Monthly Archives: December 2010

Jim Pickard

My favourite episode in the satirical TV programme The Day Today was when the Chris Morris presenter – styled loosely on Jeremy Paxman – goads various politicians into declaring a world war.

I was reminded of the clip this morning when I saw the Times’ splash predicting a campaign of strikes for the Easter: “Unions plot campaign of strikes for Easter.” 

Jim Pickard

You can find many of the more serious moments of 2010 elsewhere on YouTube, for example this clip of Gordon Brown leaving Downing Street for the last time.

But here is our compilation of 10 other clips from the political year which are distinguished only by their cringeworthiness. Enjoy. 

Jim Pickard

Plenty of coverage around today of the Independent’s story about Miliband’s plans to “sever big money ties with unions”. I predicted a week ago that the Labour leader was planning a symbolic gesture to show that he was not in hoc to the union barons; perhaps this is it?

Yet the reaction to the Indie story has got ahead of itself in terms of what it all means. 

The Westminster blog is briefly interrupting its holiday break so readers can listen to the Vince Cable audio clip, courtesy of the BBC website.

Read our story: Cable says he ‘declared war’ on Murdoch  

Jim Pickard

Alex and I are both off this week but the blog will be up and running again soon after Boxing Day. Many thanks to all our readers who have helped support us through the last year.

Jim Pickard

I revealed back in August that David Cameron wanted to invite Britain’s union leaders for a meeting, a surprising overture given the hostility between the two sides. The process has been complicated by the fact that the prime minister – unsurprisingly – did not want to give the brothers an excuse to publically snub him.

Yet the meeting has been scheduled for tomorrow. Patrick Hennessy at the Sunday Telegraph revealed this morning that a delegation of unnamed TUC officials is poised to go into Downing Street to meet Mr Cameron. 

Jim Pickard

Alan Johnson heavily criticised the New Year rise in VAT from 17.5 per cent to 20 per cent this morning, warning it would cost jobs and could jeopardise the economic recovery.

Is this responsible opposition? A Tory source points out that Labour would have almost certainly have done the same thing – or at least considered it very strongly. 

Jim Pickard

Alan Johnson was guilty of modest political opportunism this morning when seemingly questioning Philip Hammond’s position in the light of the extreme weather conditions. The shadow chancellor hinted that the transport secretary should resign.

It reminded me of the occasion that Boris Johnson appeared in front of the transport select committee (in May 2009) to defend charges that he had failed to protect London from the wintry elements.

It seems to testify to the theory that Boris is at his most witty when under pressure:

Q197 Graham Stringer: You are telling me what gritting went on, but that was not the question I asked. The question I asked was what action you took, with your overall responsibility for transport in Greater London, over the five days when we knew, the whole country knew, there was going to be a heavy downfall of snow which was likely to cause disruption. I would like to know what actions you took.

Mr Johnson: As Chair of Transport for London, I am happy to say that I had general oversight and I presided over, with my Commissioner for Transport, a massive programme of gritting. If you ask me whether I personally went around trying to repel each snowflake as it tried to settle over London, then obviously I would have to give you a negative answer. You do ascribe phenomenal powers to me – quite rightly, I think, as I think it is high time that we thought about a revision of the powers-to have authority over basic meteorology, but it is not within my competence to get up into a helicopter and encourage the snow to stay away. What I think you need to focus on, if I may be so bold, Chairman -

 

Jim Pickard

We reported yesterday that David Cameron had joined Nick Clegg in warning of new action against banks which did not show bonus restraint.

David Cameron warned banks on Friday that they faced higher taxes if they continued to pay “unjustified” bonuses, adding to a growing political and regulatory pressure on the City before the industry’s bonus season early next year.The prime minister, speaking after a European Union summit in Brussels, said that the public found such payments “galling”, adding: “Every decision the banks make like that makes it more difficult to keep a tax regime that they might favour.” 

A cloud is hanging over one of the government’s biggest privatisations

Jim Pickard

This may come as a surprise to those who read Nick Clegg’s comments today about the need to crack down on bankers’ bonuses. (And David Cameron’s veiled threats today of a higher tax on banks that don’t comply).

Yet last week coalition MEPs were sent a document on how Britain has been seeking to water down a EU rule intended to restrict bonuses in the future.

The EU last Friday laid out its new rules meaning that no senior banker should get more than 20 per cent of their bonus in cash upfront.

The EU wants bankers to defer half of their bonus, of which at least 60 per cent will have to be paid in shares or other financial instruments.

The British (via FSA policy set out in the summer) had argued that banks should be allowed to give all of the cash element upfront while mostly deferring the shares element. That would have meant bankers getting 40 per cent of their bonus in cash upfront – double what the EU wanted.

The document argued that Britain “led the way” in implementing G20 principles and that the EU should not go any further.

It was an entirely valid point of view to take; but there is a distinct irony in the idea of the British government proposing weaker restrictions than the rest of the EU while posing as banker-bashers.

The document is a bit long but here you go:

CRD3 Briefing

CEBS Guidance on Remuneration Provisions in the Capital Requirements Directive

Summary

  • There are two issues at play in the various press reports covering the CEBS guidance on the CRD3 remuneration provisions: (i) the current interpretation of the upfront cash limit provisions and the tax implications of retention conditions; and (ii) the exaggeration of provisions that relate to state assisted banks and fixed/variable pay ratios.

Upfront Cash and Retention Conditions

  • The provisions in CRD3 imply a cap on the maximum proportion of a bonus that can be paid in cash upfront.
  • These provisions are open to interpretation and throughout the negotiation and implementation of the Directive, we have supported an interpretation that limits upfront cash to 40% of a total bonus. This interpretation is consistent with the G20 agreed FSB Standards.
  • The European Parliament has taken a different view and interpret the provisions as imposing a 20% cap. This will go beyond the globally agreed position and will have a significant impact on the European financial services sector’s international competitiveness.

 

Jim Pickard

If all low-carbon energy is given a public subsidy then has nuclear power been subsidised? You might have thought so.

But Chris Huhne insisted yesterday that this was not the case.