Monthly Archives: May 2012

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.

 Read more

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 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.

 Read more

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

Jim Pickard

This is not a complete guide to everything the coalition will do in 2012/13; many of the government’s actions do not need fresh laws. But here is the full list of all the legislation that ministers plan to enact in the coming Parliamentary calendar. Ministers will also reaffirm their plan to spend 0.7 per cent of GDP on aid by 2013, although there is no bill to legislate this commitment.

Enterprise and Regulatory Reform Bill:

- repealing unnecesary legislation and limiting state inspections of companies

- setting up a Green Investment Bank

- reforming competition law

- give extra powers to shareholders to influence executive pay

- overhaul employment tribunals

Banking Reform Bill:

- implementation of some of the Vickers report to ringfence retail and investment Read more

Jim Pickard

Proposals to create a system of shared parental leave have been bogged down in wrangling between ministers over a radical plan to grant a £5,500 “baby bonus” to parents on the birth of the child.

The plan was put forward by Oliver Letwin and would replace statutory maternity pay; the idea is that it would increase individual choice and remove a bureaucratic cost from employers. But it has not yet been implemented because of fears that it could end up costing more; given that many mothers don’t take their full 39 weeks of paid leave. Read more

Jim Pickard

The BBC is reporting today that Lord (Chris) Smith, chair of the Environment Agency, has come out in favour of fracking – the controversial method for extracting gas from shale. In reality his words are not a clearcut endorsement for the practice.

The Beeb points out that Smith said on the Today programme that he only backed fracking if it was accompanied by successful carbon capture & storage, which so far only exists in pilot form.

In fact his concerns are wider. In his speech tonight at the RSA he will say that fracking “potentially ticks the box on energy security, on availability and on cost“.

But he adds: “Does it tick the box on environment? The answer is complex, and is something like ‘up to a point’.” If Britain locks itself into a new generation of gas, “with all the carbon consequences“, it would be unable to reduce the carbon impact of its power generation to zero, he will say.

Lord Smith will also add that fracking needs careful use of drilling technology and rigorous monitoring and inspection. No doubt he is aware of the controversy surrounding the chemicals which are used in the process of extraction – skilfully described in this excellent feature by our environment correspondent, Pilita Clark.

The peer will use his speech to make a broader warning that green issues are sliding down the political agenda despite being among the most important challenges facing the UK.

In a rare intervention by the former Labour culture secretary, the peer will use his first big speech for three years to call for the government to “acknowledge and respect” that environmental policy is essential and not an optional extra.

The comments come as the coalition is shedding several green commitments in order to focus on economic growth. “We can’t abandon either green or growth,” he will say in tonight’s speech.

Lord Smith told me he backed the coalition’s attempts to streamline regulation to make it less bureaucratic. The government has carried out a “red tape challenge” to strip away unnecessary burdens on companies.

But he challenged the focus on cutting legislation, saying there was a reason why many regulations existed. “Because things like putting toxins into our water or Read more

Jim Pickard

The House of Lords authorities are refusing to hand over officials’ estimates of how much it will cost taxpayers to replace the chamber with a mostly elected senate, prompting anger from Tory politicians.

Officials have rejected a freedom of information request by the Financial Times, saying that the relevant information was produced “solely” for the joint committee on Lords reform. “A decision was taken by them not to publish it as part of their report,” they said in their response.

David Davis, MP for Haltemprice and Howden, said there was a “clear-cut case” for the cost estimates to be put in the public domain.

There is a very clear argument for this,” said the influential former frontbencher. “It will be very hard for them to refuse to do it.” Mr David predicted that the question would be put to Nick Clegg: “What’s he going to say? ‘We don’t know?’ He can’t do that can he?

Another Tory MP told the FT: “This is a genuine public issue how can we reach a decision about its merits when we have no cost-benefit analysis?

The issue comes to a head on Wednesday when Lords reform is part of the Queen’s speech setting out the legislative programme for the forthcoming parliamentary Read more