Monthly Archives: February 2011

There were some fascinating exchanges in the Commons after David Cameron’s statement on Libya. Here are some of the highlights:

– Britain may arm the opposition: Cameron said that his top priority was deposing the Gaddafi regime: “If helping the opposition would somehow bring that about it is certainly something we should be considering.” He added that he was “trying to establish contact with the opposition to find out what their intentions are”Read more

A few weeks ago, we asked one senior British government figure whether the uprisings would spread to the Gulf. There are “no problems” yet, he replied.

The language was revealing (when exactly did Britain see democratic change as a problem?) But it is probably to be expected given Britain’s investment in the preserving the regional status-quo. Read more

Nothing sensational so far in the revised Mandelson diaries, but this passage is thought-provoking:

When Ed pronounced New Labour ‘dead’, he was not only being more categorical than was wise, but quite possibly more than he really intended. (xxi) …Even allowing for the tactical choices he had made in his bid to become leader, however, I was struck by the fact that he had given no strong clue during the campaign as to what alternative to New Labour he envisaged. He was quick to say what he was against: essentially, Tory policies and Tony’s policies. But he rarely said what he was for, apart from a belief in greater social mobility and equal chances in life for the young, more strategic government intervention in the economy, and primacy for individual rights in counter-terrorist law. I would sum up his position as being an egalitarian social liberal – different from Tony, yet not a reversion to Old Labour.

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The reaction inside the Treasury to the original Q4 GDP figures a few weeks ago was, I’m told, one of disbelief at first.

It would be interesting therefore to be a fly on the wall inside George Osborne’s ministry this morning as that number – a fall of 0.5 per cent – was downgraded by the ONS. The new figure is a 0.6 per cent drop. Read more

Sorry for the blogging silence on Thursday, I was enjoying a three-hour lunch with Bob Crow and also putting the final touches on our new “austerity calendar”.

It’s in today’s paper FT but also online at this address, where you should be able to see many of the major tax rises and benefit cuts taking place in the next few years; or at least the ones we already know about. I hope it proves a useful tool.

Les Bayliss was the contender for the leadership of the Unite union last autumn who called on the movement to resist the urge for mass strikes.

In the end it was the more openly left-wing Len McCluskey, from the old T&G branch of the superunion, who swept to power at the end of December. Read more

One of the fascinating aspects of the events in Libya is how swiftly the western perception of the Gaddafi regime has changed. Only a few weeks ago the country was regarded – albeit with some suspicion and caution – as a reasonable place to do business of a commercial (or political) nature.

The Libyan British Business Council, based at St James’s Park in London’s upmarket West End, has failed to update its website, it seems*. It saysRead more

David Cameron made a splash on Monday with an article in the Telegraph calling for an end to monolithic state provision of public services. Downing Street officials were rather vague that day about what it all meant – beyond saying that charities and companies would get a chance to run (or at least bid for) some services. But the prime minister’s message dominated the media cycle that day.

We will find out more when the white paper is published within the next fortnight. Meanwhile the prime minister has achieved the desired impression; that he is a reformer in the Blair mould who wants to see better public services.

What will have passed many people by is that the government has meanwhile quietly dropped its proposal for quotas to ensure that voluntary and private groups deliver a certain proportion of services – as my colleague Nick Timmins revealed the next morning. This rather undermines the idea that ministers are about to force through a revolution in delivery.

As Nick revealed:

That idea was set out in last October’s comprehensive spending review, which said the government would “look at setting proportions of

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There was delight in the London Treasury today after Verena Ross, director at the FSA, was nominated as head of one of Europe’s three new “supra-national” watchdogs.

German-born Ross will be the chief executive of new European Securities and Markets Authority (ESMA), the watchdog overseeing financial and securities markets. Read more

There’s been some chatter in the City about David Cameron’s trip to the Gulf being part of a cunning plan to sell the taxpayer’s bank stakes. Read more

Among those who appear not to have foreseen the brutal force meted out to protesters in Libya was Baroness Symons of Vernham Dean, who this month tried to strike a positive note about Colonel Gaddafi during a Lords debate.

The peer neglected to say that she was a member of the International Advisory Board of the National Economic Development Board of Libya (although she did declare that she holds the position of chair at the Arab-British Chambers of Commerce). Read more

In case you missed the Today programme this morning, it featured US Treasury Secretary Tim Geithner backing the coalition’s deficit reduction strategy. Geithner appeared to rebuff the idea – recently floated by Ed Balls* – that he had criticised UK economic policy during a speech at Davos.

Instead he said: “I’m very impressed at the basic strategy that [George Osborne] has adopted.”

“I don’t see much risk of [growth being damaged] at the moment. Again, what he did is a very remarkable thing. At a time when it was easier to make tough choices quickly because they were not problems created by

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It was back in the autumn of 2009 that I revealed a “fleeting” and “co-incidental” meeting between Lord Mandelson and Saif Gaddafi in a Mediterranean villa – just before the release of the Lockerbie bomber.

As I wrote then: Read more

Britain’s defence industry has no better friend than David Cameron, at least when it comes to exports.

Given the dramatic turn of events in the Middle East, the prime minister has certainly not opted for the path of least resistance.

We’re still at the beginning of this trip (as I write this I’m sitting in the Kuwaiti parliament). But it is already absolutely clear that he really does believe in commercial diplomacy – and that means promoting defence sales, come rain or shine. Read more

(I first published this last October but thought it could be of renewed interest).

The following documents, obtained by my freedom of information request, refer to a contract signed in early 2008 between General Dynamics UK (the British arm of the US company) and the Libyan government to supply a communication system for its military.

The $165m deal was the first major defence deal between a British company and the north African state since an embargo was lifted in 2004.

The letters provide an interesting insight into the way that the Foreign Office provides help in assisting British business overseas – which is one of William Hague’s top priorities.

The redactions are by the FCO, which did not provide the dates of the letter. General Dynamics confirmed that the correspondence refers to the communciations deal.

Letter from General Dynamics United Kingdom Ltd to His Excellency, Sir Vincent Fean KCVO, Her Britannic Majesty’s Ambassador to Libya

Dear Vincent

As I sit on the aeroplane back to London after my first visit to Libya, I wanted immediately to write to thank you, not only for your extremely generous hospitality, but also for your personal interest and support on the rocky road towards success in the […] programme.

I am convinced that we would not be in the optimistic position in which we find ourselves without […] that your involvement […] and neither would we be able to make suggestions

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Sorry for the blogging hiatus; I spent Thursday on a train up to Stoke-on-Trent and back with Ed Balls (who said political journalism wasn’t glamorous?): The results of the interview are here (Balls warns King on Bank credibility) and here (Remember voters’ aspirations, warns Balls).

One of the best lines that ended up on the cutting floor was the shadow chancellor denying that he was a bully:

“If I was five foot one people wouldn’t call me a bruiser, unfortunately in politics if you are male and a bit heavy, a broad frame, you always get a bit of that,” he says. “I’m the opposite of somebody who throws things around the room.”

In the meantime I’ve been struck by two comments about the economy, both by senior members of the cabinet, in the last two days.

The first is Ken Clarke in today’s FT, admitting that he is “very pessimistic” about the short term economic outlook – although naturally the justice secretary believes in the deficit reduction programme.

I’m very pessimistic aobut the immediate outlook for the economy. I think we are going to be bouncing along for a bit…I am not expecting a quick bounce back.”

That looks like a deviation from the official script. Read more

David Cameron actually made three policy concessions this week. At this rate, he may as well install a revolving door at No 10. It’s another Lib Dem victory of sorts, but they’re not really crowing about it.

Buried in the documentation for the Universal Credit is a softening of the plan to cut payments for disabled people in care homes. Read more

This is definitely the most curious policy included in the Universal Credit reforms. Why does IDS want to meddle with the mighty army of stay-at-home mums?

Under his plan, if mothers with working partners want to claim Universal Credit, they will face the same jobseeking regime applying to single-mothers. With a few important caveats, they’ll effectively be regarded as someone claiming Jobseekers Allowance.

This is a big change. It will mean that these mums (or stay-at-home fathers) will in future have to turn up at the Jobcentre to explain how they’re planning to return to work.

Once their children are aged seven, if they don’t turn up for their “work focussed interview”, they could even have their benefit docked.

For, say, the proud wife of a postman who stays at home because it makes economic sense, turning up at the Jobcentre could be quite a unsettling experience.

What is even more peculiar is the fact that IDS will be toughening the rules and threatening sanctions, while at the same time reducing the financial incentive to work.

Around 330,000 second earners will, after these reforms, face a higher marginal deduction rate. That said, these reforms will make it easier to work fewer hours — one of many positive benefits.

But I struggle to see the advantage of extending a conditionality regime on to stay-at-home mothers in working families. This will cost money, use up the scarce time of jobcentre advisors and be unpopular in many households. What is the point? Read more

Iain Duncan Smith declared this morning that “nobody will be worse off” under Universal Credit.

That is quite a claim, particularly given 1.7m households will lose out, at least in terms of their notional entitlement to benefit.

He was referring, of course, to the protection that will be provided so no family loses in cash terms at the point of transition.

This promise is both the midwife to this dramatic reform plan, and one of the most tricky measures to implement. Read more

Here are some of the highlights from the DWP impact assessment:

1) Higher bill: The reforms in total will add £2.6bn to the welfare bill overall. There could be other “dynamic benefits” not included in the model. Read more