Monthly Archives: January 2009

Jim Pickard

One advantage of a blog is you can flag up curiosities before they become mainstream news. Take the threat of industrial action over foreign workers, which I mentioned here three weeks ago.

I mention this before drawing your attention to a small and obscure clause in the Hooper report on the modernisation of the Royal Mail.

Lord Mandelson, who wants to bring in a private investor into the public group, is at odds with unions who want to see some form of state aid instead. But Hooper makes clear (I think it’s on page 64) that state aid would have to get past Brussels. To do this, he explains, the company would have to carry out options which could include a] radical restructuring and b] closing the final salary pension scheme to existing members.

It seems obvious that b] would be politically explosive. Even in the private sector this has hardly ever been tried before. (Rentokil did it a couple of years ago and kicked up a furore.)

It wouldn’t surprise me if we see Mandelson using this threat to cow the unions into submission later in the year. I can already see the headline now: “Two hundred thousand Royal Mail workers to lose their pensions if they resist part-privatisation, says business secretary“. Remember: you read it here first.

Jim Pickard

You might have already read about the 10 Downing Street gift shop failing to pass on the VAT cut: Now it emerges that the Cabinet War Rooms are having similar problems…

Jim Pickard

It may seem incredible to some. But the MP for Rushcliffe has changed his mind after two decades of refusing to use a mobile phone – to the frustration of anyone trying to get hold of him.

What’s more, he is now using a Blackberry. Or at least owns one. It appears that fellow Tories want Clarke to be instantly accessible now he is in the shadow cabinet. Wonders never cease.

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Jim Pickard

Gordon Brown has made huge political capital out of his desire to reform the international system of bank regulation. This, he regularly implies, could have prevented the downturn. And it was something he has been arguing for (apparently) for over a decade.

Funny then that Lord Turner, chair of the Financial Services Authority, doesn’t agree. A line buried deep in today’s Times (from business editor David Wighton’s column) says “Turner….told me yesterday, international standards and better co-ordination would have made little difference to the course of the credit crisis. It would not have improved the Federal Reserve’s regulation of Citigroup or the FSA’s regulation of Northern Rock.”

Um, over to you Gordon?

I couldn’t get the PM himself. But the No 10 spokesman says: “It is widely accepted that there is a need for greater international co-operation, given the global nature of the international market. It was the prime minister’s view that we did need better global co-operation.”

Jim Pickard

Full marks to Baroness Royall, leader of the Lords, for announcing plans for a new law which could lead to Lords being suspended, expelled or even lose their title if they break the rules (albeit if the Tories and Lib Dems thought of it first).

But am I the only one feeling a little sceptical?

Lord Tyler, the excellent Lib Dem peer, tells me that he sat on a committee in 1999 (including various law Lords and others) which decided that there was an urgent need forstronger rules to suspend misbehaving Lords. Somewhere along the line it was kicked into the long grass.

“The committee sat for eighteen months,” he says with a sigh.

Jim Pickard

It was in an FT interview the other day that David Cameron said a Tory government would cut the number of MPs in the Commons by 10 per cent – a plan which would fall hardest on Wales for demographic reasons.

Interesting then that Cheryl Gillan, the shadow Welsh secretary (you learn something new every day), has been in the Commons insisting: “The Committee on Standards in Public Life has recommended a cut in the number of MPs across the UK….The special circumstances that pertain to Wales will, of course, continue to do so.”

So who should we believe?

Jim Pickard

I wrote on this blog two weeks ago about how PFI* schemes were struggling to get away in these difficult times – with serious implications for the government. It seems it will be much harder for Gordon Brown to carry out his Keynesian infrastructure programme than he implied a few weeks back.

The PM has claimed that he can simply shuffle forward money from existing three-year budgets to get new schools, hospitals and roads built. But what if this only helps to compensate for the draining away of PFI funding?

I put the question to the no 10 spokesman this morning – did he still expect a net increase in infrastructure projects this year – and I’m not sure I got the answer.

Here is today’s FT exclusive on the DfT preparing to shore up the £1.45bn project to widen the M25, one of the biggest PFI projects around at the moment. The government is ready to step in with hundreds of millions of pounds to stop the project’s preferred bidder (ConnectPlus) failing to secure the finance necessary from about 20 banks. Investment banks, which would usually underwrite this sort of thing, can no longer do so.  

All well and good. And – in theory – the government can sell on the debt in the private markets when things pick up in a few years time. But there will be scores of projects which may not go ahead because they can’t get private backing or a similar government guarantee.

It’s looking increasingly likely that the “Keynesian drive” may be less than the sum of its parts.

* Private Finance Initiative

Never underestimate the hazards of writing columns before embarking on a political career. Here’s Michael Gove’s take on Ken Clarke in 2002.

For the Conservatives to return to power, the party must be seen to have learnt from its mistakes, rejected the arrogance, cynicism and pocketlining of the Major era, developed a tone of voice appropriate to an anti-politician age and come up with a reforming agenda for the public services which respects professional as well as personal freedom.

Ken Clarke is sadly ill-equipped to do that job. As John Major’s tax-raising Chancellor, British American Tobacco’s handsomely remunerated director, the euro’s voter-rubbishing cheerleader and the tireless hammer of nurses and teachers, Ken carries more tainted baggage than a mule on Colombia airways.

Jim Pickard

In the year to April 2008 about 300,000 people joined the waiting list for council housing, which now features one in 12 families in the UK.

In part this is a grim reflection of the economic downturn and rising repossessions (up 92 per cent since last year, according to new figures from the FSA today).

It is also symptomatic of Labour’s failure to get to grips with the problem. Ministers were too busy exhorting people to get on the housing ladder - a mistake which contributed to the boom - to tackle the desperate shortage of social housing.

When the party came to power in 1997 there were 1m families on council waiting lists. The latest figure out today (from last April)  is 1.8m – equivalent to 4.5m people. In April 2007 the figure was 1.67m. 

In the meantime, the housing associations – which how provide most of Britain’s social housing – have been rocked by the credit crunch and will struggle to build much in the coming months.

Margaret Beckett, the new housing minister, has been strikingly silent on this.  

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Jim Pickard

hain-face.jpgPeter Hain’s hopes of returning to a cabinet position won’t be helped by today’s report from the Commons’ committee on standards and privileges.

The report has stern words for Hain’s late registration of £103,000 in January of donations to his (unsuccessful) campaign to become deputy leader of Labour.

The failure was “serious and substantial“, it says. “We therefore recommend that Mr Hain apologise by means of a personal statement on the floor of the House.”

The committee accepts there was “no intention to deceive”. It takes into account Mr Hain’s apologies and the speed with which he rectified his omissions.

This is why the punishment is not heavier: “Because of the seriousness and scale of this breach and noting the considerable, justified public concern that it has created, we would ordinarily have been minded to propose a heavier penalty.”

The committee does not explore the most interesting element of the affair, which is that a good chunk of the money came from a think-tank (the “Progressive Policies Forum”) which had no address and never published anything.

(The CPS decided not to press charges in December).

Jim Pickard

Word reaches me that Laurence Faircloth, south-west regional officer for Unite, has dropped out of the battle to be joint head of Britain’s biggest union. Apparently he has thrown his lot in with Derek Simpson, the embattled encumbent.

Jerry Hicks, one of the remaining three challengers, suggests that the branches which backed Faircloth won’t necessarily follow his move, which may be an attempt to “save his own skin”* in case Simpson wins.

* I’d ask Faircloth but he isn’t returning calls 

UPDATE

From more on the Unite saga it’s worth reading this blog from Rene Lavanchy, who has very good contacts deep within the union movement.

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Westminster blog

on the UK political scene

About this blog Blog guide
Jim Pickard and Kiran Stacey, FT Westminster correspondents, share the latest news and analysis on the UK's political scene.

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Contact the Westminster blog team: Jim Pickard, Kiran Stacey, Nicholas Timmins, Elizabeth Rigby and Helen Warrell.

The illustrations of Jim and Kiran are by Nick Hardcastle.

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The authors

Jim Pickard joined the lobby team in January 2008. He has been at the Financial Times since 1999 as a regional correspondent, assistant UK news editor and property correspondent.

Kiran Stacey is an FT political correspondent, having joined the lobby in 2011. He started at the FT as a graduate trainee in 2008, working on desks including UK companies and US equity markets before taking over the FT's Energy Source blog.

Contributors

Elizabeth Rigby, the FT's chief political correspondent, joined the lobby team in September 2010. Elizabeth has worked at the FT for more than a decade and was most recently its consumer industries editor.

Helen Warrell is the FT's UK reporter, covering home affairs, crime and policing. She joined the FT in 2008 and has spent time as a reporter in the Brussels bureau and more recently, editing the paper's Asia coverage on the world news desk.

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