Monthly Archives: March 2013

Jim Pickard

Countryside campaigners on Wednesday have warned about the “truly irreversible damage” taking place because of an overhaul of the planning system which took effect at midnight last night, urging the coalition to reverse its “charter for builders”.

But senior ministers agreed at yesterday’s weekly cabinet meeting to press ahead with the plans, under which all “sustainable development” must be waved through by any council that has not drawn up new local plans.

A third of local authorities have still not had their plans approved, leaving them open to unwanted building.

Eric Pickles, communities secretary, wants to go further and allow more liberalisation of the planning system as part of the coalition’s attempt to generate economic growth.

Last week’s Budget opened the way for a new “permitted development right” for people to convert retail properties into homes without planning permission – following a similar move to allow office-to-flats conversions.

The Campaign to Protect Rural England warns on Wednesday that the system, called the Read more

Jim Pickard

With Andrew Marr off sick, his stand-in this morning was Eddie Mair, who proceeded to put Boris Johnson through the most relentless interview the London mayor has ever faced.

Questions from Mair included:

“Aren’t you in fact, making up quotes, lying to your party leader, wanting to be part of someone being physically assaulted? You’re a nasty piece of work, aren’t you?”

and

“But even Conrad Black, your friend. Convicted fraudster, even he says he doesn’t trust you completely.”

Plenty has been said about this skewering on the Twittersphere this morning. Fans of Johnson suggest he came out of it in one piece, given the lack of new accusations. The vast majority of the public will not have seen the programme, although they may see clips elsewhere. Others believe this may mark the point where the wheels start to come off the Boris band-waggon.

Either way, here is a transcript of the key passages for those who missed the event:

EDDIE MAIR: Let me ask you about some of the things that came up in the documentary.

BORIS JOHNSON: Right. I haven’t seen it, so you know …

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Kiran Stacey

Peter MandelsonAmid the genteel surroundings of the Park Lane Hotel ballroom last night at the CBI’s annual black-tie dinner, Lord Mandelson was at his waspish best.

His keynote speech was ostensibly about Britain’s role in Europe, but he couldn’t resist throwing in a few barbed remarks about his Labour colleagues, both past and present. Departing from his pre-prepared script, the former business secretary had this to say about Gordon Brown, the man he served so closely in the dying days of the Labour government:

I can’t remember which who the member of the government was who claimed we abolished boom and bust. Well, we abolished boom…

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Jim Pickard

Mervyn (now Sir Mervyn) King did not cover himself with glory during the credit crunch, preferring to lecture on moral hazard while others were scrambling to prevent financial catastrophe.

Even so, the governor of the Bank of England’s words of warning about government mortgage guarantees, made in August 2008, are fascinating – in the context of Osborne now setting up a new entity to do just that. (Bear in mind that the chancellor and the governor are close allies.)

At the time Gordon Brown was pushing a UK-style Freddie/Fannie through the Crosby mortgage review. (Fannie and Freddie collapsed into US nationalisation only a month later): hat-tip Hannah Kuchler

“On the question of guarantees all I can say is the Federal Reserve, for the last 30 years have been pointing to the great dangers of offering government guarantees to mortgages.

They pointed out that if you offer a government guarantee to a mortgage, remember they spent a very long time trying to press the argument that Fannie Mae and Freddie Mac were not guaranteed by the Federal Government, they could see the risk that if people believed it then they would be able to attract funds more cheaply than any other source, mortgage funding would go through that

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Kiran Stacey

HMS Ark Royal on a farewell tourLast month, we mapped out what each department could expect to face in the June spending review given the Treasury’s promise to keep cutting at the same pace as it has done before.

That study showed some of the most sensitive departments were in line for the steepest cuts. Local government was in line for £1.3bn of cuts, the business department, just over £1bn, and most sensitively of all, defence, nearly £700m.

Those calculations, however, only got us up to just over £7bn of cuts. We decided to take a cautious view, sticking to the idea of spending falling at the same trajectory as it has been so far, rather than striving to hit the £10bn figure. Read more

Jim Pickard

George Osborne is edging Britain closer to an American-style government-backed mortgage market by promising to underwrite £130bn of new home loans over the next three years.

Mr Osborne’s advisers insist that the new “Help to Buy” scheme will not lay the foundations for a UK-style Fannie Mae or Freddie Mac. Yet there are striking parallels to the way that the former was set up by FD Roosevelt at the height of the Great Depression, underwriting about one in five US mortgages during its early years.

The two entities enjoyed implicit government backing for 50 years, and were nationalised during the financial crisis of 2008. At that time they were blamed for fuelling the sub-prime loan for relaxing lending criteria to low-income groups under pressure from the Clinton government.

By stepping up government involvement in the UK housing market and helping to

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by Kate Allen

Britain’s Chancellor has today announced a substantial expansion of the government’s intervention in the housing market. Specifically, he’s going to give government backing to a great deal more mortgage lending. There have already been cries of “Fannie Mae!” as commentators remember the disastrous housing bubble in the US.

But were Fannie Mae and Freddie Mac really responsible for driving up house prices? Hmm, maybe not actually.

US mortgages and house prices

 

The striking thing about this chart is the divergence between total mortgage

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What was your response to the Budget? We asked readers on social media what the most important decisions were for them.

For Peter Curnow-Ford it was the stamp duty cut: Read more

Tom Burgis

George Osborne fights to retain confidence in his stewardship of the economy with a crunch mid-term Budget.

By Ben Fenton, Lina Saigol and Tom Burgis on the newsdesk in London with contributions from FT correspondents in Westminster and beyond. All times are GMT.

 

Jim Pickard

George Osborne will use his Budget on Wednesday to announce a further squeeze on public sector spending and pay to shore up government finances and provide some money for his pet projects.

Changes to the state pension announced at the weekend will bring the exchequer a stealth windfall of almost £6bn a year from 2016-17, mostly paid by public sector employers and employees in the form of increased national insurance contributions.

By banking much of the money generated, the chancellor will be able to challenge Labour to match his tough attitude to public sector workers or face a further black hole in the public finances.

Officials have indicated Mr Osborne will bank £3.3bn, more than half the windfall, with the remaining £2.2bn used to fund projects such as the Dilnot proposals on social care and other Treasury initiatives.

Mr Osborne’s windfall will come from the small print of the plan to introduce a single-tier pension at a minimum of £144 a week in 2016-17.

The chancellor said on Sunday the new pension would be a “huge boost” for pensioners but did not add that associated changes would see steep rises in national insurance bills  Read more

Jim Pickard

The chancellor has drawn up plans to find fresh savings from the public sector payroll by ending the historic system of “pay progression” enjoyed by millions of workers.

Teachers, NHS workers, police and civil servants in six departments currently enjoy regular pay rises along a sliding scale for their pay grade, so long as they meet career appraisals.

That explains why public sector pay has continued to rise despite a headline “freeze” to salaries since 2010.

But the Treasury has just set out new plans for departments to propose an end to “automatic time-served progression” as a way to save costs in the 2015-16 spending review, scheduled for June. Those changes would apply to the six departments which still Read more

Elizabeth Rigby

David Cameron and Nick Clegg were this morning falling over themselves to claim the credit for helping “hard working families” with news of a new voucher scheme that could be worth up to £1,200 per child.

After weeks of wrangling, the coalition was finally ready to press the button on a tax-free childcare scheme to replace the current “employer supported childcare” system. The new scheme will eventually reach up to 2.5m families – compared with the 450,000 who access the current voucher system – and include the self-employed. Read more

Kiran Stacey

David Cameron is currently leading a debate in the Commons over the deal struck late last night to regulate the press with a Royal Charter. That debate has so far been characterised by a great deal of backslapping by all three party leaders, to the extent that Nick Clegg joked:

If all three parties behave like this after the general election, they’ll have problems fitting us all into Downing Street.

He had a slightly tougher time however when trying to explain the measures to the parliamentary Tory party, which met before the debate started. Read more

Kiran Stacey

British newspapersSince Thursday, the manoeuvrings over press regulation have taken increasingly more surreal turns.

First we had the prime minister abruptly calling off the talks, citing irreconcilable differences with Labour and the Lib Dems. Clegg and Miliband were only given a couple of hours’ notice about the announcement, journalists were given 30 minutes.

After that, it looked like the prime minister was heading for inevitable defeat in a vote today on the Lib-Lab proposals for a Royal Charter backed by statute. His aides seemed to recognise such, saying that the prime minister would promise to repeal such a law if there was a Tory majority in 2015. Read more

Kiran Stacey

George OsborneSome fascinating economic research by Ipsos Mori, published today, shows that George Osborne is the least popular chancellor in nearly a decade, with net approval ratings of -33. Nobody has had such bad ratings since Ken Clarke in the early 1990s.

At first sign this is unsurprising: this is the first recession we’ve had since the early 1990s (if you take 2008-now as one recession). But actually when you plot the popularity of chancellor’s against economic growth, the two are surprisingly unconnected.

Plotting chancellors’ approval ratings since 1976 tells us a few things: Read more

Kiran Stacey

Sometimes when a leader of the opposition has a lot of different attacks to make on a prime minister at PMQs, they try to spread themselves too thinly and end up not hitting home with any of their pre-prepared lines.

Not so today. Ed Miliband was faced with a choice selection of easy pickings with which to attack the prime minister, and blended them together perfectly to leave David Cameron looking red-faced and ineffectual.

The Labour leader began with an uncharacteristically well-delivered joke about the apparent u-turn on minimum alcohol pricing: Read more

Kiran Stacey

Justin Welby outside the LordsThis morning we reported in the FT that bishops in the House of Lords are leading an attempt to exempt children from the below-inflation rise in benefits. This follows on from the comments of Justin Welby, the Archbishop of Canterbury, over the weekend, who said:

By protecting children from the effects of this bill, they can help fulfil their commitment to end child poverty.

But just as interesting as the bishops’ response to government attempts to slash the welfare bill has been the reaction of Tory MPs to the archbishop’s comments. Read more

Elizabeth Rigby

Theresa MayTwitter was awash with “TM4PM” frenzy over the weekend after Theresa May delivered a speech to the ConservativeHome 2015 Victory conference that carried the undertones of a leadership bid.

The home secretary used the gathering of Conservative activists to sketch out her vision of Conservatism, just in case David Cameron’s one doesn’t wash with voters in 2015. She went far beyond her remit as she floated the idea of profit-making schools and a comprehensive industrial strategy.

Tim Montgomerie, ConHome’s founder and editor who has just been appointed the Times’s comment editor, was quick to calm the hype. He pointed out that May had agreed to speak at the event last November, quashing any talk of a post-Eastleigh leadership push. He also said May was loyal to Cameron and that her loyalty was one of her best qualities. Read more

Kiran Stacey

Labour continues to pile the pressure onto Iain Duncan Smith over reductions in housing benefit to those who have one or more spare bedrooms in their social housing. At DWP questions today, Labour MP after Labour MP stood up to ask a question about what they call the “bedroom tax” (Tories hate the label but their “spare room subsidy” label misses the point).

Amid the barrage of questions, it became clear that DWP is about to offer a concession. IDS told the Lib Dem MP Greg Mulholland that guidance would be going out to councils tomorrow about what they can do for severely disabled children. Read more

Hannah Kuchler

Ukip leader Nigel Farage has arrived. His invitation to dinner with Rupert Murdoch on Tuesday was almost as much of a sign of his growing political influence as the eurosceptic party’s strong showing in the Eastleigh by-election last week.

Farage has confirmed he did indeed dine with the media mogul at Murdoch’s London flat but has refused to give any clues about what was said. However, the Daily Telegraph writes he suggested he would form an electoral pact with the Conservatives if Cameron stepped down. Read more