Daily Archives: June 17, 2011

Elizabeth Rigby

Lord Strathclyde may be the one who has been charged by David Cameron to deliver House of Lords reform, but the peer is under no illusion about the scale of the task as he grapples with resistance from peers across the political spectrum in the House.

The Tory leader in the Lords, in an interview with the FT published tomorrow (Saturday), reassures his Lib Dem colleagues that he backs an elected house. But his mood music will give reformers little cause for celebration. The junior coalition members may have hoped for a spirited backing for reforms from Lord Strathclyde, instead the peer painted a more nuanced picture — proffering up a number of pitfalls that threaten to derail the project. Read more >>

Jim Pickard

Within the DfT there is likely to be relief today at the relatively muted coverage of yesterday’s decision to give a multi-billion pound train contract – for Thameslink – to Siemens. Yesterday’s decision raises questions about the future of Bombardier’s factory in Derby, which was the other rival bidder. Unite, which is the union representing many of the workers at the plant (which employs 3,000) calls the decision a “hammer blow“.

Bear in mind that David Cameron took his regional cabinet to Derby in March in an attempt to emphasise his commitment to manufacturing; Nick Clegg visited Rolls-Royce and George Osborne posed at the Toyota factory. Philip Hammond’s visit to Bombardier was not publicised given the commercial sensitivities. Read more >>

Jim Pickard

Vince Cable said last week that now was a time for calm heads amid increasing tensions between the government and the unions. Negotiations over public sector pensions are at a very delicate stage.

So how come Danny Alexander seems to have provoked the wrath of the brothers this morning? The GMB has called his comments a “show-stopper”. Unite has called it “gunboat diplomacy”.

Even mild-mannered Brendan Barber of the TUC has stepped in angrily, saying:

“At such a critical time in complex negotiations this is a deeply inflammatory public intervention with a clumsy mix of announcements apparently designed to pre-empt the talks, coupled with crude threats that even worse terms might be imposed if unions refuse to acquiesce to this assault on their pensions.”

It’s worth examining what Alexander’s comments. He will promise in a speech this afternoon (at the IPPR) that the lowest-paid workers (under £15k) will be protected from the worst of the rise in pension contributions, as the FT reported this morning.

Another half a million workers will have contribution increases limited to 1.5 per centage points. And overall there will be a cap of 5 percentage points, meaning the average public sector worker will be paying an extra 3 percentage points of their salary towards their pension.

The broad numbers shouldn’t have been a surprise; and the mitigation for low-income workers ought to be welcomed by the unions.

The reason for their anger is the perception that Alexander has presented a fait

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