The Queen and Prince Charles have made their debut in the Wikileak files.
A dispatch from a US diplomat notes that the next British monarch will not necessarily be the next head of the Commonwealth. Apparently there are no rules on succession. Should Charles become the next King, he could in theory face a Commonwealth leadership challenge. Read more
If you asked a Lib Dem MP whether they would abstain on tuition fees given a free vote, the answer would almost certainly be no. Most of them have very strong views on the matter. Vince Cable just spelled out the obvious: his “personal instinct” is to vote for the policy he developed.
Yet when 57 Lib Dem MPs gather in one room, strange things begin to happen to their judgement.
Even Nick Clegg is now seriously considering the mass abstention option — bravely leading his party to sit on the fence.
To be fair, there are no good options. They will be punished for breaking their pledge to vote against a rise. But it seems that after countless hours of excruciating debate, they’ve decided the best way to minimise the pain is to not vote at all. Read more
Here’s another example of the OBR shrugging its shoulders at coalition policy.
The Office of Budget Responsibility reviews the Lib Dem-backed crackdown on tax avoidance and concludes that it will have no impact on compliance rates. Read more
Some weeks ago, we ran a story on how David Cameron’s immigration cap would stunt economic growth and cost the exchequer around £9bn a year, at least according to the Office of Budget Responsibility economic model.
At that point the OBR had yet to take account of the new coalition policies. So for our piece, we had assumed Cameron would actually achieve his aim of bringing net immigration down to the level of the 1990s, when the average was close to 60,000.
Well, the OBR has now officially taken account of the coalition’s immigration policies. Their verdict makes surprising reading.
Their considered view is that Cameron will have no impact on net immigration. All the announcements since June have not made a jot of difference.
This is the key passage explaining the old assumption and the new policies: Read more
Ed Milband flailed around this morning while defining his “squeezed middle”. By the end of the Today interview, it basically counted as any household earning under £100,000 that is not reliant on benefits.
All wonderfully inclusive (see this chart). But including most of the nation in your analysis hardly helps in identifying policies to help these squeezed people. Read more
Does the defence review add up? The head of the RAF has today given us an important insight into the maths. He has made public that David Cameron’s vision for the armed forces in 2020 is only affordable if you assume the MoD budget rises every year after 2015 by around 2 per cent above inflation.
For those of you who don’t think it sounds much, a five-year military settlement as generous as that was last granted in the early 1980s.
Is the rise a realistic basis for planning? A prudent approach? Should we really count on a military spending boom after 2015?
This review was, after all, supposed to balance the MoD books. Yet it looks like we’re back to buying kit on the never-never. Officials tell me the cumulative unfunded liability — if you take the usual planning assumption of the budget rising in line with inflation after 2015 — stands at £13bn to £15bn over the coming decade.
Coalition aides say this is completely different from the “black hole” they say they inherited from Labour. It all comes down to this statement given by the prime minister in the Commons:
“My own strong view is that this structure will require year on year real-terms growth in the defence budget in the years beyond 2015.”
On the basis of this “strong view”, Liam Fox’s team think it is realistic and reasonable to at least plan on the basis of real terms increases to cover their spending commitments. Defence chiefs also welcomed Cameron’s “strong view” of the future — but they are still pushing for a more “bankable” pledge. They want George Osborne to guarantee an annual uplift beyond 2015, a request that some Treasury officials will treat as light comedy. I don’t think such a guarantee has ever been given to a department. Read more
An old parlour game in Westminster has been guessing the political motives (if there are any) behind Mervyn King’s various interventions in public life.
What has become all too clear today is the serious concerns they have generated in the Bank of England.
At an extraordinary hearing of the Treasury select committee today, an external member of the monetary policy committee spoke out over Mervyn’s “excessively political” statements on the pace of deficit reduction. In genteel Bank terms, this is an uprising. Read more
Howard Flight is the latest politician to make a bid for the “most inappropriate remark of the year” award. He’s up against some tough competition but this quote is quite something.
We’re going to have a system where the middle classes are discouraged from breeding because it’s jolly expensive. But for those on benefits, there is every incentive. Well, that’s not very sensible.
Here the FT’s South Asia bureau chief discusses the UK’s aid policy in India. What do you think David Cameron’s government should do? Join the debate in the comments section. Read more
Bankers can breathe easy. This year’s bonus season will roll on unhindered by any new disclosure rules.
George Osborne will take credit in the City for the U-turn. But the bankers also have to thank Sir David Walker, the City grandee who originally proposed the measures, for concluding it would be “mistaken” for Britain to go it alone.
Walker’s revised view is largely consistent with his report, which did acknowledge the dangers of unilateral action. But Walker also made one conflicting point. This is the key passage:
The priority of persistence with efforts to achieve such [international] convergence needs no further underlining, but a situation may develop in which the adoption of an exemplary leadership stance by the UK in this respect is the most effective way of achieving progress.
Exemplary leadership? The virtues of going it alone? This bold manoeuvre is not something Walker cared to mention in his recent op-ed for the Financial Times.
It is probably not an idea that will capture Osborne’s imagination. Read more
There have already been some noises off between the UK government and the green energy industry over the green investment bank, the government’s proposed investment vehicle for funding clean energy projects. Apart from anything, many in the sector simply don’t think the £1bn promised by Chris Huhne, the energy secretary, is enough. Read more
Michael Gove interviews can, in patches, be almost as fun as reading his newspaper op-eds.
One particularly highlight of our interview with him yesterday was the section on grammar schools. Gove, remember, had told pro-grammar school Tories that his “foot was hovering over the pedal” of allowing an expansion of selective education.
His foot, it seems, is still hovering. Here’s an extract from the transcript: Read more
OK, I know, there were only four Tory MPs who signed-up to opposing a rise in tuition fees. Read more
Here’s a rather entertaining and comradely exchange between Kevan Jones, the former Labour minister, and George Parker, the FT’s political editor who is my boss and therefore right about everything.
As chairman of the press gallery, George gave evidence to a committee of MPs conducting a review of catering on the parliamentary estate. Read more
So the Royal Wedding is to be on April 29. Congratulations to the couple. They’ve picked a date that effectively parks a golden landau in the path of the political horse race. It will come a few weeks after the cuts kick in, and a few days before an epochal referendum on electoral reform. Read more
David Cameron took the biggest delegation to India since the Raj in an attempt to revitalise relations. But, impressive as it was by UK standards, the trip has clearly not provided much of an aide-mémoire for Manmohan Singh, India’s prime minister.
Here is a telling dispatch from James Lamont, the FT’s man in New Delhi: Read more
Transparency on high-end pay is good for Whitehall but not yet for the City – that is the conclusion emerging from the Treasury.
But what about the Lib Dems? Weren’t they billing themselves as the slayers of City excess? Tackling “obscene” banker pay was one of Nick Clegg’s top four priorities in the election campaign.
Yet it seems the element of the four point plan where the Lib Dems have made least progress.
Just compare what has happened to the proposals Clegg unveiled during the election.
Cash bonuses? Uncle Vince says £2,500 is your limit. Board level bonuses? Banned outright. (Vince made a joke about how the bank directors can make do with free golf club membership.) Working at a loss making bank? No bonus at all.
There was more. The one measure that really stood out was transparency. Cable and Clegg wanted to require banks to publish the names of all staff on a pay and bonus package greater than the prime minister’s salary. This would not only have ensnared top traders — it probably would have included their PAs as well.
When we asked Clegg about this recently, he dismissed the question, saying the Walker review was being implemented. When we pointed out that the legislation had been delayed, he seemed a bit taken aback.
Now George Osborne wants to impose such transparency rules on high pay “internationally rather than unilaterally” — which is an all too transparent code for shelving the reforms. Sir David Walker, the City grandee who proposed the tighter disclosure rules, has given the chancellor some convenient cover.
What will Clegg do? This will be a fascinating test of Lib Dem resolve. Read more
When Cameron heads too deep into the westcountry, whether for work or pleasure, things never seem to go to plan.
Some members of his team are already muttering about the “Curse of Cornwall”. Read more
A remarkable number of the new Conservative peers share a common past: knowing David Cameron when he was a young Tory apparatchik.
It is tempting to conclude the honours list is payback to some people who helped him rise to the top. But that is probably a bit unfair. It more reflects the fact that Cameron is the first Tory prime minister to rise from the party’s staff ranks. Read more