce said firms were not in a position to start recruiting. Mr Brown dismissed it as "unfunded".

The Tories also point out that Mr Brown's decision to fund tax cuts through borrowing and to "spend his way out of recession" will only lead to more debt and higher taxes in the future. Tony McNulty, the employment minister, admitted last week that taxes might have to go up once the economy emerges from the downturn.

The Prime Minister kept up the pressure this weekend by using the G20 financial summit in Washington to call for co-ordinated tax cuts across the world's major economies to help reduce the effect of the downturn.

Labour produced a dossier titled "Osborne's judgement under scrutiny" in which it accused the shadow chancellor of "schoolboy errors".

Tory insiders, however, insist that Mr Osborne is safe, and that that Mr Cameron will never break the political "axis" he has formed with his Notting Hill friend.

A senior insider admitted that Mr Osborne's job had been diluted to take him out of the firing line: "It has been decided that he should do less of the general politics."

It has been reported that Mr Osborne is suspending his work as election coordinator until next March to allow him to concentrate on completely rewriting his economic plans. A series of u-turns, first revealed by this newspaper months ago and denied at the time, have now been confirmed by Tory officials, including ditching green taxes. Mr Osborne is also searching for a way out of his policy of "sharing the proceeds of growth between tax cuts and public spending", since there now isn't any growth. Depending on what Mr Letwin decides, he may need to water down his commitment to match Labour's spending plans.

But rumours of Mr Osborne being replaced with William Hague, Mr Davis, or even Ken Clarke are "very wide of the mark", insiders say.

Mr Hague is understood to have told colleagues that he does not want the job. Another senior MP had a different theory for why Mr Osborne is safe: "George is not going to move because David won't move him. There is an element of lightning conductor in George."

NHL roundup: Monday's action on the ice

Kevin Weekes was stellar, but Ryan Miller was perfect.

Miller had 24 saves in registering his second straight shutout and Jason Pominville ended a 20-shot first-period barrage against Weekes with a power-play goal to lead the Buffalo Sabres to a 2-0 win over the New Jersey Devils Monday night.

Weekes had the thankless task of replacing injured all-star Martin Brodeur in the Devils' goal, and he performed admirably.

"I thought he (Weekes) made the difference early or we would have run away with the game," Sabres coach Lindy Ruff said. "Kevin played a great game in the first period he probably made I'd say seven quality saves and kept them in the game."
Miller was better though.

"Most of the time he is the best player on the ice, pretty much every game," said Patrick Kaleta, who scored the insurance goal in the third period. "He comes to play every night and gives us a chance to win."

The Sabres also won for the eighth time in 12 games (8-2-2) because they got two assists from Jaroslav Spacek and a perfect 7-for-7 from their penalty killers.

The loss was the Devils' fourth in five games.

Brodeur, a four-time Vezina Trophy winner, suffered a bruised elbow on Saturday.

Devils president and general manager Lou Lamoriello said before the game the team was awaiting test results. He gave no indication how long the 15-year veteran would be sidelined.

Brodeur's absence Monday marked the first time in 57 games dating to last season that he did not start. It also marked only the 21st time in his career that he did not dress for a game.

Elsewhere in the NHL, the New York Islanders ended a six-game losing streak by beating Columbus 4-3 in overtime, and Chicago remained unbeaten in regulation at home with a 6-2 win over Colorado.

At Newark, N.J., the Devils basically didn't show up for the first period. They were called for five penalties and were outshot 20-3.

"We didn't play at all in the first," Devils centre John Madden said. "We stood around and watched and then the penalties. We didn't get anything going."

Only Weekes kept them in the game, and he nearly escaped the period without a goal.

Pominville got his fourth goal of the season with 34 seconds left in the period, just seconds after a 5-on-3 power play ended.

Spacek set up the goal with a pass from the right side to Pominville in the left circle. He found the top of the net as Weekes came across low to stop a shot along the ice.

"We moved the puck really well and Spacek made a great play," Pominville said. "He faked the shot and slid the puck over to me. I just had to one-time it in."

Earlier in the period, Weekes had stopped Pominville twice in close, Thomas Vanek in close on a power-play shot and Tim Connolly after a great rush up ice.

"I thought we did a great job in that period to be only down one," Weekes said. "We put ourselves in a position to win and that's what it is all about, giving yourself a chance to win."

Miller, who stopped 29 shots in shutting out Washington on Saturday, was at his best in the second period when the Devils had three power plays. He stopped three good point shots by rookie Anssi Salmela, two by fellow defenceman Johnny Oduya and a chance straight on by Zach Parise, who also had a good opportunity on a wraparound in the third period.

Until the Devils got the power plays, fans booed and had derisive cheers for shots on goal.

Kaleta stretched the lead 2-0 just under eight minutes into the final period with his first goal of the season. Standing about halfway between the goal and the blue line, he redirected a point shot Andrej Sekera between Weekes' pads.



Islanders 4 Blue Jackets 3 (OT)

At Uniondale, N.Y., Chris Campoli had his first two goals in nearly a year, the second coming 3:13 into overtime, and the Islanders overcame another blown three-goal lead in the third period to beat Columbus.

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Blackhawks 6 Avalanche 2

At Chicago, Patrick Sharp and Andrew Ladd each had two goals and an assist, leading the Blackhawks over Colorado for their third straight victory.

Long-term care providers, lawmakers meet

By Russ Mitchell, Daily Reporter Staff

Less than three months are left before the 2009 session, but expect long-term care concerns to be on the agenda when state Sen. David Johnson and state Rep. Mike May return to Des Moines.
They were on hand at Longhouse-Northshire to talk with health care providers.

"We're holding 28 of these legislative forums throughout the state of Iowa and we want to really stress to the legislators the importance of access to health care," said Steve Ackerson, the executive director of the Iowa Health Care Association and Iowa Center for Assisted Living. "Right now, we see some barriers out there. One is that we have a really heavy regulatory process that sometimes curtails admissions."

The lack of Medicare reimbursement in Iowa has sometimes made if difficult for Iowans with acute needs to be admitted for long-term care, Ackerson said.

"Our Medicaid reimbursement system is 48th in the country," he said. "That's about $41 per day below the national average."

Ackerson's group represents about 75 percent of the state's long-term care organizations. He would like to see lawmakers implement a quality assurance fee. When the state reimburses the industry for the fee through Medicaid, the process captures a critical federal match.

The excess from the federal matching funds would allow providers to enhance services, increase access for health care for low-income individuals and create a fund for nursing home employees who lost possessions in the eastern Iowa floods. Funds would also go toward infrastructure. Ackerson said Iowa has some of the oldest facilities in the country. He'd also like to see the insurance premiums for nursing home employees to go down.

May, a Spirit Lake Republican, said he would make a concerted effort to push through provider increases through Medicaid in the 2009 session.

"Everyone knows it's just not adequate to maintain the kind of health care staff and specialists that we need in rural Iowa," May said. "If we're not willing to make that commitment, then rural Iowa is in deep trouble. Frankly, we know that we're aging. We know that we have health issues because of that. But we need to simply make that commitment to rural Iowans."