Monthly Archives: June 2012

Kiran Stacey

As Jim wrote earlier on this blog, the Tories and Labour are trading accusations of hypocrisy over their response to the news that Barclays has been hit with a record fine for trying to manipulate key interest rates.

The Tories are accusing Labour of under-regulating the banks; Labour reply they were under pressure from the Tories to regulate even less. Both are right, and here are a couple of quotes both will use to score points off each other.

The first is from Lord Tunnicliffe, Labour’s deputy chief whip in the Lords, who admitted today that his party did not legislate to make such manipulation a criminal offence: Read more

Jim Pickard

The line from Downing St this morning was very clear: the Barclays/Libor scandal and others were less likely to be repeated under the government’s new regulatory regime. The prime minister’s spokeswoman said:

The government is taking measures over regulation because soft-touch regulation under the previous government hasn’t worked. Hence we have seen this sort of thing happen. This activity happened at a time when there was soft-touch regulation in place.

George Osborne is in the Commons right now extolling the virtues of the coalition’s reform of the regulatory regime and replacement of the FSA, the City watchdog which is currently being dismantled: “How were such failures allowed to continue unchecked?” he asked MPs of the old regulatory system. Read more

Kiran Stacey

One of the questions being asked about yesterday’s Treasury questions, during which George Osborne announced he would freeze the planned fuel tax rise, was: “How did Ed Balls know?”

The shadow chancellor had written an opinion piece in the Sun just that morning arguing for such a move: coincidence, prescience, or had he been tipped off? Whatever the answer, Labour’s early move in calling for the government to reverse its initial refusal to cut fuel tax has meant blunted any credit ministers would have like to take from the move.

That was clear today during prime minister’s questions, when Tory MPs seemed muted in their cheers when Cameron said:

Why not get up an congratulate the government for being on the side of the motorist and the people who work hard and do the right thing?

 Read more

Kiran Stacey

Members of the House of LordsAfter weeks of shadow boxing, ministers are finally publishing their proposals on reforming the House of Lords today. They include an 80 per cent elected chamber, filled with 450 part-time “senators”, elected by regional list.

Tory backbenchers are already up in arms, threatening rebellion and, in the case of some ministerial aides, resignation. Conor Burns, PPS to Owen Paterson, said this morning:

If I lose my job for something that was a mainstream view within the Conservative party within the last parliament, which serving cabinet ministers held as their view, so be it.

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Jim Pickard

A report is coming out on Tuesday suggesting that councils are facing a doomsday scenario with cash cuts of 90 per cent by 2020 to services such as roads, libraries, leisure centres and parks.

The LGA has done the research to co-incide with its annual conference and the findings are stark. Unless there is reform of social care – perhaps under the Dilnot system – councils are heading for some existential decisions about what they can provide.

The chart shows neatly the problem faced by councils: The LGA anticipates that the main council grant will be cut by around 30 per cent in next year’s comprehensive spending review. (It is already being sliced by 28 per cent during the current Parliament). Read more

Jim Pickard

During the prime minster’s speech today he castigated the unfair system whereby families were punished if their child got a job:

“If a family living on benefits wants their adult child to stay living at home they are actually penalised – as soon as that child does the right thing and goes out to work”.

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Kiran Stacey

The Mail on Sunday reports this morning on a radical idea from David Cameron to cut housing benefit for under-25s altogether, something that would save £1.8bn a year, he says. It’s a proposal bound to garner a lot of interest, and designed to win back faltering support from Tory voters.

But another suggestion caught my eye lower down this piece. The paper reports:

Well-placed sources say Ministers are also taking a fresh look at plans to limit child benefit to a couple’s first three children, although Mr Cameron is not expected to address this issue directly tomorrow.

Long-time readers of FT Westminster will know all about this proposal: I first reported it on this site back in March. At the time I wroteRead more

Kiran Stacey

Reading this morning’s papers, you would have known that Michael Gove’s proposals to scrap GCSEs and bring back two levels of qualification for 16-year-olds have sparked a row. But to a greater extent than any recent government, this row is not between the government and the opposition, it is within the government. The papers reported:

Michael Gove has ignited a furious coalition row with the Liberal Democrats… (FT)

Nick Clegg vows to block Michael Gove’s plan to ditch GCSEs (Guardian)

Nick Clegg erupted with fury and vowed to block Michael Gove’s proposals… (Daily Mail)

To an extent, this suits both coalition partners: Gove gets to posture in front of the Tory faithful, while the Lib Dems get to show their muscle when the eventual compromise is reached. Read more

Jim Pickard

I wrote a while back about how Lord Mandelson had sidestepped a new requirement for peers to disclose certain business clients after exploiting a loophole in the system. As I wrote:

He had been expected to be among a wave of peers to publish a full list of their clients under new rules voted through the House of Lords last November. Read more

Jim Pickard

It probably seemed like a great idea to David Cameron when he criticised Jimmy Carr’s tax affairs during a round of TV interview in Mexico. His comments – attacking the immorality of avoidance – chime with the public mood. People don’t like to find out that others aren’t paying as much tax at a time of austerity, unemployment, spending cuts and so on.

But the Cameron stance quickly unravelled within minutes of him uttering the words on Wednesday afternoon. First question was why the prime minister criticised a single comedian and not those closer to home (Sir Philip Green, Lord Ashcroft, etc) whose tax affairs have been questioned in the past.

Second question was why the PM attacked Carr but not Gary Barlow, the cuddly Take That singer who supported the Tories before the last election. Asked about Barlow on Wednesday, he said something vague about having not reached his computer yet. By today, it was a matter of no comment.

During a press conference today Cameron sought to shift into reverse gear, saying it was everybody’s right to arrange their tax affairs efficiently and that he wouldn’t provide a “running commentary” on individuals’ tax. Yet the genie is already out of the bottle. The spotlight will now be on members of Cameron’s family, his friends, his donors and his MPs; who else has been a little too efficient in Read more

Jim Pickard

I wrote a while back about the refusal of the Lords’ authorities to hand over their estimates for the cost of an elected upper chamber - despite receiving an FOI.

It appears that the government will next week produce their own estimate for the first time as they set out the Lords reform legislation. Read more

Helen Warrell

It is not often that political parties admit to having made mistakes, and this particular mea culpa has been a long time coming. But in an opinion piece for The Times today, Yvette Cooper, the shadow home secretary, says that the Labour government was wrong not to have recognised sooner that immigration needed to be controlled. She writes:

We should have brought the points-based system in earlier to restrict low-skilled migration. And we should have adopted transitional controls for Eastern Europe.

This is an important moment, since Labour figures have always privately acknowledged that they cannot really take the Home Office to task on its immigration reforms until they have publicly addressed their own historical mistakes in this area (although Jonathan Portes, an economist who worked as a civil servant in Downing St at the time, would argue that no such apology is necessary). Ed Miliband is due to announce a new policy approach on immigration tomorrow, and it seems that a certain amount of self-punishment is required in the run-up. Cooper says candidly in her article that this is not the “easiest subject” for Labour to discuss, and suggests that the party lost touch with the electorate’s anxieties about the effect that migration would have on jobs and communities: Read more

Kiran Stacey

William HagueAs Chris Bryant, the Labour MP, reminded his Twitter followers during today’s PMQs:

Blair was right about Hague: good jokes, poor judgement. They are good jokes though.

And there were some excellent jokes from the foreign secretary, who was standing in for the prime minister and DPM today.

First he began by mocking Ed Balls, the man whose carping from the sidelines often winds up David Cameron into a red-faced fury. Hague said to Harriet Harman, who was leading the charge for Labour:

I congratulate her on not having the shadow chancellor sitting next to her, it makes her questions easier to hear. The chancellor is at the G20, I presume the shadow chancellor is off conducting another survey into what people think of him. We could have told him that for free – always better value under the Conservatives.

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Stefan Rousseau/PA

David Cameron at the G20 in Los Cabos, June 18 (Stefan Rousseau/PA)

David Cameron is taking a break from irritating the Germans. Instead, he has decided to piss off the French.

At the G20 summit, he generously allowed that it might be unfair to blame the entire euro-crisis on one leader, Angela Merkel, and acknowledged that the German chancellor had some difficult decisions to make. (She must still, ultimately, take his advice, however.) But, in separate remarks, Cameron also mocked President Hollande’s decision to increase the top marginal tax-rate in France to 75% – when Britain has just cut its top-rate back to 45%.

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Jim Pickard

The government was defeated by just four votes yesterday afternoon in the House of Lords despite peers being threatened with the ultimate sanction: the loss of some of their treasured summer recess.

The government has been eaten alive in the Lords,” is how one Tory MP put it to me. “It was extraordinary.”

The topic may sound a bit dry. Ministers wanted to refer part of the financial services bill to a grand committee – while allowing peers to debate the (relatively) exciting bits involving the Bank of England in the upper chamber. Read more

Jim Pickard

Lord Strathclyde, as leader of the Tories in the House of Lords, is a pivotal figure in attempts to achieve reform of the upper House – a key aim of the Lib Dems in government.

So when Strathclyde tells Total Politics magazine today that he thinks the chances of Lords reform succeeding are “50/50″ it is worth paying attention. He adds: “We have always said that the Lords is not going to be reformed with a proper electoral mandate unless there is a consensus between the parties…if Labour supports the legislation it will go through and we will have elections in 2015.”

Strathclyde also made the 50/50 comment in the FT a few weeks ago in an interview where he said that using the Parliament Act to force through the reforms amounted to a “nuclear option” – not exactly an endorsement of the idea.

Strathclyde knows perfectly well that Labour’s current plan is to let the legislation through the House of Commons in the next Parliamentary session but then sit back as Labour Read more

Jim Pickard

Abid Hussain is the relative and onetime business partner of Lady Warsi and has appeared at several of the same events in recent years.

For example he accompanied her in opposition in August 2008 to meet the Pakistani prime minister, Yousaf Raza Gilani, in private talks at the national assembly in Islamabad. More recently – since the general election – Abid Hussain was present at a meeting with Nawaz Sharif (former prime minister of Pakistan) which Lady Warsi attended. Read more

Jim Pickard

The Lib Dems are set to deliver a blow to coalition unity tomorrow by refusing to back embattled culture secretary Jeremy Hunt in a vote in the House of Commons.

Labour have called a debate for MPs to argue over whether Mr Hunt’s handling of News Corp’s BSkyB bid should be examined by David Cameron’s adviser on ministers’ interests, Sir Alex Allan.

But all Lib Dem MPs – including senior ministers – are set to abstain in a move described by party aides as a “plague on both your houses” move.

Nick Clegg, party leader, is concerned that he was not asked for his approval before the prime minister gave his full support to Mr Hunt and ruled out any inquiry.

That decision was made just minutes after the culture secretary gave evidence to the Leveson Inquiry on press standards last month. “It was not a decision endorsed by Mr Clegg or by the Lib Dems,” said his spokesman.

Lib Dem MPs agreed the move at a unanimous meeting at the House of Commons on Tuesday evening where there was “not a single dissenting voice” against the plan.

The move will be only the second mass abstention by the Lib Dems while in government, after having done so against a DUP motion in December 2011 hailing the prime minister’s use of the veto at a European summit.

Don Foster, spokesman for the Lib Dems on culture, said the party strongly supported the way Mr Hunt had handled the BSkyB bid: “He did it by the book.”

But he said there were still questions to be answered after Mr Hunt’s Leveson appearance, he told the FT, and the prime minister had failed to discuss this with Mr Clegg: “You can’t have collective responsibility if there wasn’t collective decision-making.”

Yet Mr Clegg decided not to back Labour’s motion against Mr Hunt because of that party’s history of “cosy” relations with Rupert Murdoch, according to his spokesman.

The Lib Dem abstention is likely to prompt accusations of treachery by Conservative backbench MPs who will swing behind Mr Hunt in the debate.

Mr Hunt had admitted at his Leveson hearing that he was sympathetic towards News

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Jim Pickard

The huge Lib-Tory row over plans to let bosses “fire at will” appeared to end in a victory for Vince Cable, the Liberal Democrat business secretary, who was opposed to the “Beecroft” plan.

Under the proposals written by Adrian Beecroft, a venture capitalist – and pushed hard by former Downing Street policy chief Steve Hilton – employers would be able to sack staff in return for a payout. But this was dropped. Read more

Kiran Stacey

Ed MilibandSpeculation on Labour’s position on an EU referendum has been building for a while. It all started with the arch pro-European, Peter Mandelson, who unexpectedly said on May 3:

I believe a fresh referendum will be necessary because the political parties cannot reconcile their own differences and come to a final conclusion on their own, and nor should they.

He was soon given further credence by the shadow chancellor Ed Balls, who said:

That might be an issue whose time comes.

Although he added: “I don’t think that time is now.”

Two weeks later, Ed Miliband shuffled his top team and placed Jon Cruddas, who has previously called for an in/out vote, in the role of policy chief. That appointment triggered further speculation, which was distilled in an Observer piece on May 19 headlined Ed Miliband set for decision on Europe referendum:

The Observer has been told that, after discussions with shadow cabinet members, Miliband is leaving the door open to a referendum.

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