Monthly Archives: March 2012

Kiran Stacey

One of the biggest announcements from the Budget was one that may not happen, and if it does, is unlikely to be implemented for several years. George Osborne told parliament:

If in the next spending review we maintain the same rate of reductions in departmental spending as we have done in this review, we would need to make savings in welfare of £10bn by 2016.

 

Kiran Stacey

We reported in this morning’s FT that wealthy Conservative backers are increasingly anxious about giving money to the party, worried they will end up in the headlines when the next donor scandal breaks.

In the last six months, these donors have been exposed to the media spotlight twice: first in the controversy over who was paying for Adam Werritty, Liam Fox’s unofficial adviser, and now in the scandal prompted by allegations that prospective donors were offered access to Number 10 in return for cash.

One prominent backer told the FT he was adopting a “hedgehog” policy – retreating behind his spines rather than giving more money and exposing himself to this level of scrutiny. He said: 

The government has given in to pressure today for more disclosure of David Cameron’s meetings with wealthy Conservative party donors amid the “cash-for-access” storm. 

Helen Warrell

The two police chiefs who attracted so much controversy earlier this month with a plan to open up their forces to a £1.5bn private sector contract were summoned to the home affairs committee yesterday to explain their ideas to MPs. But anyone hoping this would help to clarify which elements of policing might be carried out by private staff and which would remain the remit of police officers and their civilian officials would have been sorely disappointed.

Confronting the committee, Chris Sims, chief constable of West Midlands police, and Lynne Owens, chief constable of Surrey, were keen to distance themselves from the idea that they were privatising the police force. Ms Owens said:

We will not give our crown jewels to a private sector company.

Mr Sims even denied that the procurement process was an outsourcing project – claiming that while Cleveland, Lincolnshire, Avon & Somerset, Cheshire and Northamptonshire police forces had all entered into contracts which effectively hand over services to a company, this was not the model West Midlands and Surrey would follow. 

 

Welcome to the FT’s rolling coverage of the UK Budget.

By Kiran Stacey at Westminster and Gordon Smith, Michael Hunter, Darren Dodd, Tom Burgis and Ben Fenton on the FT news desk.

All times are GMT.

16.45 So, that is about it for the live blog. The main FT coverage can be found in the usual place.

We thought we would leave you with a small image of what life in the Financial Times London newsroom is like on Budget Day. Below, you can see Chris Giles, economics editor, briefing the rest of us on what it all means. This picture was taken less than two minutes after the Chancellor sat down at 13.29.

So, from the FT live news desk, enjoy digesting the ramifications of the 2012 Budget, whether you are an outraged pensioner, a relieved 1-percenter or the Chancellor of the Exchequer. FT Live Blogs will be back just as soon as something big enough breaks. Goodnight.

Chris Giles briefs the Budget team on what it all means. He is the figure in a light grey shirt immediately below the left-hand TV image of George Osborne.
Chris Giles briefs the Budget team on what it all means. Chris is the figure in a light grey shirt immediately below the left-hand TV image of George Osborne.

 

16.25 John Authers and Martin Wolf parse the 2012 Budget

16.06 The top trending phrase on Twitter in the UK at present is #grannytax.

And one of the main users of Twitter, Lord Prescott, has his say on the Budget.

[blackbirdpie url="https://twitter.com/#!/johnprescott/status/182489902074703875"]

16.01 The FT’s Christopher Cook tweets:

[blackbirdpie url="https://twitter.com/#!/xtophercook/status/182490962516393984"]

15.57 This was a budget, opines the FT’s Philip Stephens
that was in part “about George Osborne’s ambitions to establish
himself as David Cameron’s heir apparent”.

 

The chancellor talked about a Budget to put Britain back to work, but

the measure most likely to stick in the public mind was the cut from

50 per cent to 45 per cent in the top rate of income tax. It marked a

tilt to the tax-cutting right that he hopes will build his support on

the Thatcherite wing of the Tory party.

 

 

15.52 Podcast time.

 

15.48 Our colleagues over at FT Alphaville have been going through the
Budget documents and have found the official issuance plans for the
Osborne super-long bond.
The question, it seems, is not how long the bond should be, but how
big…

 

 

Kiran Stacey

The quad - David Cameron, Danny Alexander, George Osborne, Nick Clegg

Tim Farron, the Lib Dem president, told me yesterday:

I suspect that we are going to see a Budget which has got more Liberal Democrat stuff in it than Tory. The amount of money being returned to individuals will go overwhelmingly to middle and lower income earners.

He’s right, to the extent that by far the biggest spending measure announced by George Osborne tomorrow will be the increase in the personal tax allowance to around £9,000 – a move likely to cost around £3.3bn. 

By Andrew Hill

I’m getting fed up with the UK coalition government’s ritual invocation of Victorian values or visions whenever it wishes to urge a put-upon populace to new heights.

In David Cameron’s latest speech, the prime minister calls on the spirits of Brunel, Telford and Stephenson, to inspire new infrastructure investment in the UK, from nuclear energy to new towns. He accompanies nostalgia for the Victorian era with the inevitable negative comparison with other nations’ superior efforts: the French, Dutch and Swiss have cheaper, less crowded railways than the British; the South Koreans have faster broadband; the Indians have newer nuclear power stations; and the Chinese have bigger airports.

In his speech on Monday, Mr Cameron blamed a failure by governments to break down “vested interests and bureaucratic hurdles” to progress:

 

Kiran Stacey

The Lib Dems have made raising the personal tax allowance (what you can get paid without paying income tax) one of their flagship policies. So when George Osborne says at the Budget in two days’ time that he will raise that allowance beyond inflation, it should be a major victory for the junior coalition party.

It is interesting therefore, to take note of a piece of research published today by CentreForum, a think tank with close ties to the Lib Dems, showing that raising the tax threshold* to £10,000 (the eventual aim), would not be especially progressive. It fares especially badly when compared to an alternative proposal, to lift tax credits instead, which would cost the same amount of money.

The think tank produced the following table detailing who benefits from either move, which paints the difference in stark terms: 

Kiran Stacey

The most interesting thing about today’s session of prime minister’s questions was not the contest between Nick Clegg and Harriet Harman (although Harman was, as always, an impressive stand-in, and Clegg did better than he previously has), but the reaction of Tory backbenchers, who were given their chance to put the deputy PM on the spot.

Clegg always struggles a bit in PMQs, partly through no fault of his own – his parliamentary party is simply not big enough to give him loud support against the heckles of Labour and the silence of many of the Tories who enjoy seeing him squirm.

But things were even worse today. Not only did his coalition colleagues fail to lend him their vocal support, but several of them openly tried to attack or embarrass him. 

Kiran Stacey

They call it Godwin’s Law: as an online discussion grows longer, the probability of a comparison involving Nazis or Hitler approaches one. And before the internet, it was known as “reductio ad Hitlerum” – trying to beat an opponent in a debate by comparing them to Hitler.

Perhaps now we’ll have to call it Hemming’s Law, after the campaign against an elected mayor in Birmingham – led by Lib Dem MP John Hemming - produced an astonishing leaflet entitled “Brummies have always fought back against dictators – don’t elect one”. These words are printed against a picture showing a scene from the Blitz.

In the leaflet, according to the report by the Birmingham Post’s Jon Walker, the No Campaign produces a list of reasons to vote against having an elected mayor. They include: 

Kiran Stacey

Ed Miliband and Alistair DarlingI revealed in this morning’s FT that three former political heavyweights will take the lead roles in the fight against Scottish independence. Each is surprising in their own way:

For the Tories, David McLetchie. But what does choosing a former Scottish leader say about Ruth Davidson, the current one?

For the Lib Dems, Charles Kennedy. Having maintained a low profile since the beginning of the coalition (which he voted against joining), it will be a pleasant surprise to many to see the popular former leader return to frontline politics.

But it is the third one, Alistair Darling, who will be Labour’s leading figure in the campaign, that is most surprising. Whereas the other two do not have prominent Westminster roles, Darling only stopped being chancellor two years ago, and has even been talked of as a possible party leader to usurp Ed Miliband. 

Kiran Stacey

Last night’s comments from Leon Panatta, the US defence secretary, that the US was considering equipping Syrian rebels, triggered interest on this side of the Atlantic too.

Panetta insisted, as has the UK, that taking military action against Syria without agreement from the UN would be a “mistake”, but he acknowledged the Obama administration was considering providing communications equipment and other “non-lethal” support – something that has not previously been given.

So when William Hague was quizzed by the foreign affairs select committee this morning, it was the perfect chance for the MPs on that committee to ask if Britain would so the same. We have always ruled out arming the rebels – Philip Hammond repeated the view today that to do so would be illegal – but could we provide any “non-lethal” equipment?

Hague revealed that the UK is actually already doing so – to an extent: