Monthly Archives: February 2013

Jim Pickard

Attention is focusing ever more on the Liberal Democrats and their former election strategist Lord Rennard, (pictured*) who denies claims of sexual harrassment. Against this backdrop we have been offered an account from a female party worker who has asked to remain anonymous.

Like many women working inside Westminster the current LibDem scandal has prompted me to reflect on the culture within the bubble. I started working there in 1996. During this time I have been propositioned by members of all three parties, a couple of journalists, a senior No 10 advisor, party donors, one or two MPs and handful of peers. Some even have nicknames which should be a warning to stay clear. There were invitations in for coffee after shared taxis, bottom patting, innuendo and blatant

 Read more

Jim Pickard

The government faces a pincer movement from an array of opposition parties to its “bedroom tax” tomorrow with the potential to expose splits within the coalition over the controversial plan.

It’s a taste of how Gordon Brown’s “umbrella coalition” could have worked had the defeated prime minister been able to cobble together a desperate union of Labour with the Celtic fringes and the solo Green MP back in 2010. (No one, including those involved in those half-hearted talks, has since mourned their failure.)

The SNP, Plaid Cymru and Greens will use an opposition day motion to call on the Read more

Jim Pickard

The bruising Commons encounters between George Osborne and Ed Balls are often a pleasure to watch – albeit from a safe distance. And none more so than today’s bout, with its characteristic “rapier v sledgehammer” quality.

It was Balls who called the encounter through an urgent question to inquire about the loss of Britain’s cherished AAA credit rating. But it was Osborne who got to speak first.

The chancellor observed that the markets had not shown much volatility today, with 10-year gilts steady at 2.1 per cent and the FTSE slightly up. (He ignored the fact that at one point sterling hit a two-year low in reaction to the news.)

Waspishly, he observed that the downgrade was “worrying” to anyone who thought that Read more

Kiran Stacey

George Osborne and Danny Alexander will front two important pieces of analysis next month into why being in the UK benefits Scotland both in terms of its currency and its financial services sector.

The first of these papers could prove particularly interesting. It will argue that the best kind of relationship between Scotland and the rest of the UK would be full fiscal and currency union – ie remaining part of the UK.

But it will also give an intriguing answer on the terms on which Scotland could leave the UK and yet still retain sterling as its currency. Read more

Kiran Stacey

Joachim Gauck

Joachim Gauck

David Cameron’s European strategy hinges on the idea that he will be able to repatriate powers from Brussels to Westminster, before offering voters a choice between the new settlement and leaving the EU altogether in a referendum.

But the question that remains to be answered is exactly how much will other European countries be willing bend to Britain’s demands for such repatriation? Will the threat of Britain leaving be enough to persuade them to cooperate, or will they be so irritated by the way in which Cameron is going about his project that they happily wave goodbye to the UK?

In a speech this morning in Germany, the German president made it clear that he does not want to see the UK simply pack its bags and leave. Speaking from his Schloss Bellevue, his official residence, Joachim Gauck said: Read more

Kiran Stacey

Boris Johnson and Maria Hutchings doorknocking in Eastleigh

Boris Johnson and Maria Hutchings campaigning in Eastleigh

We are now just a week from the Eastleigh byelection and the likely result is starting to take shape.

The Lib Dems have emerged as the decisive favourites. They have run an impeccable campaign, from choosing a man who was the antithesis of Chris Huhne, to limiting the campaign to three weeks, preventing their rivals from getting their machinery properly off the ground.

For a full explanation of why the Lib Dem ground operation has been better than the Tory one, James Forsyth’s piece for the Spectator gives an excellent summary. Read more

Jim Pickard

It was an awkward moment for George Osborne this morning when the results of the 4G broadband auction appeared. The sale has raised just £2.3bn – against an estimate of £3.5bn which had been factored into the government’s accounts for this year.

That missing £1bn may be a drop in the ocean compared to the £212bn of extra borrowing which the coalition is having to make compared to its ambitious 2010 forecasts.

Yet the figure is of fierce political significance. That is because it could make the difference to whether the deficit is rising or falling this year.

Two months ago Ed Balls accused the Treasury of manipulating the public borrowing figures by taking account of 4G spectrum proceeds before the auction had taken place.

That, you may recall, was the reason for his stumbling performance when he responded in the autumn statement in December. Balls simply couldn’t believe that the chancellor had been able to say that the deficit was still going down and not up. Read more

Kiran Stacey

Andrew MitchellAs Andrew Mitchell begins to emerge from the shadows of the “plebgate” row, talk has turned to whether he could be brought back into the cabinet, or perhaps be given another plum government job.

The latest talk is that the former chief whip is one of two candidates (alongside Peter Lilley) under consideration to become the UK’s next EU commissioner when Cathy Ashton steps down next year.

Mitchell has not said anything in public about whether he would want to take the job. But his comment piece in this morning’s FT gives us some idea about what kind of agenda he would pursue if he was selected. Read more

Kiran Stacey

George Osborne and Danny Alexander

George Osborne and Danny Alexander

This June, George Osborne will unveil his spending review for the financial year 2015/16. The chancellor is expecting to have to make around £10bn of cuts to Whitehall departments, which, as we revealed in the FT a few weeks ago, would mean some departments taking a particularly heavy whack.

Our figures show that cutting at the same pace as the government has done so far, which is what Osborne has promised, would mean another £1bn taken out of both the business department and the money that goes to local government. The defence budget, possibly the most sensitive of budgets, at least within the Conservative party, would fall by nearly £770m. Read more

Kiran Stacey

David Cameron with Maria HutchingsIt was always going to be fascinating to watch how the two coalition parties would campaign when pitted against each other in the closely-fought Eastleigh byelection.

Commentators expected both sides to start criticising policies they have backed within the coalition, and to a certain extent that has happened.

But a press note just delivered by the Lib Dems has turned that on its head, becoming what must surely be the first election material to praise a minister of a different party for implementing government policy. Read more

Kiran Stacey

Ed Miliband’s announcement that Labour backs a mansion tax on properties over £2m, with the money used to fund a new 10p rate of income tax, has left the two coalition parties scrambling to trump the opposition with their own progressive tax plans.

For the Lib Dems, this meant leaking a tax document* being prepared in advance of the party’s spring conference. The paper proposed extending the mansion tax from people’s first properties to apply also to additional properties and any other land they may own. It also suggested the more radical idea of taxing assets such as paintings, jewellery and even record and book collections – although this was quickly dismissed by Vince Cable.

The Tories offered their own response on Sunday evening, when Tory chairman Grant Shapps appeared on BBC 5 Live’s Pienaar’s Politics. Shapps told the programme the Tories were considering pushing the income tax allowance beyond the £10,000 level currently planned – something that could go into the party’s 2015 manifesto.  Read more

Jim Pickard

The shadow cabinet may have been kept in the dark but Ed Miliband did have a policy to announce on Thursday; and it was a big one which made the front of today’s FT.

With one stroke he has seized the political initiative, at least temporarily. The politics and fiscal implications are both worth examining in detail.

Clearly the promise of a new mansion tax is an attempt to steal the Lib Dems’ big idea and neutralise any lingering attraction between the third party and left-leaning voters. Labour is still vague about how the tax would work, however: it could still consist of a new upper rate of council tax on the most pricey homes. (Ed Miliband’s is said to be worth about £1.9m, incidentally).

Meanwhile by promising to reinstate the 10p tax band – albeit only in a limited way – Labour hopes to close down any attempt by the Tories to make a similar move. The party also wants to end any lingering anger at the original scrapping of the rate by Gordon Brown.

It was in the spring of 2008 that the changes kicked in as a way to make up for Read more