Monthly Archives: January 2012

Kiran Stacey

I wrote in today’s FT about how Labour’s Lords operation has helped delay or even stall several significant government bill in the upper chamber, including the health, welfare and legal aid bills.

Today, it is the welfare bill that is in question, with Labour, the Lib Dems and crossbenchers lining up to vote for a range of amendments that would change plans to impose a £26,000 cap on overall benefit payments for any one family.

As I mention in my piece, part of the reason the government has already suffered four defeats on this bill is that the opposition whipping operation, led by Lord Bassam, has been particularly effective. Labour has drummed up a core of Lib Dems and crossbenchers willing to oppose the coalition on a whole raft of measures, and is inflicting some real damage.

Now minsters will either have to make significant changes to the bill in the Commons or hope they can simply face down peers if it is going to pass in time for the Queen’s speech, which will probably be in May. 

Jim Pickard

Friday will see Mark Harper, Cabinet Office minister, unveil a consultation on a statutory register of lobbyists – with the potential for many other groups (unions, law firms etc) required to sign up. I’ve written the news story here.

More quietly, however, a major change is taking place at the House of Lords where officials are tightening up their disclosure criteria on the “register of interests”. 

Kiran Stacey

George Osborne with Jun Azumi, the Japanese finance minister

Osborne with Jun Azumi, Japanese finance minister

George Osborne has been in the far east this week – probably the best place to be when the IMF announced it would ask member countries for an extra $500bn in funding. This would probably involve another €30bn from the UK – a request that would have to be approved by parliament.

This request is tricky for the chancellor. He wants to play his role as a responsible world leader and help the Fund fight the various economic crises gripping global markets – after all, a collapse of the eurozone (for instance) would have serious implications for the UK too.

The problem is, his own MPs see this as a backdoor bailout for the eurozone. They say that as the UK is not a part of the currency bloc, it shouldn’t be forced into rescuing it when it fails. And Cameron and Osborne have both made much political capital out of not signing up to the expanded European rescue fund, the EFSF. Many Tories therefore see this as both a cop-out and hypocrisy. 

Jim Pickard

There is a Parliamentary report out today into Jack Dromey, Labour MP for Birmingham Erdington, over his failure to register payments from Unite. Dromey is of course Mr Harriet Harman.

Dromey, former deputy general secretary of Unite, was paid by the union from May 2010 to October 2010 (while an MP) and failed to register the payments or on several times declare his interest in debates. 

Kiran Stacey

Ed MilibandIt was sensible of Ed Miliband to tackle the prime minister over unemployment at prime minister’s questions today. No matter what the coalition says about falling interest rates, if people keep losing their jobs, the government’s robust position in the polls (if not quite a lead) is not going to last very long.

Miliband has tried to recreate a narrative from the 1980s: that the callous Tories don’t care about people losing their jobs. It’s not quite working yet, partially because voters still believe the government is clearing up Labour’s economic mess and partially because the 1980s are a fading memory. At one point, the Labour leader even had to explain who he meant by one reference to Lord Young, the former Tory employment minister, who is back working at Number 10. 

Jim Pickard

The FT splashed back on November 18 about the government’s new enthusiasm for a Thames estuary airport with ministers such as George Osborne taking the plans seriously for the first time.

We revealed that the proposal would be part of an interim report on aviation published this March*:

Submissions have already been made to the transport department for an aviation review, which should produce an interim report in March next year and a final report in the spring of 2013. “The concept of a Thames estuary airport forms a useful contribution to the debate and will be considered alongside all other responses,” the Department for Transport said.

The BBC is now all over the story, which has resurfaced on the front of the Daily Telegraph.

Key to the project is Steve Hilton, who shares Boris Johnson’s enthusiasm for the visionary plan to build a new airport hub in the estuary; it could either be at”Boris Island” or on the nearby Isle of Grain as suggested by Lord Foster, the architect.

We also wrote this analysis, which laid out some of the technical issues surrounding the plan. In theory the new hub would be applauded by business leaders, who are worried that Britain will run out of aviation capacity within the next two decades; Heathrow is almost full already. The coalition’s promise not to build a third runway at Heathrow is the reason why ministers are now casting around for more radical ideas.

The potential obstacles to an estuary airport include:

1] The cost: At around £50bn this is an awesome sum to be considering at a time of fiscal austerity – although it would be spread over many years.

2] Environmental issues. Would the new airport breach Britain’s future carbon pledges? Would geese pose a danger to jets by flying into engines?

3] What do you do with Heathrow? If it’s closed down BAA would require compensation estimated at £12bn. If it’s kept open then traffic to the new estuary hub could be slow at first. (This is what happened when a new Malpensa airport was built at Milan).

4] There are suggestions that Dutch or Belgian air authorities would not accept planes flying through their airspace en route to the hub.

One entirely separate obstacle which has emerged in today’s Telegraph is the hostility of the Lib Dems towards the estuary project.  It’s easy to forget but the party entered the general election with a commitment to no airport expansion at all in the south-east. And that remains their point of view. The Libs hope that HS2 could reduce future aviation demand – a theory which doesn’t really fit with the DfT’s predictions for where high-speed passengers will come from.

The environmental and cost implications mean we don’t the estuary project is viable even in the long-term,” a senior Clegg aide tells me today. That sets up the coalition for a battle when this comes to a head; not necessarily this March but definitely in March 2013 when the final aviation report is published.

* If you’re interested in the technicalities: There was a scoping document last 

Kiran Stacey

Last week, we were told that the UK government believes the Scottish parliament does not have the legal right to hold its own referendum on independence.

Since then, debate has focused on what the legal consequences would be if Alex Salmond pushed on and held one anyway: would it be regarded as “consultative”? Would the UK government challenge it in the courts? If so, would that look like London bullying Edinburgh?

Today, Jim Wallace, the former deputy first minister and Lib Dem leader in Scotland, has intervened in that debate, using some pretty strong language to try and head off the possibility of Salmond simply going ahead and holding his own referendum. In the most striking passage, Wallace says that to do so would be not just illegal, but undemocratic: 

Jim Pickard

This won’t come to a head until the summer; but rebellion is already in the air among Lib Dem MPs over coalition plans to regionalise public sector pay. Several have told us they believe the idea is “stupid” or “unsound” and “should be resisted” because it could accentuate the north-south divide.

George Osborne has written to six pay bodies to report back by July on how the idea might work; the Tory chancellor believes it could help the economy. (The theory is that if the state offers higher wages in poorer areas then companies have a smaller pool of available talent). Tory MPs – even in the north and south-west – seem to think it’s a great idea. But the Lib Dems fear it could have the reverse effect, causing a “race to the bottom” as companies follow suit and cut their pay to match the public sector. 

Jim Pickard

I’m not entirely sure that the potential merger between PCS and Unite has been confirmed before by any senior figure from either union: until today. Mark Serwotka, head of the PCS, told us in an interview today that he wanted to deepen the “ever closer developing relationship” the pair had formed since signing a co-operation deal a year ago. He also pointed out that his union had a similar deal with Unison which had not gone so well.

There are wider political consequences. While both unions are not in formal merger talks, as Serwotka made clear, any future deal would be of great concern to the Labour party. Why? Because Unite, with about 1.5m members, is the party’s biggest donor. The PCS, with nearly 300,000 members, is a vocal critic of the party for its relatively centrist approach. 

Jim Pickard

It’s a common assumption that without Scotland the Labour party would be eternally doomed, unable to ever get another majority in a Disunited Kingdom.

As Peter Oborne wrote yesterday in an otherwise excellent Telegraph column about the union: 

Kiran Stacey

After four days of heated argument about the complex process of holding a referendum on Scottish independence, unionists are finally starting to get the debate they have been wanting to have for a while: about the substance of what independence means.

At first, Westminster politicians seemed to have been outmanoeuvred (again) by Alex Salmond, getting drawn into a row over the timing of a referendum and what questions would be asked – allowing the Scottish leader to depict them as interfering in Scottish politics.

Now, they are beginning to put him on the spot, asking the kinds of difficult questions they think will guarantee that the Scottish people will not vote for independence when they eventually get the chance to do so. 

Kiran Stacey

This was a dangerous PMQs for Ed Miliband. The Christmas break has not been particularly good for the Labour leader, with criticism being fired at him from his own supposed “guru”, Maurice Glasman – and a more coded warning shot from his own front bench in the form of Jim Murphy.

His relaunch on Tuesday fared little better, as Jim mentioned in his post yesterday.

Miliband’s vulnerability was made clear when, on standing up to speak, he was given a bigger cheer by the Tory benches than his own.