Monthly Archives: January 2011

Jim Pickard

I’m informed that a compromise will be presented soon after 5pm which could bring the Somme-like battle in the House of Lords to an end after weeks of late-night sittings and abrasive filibustering. Although one source tells me it may turn out to be less of a “compromise” and more of a potential way out of the impasse.

More here when it happens: For now here is Nick Watt at the Guardian explaining the situation earlier this afternoon. Read more

Now here is a startling statistic uncovered by my colleague Chris Cook.

Free schools will receive almost twice as much state funding for taking a poor pupil rather than a child from a more well-off background. Read more

Jim Pickard

It’s not quite Keys/Gray but amusing enough. You need to listen to this recording quite closely, the key moment is 17:01:45. You can hear an MP – I believe it’s Eric Ollerenshaw, Tory MP for Lancaster and Fleetwood – chatting to another member of the localism bill committee.They are about to take evidence from companies including Barrett, Taylor Wimpey and Redrow.

We’ve got the bloody builders next,” he whispers. Read more

Jim Pickard

George Osborne could begin the sell-off of RBS early next year, marking the start of Europe’s biggest every privatisation, as my colleagues report this morning. If the bank is profitable by the turn of the year – and if the share price is substantially higher – an initial tranche of £5bn could be sold.

Intriguingly, I’m hearing separately that Lloyds Banking Group could be even earlier off the blocks, with ministers keen to start the LBG sell-off first. In theory this process could begin before Christmas. Read more

Jim Pickard

My former colleague Fiona Harvey revealed last October that Chris Huhne’s plan for a green investment bank was being thwarted by Treasury officials, who wanted it to be more like a fund. Then in December Mr Huhne let the cat out of the bag in public when he admitted that the Treasury had won the battle and the new entity probably wouldn’t have the powers to issue bonds*.

Without leverage, the fund will only have £1bn to spend (plus £1bn from asset sales) rather than the £4-6bn demanded by the renewables industry. Read more

Jim Pickard

There is increasing concern at the highest levels of the coalition that its own “localism” agenda has the potential to hamper economic growth in the coming months – just as the government is at its most vulnerable to any sign of downturn. Ministers at Eric Pickles’ communities department believe that many of their localist policies will help business to grow; but others suspect that the general theme – handing more power to communities – will instead empower “nimbies” who want to stop development.

Against this backdrop we revealed this morning that Vince Cable and George Osborne are drawing up plans for several planning changes which could be announced in the spring Budget. The proposals come as the new head of the CBI warned that the ”jury is still out” over whether Mr Pickles’ new planning system will “deliver”. Here are the ideas: Read more

Jim Pickard

It has become a favoured accessory of the modern political leader; the personal trainer. David Cameron is often spotted jogging around with his fitness coach, who also works for comedians James Corden and Michael McIntyre. Even Gordon Brown had one by his side to keep him in, er, peak physical shape.

Now my colleague James Crabtree has revealed that Ed Miliband has hired a personal trainer to get him into shape. It will be interesting to see how this pans out for Miliband, who – up til now – hasn’t shown much aptitude in the sporting sphere. Read more

Jim Pickard

As I revealed before Christmas, Network Rail has agreed to pay for an independent inquiry into allegations of misuse of public funds that have dogged the publicly funded company for months. You can read the full story here. The state-funded track operator believes it has no case to answer but wants to “close this chapter” through a QC-chaired investigation. There will be a “statement of full exoneration” if the key allegations prove to be groundless. As I disclosed:

Chaired by QC Antony White, the inquiry will begin at an undisclosed London location by February. In a letter to Network Rail’s 100 members, Mr Haythornthwaite said the inquiry would focus on allegations against Iain Coucher, former chief executive. He told members he wanted a “focused and effective gathering of hard evidence” that would “establish the truth around specific allegations of fraud”.

 Read more

Jim Pickard

I wrote in yesterday’s FT about Caroline Spelman’s plans to sell off much of the Forestry Commission’s estate.

The environment minister is keen to rebut the idea that she is poised to flog every tree in Britain to private companies who will then chop them down and replace them with golf courses, leisure centres and business parks.

So what is her plan? Put simply there are two legs to the strategy.

1] The commercial forestry estates – largely monoculture conifers – which mainly grows logs for commercial sale, could be sold off under one of four options put forward. This could raise several hundred million pounds. As Julian Glover at the Guardian suggests: “The state has no business being a lumberjack.” Much of the forestry that covers the uplands of the north and Scotland is so unlovely that perhaps it might as well be in private hands. Alternatively, community groups could club together to buy some of this land and – perhaps – turn it back to native deciduous habitat.

 Read more

Military police have been called in to examine allegations of improper conduct during bidding for the £6bn privatisation of the search and rescue helicopter service.

It has brought the deal to the brink of collapse.

We’ve broken the story online because the redoubtable Cathy Newman of Channel 4 News has been chasing the same tale. The main elements are:

– MoD police are investigating the access to information given to bidders and the relationship between a military officer, who has since left the forces, and CHC, a Canadian helicopter operator that is part of the Soteria consortium chosen as preferred bidder.

– Royal Bank of Scotland have pulled out of the Soteria consortium because their concerns over the allegations. It will make it much harder for the deal to be revived, even if the concerns over improper conduct prove to be unfounded.

– Ministers are urgently examining options on how to proceed, including re-tendering the contract and scrapping the private finance initiative model altogether.

This is the deal, remember, that so angered Prince William he raised his concerns with the prime minister.

Read on for more details. Read more

On the day the coalition was formed, Michael Gove entered Downing Street with his consigliere Dominic Cummings. Only one of them left with a job.

It was one of the clearest demonstrations of Andy Coulson’s power. On Coulson’s advice, David Cameron offered Gove the position of education secretary on the condition that he sacked Cummings. Gove did not take it well. Read more

Jim Pickard

David Cameron is not always a perfect performer at the weekly prime minister’s questions – sometimes the charming confidence tips over into a somewhat bullying manner.

But today showed why he is so effective in the post. In an otherwise unmemorable PMQs, Cameron demonstrated how to neutralise difficult questions by displaying a degree of candour. Read more

Jim Pickard

Unlike Colin Firth in The King’s Speech, there was no verbal stumbling from Mervyn King when the governor of the Bank of England made his keynote speech in Newcastle last night. But the economic recovery seems to be stuttering.

Economics is such fun (despite its ‘dismal’ reputation) because very rarely are any forecasts absolutely right; even from the experts. And right now there are so many pieces of contradictory data that the overall picture is more blurred than ever. Read more

Jim Pickard

A rumour has been circulating for a while about David and Ed Miliband staging an imminent public rapprochement in an attempt to cauterise the bad blood* between the brothers. In fact we asked Lord Kinnock about the prospect during an interview this morning; he didn’t think it was a very advisable idea.

Now Allegra Stratton at the Guardian has the story that the meeting is in the diary for March and revolves around the brothers Mili setting up a revived Movement for Change campaign. Clearly this may be largely symbolic – and may not convince the general public that the wounds have healed. It’s hard to believe that David suddenly no longer resents his younger brother for winning the leadership with the help of the trade unions. Still, it is an important part of Labour’s attempts to move on.   Read more

Jim Pickard

Here is an amusing quote from last night’s Lords Hansard; it doesn’t really require explanation:

The Duke of Montrose: My Lords, although I have not participated greatly, I have attended quite a few of the Committee’s meetings. The Minister says that he will take away and consider issues such as those raised by my noble friend Lord Deben. With the great efficiency of this Committee, we are presently discussing the clauses to do with England and Wales, but exactly mirroring clauses, which are word for word the same, later extend the provisions to Scotland. However, nobody has thought to extend their amendments into that same text, but no doubt the Minister will consider- Read more

Jim Pickard

One of last week’s big stories was about Riven Vincent, the mother of a disabled child struggling to get extra care from her council. It encapsulated the problem of passing responsibility to communities – a key theme of the coalition – while still ensuring that councils provide vital services. Ministers have got rid of ring-fencing for many council revenue streams, just as authorities face a 28 per cent cut to their main grant over four years.

What then to make of Grant Shapps, housing minister, writing today to the chair of the Local Government Association to complain about several councils cutting their funding for homelessness? The minister said this was “disappointing” and “hard to understand“. The minister has asked the LGA to encourage and support councils to prioritise such services. Read more

Jim Pickard

Gordon Brown is perfectly entitled to his views on the economic situation, given the prestigious government posts he occupied for 13 years – regardless of your opinion of his time in office. But his intervention into the debate today is not particularly helpful for the new shadow chancellor, Ed Balls.

Remember the old Tory slogan about Labour economic policy: “It’s not Brown, it’s Balls.” It was a reference to the idea that many of the party’s key policies emanated from brain of the Treasury adviser rather than Brown himself.

One of the biggest challenges for Balls is to shed the idea of himself as some kind of mini-Gordon, nurtured at the feet of the last prime minister. It’s a particularly damaging Read more

This must be one of the stranger ideas to emerge from Gordon Brown’s Treasury.

Lord Wilson, the former cabinet secretary, has just told the Iraq inquiry of his one-man battle to stop the chancellor from introducing an internal market for intelligence. Read more

Jim Pickard

This hasn’t been picked up by the House of Commons mikes, as far as I am aware. But apparently whenever Rory Stewart stands up to speak there is now a low rumbling of MPs humming the Pink Panther theme.

Fellow Tories tell me that the tune is a reference to Mr Stewart’s mysterious career path, which – some say – has an MI6 air. (The Tory MP has himself admitted that his career may “give the impression” that he was in the agency, although he denies this was the case). Read more

Jim Pickard

Economic activity in Britain contracted unexpectedly in the fourth quarter of 2010 – partly as a result of freezing weather – according to preliminary figures that create a fresh headache for the coalition government.

This is in contrast to the 0.5 per cent increase that was the average forecast of a poll of economists conducted by Thomson Reuters. The economy expanded by 1.2 per cent and 0.7 per cent in the second and third quarters of the year respectively

The Office of National Statistics, which provides the data, said that it was “clearly affected by the extremely bad weather in December last year.” Without this the picture would have been flat. Hotels, restaurants and retailers were all hard hit by the freezing conditions, a fact which has depressed the figures further.

Four political points to make:

1] The least subtle point is that the coalition will now be terrified about the threat of a double-dip recession, which Labour has warned about for months as the potential consequence of the cuts programme. The definition of a recession is two quarters of negative growth in succession – making the next set of figures in April a crucial moment for the government. If the economy shrinks in January to March it could give many ministers cold feet about the scale and pace of spending reductions. Read more