Monthly Archives: August 2012

Kiran Stacey

Danny Boyle's tribute to the NHS at the Olympics opening ceremony

Danny Boyle's opening ceremony tribute to the NHS

The Times and the Independent both broke an interesting story this morning about government plans to set up a body to promote NHS expertise across the world as a way of making money for the domestic health service.

The Independent reports:

Some of Britain’s best-known hospitals are being lined up by the Government to export the “NHS brand” around the world and set up profit-making branches overseas to boost their incomes.

Under a radical plan to be launched this autumn, officials from the Department of Health and UK Trade and Investment will come together to act as a “dating agency” between hospitals that wish to expand overseas and foreign governments with a demand for British health services.

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Helen Warrell

As I reported today, the Treasury is looking seriously into the idea of adopting German-style “mini jobs”, a scheme long championed by free market Conservative MPs. The model is that workers can earn up to €400, or £314, tax free each month, while their employers benefit from flexible labour with minimal bureaucracy: they pay a flat rate of wage taxes, insurance and pension contributions.

It is easy to see why companies and jobseekers might be clamouring for the government to pick this up, but there is actually a serious political case as well. Tories who were frustrated by the Liberal Democrats’ opposition to radical labour market reforms put forward by Adrian Beecroft have been calling for ministers to come forward with some new deregulation measures for some time.

The Lib Dems themselves are keen not to be seen as too obstructionist on this issue given the drive for growth, and party officials have assured me that they are not pushing back against the mini jobs idea. Could this be the middle way? Read more

Kiran Stacey

Alex Salmond with David CameronIt has been assumed in Westminster for several months now that the Scots will get an independence referendum, and it will happen in 2014. But mutterings are beginning to emerge that this may not happen at all - and here is why.

After David Cameron signalled he was willing to give way on his preferred date of 2013, the only things left to work out were supposed to be who got to vote and what the question would be.

The first of those points of tension looks close to being settled. Number 10 this morning all but admitted it was willing to let 16- and 17-year-olds to vote in the referendum if the SNP insisted on it. When asked if allowing this to happen would set a precedent for general elections, a Downing Street spokesman said:

These are two different things. One is a referendum on the independence of a nation which is an irreversible decision. The other is an election for the government, which can be reversed after five years.

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Kiran Stacey

George Osborne

George Osborne

This morning’s papers are not going to make comfortable reading for George Osborne (not the first time we’ve said that recently…).

The Guardian has splashed on a story in the New Statesman that several of the 20 economists who signed a letter in 2010 backing the Osborne deficit reduction strategy had now changed their minds. The story was picked up in other papers too.

But of greater political significance is the piece I wrote in this morning’s FT about how the first fissures are starting to show in the joint coalition commitment to Plan A. Three Lib Dem MPs went on the record to say they wanted the chancellor to be more flexible with his   spending plans, and allow the deficit reduction targets to slide in order to pay for a short-term stimulus. Read more

Jim Pickard

Boris Johnson has threatened a rift with senior Tory colleagues by condemning the government’s aviation policy as “totally mad” and urging ministers to proceed faster with new economic growth measures.

The mayor of London, buoyed by strong poll ratings and a successful Olympic games, made the forthright comments in a newspaper interview on Wednesday. His observations left colleagues visibly irritated, with Iain Duncan Smith, welfare secretary, saying it was nonsense to suggest that the prime minister was simply sat “twiddling his thumbs” in Downing Street.

Despite hugging one another at an event during last week’s Olympics, relations between David Cameron and Mr Johnson are uncomfortable, not least because the latter is now the grassroots favourite to become the next leader of the Conservative party.

In his latest outspoken interview – in the Evening Standard – the mayor urged the government to “stop pussyfooting around” and get started on a clutch of new Read more

Kiran Stacey


Sir John Vickers

Sir John Vickers

I revealed in this morning’s FT that Nick Clegg and Vince Cable want to reopen talks on how to put the Vickers recommendations on banking reform into law.

When the commission led by Sir John Vickers first set out its proposals, the government accepted most of them – most significantly that banks’ retail operations should be ringfenced from their investment banking side.

But the banks won two crucial victories in their attempts to water down these proposals. The first was that the government scrapped the Vickers recommendation that ringfenced banks should have stricter standards on how much equity they had to issue compared with their assets. The second was that ministers allowed for interest-rate and currency swaps to be sold from within the ringfenced arms of banks, putting them in the same category as ordinary loans and making them cheaper and easier to sell. Read more

Jim Pickard

Last Saturday I revealed that Danny Alexander will use the Lib Dem conference to articulate his differences with Tory partners over green energy and employmeng legislation.

The event is likely to see many more moments of differentation, and not only from the usual suspects such as Tim Farron or Vince Cable.

On transport, too – and in particular aviation – the Lib Dem motion at conference is a reminder of the gulf between the two parties on issues of policy.

While the Tory leadership (if not transport secretary Justine Greening) has swung behind a third runway at Heathrow, the Lib Dems are determined in their opposition to the scheme.

The motion says that Heathrow is “extremely badly located” and repeats that the Lib Dems remain “strongly opposed to the third runway“.

It repeats the coalition rejection of new runways at Heathrow, Stansted or Gatwick. It then goes further and voices opposition to mixed-mode at Heathrow, which the Tories are keen to push as an interim measure for the next three years.

(I revealed on July 1 that the coalition has put any aviation decision into the long grass until 2015 and that the Tories will not mention Heathrow in their manifesto to enable a U-turn in the next Parliament.)

The Lib Dem motion, from backbencher Julian Huppert (who has a Read more

Kiran Stacey

Last week, Sir Merrick Cockell, the head of the Local Government Association, made some interesting comments about how the government provides public services. In an interview with the FT, he warned ministers not to assume that the private sector was necessarily best.

He said there had been a period when “public bad, private good” had “almost been a mantra”, accompanied by a belief that “the right way for local authorities to do things was to outsource everything”.

He added:

I hope we’ve moved beyond that, because there are very good cases for outsourcing. There are even stronger cases for testing a service properly to see whether it’s the right service to outsource, to see whether there’s a mature market out there that may be suitable to tender against it and then properly to reach a conclusion that there is, or there isn’t.

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Jim Pickard

You may have read in several places over the last week about a new “jobs bill” which is being drawn up for the autumn and will somehow launch the Heathrow expansion, slash red tape and kickstart the economy.

All of this is a little premature.

Tensions are growing in the coalition over how to fill the gap in the parliamentary calendar left by the collapse of House of Lords reform, but ministers are nowhere near agreement on new laws to stimulate the economy.

Downing Street is under pressure from rightwing Conservative MPs to deliver free-market reforms that some hope could be enacted through a “jobs bill” or “economic regeneration bill”.

Boris Johnson, London’s mayor, spoke for many on Sunday when he urged the government to press on with “supply-side reforms” such as slashing red tape, as well as a new London airport and more housebuilding and infrastructure.

Nadhim Zahawi, a former businessman who is close to George Osborne, the chancellor, told the Financial Times that he wanted a more flexible labour market to unlock business growth.

Elizabeth Truss, a leading member of the Conservative party Free Enterprise Group, called for an aviation bill to allow a new four-runway hub airport in the south-east and employment reforms to exempt small companies from unfair dismissal claims.

The Tory backbencher is championing a planning bill to include compensation packages for residents affected by nearby developments and legislation to enhance the competitiveness of the banking, energy and telecoms sectors.

But officials denied Downing Street was behind reports that such

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Jim Pickard

Danny Alexander, one of the Liberal Democrats’ most senior coalition linchpins, is poised to launch a stinging attack on Conservative colleagues at his party’s autumn conference in a sign of the increasing tensions between the governing partners.

Mr Alexander, who as chief secretary to the Treasury is in effect deputy to George Osborne, has until now been seen as the most conciliatory Lib Dem minister.

Within Whitehall and Westminster he has always been seen as completely loyal to the chancellor and the Lib Dem minister least likely to rock the coalition boat. (He is also part of the all-powerful “quad” of four cabinet ministers who decide final policy.)

Yet at next month’s gathering of his party Mr Alexander will make an outspoken criticism of the Tories for blocking green policies and trying to make changes to employment law “without clear, robust evidence”, according to a policy paper seen by the Financial Times.

The mutual trust between the two sides of the coalition has been tested sorely after David, the prime minister, abandoned the Lib Dems’ cherished plans for an elected House of Lords.

Nick Clegg, his Lib Dem deputy, retaliated this week by announcing that he would in turn scupper Mr Cameron’s plans to re-engineer constituency boundaries to the Tories’ advantage.

That move will see Lib Dem ministers voting against their government’s own policy,

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Jim Pickard

It was pretty clear yesterday that the government still doesn’t quite know what position to take on Standard Chartered, which has been accused by a New York regulator of breaching sanctions on Iran. Even the usually vocal Vince Cable has been completely silent on the issue; while the Treasury merely emitted a neutral statement saying “these are allegations at this stage”.

Not so Boris Johnson. The London mayor has come out with a trenchant defence of the bank, saying to the FT:

“We must be very careful that the proper desire to root out wrongdoing does not become an excuse for protectionism and a self-interested attack on London’s status as the world’s pre-eminent financial centre.”

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Jim Pickard

Louise Mensch was something of a Marmite character in Westminster but she was never boring; the Commons will be slightly less interesting without her sharp opinions and colourful interventions. She was no doubt  controversial, however: at least one senior Tory called her “Gizza Mensch” in reference to her love of media appearances. Here is our news story about the exit – a by-election is expected in November.

One senior Tory MP even said icily that Ms Mensch’s resignation showed the “folly” of the A-list system:

“There’s no point in bringing people in who haven’t really thought about what the job will be like – people who think it’s much more glamorous and more fun than it actually is.”

The highlights of her brief Westminster career included a glamorous magazine spread; testily standing up to Tom Watson over the Murdochs; and a painful appearance on Have I Got News For You. (The Guardian has a good catch-up on some of these).

But commentators are divided about whether her departure has wider Read more