Daily Archives: January 10, 2011

Jim Pickard

You may find it hard to disagree with Eric Pickles’ call last autumn for all council chiefs earning more than the prime minister to take a pay cut. The communities secretary argued for a 5 per cent cut for those earning more than £150,000 and a 10 per cent cut for those on £200,000-plus.

Most right-thinking people would question why executives running local authorities should earn more than David Cameron. (Although the PM’s earning power will go through the roof when he leaves Downing Street, as Tony Blair found out). They should doubtless show restraint in these difficult times – and those who do not may deserve public opprobrium.

Where ministers are becoming increasingly disingenuous, however, is their suggestion that this pay restraint could somehow stop cuts to front-line services. The figures in question are a mere drop compared to the scale of looming cuts to council budgets. Read more

Jim Pickard

The whole debate around bank bonus taxes has become a tad complicated, not least because of potential confusion between last year’s one-off 50 per cent tax on bonuses and the new “banking levy” – which will be based on balance sheets.

Ed Miliband and Alan Johnson this morning called for the bonus tax – which last year raised £3.5bn – to be used again this year. Their argument is that the new levy will not raise enough cash this year compared to the generous bonus round.

To understand where Labour is coming from you need to see the estimates for how much the bank levy will raise for the coming years against last year’s tax. The figures below do suggest that there will be a rather inexplicable fall – described by Miliband as a “tax cut” – this year before the figure rises once again in 2012.

2010: £3.5bn 2011: £1.25bn 2012: £2.3bn 2013: £2.6bn 2014: £2.6bn.

The figures  support Miliband/Johnson’s demand for an extra top-up on this year’s levy – if not to the tune of the £3.5bn they are suggesting.

 Read more

Jim Pickard

Why would the prime minister invite the chief executives of 19 leading companies to Downing Street for a jobs summit? There are two possible answers:

1] David Cameron wants to know what big business wants from the government in order to expand and prosper. Except he already knows; lower taxes, less red tape, looser planning laws, not replacing RDAs with poorly funded “local enterprise partnerships” etc. The PM has endless opportunities to discuss these issues with UK plc and does so – as the list of private visits to Downing Street shows.

2] It is primarily a public relations exercise designed to make Britain feel more positive about the economic situation.

I don’t think it’s too cynical to lean towards the second option. Ministers are increasingly anxious about the need to get across the message that the private sector can, and will, create over a million jobs over the current Parliament – dwarfing the estimated 330,000 set to be lost in the public sector.

So is today’s announcement impressive? As I wrote in this morning’s FT, the 19 companies have suggested that they are creating over 40,000 jobs this year alone.

But of these more than 34,000 – or 85 per cent – are big retail chains such as Sainsbury, Asda, WM Morrison and Tesco. Every year these supermarket groups promise thousands of new jobs as they lay out their expansion plans.

Their growth within the UK tends to be at the expense of other retailers, inevitably, for whom - given many are small family firms – it is impossible to collate how many jobs are simultaneously lost. In other words, by hailing supermarkets’ expansion, Mr Cameron is praising the growth of what – to many eyes – is an oligopoly whose growth threatens Britain’s high streets. Read more