Monthly Archives: March 2011

Jim Pickard

Oliver Letwin, Cabinet Office minister, told a committee of MPs this afternoon that Britain was facing an “immediate national crisis in the form of less growth and jobs than we needed“.

This was why ministers had focused so hard on economic growth in the run-up to the Budget, Mr Letwin told the environmental audit committee. Read more

Nicholas Timmins

“We the willing, led by the unknowing, are doing the impossible for the ungrateful.” Well, not quite.

But the quote attributed to Mother Teresa might be the new slogan for Whitehall civil servants, where, the Institute for Government has just noted, there has been a spectacular turnover at the top. Read more

Jim Pickard

Network Rail was structured as a private company (to keep debts off the state balance sheet) and likes to pay its senior staff private sector-style remuneration.

Others point out that the track operator is owned by the taxpayer and receives a huge annual subsidy from the government. (And its £25.6bn of debt is guaranteed by the government). As such, its pay structure ought to be of interest to the public.

For the current year senior executives are not taking an annual bonus, after the previous year’s £2m-plus bonanza was heavily criticised by Philip Hammond, transport secretary. Read more

Jim Pickard

The story broke late last night that Moussa Koussa, Libya’s foreign minister, had defected from the regime and flown to Britain via Tunisia. Here is the story from our front page this morning.

At this morning’s Downing Street press briefing there was only one story in town. Here are a few nuggets of new information about Koussa:

1] He has brought (at least some of) his family with him. Koussa’s son gave an interview to the BBC’s Arabic channel last night, although this wasn’t immediately shared with the rest of the corporation – I’m told – which is why we’re only now learning about it. Downing St would not say whether Koussa’s entire family has defected with him but you’d imagine they have.

2] He is in an unidentified “secure location” somewhere in the UK. We are not being told if he has applied for asylum or for a visa.

3] “Moussa Koussa will not, is not being offered any immunity from British or international justice”, said the spokesman. I asked whether his eventual sentence – if he were to be found guilty of any crimes – would be mitigated for any co-operation with the western powers. There wasn’t a straight answer. Instead the spokesman merely replied that there was a UN resolution in place (1970) governing a prosecution of Gaddafi over in relation to attacks on unarmed civilians in February.

4] David Cameron signed off the decision to allow Koussa into the country.

5] Koussa has been communicating with the British government throughout the recent military action.

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Jim Pickard

When I interviewed David Miliband last summer and asked him what his philosophy was he was able to sum it up in a sentence. The reply, as I recall it, was succinct: “Opportunities for the many not the few.”

Perhaps he had learned from the day that Tony Blair was asked the same question and couldn’t come up with a reply. Read more

Jim Pickard

Last time Arnie was in town (last October) Downing St made a few groan-worthy jokes about how he would help “terminate” the deficit. He promised: “I’ll be back.”

True to his word, the former governor of California returned today, attending a gathering of the Tory backbench 1922 committee. The appearance conjures up the surreal vision of grand Conservative backbenchers mingling with the star of Terminator, Conan the Barbarian and, er, Jingle all the Way. Nick Watt at the Guardian has tweeted that David Cameron unveiled the muscular movie star as his “secret weapon” just before the meeting this afternoon in a Commons committee room. Arnie told Watt: “It was very good to pump them up, to tell them they’re doing a great job on Libya.” Read more

Jim Pickard

When the new chair of the BBC, Chris Patten, admitted he was not a fan of TV soap operas it caused a mild ripple. His comments had been somewhat misquoted to suggest he didn’t watch telly at all. In fact he said: “I take slight exception to the argument that I hardly watch television, it is true you don’t find me in front of Eastenders.”

But what to make of Jeremy Hunt admitting today that he hasn’t borrowed a library book for a decade? I was at the culture committee this morning* but slipped out just before Tom Watson asked Hunt when he last borrowed a book from a library. The answer: “Certainly not in the last decade.” Read more

Jim Pickard

As news emerges of Ed Miliband’s impending nuptials, FT Westminster has obtained a secret copy of his draft speech:

“I’m so sorry that David cannot be here today, having been called away at short notice to a conference in Patagonia. David, I love you so much as a brother. Read more

Jim Pickard

When Colonel Gaddafi accused the eastern rebels of Al-Qaeda links there was a presumption that this was merely propaganda from the Libyan dictator.

Now, however, a Nato US commander has suggested that intelligence reports indicate a potential “flicker” of al-Qaeda within the resistance. James Stavridis, Nato’s supreme allied commander for Europe, was speaking during Senate testimony today. Here is the relevant transcript:

“We have seen flickers in the intelligence* of potential Al Qaida, Hezbollah. We’ve seen different things. But at this point I don’t have detail sufficient to say that — that there’s a significant Al Qaida presence or any other terrorist presence in and among these folks. We’ll continue to look at that very closely. It’s part of doing due diligence as we move forward on any kind of relationship.”

The Conservative chair, Baroness Warsi, was asked about this on Sky today; her reply wasn’t exactly reassuring. To quote Politicshome.com:

Baroness Warsi responded to reports that there are “flickers” of Al-Qaeda in the Libyan opposition by saying it was “very concerning” but she is confident that the Interim National Council’s “vision of Libya” is not a “post-Gaddafi Libya that includes Al-Qaeda”. “That is the first I’m hearing

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Jim Pickard

It’s too early to know how the May 5 local elections will pan out – and AV may get the bigger headlines – but the omens are promising for Labour.

I revealed this morning that Labour is fielding candidates for at least 67 per cent of seats, up from just 54 per cent the last time these English seats were contested – in 2007. Read more

Jim Pickard

The wisdom of ending the 50p upper tax rate half-way through this Parliament is open to doubt. If unemployment is still rising and benefits being pruned, a tax cut for the rich would send out a curious signal to the public.

Yet there is no doubt now that this is what the coalition intends, however, given David Laws writing last week in the FT that it should be done by 2013 and Nick Clegg telling us today that it would be done when people on lower middle incomes are “breathing more easily“.

How this will be done seems likely to be a combination of a crackdown on tax avoidance on the purchase of large houses (announced in the budget) and fiddling with council tax. It won’t be a mansion tax – according to Clegg – despite claims in some newspapers this morning. Read more

Jim Pickard

The coalition’s promise to be the “greenest government ever” is now rather under strain after environmental groups reacted with hostility to Wednesday’s Budget – given that it provided tax relief for motorists and air passengers.

I was surprised that George Osborne, the chancellor, repeated his regular claim that the government would raise the proportion of green taxes on individuals.

Yet this is still a realistic ambition, according to the Institute of Fiscal Studies in its Budget analysis yesterday.

Having said that, the IFS said that while the target was “still on course”, the Budget had put progress back by cutting fuel duty by the equivalent of £2bn a year.

Green groups, which welcomed the commitment of £3bn of capital towards the Green Investment Bank, were disappointed that the

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Jim Pickard

The catchphrase “I agree with Nick” became something of a joke after the pre-election TV debates a year ago, as David Cameron and Gordon Brown both vied to sound collegiate.

A close examination of Monday’s Libya debate on Hansard shows how Cameron uses courtesy as a Commons tool to win around MPs to his point of view; impressively in this case. Notice how he uses the phrase “I agree” – or variations thereof – to appear statesmanlike again and again. It is hard to imagine Gordon Brown being quite so smooth. Read more

Jim Pickard

The chancellor’s autopilot is locked to Plan A – Philip Stephens, FT

A little light at the end of the tunnel – David Laws, FT Read more

Jim Pickard

Today’s Budget did not include many surprises beyond the ones we flagged up in our FT Westminster checklist. They include a plethora of “pro-business measures” which Vince Cable tells us amount to “small changes culminating in big differences“.

On the fiscal front, looking at the crucial “scorecard” in the Red Book (pages 42-46) you can see that many of the changes are relatively small in financial terms.

They are dwarfed by the following changes – for this year alone – which were already in the pipeline from decisions made last year or earlier.

Money already coming into the Exchequer: NICs is going up for employees (£3.5bn) and for employers (£4.6bn), pensions tax relief is being restricted (£1.2bn) and benefits and tax Read more

Chancellor’s red boxThe FT’s Westminster blog is running live commentary on the Budget. Join us here from 12.30pm, London time. This post will update every few minutes, although it will take longer on mobile devices.  Read more

Jim Pickard

The fog is lifting – and the shape of tomorrow’s Budget is becoming more clear.

My expectation is that this will not be a time for huge giveaways or takeaways given the extraordinary spending review we had last October. (Here is a reminder of the upcoming tax and benefit changes, with 16 alone in April – as illustrated by our Austerity Calendar).

Leaving aside the inevitable surprises, here is what we already know – or expect – in the showpiece event.

UPDATE on Wednesday morning:

i] £250m for housebuilding. The government will replace its old Homebuy Direct (£275m) – which effectively ended last autumn – with a new Firstbuy Direct (£250m) which will help 10,000 first-time-buyers. (The old scheme also helped 10,000 first-time buyers.). The housebuilders are delighted but others may simply see this as filling a vacuum in the shared-equity market.

ii] Rumours on corporation tax. The government is due to cut the rate from 28 per cent to 27 per cent next month (as part of a plan to lower the rate to 24 per cent by the end of Parliament) but could go further – or signal its intention to go faster.

iii] George Osborne will announce a further £600 rise in the tax threshold from April 2012 to £8.045 – on top of the £1,ooo rise taking effect next month. Bear in mind, however, that this threshold should have risen by inflation (4.4 per cent) anyway.

1] George Osborne will signal his medium-term intent to merge National Insurance and income tax. The idea is to convince the British public that they pay too much tax – preparing the way for a more low-tax future.

2] Fuel duty escalator. The chancellor is set to reduce or cancel the 5p a litre rise. But a “fuel duty stabiliser” – being considered by the Treasury – seems unlikely after being criticised by the OBR.

3] Aviation tax:

a] The government has cancelled plans to shift aviation duty from a per passenger to a per plane duty which would have stopped half-empty planes paying less tax.  Officials claimed that the change would have been thwarted by the Chicago Convention from 1944.

b] Air passenger duty will be frozen, according to reports – instead of being raised in line with inflation.

c] Lear Jet levy – passengers in private jets will pay duty for the first time in a small but symbolic hit on the rich.

4] Employment tribunals. Could change rules so that staff at SMEs must work at a company for two years – up from one – to be eligible.There are also plans to charge for visits.

5] More support for apprenticeships, including 100,000 work placements.

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Jim Pickard

Andy Coulson has set himself up as an independent freelance consultant offering communications advice and has just won approval for his first client, a global conference for young future world leaders.

Mr Coulson, former director of communications at 10 Downing Street (pictured back left) resigned in January after the furore caused by allegations of phone hacking at the News of the World, which he previously edited. He has always denied knowledge of hacking under his watch, although he resigned as editor in 2007 when one of his journalists and a private detective were jailed for intercepting voicemails.

His new role was confirmed by Kate Robertson, the co-founder of “One Young World“, who is also UK group chairman of Euro RSCG Worldwide, part of the French marketing group Havas.

Ms Robertson told me she met the former spin-doctor after the Conservatives hired her company in 2007 ahead of the “election that never was”.

She said that Mr Coulson would only be working on a paid ad hoc basis for One Young World and not Read more

Jim Pickard

So far there has been a solid display of cross-party unity over the military action in Libya, designed to save the lives of rebels in the east of the north African country. The Labour leadership is firmly behind the coalition on its swift action in maintaining a no-fly zone and protecting Libyan citizens.

But this afternoon’s ongoing debate - it began at 3.30pm and will last six hours - has shown that the consensus is not quite as firm as it might appear at first glance. Instead, having talked to MPs in private, and having watched the first few hours of the debate, I would say the overwhelming feeling is one of pride at the initial intervention but unease about how events will now pan out.

Concerns are shared among MPs of all parties, under these categories:

1] End game. There is concern about the lack of an exit strategy for the Libyan intervention. Does it end with an uprising that extinguishes the Gaddafi regime? Could the country be split into west and east? Could the allies pull out before either side wins? Could this be another Vietnam/Iraq? How does the alliance attack Gaddafi’s troops and tanks – from the air – if they enter suburbs and urban areas. As Dennis Skinner said – in a point accepted by the prime minister – with wars it is “easier to get in than get out“. Or as Emily Thornberry asked: “What would be a successful outcome?” For now the answer of David Cameron – and of a supportive Ed Miliband – it is to uphold the UN resolution which allows the protection of Libyan citizens. That may, in reality, only be phase one.

Rory Stewart, the Tory MP, warned that when you dip your toe into such engagements you can soon become up your neck: ”I think the no-fly zone is the correct thing to do but this is a 20-30 year marathon with a very complicated region,” he said. Read more

Jim Pickard

If you are not a regular reader of the paper FT it’s worth buying it today if only for two pieces by our economics editor Chris Giles alone: A feature in which he casts a doubtful eye over the coalition’s “growth claims” and another piece examining the worst losers from the austerity programme.

Perhaps unsurprisingly, it is white-collar public sector workers who are going to be more squeezed than anyone else. Firstly about 320,000 public sector workers are set to lose their jobs over the next four years.

Secondly, those who remain in their jobs will see a real terms fall in gross pay by 6.6 per cent by 2014-15. They also face a 3 per cent rise in pension contributions and tax rises and benefit cuts of around 3 to 4 per centRead more