Monthly Archives: February 2009

The jolly japester (sic) who runs London has been asked to appear in front of the transport select committe to explain why the city ground to a halt during recent snowfalls. Read more

I’m sure there’s a mixed metaphor to be had here re a big fish across the pond.

But the RBS director with an equally impressive pension – according to RBS’s 2007 accounts – is one Larry (Lawrence) Fish, chair of the bank’s US operations. His pension pot was $24m at that point. Read more

Has Pesto got his sums right? He reported that Sir Fred Goodwin is drawing a pension of £650,000 a year from a pot of about £16m. But if you take account of Goodwin “retiring” at 50, the maths doesn’t seem right.

The FSA’s handy pension calculator shows his total pension pot is closer to £25m. Yes, there’s even more cash for Alistair Darling to claw back. Read more

I have just been tipped off that no fewer than 11 ministerial aides have signed the motion opposing Lord Mandelson’s part-privatisation of the Royal Mail.

Given that parliamentary private secretaries (PPSs) tend not to sign early day motions under Parliamentary convention, this is a striking facet of the rebellion. The EDM has now hit 132 Labour signatures. Read more

A slew of private finance initiative deals are likely to be rescued with state support in coming months. But if you were expecting the government to properly tell taxpayers about the extra risk they are taking on, think again.

Yesterday eagle-eyed Mark Pritchard, a Tory MP, was tipped off about a significant announcement in an “unnumbered command paper”. It announced that ministers had offered contractors bigger state-guarantees to save the largest PFI deal in Britain. But it was laid before the House in such a way as to be all but hidden. Can this be right? Read more

We predicted a month ago that Lord Mandelson would shortly use the pensions threat “to cow the unions into submission” over part-privatisation.

Last night saw the release of a letter from the chair of the pension fund trustees warning that - without radical reform - pensioners could lose half their benefits. The timing is striking at best given that the bill is set to enter the Lords this Thursday.

Here was our news story this morning – which includes a private sector estimate of £10bn-plus for the deficit, far worse than the £5.9bn envisaged by Richard Hooper in his December report.

If you want to see the letter here it is. Read more

The prime minister won favourable coverage over the weekend for his claim that he would abolish 100 per cent mortgages. Read more

This is a real puzzle. Gordon Brown has just sent out his invite list for the G20, which, once Britain is included, runs to 22 countries. I think it is because Spain and the Netherlands have been invited this time. Even so, you have to wonder why it is still called the G20. So far the UK bumpf has promoted it as the “London Summit”, which may be a cover for the arithmetic issues. It would be easy enough to rename it the G22 — after all we there have been G22 and even G33 meetings in the past. But G22 does sound a bit like a fighter plane. And if you put G22 into google, it comes up with this rather scary looking gun. Probably best to leave things as they are. Long live the 22 members of the G20.

Here is the full Downing Street statement. Read more

One of our readers is clearly upset. I’ve just been sent a diatribe against the (Tory) claim that it is cheaper to insure the debt of McDonalds than Britain. Here’s the sanitised version:

 Read more

America’s pit traders revolt…

The London summit is in the first week of April — which happens to coincide with US banks putting out first quarter results. It could be messy. Nationalisation is rising up the Washington agenda. There is a chance — albeit small — that Obama will have to seize the banks around the time he’s due to hob-nob at the G20.

Here’s some background from Ed LuceRead more

Last Friday some parents lost their legal challenge to stop a proposed academy in Camden. The press reports mainly covered it as a blow to plucky campaigners. But this was a story of national significance. One Whitehall academy champion told me this case was the single thing he “worried about most”. Had the ruling gone the other way, it would have devastated both Labour and Conservative plans to reform education.

Why? The parents demanded that academy sponsors should be selected through a European Union procurement process, rather than being chosen by ministers. A competitive tender would take months longer and cost much more, for both the government and the sponsor. The sponsor in Camden was UCL. Had the judge told them to make their bid via Brussels, the university would have almost certainly walked away. Why bother with the cost? Read more

.  Alan Greenspan, the high priest of laisser-faire capitalism and an “honorary adviser” to Gordon Brown, told the FT that seizing banks was a least worst optionRead more

Are the Tories ducking a few big political issues for fear of saying something principled? Sam Coates thinks soRead more

The New York Times raises the intriguing prospect that the submarine crash in the mid-Atlantic was actually the result of a war game. Read more

Stephen Timms appears to have done enough to tamp down speculation about nationalisation and avert a run on Lloyds shares. But it still feels like the government is struggling to convince the market that it really does see full public ownership as a last resort. Privately, ministers make clear that they want another nationalised bank like a hole in the head. But their public statements sometimes seem too terse and contrived. Contrast their approach with that of Barack Obama, who gracefully addressed the question in a recent ABC interview:

MORAN: There are a lot of economists who look at these banks and they say all that garbage that’s in them renders them essentially insolvent. Why not just nationalize the banks? Read more

Chris Giles chronicles Mervyn King’s faltering response to the credit crunch and the fading power of the Bank:

Success certainly bred a certain arrogance when it came to views about how the economy worked. Dismissing as “an old shoe” the idea that asset prices should be taken into account when setting interest rates, [King] said those who worried about the effect on consumer spending of rapidly rising house prices were peddling “mindless regressions” and should instead think about the economics. “Housing does not determine consumption; there are more fundamental influences on consumer spending,” he insisted. Read more

There is a certain irony to David Freud’s defection. When he first unveiled his plan to massively expand the role of private providers in finding work for the jobless, the ideas were compelling but largely ignored by politicians. He now joins the Tory frontbench at a time when his welfare plans are as popular in Westminster as apple pie. But his ideas, out in the real world, are facing their first real test.

The early evidence from Freud-style welfare programmes suggest the reforms are harder and more expensive to implement than first envisaged. Freud designed them in the good times, when credit was easy and jobs were aplenty. The core ideas are still sound. But neither Labour nor the Tories have really come to terms with how they will need to be changed to cope with a severe recession and credit crunch. Read more

A cabinet minister told me a while back that he expected no pay rise for any government ministers this year. Gordon Brown imposed a pay freeze last year as a gesture of austerity.

This week a No 10 spokesman said that it was too early for the prime minister to make the decision for the coming financial year. Read more

The full story is on This is only one day after the prime minister repeated his belief that taxpayers would make money out of the bank rescues.

From Bloomberg, February 12 Read more