A rather strange and fractious PMQs today. Amid much gnashing of teeth about the allegations surrounding Paul Flowers, the former chair of the Co-Op bank, and his links to Labour, Ed Miliband set off in an unexpected direction at the beginning of his questions. He asked the prime minister about “his campaign against the closure of children’s centres in Chipping Norton”.
It was an intriguing opening and Cameron floundered for a bit talking about “difficult decisions” on children’s centres. Miliband followed up by saying:
He has even signed a petition to save the children’s centre in his own area. Is he taking it right to the top?
Back in October, the FT revealed that Philip Hammond’s bold plan to part-privatise the MoD’s weapons-buying arm were in trouble, with one of the two potential bidders worried about various aspects of the bid.
At the time, the consortium, led by CH2M Hill, was worried about whether the terms on offer were commercially attractive. It was also worried about the status of one of its component companies, Serco, which is under threat of not being able to bid for government contracts in the future after allegations emerged it had overcharged taxpayers for tagging offenders.
Today, the CH2M Hill consortium dropped out altogether, leaving only one bid, led by Bechtel, the US engineering group. The company says the commercial terms on offer were simply not good enough to continue with the bid. Read more
By Roger Beale
When news broke that Serco was one of the companies under investigation by the Serious Fraud Office for overcharging the taxpayer for tagging criminals, the government began its own investigation into the company, during which it is banned from winning new Whitehall contracts.
Depending on the result of the government probe, the company faces the threat of not being able to win any contracts in the future at all: something, incidentally that would cripple government plans to outsource defence procurement.
But figures revealed by the FT this morning show that whatever happens, the company will remain an integral part of the defence machinery until well into the 2020s, doing everything from training RAF pilots to building nuclear weapons. Read more
The Govan shipyard
This morning, BAE confirmed what had been trailed heavily last night: the company is to shut down the shipbuilding yard at Portsmouth and focus instead on Govan and Scotstoun on the Clyde. The company is consulting on cutting 1,775 jobs across the UK as it adjusts to future life without the massive contract to build the UK’s two aircraft carriers.
This could have been a difficult moment for the coalition. Large-scale job losses can cause devastation for local communities and economies, and the political consequences are even greater when the government is responsible for those jobs in the first place.
Ministers on the other hand, argue the job losses were inevitable – and they are right. Read more
In the wake of the Labour party conference, hacks returned from Brighton with one question for Tory advisers: how will you counter Ed Miliband’s energy price freeze?
We won’t, came the reply. We don’t want to get into a micro-battle about who has the best giveaways for the public on cost-of-living. We will keep the focus on the big picture, on the nascent economic recovery – how that is the only thing that can sustain rising living standards and only we can be trusted to safeguard it.
That policy made sense, and was stuck to for a few weeks at least. During his conference speech, the prime minister resisted the temptation to promise a big giveaway, or really, any significant policy whatsoever. His critics said it was lacklustre, his supporters said it perfectly matched the tone of “steady as she goes”. Read more
Yesterday’s pledge by David Cameron to “roll back green levies”, made in the heat of PMQs, apparently caught his coalition partners by surprise. While the government had been discussing reducing certain levies, the Lib Dems had not agreed to anything specific and did not expect it to be made public.
This morning, Clegg decided to seize the initiative. Clearly irritated by the prime minister’s decision to float policies without checking them, he decided to float his own idea, as anathema to the Tories as reducing green measures is to the Lib Dems – raising taxes.
He told the Today programme: Read more
Yesterday the Treasury announced ten rural towns that it is putting forward for consideration to receive five pence off fuel duty. Given the fact that these towns could come from anywhere in the UK, you might expect the majority to come from England, with a few in Scotland, Wales and Northern Ireland.
But no. Of the ten places chosen, seven are in the Scottish Highlands, where Alexander himself is from. What’s more, eight are in seats held by Liberal Democrats – two towns are in his own constituency and four in those of Charles Kennedy, the party’s former leader.
Here is the full list: Read more
Back in 2011, the FT broke the news that the MoD was looking to do something no other country in the world has done: privatise its procurement arm.
You can understand why the government felt this was necessary: buying weapons and equipment for British troops has often gone terribly wrong in the past – just look at the saga of the aircraft carriers with no planes to land on them.
The idea is being pushed by Bernard Gray, a senior civil servant (and former FT reporter) in the MoD. Gray wants a particular model of privatisation, whereby the public would own the company that buys weapons on behalf of British forces, but private companies staff and run it. This model, known as a Goco, would run in the same way the British Olympics Authority did.
But the plan is starting to unravel. Two years after it was first floated, detailed negotiations between the government and two consortia competing to run the new company are starting to break down. Read more
At his 2011 conference speech, Ed Miliband argued there were two kinds of business: “predators” and “producers”. The speech was not well received, not least because the bluntness of the message was not even backed up by any concrete examples of companies that fell into either category. Miliband’s attacked was drastically weakened by the fact that he was not willing to name any specific targets it was aimed at.
Well now he has. Last week, the Labour leader told the FT that SEE, the energy company that is raising bills by 8.2 per cent, was engaging in “predatory behaviour”. Today at PMQs, he went even further – but even more interestingly, he argued against one of the central tenets of free-market capitalism.
Arguing against SSE’s action, Miliband said: Read more
Despite the protestations of those close to Ed Miliband, yesterday’s Labour reshuffle looked very much like a cull of the Blairites. Jim Murphy, Ivan Lewis, Stephen Twigg and Liam Byrne, figures associated closely with Tony Blair, were all demoted. For someone like Jim Murphy, who had been told what a good job he was doing by the leadership, that came as a surprise to say the least.
So it was no surprise when Dan Hodges, the Telegraph blogger, wrote this morning:
The biggest impact will be on Labour’s fragile, and mythical, unity. Until now the remaining Blairites in Labour’s ranks have been content to sit back and wait for Ed Miliband to lose the 2015 election, then pick up the pieces afterwards. They will see today as an act of war. Miliband has signalled there is no place for them in his party, and they will respond accordingly.