Monthly Archives: August 2012

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

Kiran Stacey

Nick CleggNick Clegg yesterday exacted the price his ministers and advisers had long warned would be paid for the Tories scuppering Lord reform: the Lib Dem leader in turn killed off the boundary changes, which are important to his coalition partners’ chances of a 2015 majority.

Most Westminster watchers saw it for what it was: a piece of tit-for-tat politics that was not particularly edifying, but probably important for the Lib Dems to show they were willing to use their muscle to get what they want.

Clegg attempted to appeal to principle when giving his rationale for the move yesterday. He said:

Lords reform and boundaries are two, separate parliamentary bills but they are both part of a package of overall political reform. Delivering one but not the other would create an imbalance – not just in the Coalition Agreement, but also in our political system.

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Jim Pickard

In trying to get the House of Lords reformed Nick Clegg has always been aware of the ominous lesson of history; that others have tried for a century and failed.

The only real example of Lords reform was the removal of (most) hereditary peers soon after the New Labour election of 1997 – and this was by Tony Blair with an enormous majority.

For Clegg to try to set up a mostly-elected chamber was always going to be difficult, even with supposed cross-party support. The Tory leadership was signed up to the programme; its backbenchers were obstinately opposed – leading to a major showdown in July and a “pause” in the plans.

Today the news is breaking that senior ministers could announce as early as next week that they are not pressing ahead with a Lords reform bill in the next legislative session. All sides had been braced for months of trench warfare in both houses over the issue, with Tory MPs adamant that the changes would damage the primacy of the Commons and were an irrelevance during the deepest recession for decades.

Ministers will instead declare that they will stuff the legislative programme for 2012/13 Read more

Kiran Stacey

David Cameron and George OsbornePrime ministers aren’t supposed to engage in reshuffle speculation. Once they answer one question about a reshuffle, not only have they admitted it is going to happen, they invite a whole load of others.

But David Cameron seems to have been sufficiently spooked by recent speculation surrounding his chancellor that he felt moved to say the following to Sky’s Kay Burley:

KB: The economy will pick up, and George Osborne, his job will be safe?

DC: George Osborne is doing an excellent job in very difficult circumstances and he has my full support in going on and doing that job.

KB: And he’ll still be the chancellor at the next election?

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Kiran Stacey


Stephen Hester, RBS CEO

Stephen Hester, chief executive of RBS

We reported this morning on high-level discussions in the government about the possibility of buying out the remaining 18 per cent of RBS that taxpayers do not already own.

The argument for doing so runs like this: we are already exposed to the vast majority of the bank’s hugely damaged balance sheet, and the losses only look like getting worse as we find out more about its distressed debt.

Given that, would it not be better to take advantage of our holding and actually use the bank to pump some credit into our stagnating economy?

At the moment, the problem with doing this is that it means making loans the bank does not currently consider commercially viable. That would be a dereliction of duty to the remaining private shareholders, who would have every reason to sue. The answer therefore is simply to buy them out, and actually use the government’s stake to achieve what it is trying to do. Read more

Helen Warrell

Photo via @BTLondonLive on twitter

Even before Boris Johnson got stuck in the middle of a zip wire, suspended high above a crowd of Olympic revellers in East London, it was clear that this was not a stunt that any other politician would have attempted.

Wearing a giant red and blue harness over his suit, a hard hat strapped securely under the chin, and waving a Union Jack in each hand, the London mayor’s aerial progress towards spectators was anything but dignified.

The harebrained scheme had been intended to provide a spectacular mayoral entrance to one of the many “live” Olympic events being held around the UK capital, this one sponsored by BT and held in Victoria Park. However, when Boris came to a halt after gradually losing momentum, he was left prone above the assembled masses, unable to do anything except wave his flags in a lacklustre way and call on onlookers to throw up a rope.

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