Monthly Archives: December 2009

The Westminster blog is taking a break over Christmas and the new year and will return the week of January 4.

Happy holidays.

Jim Pickard

Announcement today from the SEC:

Bear in mind that Michael Spencer, chief executive of ICAP, is treasurer of the Conservative party: Read more

Jim Pickard

It’s the big political question of the day. Would – as Labour argue – a fiscal tightening (to tackle the public deficit) put the economic recovery into doubt?

I can’t claim enough economic expertise to make either call. Read more

Jim Pickard

A Christmas card from Nick Brown, Labour chief whip, arrives through the post. No idea where he found this picture of a young Nick Clegg in fancy dress – but I thought I’d share it.

Jim Pickard

The Chris Bolt adjudication (I flagged it up yesterday) came through this morning, as my colleague Robert Wright reports. It is particularly bad news for the Tube Lines PPP consortium.

The PPP arbiter has told Tube Lines it will have to do the upgrade work on its three Underground lines for £4.4bn. That suggests a gap of £1.35bn between the figure of £5.75bn which Tube Lines insisted it needed to carry out the 7.5-year programme. Read more

Jim Pickard

What was bizarre about the Hutton inquiry was the disconnect between the often sensational evidence and the ultimate “whitewash” report.

Who knows how Sir John Chilcot will jump when it comes to ordering the evidence to his inquiry into some kind of published form? Read more

Jim Pickard

The mother of all rows is brewing at London Underground over the multi-billion pound cost of upgrade work to three lines in the coming years. Read more

Jim Pickard

I wrote this afternoon about concerns over the Tory amendment designed to force all peers and MPs to pay tax in the UK. Labour had spotted that the phrasing of the amendment – any UK legislator had to be “domiciled and ordinarily resident in the UK” – could be used as a loophole (something the Tories denied vehemently).

How come the wording stopped short of Philip Hammond’s claim yesterday that all legislators “would have to be resident, ordinarily resident and domiciled”? Read more

Today’s NAO report is yet another reminder of the dismal state of the defence equipment budget. The graph below sets out how bad the situation is until 2020. The best case scenario is a £6bn budget shortfall — and that is based on some quite rosy assumptions.

The MoD buys kit, which often takes a decade or more to deliver, on the basis that their cash budget will rise by 2.7 per cent a year. In good times that would be acceptable (although you have to wonder why they think the Bank of England will overshoot its inflation target by 0.2 per cent). But in these straightened times, that seems dangerously optimistic. If the budget is frozen (the blue line in the graph) the gap in the 10 year budget rises to an eye-watering £36bn. Read more

Jim Pickard

Stephen Carter, former chief executive of PR firm Brunswick, famously lasted just eight months in the bunker-like pressure cooker that is 10 Downing Street. Hired at the start of 2008 (as head of communications and strategy) he had gone before the year was out. Instead he was relocated to become, as Lord Carter, “communications minister” in the Lords. Read more

Jim Pickard

Gordon Brown was meant to be going out to the Copenhagen talks for Thursday and Friday next week. Now I’m told he has changed his schedule to arrive at least a day earlier – perhaps even on the Tuesday. Read more

Jim Pickard

The Guardian has splashed this morning on a story that Darling wanted to impose a VAT rise above 17.5 per cent in the PBR but was prevented from doing so by the prime minister. Instead the Treasury agreed to increase National Insurance; in 2011.

The story has been cast as part of a wider dispute over how fast to cut the UK deficit. Read more

There is no shortage of gloom on the public finances. The numbers look so appalling you can’t help but pray they are based one some dodgy assumptions that will soon be proved wrong. To cheer myself up ahead of the Treasury Christmas drinks, I thought it would be worthwhile to review them with some rose tinted spectacles, giving a fiscal view of the world that is so rosy even Gordon Brown would blush. Here are the five things to pray for:

1) Unemployment: The Treasury took the unexpected step of publishing internal unemployment forecasts this year. When you see how they compare to the National Audit Office numbers (which form the basis for the public finance projections) you can see why. The NAO, on which the PBR projections are based, think unemployment will rise to about 1.9m by 2010 and stay at that level till 2014. By 2012 there is a 700,000 difference with the Treasury estimate, which is the equivalent of an extra £3.5bn a year, if the Treasury figures prove to be correct. Read more

Sometimes it seems like the only trusted voice in politics is that of the Institute of Fiscal Studies. In Westminster, IFS papers have the weight of something like a Papal edict. Here’s our selection of the best slides from their latest presentation on the PBR. Hats off to Gemma Tetlow and Stuart Adam.

 Read more

Jim Pickard

So even ministers are human, it transpires. Mike O’Brien, minister for health service, claimed for a huge amount of junk food in his spring 2008 expenses: including

28 ready meals, 20 mini doughnuts, jumbo wedges, banoffi tart, 20 choc ices, lollies, puddings, Fox’s sweets, rice puddings, glacier mints and more……

Jim Pickard

Laura Moffat, Labour MP for Crawley, claimed in total just £38.70 under the additional cost allowance in the whole of 2008-9. That makes her by far the most austere member of Parliament.

There is also a single night at a Novotel on her expenses claim but that appears to pre-date that financial year. The Telegraph wrote a while back that Moffat had given up her flat in favour of a camp-bed in her Commons’ office. Read more

Jim Pickard

The MPs expense receipts released today were made after members knew that their claims would almost certainly be made public. As a result, most MPs will have shown relative caution.

 Read more

Jim Pickard

France set to impose its own 50 per cent bankers’ bonus tax

Where Alistair Darling was a little economical with the truth in the PBR Read more

More MPs’ expenses receipts are out. So far there is nothing particularly shocking to report. But looking through them is a depressing business. Some things we just do not need to know.

Just imagine receiving a receipt from a cleaning company that describes your sofa as “full of crumbs and dirty” and condemns your carpet for having “large spot marks and stains” — and then realising it would be made public. Read more

Jim Pickard

I’m not officially working today (am at home, in recovery from gastric flu). But I’ve just been passed something so fascinating I couldn’t help passing it on.

You may not remember but something called the “Homeowner Mortgage Support Scheme” was one of the flagship ideas in Gordon Brown’s Queen’s Speech in 2008. (Even Alex and I were quite excited at the time.) The idea was to help people defer mortgage interest for up to two years if they were struggling with payments. The scheme took ages to set up and – even when it was finally announced this spring – only half of lenders fully signed up to it. Even so, the government presented it as a major victory against repossession. Read more