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January 23rd, 2008

Northern Rock

David Cameron had the best lines at Prime Minister’s Questions today. On Northern Rock, he claimed, the public had been offered a "sub-prime deal from a sub-prime minister". Very good.

He also suggested that Gordon Brown had turned from Prudence into Del Boy. And the difference between administration and liquidation, he quipped, was: "Administration is what the government is in at the moment, liquidation is what will happen by the British people at the next election."

Such lines, surely pre-prepared, are well and good. The Tory leader also nailed Brown on the specifics, such as the total liabilities the taxpayer will be taking on - and how much Goldman Sachs will receive for its advice (to which no clear answers were given). Brown’s suggestion that he hoped the government will make a "profit" from the deal sounded like a grand hostage to fortune.

There is still an uneasy suspicion that the Tories don’t exactly have a better solution for handling the Northern Rock implosion, however. That may limit the political damage to the government for now.

January 23rd, 2008

MPs expenses

The Information Commissioner wants more transparency in the publication of MPs’ expenses. Not everyone agrees.

Denis Murphy, a Labour MP, says he voted against similar proposals last time around but will listen to what the commissioner has to say.

Even so, he reckons that "frankly there are some things which should be kept private, I’m sure you wouldn’t want everything that you claim to be in the public domain."

He adds: "For example if I  have to buy something in London which is legitimate it is between me and the fees office."

Enough said.

January 22nd, 2008

Ministers checkmate children

At last, cooking is to be elevated to the level of importance of religious education on the national curriculum. The youth of Britain will have to learn about frying and filleting along with the ten commandments.

Whatever the merits of making cooking compulsory, it fits an interesting pattern. Education ministers just seem to be incapable of stopping themselves from foisting their own interests and hobbies on innocent children.

Ed Balls, schools secretary, is a noted foodie, with a talent for whipping up tex-mex and creole feasts. His signature dish is apparently the soufflé. His spokesman declined to comment on whether this would be a "set dish" on the curriculum.

Other ministers have had less luck injecting their own obsessions into the classroom. Charles Clarke, the former education secretary, once asked his officials to investigate whether chess — yes chess — could be introduced into the curriculum. Understandably, they said "what a good idea", and hid for weeks, hoping that he would forget. A smart move.

January 22nd, 2008

Bombast from the past?

Some of Gordon Brown’s recent comments have offered curious insights into how he sees the UK’s role in the world.

Last Friday saw the prime minister jet off for India and China with the promise to teach its 2.4bn citizens how to speak his native tongue. “I want Britain to make a new gift to the world….English,” he pledged.

Among his other gifts was a new programme to recruit “master trainers” to train 750,000 English language teachers in India in just five years.

This sort of bombast is looking increasingly familiar to those following Brown’s comments on foreign affairs over the New Year.

In post-Bhutto Pakistan, the prime minister said “we will be insistent” that free and fair elections were held as soon as possible.

As for Kenya, meanwhile, he intoned, “I want to see a bringing together of all the different groups.”

“I have talked to the president. I have talked to Mr Odinga…..now I want both parties to meet together with Mr Kufuor….I want an end to the violence….etc…etc.”

One African newspaper has asked whether this “language of a former colonial power” was appropriate, suggesting that his tone “set teeth on edge”. It pondered whether Brown would have used the same language if another former British colony – the US – had a hung election.

January 22nd, 2008

Theo Paphitis and the Tories

Theo Paphitis, one of the sour-faced arbiters of BBC’s Dragon’s Den, has agreed to join a Tory taskforce on social mobility which meets for the first time this week.

Having gone from assistant tea boy to millionaire in two decades, Paphitis is not a bad choice for the group.

But how high up the Conservative agenda is the issue? Someone in Labour points out that the taskforce was first promised by David Davis, shadow home secretary, at the end of 2006….with the grand words:

"I am undertaking to make 2007 the year in which the Conservative party gets to grips with social mobility. I am setting up a taskforce…."

Beverley Hughes, Labour’s minister for children, claims that this is proof that the Conservatives aren’t serious about helping to level the social playing field. "It says everything you need to know about the Tories’ PR approach to poverty when we see that a taskforce announced over a year ago is now only just meeting for the first time."

Is it a co-incidence that the Paphitis initiative came only a week after a letter from David Blunkett to a newspaper pointing out there was still no evidence of Davis’s taskforce? Perish the thought.

January 21st, 2008

Hague and the Lisbon treaty

Watching William Hague debating the Lisbon treaty this evening was a reminder of why he is widely seen as the finest orator in the House of Commons.

Asked by a Labour backbencher about the failure of the Tories to hold a referendum on Maastricht - just as today’s government will not hold a public poll on Lisbon - he was not phased. "The difference between then and now is that," he began.

"You were in government?" interrupted Menzies Campbell, former Lib Dem leader.

"A difference on which the Liberal Democrats can only dream," replied Hague smartly.

David Miliband, though fluent, seemed less than commanding, not least when he ran through a less-than-convincing list of supporters of the new treaty. They included the NSPCC, Oxfam and a group of bishops.

Miliband also returned again and again to his set text: that the Lisbon treaty was different to the old EU constitution - contrary to what nearly everyone else seemed to think - in "structure and content and consequence".

Patrick Cormack, Tory MP, accused the foreign secretary of making an "appalling" speech and suggested the House be adjourned so he could "go and write a proper one". It was fortunate Miliband had his band of bishops, added Hague, as he could do with some supportive prayer.

Such were the highs of the debate, while Tory MP Andrew Robathan - deputy chief whip - struck a low when comparing Miliband with Joseph Goebbels, the infamous Nazi propaganda chief. Asked to retract the comment, he did so only while mentioning that he had lost a relative in World War 2.

The frosty atmosphere which immediately followed was a reminder that while a red line remains in UK foreign affairs, despite joining Europe, there is also an invisible line in taste which MPs usually know when not to cross.

January 21st, 2008

Carbon trading and the £9bn windfall

Sometimes consumer outrage is muted simply because no one can get their heads around a complex issue. Take energy prices and the EU’s emissions trading scheme.

Ofgem, the energy watchdog, popped up last week to suggest that we are being overcharged to the tune of £9bn because of a glitch in the scheme.

There weren’t many screaming headlines in the tabloids, which was a surprise. Maybe it’s because most people have filed the ETS under: "Must read up on it….one day".

The way the scheme works is that companies which produce emissions must obtain permits to offset their impact on the climate. Eventually, as of 2012 - the details will be discussed by the EU on Wednesday - they will have to pay for most of these permits. In the meantime, to get things up and running, they have been given most for free.

But the twist is that people’s bills have been rising to take account of the existence of the permits. This is because the wholesale price of electricity must be high enough to convince generators to run power stations instead of closing them down and selling the permits they would otherwise use. The ETS is said to account for about £9 in the current electricity price of about £53 per megawatt hour.

Surprisingly, no political party is trying to drum up a ruckus about this £9bn windfall - which Ofgem thinks should be given back to the public in the form of energy subsidies.

Some MPs believe the situation should be resolved, however. Among them Elliot Morley, former environment minister, who calls the windfall "obscene".

Colin Challen, chair of the All Party Parliamentary Climate Change Group, says he agrees with the principle of a windfall tax on the energy companies. But he reckons the cash should be put towards renewable energy rather than lower bills.

"Ofgem’s duty is to try to get prices down for consumers and put the environment on the back burner," he said. "My view is that the money should be invested in climate change mitigation. That is whole point of the European Union’s ETS. If people recognise that the extra money they are paying goes to environmental causes it would make it far more acceptable to the public."

The energy companies were likely to claim that they were already putting substantial resources towards renewables, says Mr Challen. But this is only true up to a point, he adds.

Another option would be to cut taxes on low-carbon cars, for example, to encourage more sustainable lifestyles. That was the suggestion of the Select Committee on Environmental Audit in a report last March.

The subject should be topical with the energy bill having its second reading in the Commons on Thursday. But for now - until the Treasury admits there is any problem with the ETS - these concerns will be treated as so much hot air. Unfortunately.

January 18th, 2008

Blair: Not the retiring type

After a decade of running the country you might expect Tony Blair to take a breather. But it doesn’t seem to be in his nature. Last week he took a new job as an adviser to JP Morgan, the US investment bank, which is thought to be the first in a clutch of corporate posts.

Bear in mind that Mr Blair is already trying to bring peace to the Middle East; a Sisyphian task if ever there was one.

All that comes in between the speeches, the running, the tennis and the writing of his memoirs - although that task appears to be behind schedule.

Now the Guardian has revealed yet another job; the former PM is to be an unpaid adviser to the Rwandan government of President Kagame and has sent a trio of former advisers to see how he can help rebuild the once war-torn African country.

In one sense he is typical of his baby boomer generation, where doing nothing after a certain age is seen as an admission of defeat. In his quiet moments Mr Blair must sometimes long for a more relaxing retirement. A cottage in Torbay, perhaps, with a nice view of the sea?

January 17th, 2008

Porton Down and a culture of secrecy

At last it seems that the 360 ex-servicemen exposed to toxic chemicals at Porton Down will get compensation from the Ministry of Defence and maybe even an apology.

It seems likely that a payment will be announced within the next week or so. But the mooted figure of £3m - equivalent to £8,300 per person - seems almost insulting. Many of the complainants have suffered decades of debilitating health problems after being exposed to sarin and other toxins at the research centre in Wiltshire.

Bear in mind that actress Leslie Ash, by comparison, has just been awarded £5m in compensation for picking up a superbug in a hospital.

The £3m figure also seems paltry compared to the billions given to former miners now suffering from ailments due to their former work.

The Ministry of Defence recently explained that: "Much has changed in law and ethics in the half century since many of these experiments."

But has the MoD’s culture of secrecy changed? A written statement this week revealed how many freedom of information requests are answered by the department. The reply: About 3 per cent.

January 15th, 2008

Tories and shareholders

The Tories have sought to burnish their credentials as the party of business by criticising the proposed rise in capital gains tax. On Northern Rock, however, they are playing a more populist game.

Here the priorities are depositors and taxpayers, according to David Cameron, the party leader. The shareholders are - to paraphrase - almost an irrevelance. With stormy scenes expected at today’s extrardinary meeting of the stricken bank’s shareholders, the issue is highly political. Few observers want these investors to seize total control of Northern Rock’s future.

But only the Liberal Democrats have come out with explicit plans for how the company’s investors would be dealt with in the event of a possible nationalisation (which is not yet a given). The third party has an obvious distaste for the hedge funds who bought into Northern Rock after it was already deeply in trouble. On the other hand, it sympathises with the thousands of small shareholders who have held stock since the demutualisation of the group. Its proposition is that shareholders should be given some form of “option or warrant” to benefit in any upside when - after a temporary period of public ownership - the bank is returned to the private sector.

Shareholders should be grateful for getting anything out of the wreckage given that the shares would be “worthless” without government support, said Vince Cable, Treasury spokesman for the Lib Dems, at a press conference yesterday. But he added: There is a feeling that shareholders should get something.”

Contrast that with an appearance by Mr Cameron in which he appeared to have given the matter of shareholders almost no thought. He admitted that because he was not involved in the negotiations he did not know how the situation would play out. “I hope the private deal goes ahead and can be done in a way that protects the taxpayer,” he said at yesterday’s press conference. The first priority were the depositors and the taxpayers.

Asked whether he thought shareholders should be compensated in some way, he replied: “I don’t think it is possible to answer that question at the moment,” he said. It was the Conservative party which laid the foundations for widespread share ownership among the public through a string of over-subscribed privatisations in the 80s. Has this been forgotten?


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