There are two rules for politicians during a period of economic uncertainty. One is not to claim to have seen “green shoots” too early; the mistake made by Norman Lamont (and arguably by Shriti Vadera). The other is not to talk the economy down even further.
Ken Clarke, the justice secretary, today referred to the strong possibility of “a prolonged recession, with a long period of youth unemployment.” He may be correct, of course, but the comment did not show the most deft of political touches. Read more
Nick Clegg with Herman Van Rompuy
Nick Clegg’s advisers like to call him the “Heineken” of British politics, because he reaches the parts of Europe that other British politicians can’t reach. Clegg, who trained at the College of Europe, learned at the feet of Leon Brittan, the famously pro-European Tory, became an MEP and speaks to leaders across Europe in their own languages, is ideally placed to try and win back some goodwill for the UK among European leaders.
And that is what he will try and do over the next few weeks and months. He told cabinet this morning that he now wants to focus on how to re-engage with Europe after David Cameron’s treaty veto, which has clearly angered many on the continent. Vince Cable specifically raised the issue of business fears about being cut adrift.
Tomorrow, the Lib Dem leader will host a series of meetings with business leaders to try to soothe any worries they have on the UK becoming isolated from the rest of Europe, and to ask their views on Europe more generally. He will also attend a business breakfast arranged by Business for New Europe, a pro-EU group of corporate representatives. Read more
One of the key achievements of Britain’s veto in Brussels on Thursday night was supposed to have been that not allowing the full 27 members of the EU to sign a treaty would have stopped the 26 countries willing to go ahead using the EU’s institutions to do so.
The main effect of that would be to stop the European Commission scrutinising other countries’ budgets, and the Euroopean Court of Justice implementing the Commission’s decisions. This would make it much harder for Brussels to interfere in the fiscal plans of member states. Read more
Douglas Alexander has written a piece for the New Statesman trying to prise open the cracks in the coalition over Europe.
In the run up to this afternoon’s debate on the EU, during which Ed Miliband is expected to paint Cameron as isolated both at home and abroad, the shadow foreign secretary has invited the Lib Dems to work with Labour to get the UK back into the heart of Europe.
The roots of what happened on the night of Thursday 8 December lie deep in Cameron’s failure to modernise the Tory party. Just because he puts party interest before the national interest, there is no reason others should do the same. That is why I make a genuine offer to Liberal Democrats to work with us to try to get a better outcome for Britain, between now and when this agreement is likely to be finally tied down in March. Work can and should start immediately both to win back friends and allies and to consider what rules and procedures can avoid Britain’s further marginalisation.
One of the most interesting lines to come out from Vince Cable’s statement today on the Green Investment Bank is the sheer number of cities vying to host the new entity, which will have £3bn of capital to invest in renewables.
We already knew about Edinburgh, Leeds and Bristol. The business department has now put out a much longer list today, made up of: Read more
Ed Balls has given an interview this morning to the FT where he accuses European leaders of “catastrophic failure of leadership“, warning that the debate over Britain’s isolation should not obscure the wider danger to the eurozone.
This is politically significant as it implies that the shadow chancellor is aware of the fact that the British public rather enjoys the sight of the prime minister “standing up” to Brussels. A poll by Populus for the Times this morning suggested that 14 per cent of the public disagree with Cameron’s stance while 57 per cent agree.
Thus Balls’ focus more on the fact that the eurozone crisis has not been tackled; for example the summit has not yet addressed the role of the EC in heading off the Read more
Nicolas Sarkozy avoids shaking David Cameron's hand
So Britain has isolated itself in Europe by refusing to sign up to a deal to save the eurozone because other countries refused to give the UK specific safeguards to protect the single market and the City of London. Tory backbenchers are delighted, but what does the pro-European Lib Dem half of the coalition make of it?
Anyone expecting a massive bust up at the heart of the coalition will have been dismayed to read Nick Clegg’s statement this morning. The deputy prime minister said:
The demands Britain made for safeguards, on which the Coalition Government was united, were modest and reasonable. They were safeguards for the single market, not just the UK.
What we sought to ensure was to maintain a level playing field in financial services and the single market as a whole. This would have retained the UK’s ability to take tougher, not looser, regulatory action to sort out our banking system.
Sitting in the Commons chamber for business questions today, I was startled to hear an apparently frank admission from Vince Cable to a question from Gordon Banks, the shadow business minister.
Other ministers (including the chancellor) have insisted that Project Merlin, the deal between the government and the banks to increase gross lending to businesses, has been a success. But Cable apparently disagreed.
Here is the full exchange: Read more
The FT has a big analysis piece today on how hedge funds became some of the Tories’ biggest donors. The graphic below displays how important the industry has become for filling the party coffers, and how quickly that has happened. If you want to analyse the full graphic, along with details of who the donors are, follow this link (behind the paywall).
A couple of interesting points to note from the analysis too: Read more
Nick Clegg is to sound a critical note against his Tory cabinet colleagues by warning in a speech that the debate about cuts should not become “polarised” between the public sector and the private sector.
The deputy prime minister’s comments at 10am this morning will be seen as a riposte to those Tory ministers who are ideologically keen to see the influence of the state reduced as a result of the deficit reduction programme.
“I know that some of our public sector workers bristle when they hear ministers talk about paring back the public sector,” the Lib Dem leader will say.
“If we play into these bygone caricatures of the left and the right, if we allow our society to fracture into these camps, that is the surest way to drag the UK back to the 1980s.”
Mr Clegg will make the comments as he sets out plans for England’s largest cities to take greater autonomy over their transport systems and housing under a “dramatic shift in power”.
The deputy prime minister and cities minister Greg Clark will offer individual “city deals” to the eight main regional conurbations under which they could each have “one consolidated capital pot to direct as they see fit”.
But Mr Clegg’s speech is likely to attract attention for his defence of government workers Read more
Vince Cable will not be outflanked by George Osborne. Osborne said on Tuesday that banks needed to show restraint when paying bonuses – an unusually anti-City message for a Tory chancellor.
But Cable today has gone one further, urging investors not to focus only on banks, but to make sure that no big company allows its executives to be paid too much. We will have more on this in tomorrow’s FT, but here is the letter he has sent to top investors and FTSE100 chairmen: Read more
The prime minister was asked in the Commons if he would show some “bulldog spirit” at the weekend EU negotiations. “That’s exactly what I will do,” he insisted.
Yet however the talks are resolved, Cameron seems unlikely to emerge clutching what many of his backbenchers would like to see: the repatriation of various powers such as human rights legislation and employment laws.
That is likely to stoke the internal pressures which were visible in the October Commons debate over an EU referendum, when 81 Tory backbenchers rebelled against the leadership.
Ed Miliband skewered the prime minister over the issue during PMQs, reminding the House that Cameron had promised the repatriation of powers during that debate: “Six weeks ago he was promising his backbenchers a handbagging for Europe, now he’s reduced to handwringing.”
The line is sensitive for the Tory leader as it reflects what many of his rank and file believe. Asked by backbencher Steve Baker whether Britain should simply “leave Europe” – Read more