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 >>