Monthly Archives: March 2009

Jim Pickard

I blogged back in February predicting a freeze in ministers’ pay – (‘I would be amazed if the PM doesn’t repeat this trick to convey the message: “We feel your pain”‘) – an event which finally happened yesterday

Jim Pickard

The Guardian picked up this morning on our blog on Baroness Hooper failing to mention her directorship at Barclays while defending tax havens in a Lord debate last week.

It’s taken a week to get hold of the baroness but we finally spoke at 11pm last night. Hooper explained why she had not mentioned that she was chair of the advisory committee for Barclays European Infrastructure Fund. 

Vince-mania has reached shocking new levels. The economic saint moonlighting as the Liberal Democrat Treasury spokesman has parlayed his way into a new gig: the theatre.

For a ticket price of just £18.50, Vince-ettes can spend an evening with their hero at the Yvonne Arnaud theatre in Guildford. Apparently seats are selling out fast. A nice man at the box office told me the centre stalls have already gone. Never did I think there could be a profit making business out of charging people to listen to Lib Dems. Here’s the ad

Ever wondered what the IMF would demand from Britain? Simon Johnson, the former IMF chief economist, offers a good guide to an organisation that “specializes in telling its clients what they don’t want to hear”. His piece in the Atlantic runs through a typical IMF solution for the US, but most of the points apply to the UK too. Here’s the nub of his argument, which would be painful reading for Gordon Brown and “oligarchs” in the City.

Looking just at the financial crisis (and leaving aside some problems of the larger economy), we face at least two major, interrelated problems. The first is a desperately ill banking sector that threatens to choke off any incipient recovery that the fiscal stimulus might generate. The second is a political balance of power that gives the financial sector a veto over public policy, even as that sector loses popular support. 

Jim Pickard

Kevin Coyne, north-west regional official for Unite, was today suspended by the union’s hierarchy. As were two other officials.

Coyne was one of four people who stood against Derek Simpson, head of the Amicus wing of Unite, in a recent leadership challenge. Simpson won – but with only 38 per cent of the vote (see past FT Westminster blogs such as this, this and this). 

Jim Pickard

It’s normal practice in Parliamentary debates to declare any interests which could be relevant.

During a debate on tax avoidance yesterday, Baroness Hooper – a Tory peer – made sure she mentioned her interest as vice-chairman of the Overseas Territories All-Party Parliamentary Group.

What she didn’t mention is that she is also paid by Barclays (as chair of the advisory committee for Barclays European Infrastructure Fund).

Why is this relevant? Because, as Lord Oakeshott pointed out in the same debate, “Documents leaked to the Liberal Democrats…appear to detail systematic tax avoidance on a grand scale by Barclays”.

The documents in question have been injuncted.

So what did Hooper have to say about the overseas tax havens?

– prompting Lord Myners (no stranger to offshore havens) accusing her of “veering towards her being an apologist”?

UPDATE: Mea culpa. Myners actually used the phrase “apologist” in respect of another Tory peer, Baroness Noakes – although Baroness Hooper assures me: “I’m certainly an apologist for overseas territories”.

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There is no doubt that successive governments have encouraged the overseas territories to be self-sufficient. A number of them have developed highly efficient and successful financial services, based on international best practice…

My final general point is to emphasise, as did the noble Lord, Lord Wallace, the distinction between tax avoidance and tax evasion. The former is legal, the latter a crime… 

Jim Pickard

A meeting between Gordon Brown and Pele, the Brazilian soccer legend, was supposed to be taking place today. 

Jim Pickard

We pointed out yesterday that the uncovered gilt auction was troubling if not – yet – the end of the world. 

Jim Pickard

Stern words today from the Audit Commission about the 127 councils who stuck £954m in Icelandic banks which subsequently collapsed.

Singled out for the wooden spoon are the seven which put £32.8m in Reykjavik(pictured) in early October – in the week after the ratings agencies had downgraded the Icelandic banks and one, Glitnir, had already been nationalised on September 29.

Here is the role of shame:

London Borough of Havering £2m
Kent County Council £3.3m
Redcar and Cleveland Borough Council £4m
Restormel Borough Council £3m
Bridgnorth District Council £1m
Kent County Council (again) £5m
South Yorkshire Pensions Authority £10m
North East Lincolnshire Council £3m
North East Lincolnshire Council (again) £1.5m

The report says: “In some cases, a contractual agreement to place the deposit may have been made before 30 September.”

In defence of the local authorities, their savings in Icelandic banks did drop from £2bn at the start of 2008 to the £953m when the Reykjavik banks imploded.

For the full report read here.

Regular readers of this column may remember which public finances watchdog was embarrassed by the Icelandic saga because it, too, had £10m placed there. That’s right: the Audit Commission. 

One more Tory MEP is throwing a hissy-fit over David Cameron’s decision to leave the European Peoples Party, the mainstream group in the European parliament.

This report quotes Caroline Jackson, who has been an MEP since 1984, as saying: 

Jim Pickard

Labour love to talk about the environment and housing – and the ecotown project combines both in a single grandiose project.

Even now, with the property industry in meltdown, no minister will admit that Gordon Brown’s cherished idea is heading for the grave.

I wrote this morning that a report by the DCLG itself admits that several of the projects would need massive public subsidies (tens of millions of pounds) to go ahead. On others, the maths is uncertain. Only three of the last eight (from 57 proposals and a shortlist of 15) are deemed to be definitely viable.

A flak from DCLG rang this morning to point out that I’d ignored another three schemes which weren’t on the shortlist but have been added to the list. Apologies, the relevant sentence was cut from the story by a sub-editor.

In fact the reality could be even worse than the government believes. 

Jim Pickard

Enemies of Harriet Harman – I’m told they exist – will take delight from her slips at PMQs just now.

First there was an Austin Powers moment when she told the House of Commons that the government had helped….wait for it….90 businesses. Amid ripples of laughter, she clarified this to the real figure, 90,000.

Second she referred to UKFI, the arms-length body which controls the nationalised banks, as UKIA.

And was I the only person who picked up on her description of those who will benefit from the Tory inheritance tax cut as the “super-rich“? If this is people whose estate is worth more than £700,000, doesn’t it include lots of Labour MPs?

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More seriously the Tories may want to re-examine their IHT policy (lifting the threshold to £1m). A tax cut which looked wildly popular during the boom times does not look so cunning during a recession.