Monthly Archives: July 2012

Kiran Stacey

Empty seats at the dressage eventDavid Cameron met with his “Olympics Cabinet” today to discuss, among other things, what can be done about the spectacle of rows of empty seats at Games venues. Various events, including swimming and even the popular beach volleyball, have not been full, despite huge public demand for tickets.

The problem, Downing street explained today, is not so much the sponsors (as some have suggested), but accredited Games officials, who have a certain allocation for each event, but don’t necessarily turn up.

So what did the prime minister tell the hapless official from the organising committee (Locog) who briefed him about the problem this morning? Not much really, says Number 10 – there’s not much he can do. A spokesperson said:

It is disappointing.

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Kiran Stacey

I wrote in today’s FT about the split in the Tory party between those support Mitt Romney, and think the party should generally support the Republicans, and those who see Barack Obama as the kind of popular centrist David Cameron should be.

But who does the PM himself back? It was suggested in 2008 that he was backing John McCain for the presidency in that year, after praising the Republican’s courage in refusing to advocating protectionist policies. Cameron was certainly delighted when McCain addressed the Tory party conference in 2006, and the PM’s advisers say the two men got on well.

But Cameron’s friends say that privately, he actually backed Obama in 2008. Certainly some around him did: as Nick Boles, the Cameroon Tory backbencher puts it: Read more

Jim Pickard

Jim Pickard in London and James Fontanella-Khan in New Delhi

A US firm which pays Tony Blair’s consultancy for advice has taken on Dow Chemicals as a client, prompting anger in India.

New York-based Teneo has been giving public relations advice to Dow, which is still controversial in India because it owns Union Carbide, the company responsible for the 1984 Bhopal chemical disaster.

Mr Blair, the former prime minister, has been paid by Teneo since it was launched last summer by Douglas Band, a former adviser to Bill Clinton

The group, which carries out public relations, private equity and banking, has offices in Beijing, Dubai, Dublin, Hong Kong, London, Toronto, Washington DC and Zurich.

“I am shocked, I can’t believe this is the case,” said an Indian government official who asked not to be named. “This isn’t going to go down well with the people of India.”

Although Dow did not own Union Carbon at the time of the accident occurred – with the deaths of at least 8,000 people – it has been criticised by the Indian government for not paying higher compensation.

Relations between London and New Delhi have been strained ahead of the 2012 Olympics because Dow is one of the sponsors to the event, which prompted the Indian government to threaten a boycott of the games.

Activists in Bhopal said Mr Blair’s indirect involvement as well as Dow’s sponsorship of the London Olympics would help to boost the reputation of the company, which has been tarnished by its corporate link to one of the worst industrial accidents in history.

They are already furious that David Cameron, the prime minister, said he could not see a problem with the Dow sponsorship.

Rachna Dhingra, a member of Bhopal Group of Information and Action, said the lack of criticism from both Mr Blair and Mr Cameron was “very sad and indeed shameful”.

Dow believes there is widespread misinformation about its link to Bhopal, which was owned by a subsidiary of Union Carbide when the tragedy occurred in 1984. Dow did not buy Union Carbide until 2001. Yet the Indian government has demanded a much larger settlement from the chemicals company.

George Hamilton, Dow’s vice-president of Olympic operations, in March described the company’s critics as “irresponsible“. He said:

“This issue is not our issue. We’re not going to be bullied by activists or politicians who want to get involved in this, whatever their driver may be. We’re not going to allow that to make us waver from our commitment to the Olympic movement.”

A spokesman for Mr Blair, who sits on Teneo’s advisory board, refused to comment on Dow, saying only that: “It is already publicly known that TB Associates works with Teneo.”

Teneo declined to comment. However, one person familiar with the company insisted that it was only a “general adviser” to Dow and had not been involved with issues around Bhopal.

Mr Clinton was also a paid adviser to Teneo – chairing its advisory board – until February, when he ended the arrangement. The former US president is now an Read more

Jim Pickard

A row over wind subsidies has been raging in Whitehall for months and on Monday I brought you a leaked letter showing the outlines of a compromise put forward by George Osborne to energy secretary Ed Davey.

Today we had the official announcement of the compromise – which came after the intervention of Cameron and Clegg – and it includes one or two surprises; for example a new £500m tax break to boost offshore drilling in shallow water gas fields in the North Sea.

But the outlines are as we reported two days ago and again in this morning’s FT. Onshore wind subsidies (not offshore) will be cut by 10 per cent rather than the 25 per cent that chancellor Osborne had demanded.

Yet there has been no agreement over a 2030 “carbon goal” which the committee on climate change has called for to decarbonise the electricity industry.

Davey said today that the issue would be revisited later in the year; the Lib Dems believe that the carbon goal was “decoupled” from the wind subsidy issue. Read more

Kiran Stacey

Lord Green

Lord Green has written to Chris Leslie, Labour’s shadow treasury minister, to give his first response to allegations that HSBC allowed Mexican drug gangs to use the bank to launder their money while he was chairman.

Borrowing a phrase from George Osborne, Labour insisted Lord Green had “questions to answer” over what and when he knew about the allegations. Lord Green is in no mood to answer those questions however. In his letter, he says:


Thank you for your letter of 21 July, regarding the recent Senate Subcommittee investigation into HSBC.

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Jim Pickard

Wind turbinesLast month it emerged that George Osborne had ordered the energy department to carry out deeper cuts to onshore wind subsidies in a move designed to appeal to Tory backbenchers – 100 of whom have signed a petition to that effect.

While Decc is already planning a 10 per cent cut to “Rocs” (renewable obligation certificates) the Treasury was seeking cuts of up to 25 per cent, it was widely reported.

But I have been handed a letter from the chancellor to Ed Davey, energy secretary, which suggests that the wind subsidies are only a microcosm of a wider battle over the green agenda raging in Whitehall. Read more

Kiran Stacey

Jeremy HuntJeremy Hunt has decided it is time for his political renaissance. Having endured a torrid few months over accusations he became too close to News Corp while judging whether the company’s bid for BSkyB should proceed, Hunt has now been touring around the TV studios talking about what a great success the Olympics are going to be.

But his interview for the House magazine, published today, gives the most striking sense yet of his renewed confidence. Asked whether it was still possible for him to become Tory leader, Hunt replied:

This is politics, isn’t it? From hero to zero… but definitely back again. You don’t know where politics is going to end up. I think it’s best not to have any grand plans, but I think you just have to come out of these things wiser and stronger.

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Kiran Stacey

David CameronDavid Cameron’s interview with the Telegraph this morning was interesting for lots of reasons. But the main one was his big hint of having to cope with austerity until 2020. Asked if there was likely to be a decade of cuts, the prime minister said:

This is a period for all countries, not just in Europe but I think you will see it in America too, where we have to deal with our deficits and we have to have sustainable debts. I can’t see any time soon when…the pressure will be off.

I don’t see a time when difficult spending choices are going to go away.

Bleak words, which echoed what Sir Jeremy Heywood, the cabinet secretary, said last month. He told an audience at the Institute for Government:

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Kiran Stacey

The last session of PMQs before recess today felt, in the words of one Twitter wit, like an “end of season clip show”. Both leaders played their greatest hits as they tried to buoy their troops ahead of the long break and remind the wider public of how they view each other.

For Ed Miliband, this was about tying in last night’s rebellion on House of Lords reform with the problems he’s had over the last few months with the Budget and the economy. The linking device wasn’t subtle (“House of Lords reform isn’t his main problem….”), but the attacks were effective, if not new.

We heard about the “tax cut for millionaires” (the end of the 50p top rate of income tax), paid for by a “tax on pensioners” (the end of preferential tax rates for pensioners), and to cap it all of, the “double-dip recession made in Downing Street”. Read more

Tom Burgis

Welcome to our live coverage of Marcus Agius’ testimony to MPs. The outgoing Barclays chairman faces questions on rate-rigging by the bank’s traders and his defence of Bob Diamond. By Tom Burgis and Ben Fenton in London. All times are London time.

12.53 That’s that for our live coverage of Agius’ evidence. That was brutal — even if the outgoing Barclays chairman somehow contrived to compare himself to Donald Rumsfeld and his bank to Roger Federer.

Three key nuggets from what we heard today:

  1. After points in Agius’ testimony contradicted Bob Diamond’s comments to MPs, some members of the Treasury select committee are convinced that Bob Diamond misled them
  2. Diamond will walk away with £2m in salary and cash in lieu of pension, inlcuding being paid double his contractual entitlement of six months’ notice. He has waived bonuses worth up to £20m
  3. FSA chairman Lord Turner wrote to Agius in April and told him that the regulator’s “cumulative impression” is that “Barclays has a tendency continually to seek advantage from complex structures or favourable regulatory interpretations”

12.41 Here’s a last thought from Chris Giles, the FT’s economics editor:

[blackbirdpie url="https://twitter.com/ChrisGiles_/status/222656026019762178"]

12.37 And with that, after two and a half hours in the hot seat, Agius is ejected into the Thames allowed to depart. Read more

Tom Burgis

Welcome to our live coverage of Paul Tucker’s testimony to MPs probing the Libor scandal. The deputy governor of the Bank of England faces questions about his actions at the height of the financial crisis. By Tom Burgis and Ben Fenton in London with contributions from FT correspondents. All times are London time.

19.00 That’s that for our live blog. There are three main points from Tucker’s testimony.

  1. Did Labour ministers lean on him to get banks to lower Libor in the middle of the financial Crisis, as alleged by George Osborne? “Absolutely not.”
  2. Was Libor considered an ideal measure of interbank lending, even before the rigging revelations? Nope.
  3. Is the FSA board engaged in contingency plans should Libor collapse? Yes.

Thanks for reading. See FT.com through the evening for anaylsis of Tucker’s words. Tomorrow its the turn before the committee of Marcus Agius, Barclays’ outgoing chairman. Read more

Jim Pickard

Grant Shapps, the hyper-energetic housing minister, has been under fire from Labour who accuse him of playing fast and loose with statistics. Andrew Dilnot of the UK Statistics Authority has now ruled on a complaint by Jack Dromey, shadow housing minister, about Mr Shapps. You can see the ruling here.

In the meantime, here is FT Westminster’s assessment of Dilnot’s findings.

1] Stock of Dwellings 1997 to 2010

(JP: Labour complained that Shapps had said there was a net loss of 45,000 or 200,000 homes in 13 years of the last Labour government. In fact, it says, there were 2m new homes over the period.)

“Mr. Dromey is correct to state that the published official statistics, produced by the Department for Communities and Local Government (DCLG) indicate that the dwelling stock (all tenures) increased by some 2 million between 1997 and 2010.

However, in his answer to the Parliamentary Question, the Minister refers to ‘affordable homes’. These are homes that are provided at below market prices, whether for renting or home ownership.

There is a statistical series for the annual additions to this stock (which is Read more