Monthly Archives: June 2011

Jim Pickard

John Ralfe, an independent pensions expert, is convinced that the National Union of Teachers has misled members in a fact sheet it gave them ahead of today’s strike.

The NUT insist that their wording is correct; not being a pensions guru, I can only present the two sides of the argument.

The key bit is near the top of the second page, “How much longer does the government want me to work?” The document says that older teachers will be affected: “Anyone aged 57 or less would have to work to 66 and anyone aged 42 or less to 67 (to get their teachers’ pension in full.)” Read more

Jim Pickard

I’ve spent a very long half-hour at Methodist Central Hall to soak up the “strike” vibes. There were all the usual trimmings; hand-made flags, people outside playing the drums and lots of strong rhetoric, viz, the government has a “loaded gun” to the heads of teachers et cetera.

Most interesting, however, was the thoroughly negative response to even the mention of Ed Miliband, who has sat right on the fence over today’s one-day action. Read more

Kiran Stacey

George Osborne has just announced that, for the first time since 1760, the royal household will be paid not by a set grant from the government but through a proportion (15 per cent) of the net revenue of the crown estate.

It is a change Prince Charles has been campaigning for for years, and if the crown estate has a good year, could provide a bumper pay out for the royal family. Read more

Jim Pickard

For quote of the day, few will match Boris Johnson on Today this morning as he discussed the strikes – referring to his role as the token right-winger calling for a clampdown on the unions:


It’s like some kind of Indonesian puppet theatre and I’m kept in the wings and wheeled on like some kind of ogre to say this terrifying play that old Johnson has, we’ll do it unless you shape up. People really need to start thinking seriously about it.”

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Jim Pickard

I went along to a PAC hearing the other day because Simon Fraser, permanent secretary at the Foreign Office, was being grilled on recent currency trades at the department which left it with a £150m black hole. I co-wrote the original story about this with Alex Barker, formerly of this parish.

In the course of the hearing it emerged that all government departments are ordered by the Treasury to do their currency hedging on the same day of the month: and that it is the 15thRead more

Jim Pickard

Ed Miliband left David Cameron on the ropes early on in prime minister’s questions today by probing him about the details of the NHS reorganisation.

The Labour leader pointed out that the number of NHS statutory organisations was growing from 163 to 521 – including “health and wellbeing commitees,” “national commissioning boards”, “clinical networks”, “clinical senates” and so on.

This is not the kind of language Cameron seemed to promise in opposition when he vowed to cut bureaucracy and to end top-down reorganisations of the NHS.

Miliband then pressed home the point that the government has spent £852m making NHS staff redundant, particularly on scrapping the primary care trusts. Would the government be rehiring any of those people, he asked? Read more

Elizabeth Rigby

Sajid Javid is putting forward a 10-minute rule bill next month proposing that the government legally caps the UK’s national debt.

Javid, who climbed the ranks at Deutsche Bank before joining in the Tory 2010 intake last May, wants the coalition to set net government borrowing at a certain percentage of GDP. Read more

Jim Pickard

David Cameron has just used his LGA conference speech to defend reforms to public sector pensions, arguing that his proposals are fair. He has suggested that people are being told “scare stories” about the government plans. (Here is the full transcript on the Downing St website and this is our news story).

Does he have a point?

The prime minister has claimed that there are rumours that the government is “closing defined benefit schemes and replacing them with defined contribution schemes”. He also claimed that people are being told that “we are stripping workers of the benefits they have already accumulated.”

This is not true, he points out. Not only will workers still have defined benefit schemes. They will also maintain the “final salary link” for benefits already accrued. “Any suggestion otherwise is completely untrue“.

But who is actually saying this? Anyone? Or has the PM created a paper tiger?

The scare stories are the fault of the unions, Cameron appears to suggest, without actually naming them: “they are giving really bad advice to teachers, nurses and the police officers who are wondering whether to continue with their pension.”

UPDATE: Apparently the PM is not blaming the unions per se, his aides claim. Instead this emanated from the fact that Cabinet Office has spoken to public sector staff, who say they are worried about losing such benefits. “We’re very keen to get the message across out there about what we’re really doing,” says one Downing St aide.

In fact the unions are angry about the following changes, which are not yet set in stone but are proposed by the government – as my colleague Brian Groom recently explained:

* Higher contributions to pensions that will have to be made, typically rising by 3.2 per Read more

Jim Pickard

John Denham will tomorrow criticise the government for overlooking Britain’s last remaining train factory – Bombardier in Derby - when awarding one of the country’s largest-ever train contracts.

The order for 1,200 Thameslink trains, likely to be worth over £3bn, instead went to Siemens on June 15. The German company will only create a few hundred UK jobs as a result.

The shadow business secretary will tell a Progress event that the decision not to award the Thameslink contract to Bombardier, which employs 3,000 in Derby, was “a huge blow to the UK rail industry”. Read more

Jim Pickard

This morning we reported that the £1bn Sino-UK trade package was a bit short of detail other than a £1m deal to sell breeding pigs to the Chinese. Downing St has since updated its announcement to include a few other deals beyond the porcine arrangement.

They include an agreement to let Unilever expand its manufacturing in China, as well as clearance for a Diageo takeover of a Chinese company.

Here is their announcement:

* An agreement between BG Group and Bank of China to access a new credit facility of up to $1.5 billion that will allow the group to expand their business in China. Read more

Jim Pickard

Downing Street have announced £1bn of trade deals between China and the UK today. Although this figure is somewhat caveated:

Advancing opportunities for Government and business, delivering concrete outcomes to help boost UK growth through a package of and deals, likely to be worth more than £1 billion.

 Read more

Jim Pickard

David Cameron said he was “devastated” after the chairman of his local constituency was found dead in a portable toilet in a backstage area at the Glastonbury festival.

Police said they did not yet know the cause of death of Christopher Shale, a 56-year old businessman, although friends said there was a history of heart problems in his family.

Michael Eavis, the founder of Glastonbury, earlier referred to a “suicide situation” in the early hours of Sunday morning. But a police source later said that the ongoing investigation had not found any suggestion of suicide.

Barry Norton, a councillor in West Oxfordshire, said the death had deprived the party of “a really great man”.

“He was absolutely in good health, we understand that his death has been as the result of a heart attack, that is the information we have,” he told Sky News. “There is a history of that in his family and anything to the contrary, at the moment, is totally scurrilous.”

The death came just hours after Mr Shale was quoted, in a Conservative strategy Read more

Jim Pickard

I’m told that the cabinet will meet in mid-July to make a final decision on whether to proceed with a badger cull in the south-west of England. For Caroline Spelman that could mark her third PR nightmare since Christmas.

First there was Forestry Commission sell-off, which David Cameron ruthlessly abandoned after an uprising by the general public. Read more

Jim Pickard

Michael Gove told the Andrew Marr Show this morning that he wouldn’t comment on potential action by the government against the unions, saying he had no wish to “ratchet up the rhetoric” against the movement. Not least when negotiations are still going on.

That comment sits slightly uneasily against his letter to schools calling on them to keep schools open by using the “wider school community”, ie parents. Read more

Jim Pickard

The FT is this morning running an interview I did earlier in the week with Philip Hammond, the transport secretary.

There’s a news story where he reveals his plan to sell the completed HS2 track to infrastructure funds within a year of it being built. This is likely to be a lease similar to the HS1 (London to Channel Tunnel) 30-year concession sold last year. The secretary of state also predicts that the new line could force down prices on the West Coast Mainline as its operator is forced to compete. Read more

From the FT’s Tech Hub:

A hacking group – no, not that one or the other one, a new one – has published scores of names and phone numbers that it says came from former UK prime minister Tony Blair’s address book Read more

Jim Pickard

Allegra Stratton at the Guardian set the ball rolling yesterday on whether the Lib Dems are planning a new type of mansion tax – albeit under a different name.
The proposal is being kicked around by senior Lib Dem figures (such as Richard Reeves, policy wonk to Nick Clegg) but is meeting resistance from Tories. It is also unpopular with other Lib Dems such as David Laws (who is playing a key role in co-writing their “Tax 2020″ document). That’s right: Laws does not want it.
Wealthy FT readers in big houses may rest easy for a while longer.
Here’s our news take on it:
Owners of £1m-plus homes would have to pay capital gains tax when they sell up under attempts by senior Liberal Democrats to revive their “mansion tax” proposals.
At present CGT is paid at 28 per cent when a second home is sold but main residences are exempt from the levy.
But Lib Dems are considering whether sellers could be forced to pay the duty on any profits beyond a £1m tax-free threshold – a policy which could bring in billions for the exchequer.
Treasury officials have had discussions with experts in the property industry to find out how many people live in multi-million pound homes and where they are located.
However, the proposals are likely to meet fierce resistance from Tory ministers given that many Conservative voters live in homes worth more than £1m.
Vince Cable, as opposition Treasury spokesman, was forced to revise his original “mansion tax” proposal – an annual levy on big homes – after the Lib Dems realised that it would harm many of their suburban voters in south-west London.
The business secretary’s attempts to revive the mansion tax as a device to

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Jim Pickard

The Times splashed this morning with the trend of declining union membership, focusing on the drop in Unite’s membership – a fall of 262,740 members between 2007 and 2010.

What they don’t point out is that the biggest drop occurred in one single year when Unite bizarrely lost 310,000 members at the stroke of the pen, as FT Westminster revealed in July 2009. Officials admitted that many of these people had stopped paying their fees years before, or had even passed away in the meanwhile. Read more

Jim Pickard

On Wednesday David Cameron told PMQs that his message for military chiefs – concerned about mission stretch in Libya – “you do the fighting and I’ll do the talking.”

A thoughtful reader* has written to the FT to point out the similarity to the Tennyson poem, Charge of the Light Brigade. Read more

Jim Pickard

We have done more coverage of Clegg’s proposed bank shares giveaway to 46m members of the public in tonight’s FT. The City is quite cautious about whether the whole idea is practical.

But there could be a fees bonanza if it goes ahead, with administration costs estimated at about £200m, according to some experts. Read more