Monthly Archives: May 2012

Kiran Stacey

Journalists were told two days ago in the wake of the u-turns on the pasty tax and caravan tax that there would be no imminent decision on the charity tax. The position is the same, said Treasury officials – there will be some form of compromise with the charitable sector, but not a full u-turn, and it will come after a consultation during the summer.

Today we were told there would be no consultation, and that a full u-turn would take place immediately. What on earth is going on at the Treasury? Read more

Kiran Stacey

Two text message exchanges stand out from this morning’s Leveson testimony by Jeremy Hunt, both sent on the day we found out that Vince Cable had told undercover reporters he had “declared war on Murdoch”.

The first was one sent by the culture secretary to James Murdoch. Referring to the European Commission’s decision to let the News Corp’s bid for BSkyB proceed, Hunt texted Murdoch:

Congrats on Brussels. Only Ofcom to go.

 Read more

Kiran Stacey

David Cameron is fond of saying that u-turns are not a problem, they are actually a sign of strength and a government that listens to voters and is willing to change its mind.

He may be right: voters stuck with him through a spate of u-turns early in the government’s life – on selling off national forests, on GP commissioning, on sentencing. But today we have three in one day – will this now start to look like a government that doesn’t know what it’s doing?

Ken ClarkeThe key may lie in the way in which the u-turn is handled. When he announced he was abandoning plans to offer 50 per cent discounts on sentences for offenders who offer guilty pleas, Ken Clarke united the House in laughter by telling MPs:

I have done a few u-turns in my time, and they should be done with purpose and panache when you have to do them.

This is exactly the way Clarke has gone about his u-turn today on secret courtsRead more

Kiran Stacey

Vince Cable has reignited one of the questions that has dogged the coalition since it formed: when will it split up? Talking to BBC 5 Live’s John Pienaar, the business secretary said:

Everybody involved knows that before the next general election the two parties will have to establish their own separate platforms and identity.

But how that disengagement takes place, over what time period is very much an issue for the future, certainly not something we’re talking about at the moment.

The question is, what exactly does Cable mean by “disengagement”? Read more

Kiran Stacey

In the light of what we learned yesterday about Jeremy Hunt’s strong views that the News Corp bid for BSkyB should go ahead, it is interesting to read these guidelines from the Competition Commission on the standards to which their staff should be held.

The Competition Commission, was of course, one of the bodies that could have ended up examining the bid, just as Hunt was when he was asked to make a “quasi-judicial” judgement on whether it should go ahead.

The CC tells its staff (emphasis mine):

There may be instances where a CC member or staff member has or appears to have prejudged the outcome of an inquiry. Circumstances in which prejudgement might arise would include those in which an article had been written or speech made expressing strong views about a particular merger or market.

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Kiran Stacey

The highlight of this afternoon’s evidence by Adam Smith, the former adviser to Jeremy Hunt, was the publication of a memo sent by the culture secretary to the PM before he gained responsibility for the decision on whether to let it proceed.

Here is what Hunt wrote, with what we think of as the important bits in bold (h/t to the Guardian, which put this on its website):

James Murdoch is pretty furious at Vince’s referral to Ofcom. He doesn’t think he will get a fair hearing from Ofcom. I am privately concerned about this because News Corp are very litigious and we could end up in the wrong place in terms of media policy. Essentially what James Murdoch wants to do is to repeat what his father did with the move to Wapping and create the world’s first multiplatform media operator available from paper to web to TV to iPhone to iPad. Isn’t this what all media companies have to do ultimately? And if so we must be very careful that any attempt to block it is done on plurality grounds and not as a result of lobbying by competitors.

The UK has the chance to lead the way on this as we did in the 80s with the Wapping move but if we block it our media sector will suffer for years. In the end I am sure sensible controls can be put into any merger to ensure there is plurality but I think it would be totally wrong to cave into the Mark Thompson/Channel 4/Guardian line that this represents a substantial change of control given that we all know Sky is controlled by News Corp now anyway.

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Kiran Stacey

David Cameron in casual wearThere was a great deal of coverage in yesterday’s papers about the prime minister’s so-called “chillaxing”, details of which have emerged in an updated biography of Cameron to be published later this week.

The PM loves playing “Fruit Ninja” on his iPad, he takes breaks from the working day to watch DVDs in the Number 10 flat and he keeps an arrangement to have a regular “date night” with his wife.

Cameron’s perceived laziness enrages some of his backbenchers and gives Ed Miliband a credible way to attack him. For that reason, the PM felt obliged to deny his relaxed style in a briefing with journalists during the Nato summit in Chicago. He said:

It is an enormous privilege to do this job and it is rightly extremely demanding. It requires a huge dedication at work and I am completely dedicated to that.

But if you think the PM resents being depicted in this way, you would be wrong. Read more

Jim Pickard

The row over the Beecroft report today is fascinating because the main recommendation – allowing bosses to fire at will – has polarised political opinion.

In Westminster there is a very clear divide. There are those who think this would cause mass job insecurity, prompting a decline in consumer sentiment as people decide to save instead of spend. (While thousands of people would be sacked without any just cause by managers who simply don’t like them). Then there are those who believe that companies would hire many more staff if they didn’t have the red tape of having to maintain their services even if business turns bad. Read more

Jim Pickard

John Curtice, the respected professor of politics, warned Labour last week that the party needed to “build bridges” with the Lib Dems given the likelihood of another hung parliament in 2015. Prof Curtice wrote in Juncture, the journal of the IPPR thinktank, that Mr Miliband should not “underestimate” the potential value of improving its relations with the Lib Dems.

The quality of the relationship between the two parties could well prove crucial to Labour’s prospects of future power – before or after 2015,” he wrote.

This belies the fact that Labour and the Liberal Democrats are in contact at the highest level, according to senior figures in both camps.

Some Labour strategists are increasingly convinced that the party will have the largest number of seats at the next election but not necessarily enough for an outright majority.

As such they are keen for a rapprochement between the two parties ahead of 2015 in case there is a compelling argument for a new Labour-Lib Dem coalition in the next Parliament. “The lines of communication are now open,” said one senior Labour source.

Two years ago Mr Miliband was one of four Labour politicians negotiating with the Lib Dem leadership as it mulled which way to jump in forming a coalition, but his attitude was seen as hostile.

That tough attitude continued in the early days of his leadership, when he invited disgruntled Lib Dem activists to jump ship. “They seemed to spend the first year of opposition just kicking us,” said one senior Lib Dem aide.

Since then Labour has turned its guns more towards the Tories, the much larger party in the coalition.

A spokeswoman for Mr Cable, the business secretary, said he had met Mr Miliband twice since the general election and they had spoken “four or five times” on the phone. Mr Clegg had met the Labour leader twice and spoken on the phone “a couple of times”.

Mr Cable is seen as the most likely lynchpin between the two parties for the reason that he was a former Labour councillor in his youth.

But a source close to Mr Clegg said the Lib Dem leader said he was “relaxed” about Mr Cable’s conversations because he was “in favour of plural, grown-up politics” where MPs of different parties talked to each other.

Any Lib-Lab discussions were “not about 2015,” he said. Instead they were largely to discuss shared areas of interest such as the reform of party funding and the House of Lords.

A spokeswoman for Mr Cable said the conversations had been about issues including bank reforms. “Like other members of the Liberal Democrats, he has always been willing to talk to other politicians to discuss important areas of public policy,” she said.

Mutual suspicion still remains after Labour refused to help campaign for the Read more

Jim Pickard

As housebuilding figures show a sharp drop-off in the number of “starts” by housing associations, a critical report has been published by the National Housing Federation and Shelter. They claim that the government is not doing enough to get more homes built, a situation that appears to be borne out by today’s figures.

The report is also interesting because of its sections on homelessness, a phenomenon which appears to be on the rise after many years of welcome decline. Rising homelessness was one of the most negative elements of the Thatcher administration in the 1980s; is it making an unwelcome comeback? Read more

Jim Pickard

Peter Hain will be breathing a sigh of relief today after the Northern Ireland attorney-general has dropped a legal action against the former Labour cabinet minister. This had involved a controversial chapter criticising a judge in a forthcoming book by Hain, who was Northern Ireland secretary.

Here is the statement from the attorney-general.

“These proceedings were taken to protect public confidence in the administration of justice. They were made necessary by a passage in Mr Hain’s memoirs and by Mr Hain’s refusal until now to reduce the risk to public confidence in the administration of justice arising from that passage. Had Mr Hain responded to the statement issued by the Lord Chief Justice or to our pre-action correspondence in the way that he

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Kiran Stacey

Westminster and Holyrood have been at loggerheads over various aspects of the referendum on Scottish independence. The things they disagree on are:

Now it seems as if the prime minister is preparing for defeat on the first of those points. Speaking at a reception at the Scotland Office, Cameron reportedly said he was “not fussed” over the timing but wanted a “simple, fair, decisive and legal question”. Read more

Kiran Stacey

It was a curiously flat PMQs today, partially because we have heard the stock questions and answers from both party leaders on each of the issues that was raised.

Ed Miliband brought up growth, David Cameron countered with low interest rates. Miliband asked about police cuts, Cameron responded with figures about the proportion of back office staff to frontline officers. Miliband asked about nursing cuts, Cameron mentioned Labour’s refusal to guarantee real-terms rises in health spending at the last election.

But two issues caught the eye: the first is the battle over Francois Hollande. The socialist French prime minister’s election poses a risk for both leaders. Hollande’s rhetoric about growth versus austerity has echoed much of what Ed Balls has been saying in this country.

Therefore if the French economy begins to recover, it gives Cameron the headache of having an apparently viable alternative economic model thriving just across the Channel. If however it fails, with growth stagnating and the bond markets starting to punish France, it will give the prime minister the perfect ammunition with which to attack the Balls plan. Read more

Jim Pickard

With Kent county council pulling out £3m from Santander UK, questions are now being asked about whether others should worry about the Spanish-owned bank. We report this morning that Havering council has also removed Santander from its approved list – while Westminster city council took £10m out of the bank 18 months ago.

The concerns revolve around the parent company, Santander, amid nervousness about the vulnerability of the Spanish economy. One senior MP told us yesterday that the news reminded him somewhat of the early days of Northern Rock, even though the two situations are very different. Read more

Jim Pickard

It was business questions today and the main focus was on the current battle of words between business groups and the government. But there was also an interesting moment when Vince Cable played down the potential benefits of credit easing.

“Nobody ever argued that the credit easing scheme would solve the problem of small business lending. We argued that it would cheapen the cost, and that will happen. All the major banks are now engaged in arranging packages to enable those lower costs to be passed through. I think the hon. Gentleman will be pleasantly surprised by the take-up within a few months.” Read more

Kiran Stacey

Is the government in danger of handing over its reputation for being pro-business to Labour?

William Hague’s message in yesterday’s Sunday Telegraph that businesses should “work harder” to promote growth was certainly bold.

At a time when the economy is stagnating and the government’s strategy is increasingly being questioned, turning round and blaming the sector of the economy you’re relying on to turn that round seems like a reckless strategy.

Before we get on to why it’s not a good idea to blame business for not supporting growth, let’s mention why Hague has a point:

  1. The govt is implementing the cuts programme many business groups have supported, and is sticking to it.
  2. Corporation tax is low and getting lower – on its way down to 20 per cent.
  3. Embassies around the world are pushing UK trade as their top priority, and the prime minister has taken huge business delegations on state visits with him on several occasions.

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Tom Burgis

Rebekah Brooks

This was our live coverage of the Leveson inquiry into press standards on the day Rebekah Brooks, former chief executive of News International and ex-editor of The Sun and the News of the World, took the stand to face questions from Robert Jay, QC.

16.30 That’s it for our live coverage of Leveson today. See FT.com for news and reaction. Ben Fenton’s news story on the BSkyB bid elements to Brooks’ evidence is here. And we’ll leave you with Ben’s take on the day:

So, that was five hours in the witness box for Rebekah Brooks and at the end of it I don’t feel a whole lot wiser. We know that the government was lobbied by NI and News Corp over the Sky bid and now we know that this included taking a line on phone hacking – assuming that the email from NC’s lobbyist Fred Michel wasn’t a complete fantasy. We know that George Osborne discussed the Sky bid at a dinner with Mrs Brooks not long before his boss the prime minister did the same with James Murdoch and Mrs B at her Oxfordshire home.

Beyond that, we have been told how important the holy virtues of journalism are to Mrs Brooks, especially the importance of not allowing one’s personal relationships with politicians or anyone else to compromise one’s independence and journalistic objectivity. No journalist would agree that the story was ever more important than the truth, she said.

It is tempting to say that if that last remark of Mrs Brooks was entirely true, there would be no need for a Press Complaints Commission, let alone a Leveson inquiry.

Mrs Brooks retained her cool almost all the time, but there were moments when Robert Jay’s questioning of her integrity seemed to get her hot under the dainty white collar. Similarly, both he and Sir Brian Leveson seemed exasperated at times by her refusal to be distracted from her message.

My personal favourite moment of the day was Mrs Brooks complaining that these highly paid lawyers had been troubling her with questions that verged on trivial gossip – the loan of a retired police horse, what Rupert Murdoch gave her for her 40th birthday.

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Jim Pickard

Andy Coulson at the Leveson Inquiry This was the FT’s live blog on the Leveson Inquiry on May 10th, 2012. Andy Coulson, former News of the World editor and head of communications at Number 10, was testifying. Written by Kiran Stacey (KS) and Jim Pickard (JP).

4.34pm KS: The Andy Coulson session has now wrapped up. Ben Fenton has written this story for the FT. He writes:

Andy Coulson, the former tabloid editor who became David Cameron’s spokesman, rejected on Thursday the idea that politicians in Downing Street had become too close to the press.

These are the other interesting details to emerge from today’s session:

  1. Coulson admitted he “may have” seen Top Secret documents and definitely did attend National Security Council meetings, even though he did not have top-level security clearance.
  2. Coulson had shares worth around £40,000 in News Corp while working for Number 10. This story was broken by the Independent on Sunday, whose editor was summoned to Leveson today to explain how they had got the story.
  3. David Cameron did not ask Coulson about his knowledge of the phone hacking activites of Glen Mulcaire and Clive Goodman even after the Guardian revealed the practice was more widespread than originally claimed.

This is Ben Fenton’s conclusion:

Andy Coulson was never going to be asked the toughest questions about his time at Number 10 because they would have conflicted with his status as a man on police bail.

But while he played a dead bat to everything, with a litany of “I don’t believes…I don’t recalls…” there were still some difficult moments in his verbal and written evidence.

We know he saw top secret material without supervision, which he shouldn’t have done, that he held News Corp shares but didn’t imagine there was any possible conflict of interest and that David Cameron did not ask him for further assurances that he knew nothing about the phone hacking offences at his paper even after The Guardian, in July
2009, produced evidence that it was widespread.

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Jim Pickard

The FT lets rip today with an editorial calling for the prime minister to “get a grip on his team“.

It describes the NHS reform bill as “flawed and unnecessary“; says that Jeremy Hunt has failed to give a “satisfactory explanation” over apparent breaches of the ministerial code; his administration is “aloof and exclusive“; his choice of personnel were flawed (Andy Coulson and Peter Cruddas); he has “flip-flopped” on military procurement. et cetera. Read more

Jim Pickard

Ed Miliband has not always struck home against the coalition, even when the goal has seemed rather wide. In the Commons this afternoon, however, the opposition leader demonstrated that Labour’s critique of the government is getting ever firmer.

The wind is behind Miliband, of course: an economy that has sunk back into double-dip recession, rising unemployment, an superfluous shake-up of the NHS, clear splits between the Lib Dems and Tories on several fronts, including Lords reform.

But the Labour leader has tied this to his theme of a government where ministers are “working for their friends” to ever more effective deployment – even if you consider his use of the phrase “cronies” to be more suitable for a 6th form debating society.

The heart of this problem is that the government stands up for the wrong people” is the damaging message. Labour is now repeatedly talking about rail fares, energy bills and bank charges – and criticising the overpaid bosses of such companies. And the high cost of living is unlikely to fade as a theme in the coming months.

Miliband’s job is made much easier by the Budget, in particular its cut in the 50p rate of income tax. Labour believes this was an open goal, a clearcut symbol of the Read more