Monthly Archives: October 2012

The main news this morning is that the Lord Heseltine report into economic growth contains a handful of withering criticisms of the coalition (although to be fair he is trying to remain on-message during his many interviews):

* The former deputy prime minister says he frequently hears complaints the UK “does not have a strategy for growth” and business leaders had a “powerful appetite” for a stronger vision. While there have been Treasury growth plans, he writes, “put crudely who knows of them?”

* The veteran peer calls for “war psychology” to deal with the economic crisis. He demands an end to ministerial uncertainty on crucial issues such as energy and aviation.

* He said that current structures did not enable the government to “work together coherently” on economic strategy. The report adds that “it takes too long for decisions to be made” by the government with a tendency to “kick difficult questions into the long grass”. Read more

Ed MilibandIf Labour wanted evidence of how difficult they will find it to outflank the Tories on Europe, it was there for them today during prime minister’s questions. This afternoon’s debate, during which Tory rebels will vote to push the government into backing a cut in the EU budget, seemed to offer the Labour leader a golden opportunity to embarrass Cameron in front of his own backbenches.

But the ploy failed. As Miliband attacked on why the PM didn’t back a cut in the budget, Cameron hit back, criticising the Labour leader of opportunism:

The whole country will see through what is rank opportunism… Labour gave away half our rebate in one negotiation. Today, they haven’t even put down their own resolution on this issue.

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Ministers have been urged to consider imposing severe restrictions on new out-of-town retail developments to save town centres against a backdrop of mass closures of high street shops.

David Cameron and Mary Portas

The radical suggestion was first put forward nearly a year ago by Mary Portas, the government’s retail tsar, in a review into how to stem the decline of Britain’s small shops.

The government has accepted many of the report’s 28 recommendations, including setting up a Distressed Retail Property Taskforce that will be unveiled on Monday to combat growing numbers of boarded-up shops.

Yet ministers shied away from her idea that all out-of-town applications should automatically be called in by ministers.

Chris Wade, chief executive of the charity Action for Market Towns, urged ministers to revisit the idea. “That was quite a bold recommendation, but it was never accepted,” he said. “We would want to see that happen.”

For now, the government has reaffirmed its previous “town centre first” policy in its recently condensed national planning policy framework – namely that retailers should only be able to consider edge-of-town or out-of-town locations if town centre options are not possible. Read more

The coalition will defend plans to remove child benefit from about one million of the highest-paid by arguing that the move is supported by the vast majority of society.

HM Revenue & Customs will this week send a mail-out to all households with at least one person earning over £50,000 – some 15 per cent of families with children – warning them that they will no longer receive the full payments.

Tory MPs have warned of a major backlash against the move, which will see better-off voters losing more than £1,000 a year for a first child and almost £2,500 for three children under the changes, which take effect in January.

Some fear there could be a major problem of non-compliance if people refuse to tell the taxman that they no longer merit the payments.

But the Conservative party will today (Monday) publish a poll suggesting that 82 per cent of people support the move, which comes at a time of steep cuts to Read more

Ministers have been considering the introduction of a two-tier system of road tax under which motorists who use motorways and main trunk roads pay more than those who do not.

The proposed overhaul of vehicle excise duty, which raises £6bn a year for the exchequer, would see those paying less confined to driving only on local and smaller A-roads.

The transport department and Treasury are finishing a review of how to fund Britain’s congested road network, ordered by David Cameron, prime minister.

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For the first time ever, FT Westminster brings you reaction from First Minister’s Questions, live from Edinburgh.

I am here this week to take a closer look at how the case for independence is going, and whether this week’s mess over EU membership has finally taken the shine off the SNP’s charismatic leader, Alex Salmond.

The SNP was left embarrassed earlier this week when it admitted it had not, contrary to what ministers had appeared to say previously, sought legal advice on whether Scotland could remain a member of the EU. Read more

Members of the influential Commons’ public accounts committee are considering mounting an inquiry into international tax avoidance amid rising political concern about the issue, the FT has learned.

The move, which will be decided within days, could see executives from major global companies in the spotlight as they are questioned by MPs over their corporate tax arrangements.

There has been some tension between members of the Treasury select committee and MPs on the PAC, with some of the former thinking the latter should limit itself to examining NAO reports. But this looks to be resolved shortly. Read more

Benjamin Disraeli

Ed Miliband used his conference speech a few weeks ago to try to steal the mantle of Benjamin Disraeli*, the 19th century Conservative prime minister. Or at least his “One Nation” phrase.

Michael Gove has made a speech at Politeia today where he praised the Miliband effort, calling it “beautifully-written and elegantly delivered” while hailing the Labour leader for being “gifted“, “thoughtful without being ponderous, serious without being humourless” and so on.

This, of course, was just a warm-up before the Tory education secretary laid into Miliband.

Irony of ironies, key to the Gove critique was the idea that the speech showed how Miliband was “in almost every sense of the word” conservative. Read more

Welcome to a live blog of George Entwistle’s appearance in front of the Commons culture, media and sport committee to answer questions about the Jimmy Savile scandal. Mr Entwistle will be answering questions about why Newsnight dropped an investigation, featuring witnesses who had not spoken to the police, into whether Jimmy Savile molested vulnerable young girls at a young offenders’ home as well as broader questions about the entertainer’s alleged abuse of minors on the BBC’s property in the 1970s and 80s.


12.36: That’s it for the MPs, with Entwistle taking a battering over failures in the system of decision making and his own command of the facts. The independence of BBC journalism and the hierarchical nature of the organisation seemed to frustrate the committee. The DG seemed to make life very difficult for Peter Rippon, the man who made the decision to drop the investigation, but there is still an inquiry going on into that which now seems a long way off – six weeks. Calling Rippon must surely be a next and necessary step for the committee.

12.34: Entwistle says the Pollard review into the Newsnight decision to drop the inquiry could take six weeks. Ben Bradshaw calls that “absurd” and says he must get a grip on the information. Read more

Alex Salmond believes last month’s speech by Johann Lamont was a game-changer. In it, the Labour leader in Scotland argued that many of the universal benefits currently enjoyed by Scots are not affordable in the long-term. Attacking what she called the “something for nothing” culture, she said:

Johann LamontI believe our resources must go to those in greatest need.

But if the devil’s greatest trick was to convince the world he didn’t exist, Salmond’s most cynical trick was to make people believe that more was free, when the poorest are paying for the tax breaks for the rich.

She picked on four things she believed should be scrapped: the council tax freeze, free personal care for the elderly, free prescriptions and free university education. Read more

The UK building industry could face compensation claims running to hundreds of millions after a legal battle was launched by workers who say they were in effect barred from construction sites by a blacklist – as we reported here on Friday.

The list allegedly stretched to more than 3,000 named individuals with personal information gathered over more than 15 years.

On Saturday, Tom Watson urged the Information Commission to contact all 3,200 names on the list. Mr Watson, best known for his campaign against phone-hacking, said the Met Police had led the way in pro-actively approaching victims of data scandals. He said he sympathised with the ICO given its budget constraints but said it was incumbent upon them to act.

Now Chuka Umunna, the shadow business secretary – and rising star of the Labour party – has written directly to the Information Commission: here is his letter.

Dear Mr Graham,


Blacklisting – The Consulting Association


I am writing further to the evidence given last week by your officers to the House of Commons Scottish Affairs Committee regarding the blacklisting of individuals by The Consulting Association (“CA”) and related enforcement action taken by the Information Commissioner’s Office (“ICO”).


As further evidence of blacklisting in the construction sector emerges, we already know that thousands of people have been affected, livelihoods have been destroyed, reputations unfairly tarnished and families torn apart by consequent financial stress. Employees were blacklisted merely for

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Every so often you see a political performance that transcends time and place and will be ingrained in the memory forever: not necessarily for the right reasons. Thursday October 18, 2012, 10.30am, was one of those moments.

The venue, House of Commons. The star of the show; John Hayes, newly-installed energy minister.

No matter that Hayes was defending a policy shambles – over energy tariffs – that has been unravelling by the second.

This was a masterclass in rhetoric to rival Boris Johnson or even, in the words of the Speaker, the great orator Demosthenes himself.

Even one Labour observer admitted it was one of the most watchable performances he had seen in the Commons.

Hayes had been handed a dog’s breakfast but presented it to Parliament as if it was the most sumptious of platters. Read more

It is one year since David Cameron summoned the biggest power companies to an “energy summit” at Downing Street where they were ordered to keep bills down for hard-pressed consumers.

In a joint article previewing that event, the prime minister and the energy secretary (one Chris Huhne) expressed their determination to see a fall in prices.

Speaking before the meeting, Huhne told BBC Radio 4′s Today programme that the government would be on the consumers’ side to ensure they got a better deal, as the Guardian reported at the time.

Often this stuff gets written up without any comeback; so how has the situation improved since then? Read more

By Chris Cook

Correspondence between Prince Charles and government ministers must remain secret, the government has decided.

Dominic Grieve, the attorney-general, is using a ministerial veto that has been deployed only four times, to block publication of the documents.

The letters had been requested by the Guardian newspaper under the Freedom of Information Act. This veto overturns a ruling by the upper tribunal, a higher court, that ruled in favour of disclosure. Ministers have used the veto in three other cases, to block disclosures relating to the Iraq war, Scottish devolution and NHS reform. The Prince has caused controversy in the past with his advocacy of causes from homeopathy, a reversion to “traditional” teaching methods to his dislike for modern Read more

George Osborne’s plan to offer workers company shares in return for giving up employment rights has been slammed as “awful” by an American group that exists to encourage share ownership.

The National Center for Employee Ownership told me that Mr Osborne’s proposals were a “very bad idea” and that no “rational person” would give up employment rights for a small capital gains tax break.

The California-based NCEO is a not-for-profit group that provides “objective” information to its 3,000 members including companies, consultants and employment academics.

Corey Rosen, the group’s founder, told me that he was an “unabashed advocate of employee ownership” who spent his career making the case for workers to own more stock and options.

“There is a lot of employee ownership in our country,” he said. “But not one of these employees and not one of these plans asks employees to give up any employment rights to get any of the various tax benefits associated with employee ownership.”

The idea had never been suggested in the US, “no one, Republican or Democrat, right or left”, he said. “It simply does not make sense for an employee to give up rights that could potentially be worth a great deal of Read more

Alex Salmond and David CameronDavid Cameron will meet Alex Salmond in Edinburgh on Monday morning to put the seal on a deal to transfer the power to the Scottish government to hold a referendum on independence.

As part of that deal, the British government will make sure there is a straightforward, single question, while giving way on allowing the Scottish government to give 16- and 17-year-olds the vote.

This is being treated with some consternation at Westminster, where many fear it will undermine the current constitutional settlement of only allowing adults to vote. Lord Forsyth, the Tory peer, called it a “backdoor way” of changing the voting rules, arguing that it should be debated properly in parliament. Read more

David Cameron left the symphony hall in Birmingham’s ICC after Boris Johnson’s speech today beaming – and well he might. The prime minister’s most serious rival for the leadership of the Tory party had just delivered an admirably loyal speech – and while it was entertaining and funny, it did not raise the roof in the way Number 10 must have feared.

The London mayor began his speech in the best way possible if his aim was to damp down speculation about him challenging for the top job, with lavish and lengthy praise for the PM:

If we can win in the middle of a recession and wipe out a 17 point Labour poll lead then I know that David Cameron will win in 2015. [Addressing the PM directly] When the economy has turned around and people are benefiting in jobs and growth from the firm leadership you have shown and the tough decisions you have taken.

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The idea of swapping employment rights for shares in a company may sound like a great deal to some people; in particular those without dependents, or who feel completely secure in their jobs.

The unions say that this is some kind of devil’s pact – and that no amount of equity is worth trading your right to work. George Osborne, who announced this yesterday, would obviously disagree.

But the idea raises some other, more technical, questions. Read more

What a difference a political hat makes. Around 20 years ago, Vince Cable as a company economist angered Nigeria’s military rulers by pointing out corruption – but got away with it.

Returning to Nigeria as British business secretary to foster links, he chose somewhat safer topics, discussing areas for improvement for both countries.

The last time Vince Cable set foot in Nigeria was “during the dark days of military rule” in the mid-90s.

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This blog revealed back in March just before the Budget that George Osborne was considering capping child benefit at a certain number of children per family. At the moment, parents receive £20.30 a week for their first child and £13.40 for each additional child after that, but Treasury officials were looking at stopping those payments once a family had reached a certain number of children.

At the time, the measure was supposed to be an alternative to capping child benefit at a certain income level: the family-size measure would have been easier to implement and involve less of a cliff-edge for

people increasing their earnings. In the end, it was ruled out as too controversial, but judging by George Osborne’s speech at the Tory party conference today, the idea is back on the table. The chancellor said:

How can we justify a system where people in work have to consider the full financial costs of having another child, whilst those who are out of work don’t?

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