Nick Clegg

Kiran Stacey

Chris HuhneJane Croft, our law courts correspondent, brings us an interesting side note from yesterday’s (fairly harrowing) evidence session with Vicky Pryce at Southwark crown court.

According to Pryce, when David Laws resigned as Treasury chief secretary just 17 days into the job, Nick Clegg originally approached Huhne to offer him the job.

Huhne, who used to work for ratings agency Fitch, would have been a perfect fit for the role, which he used to cover in opposition. He was also one of the driving forces behind the Lib Dems’ pre-election economic programme, which was finely poised between those of the Tories and Labour. Read more

Kiran Stacey

Chris HuhneAfter pleading guilty to perverting the course of justice, Chris Huhne made this statement outside the court:

Having taken responsibility for something that happened 10 years ago, the only proper course of action is for me to resign my Eastleigh seat in parliament.

Contrast that with the letters he sent to David Cameron and Nick Clegg at the time. To Clegg, his party leader and rival, he wrote:

I am writing to resign, with great regret, as Energy and Climate Change Secretary. I will defend myself robustly in the courts against the charges that the Crown Prosecution Service has decided to press. I have concluded that it would be distracting both to my trial defence and to my official duties if I were to continue in office as a minister….

This is what Clegg sent in return: Read more

Kiran Stacey

Nick Clegg. Getty Images

The Tories are having great fun mocking Nick Clegg’s opposition to an EU referendum, pointing out that the Lib Dems went into the last election promising a referendum of their own. The Lib Dems in turn, point out that the wording of their manifesto actually mirrors what the coalition has put into law, namely that there should be:

an in/out referendum the next time a British government signs up for fundamental change in the relationship between the UK and the EU

But the Lib Dems made a huge issue of it, even walking out of the Commons in 2008 when speaker Michael Martin refused to let the party bring an amendment calling for a referendum. As the guardian’s Nick Watt points out, Nick Clegg said at the time: Read more

Tom Burgis

George Osborne

Welcome to our rolling coverage of the Autumn Statement.

George Osborne has missed his fiscal targets and cut corporation tax.

We’ll bring you all the day’s developments live. By Tom Burgis and Ben Fenton.

15.45: We’re winding up the blog now, but you can follow events as they unfold through constantly updating stories on the front page of FT.com

15.31: A representation of the “flamethrower of uncertainty” can be found in the documentation of the OBR. It is also known as a “fan chart”. I doubt George Osborne is a fan of it, though.

15.24: Chote speaks of the “flamethrower of uncertainty”- a favourite phrase, unsettlingly enough, of the OBR, which is a chart showing forecasts in a wide range that makes the chart lines look like a firebreathing dragon.

15.18: Chote says that the variation in the possible range in the forecast of net debt figures for the UK is a large number, but is “dwarfed by the scale of uncertainties” on the issuance of debt. I think that’s the second time he has said that in his address.

15.12: The Spectator is running a rather scary chart showing the lost output of the current “seven-year slump” in the UK.

15.07: Robert Chote, director of the Office for Budget Responsibility, is live now, going through his department’s figures that underpinned the bad news Mr Osborne has just had to deliver.

15.05: Gavyn Davies has blogged for the FT with his view on the autumn statement while the FT’s Lucy Warwick-Ching has collated some very interesting instant reaction from personal finance experts.

14.49: Hannah Kuchler on the FT’s UK desk has been keeping an eye on business reaction to the autumn statement.

She says:

The CBI, the employer’s organisation, urged the government to stick to its guns on deficit reduction to retain international credibility, saying it was no surprise that austerity would last longer than expected.

John Cridland, director-general, welcomed investment in infrastructure and support for exports, but said the proof was in the delivery. He said:

“Businesses need to see the Chancellor’s words translated into building sites on the ground.”

But the British Chambers of Commerce was less positive, declaring the statement not good enough for a country meant to be in a state of “economic war”.
The government is just “tinkering around the edges”, John Longworth, the BCC’s director general said, adding: “The Budget next March must make truly radical and large-scale choices that support long-term growth and wealth creation. That means reconsidering the ‘sacred cows’ of the political class, including overseas aid and the gargantuan scale of the welfare state. Only a wholesale re-prioritisation of resources, to unlock private sector finance, investment and jobs, will be enough to win the ‘economic war’ we are facing. The danger is that our political class is sleepwalking with its eyes open.”

14.40: Lionel Barber, the FT’s editor, just passed by the live news desk so we asked him what he thought of the autumn statement.

The Chancellor is in a hole, but the good news is that he’s stopped digging. The FT supports the government’s fiscal stance, but is there more to be done on monetary policy to boost growth? That’s the question.

14.26 Who says the British don’t like doing things the French way? Might we surmise from this tweet from the BBC’s Robert Peston’s interview with Danny Alexander, Osborne’s Lib Dem No2, that the UK’s crediworthiness might be going to way of its Gallic cousins’?

[blackbirdpie url="https://twitter.com/Peston/statuses/276330461142327296"]

Others are more chipper:

[blackbirdpie url="https://twitter.com/MJJHunter/statuses/276330252601524225"]

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Kiran Stacey

George Osborne and Nick CleggBack in September, Nick Clegg said he would block any attempt by George Osborne to freeze benefits in this week’s autumn statement. This put the chancellor in something of a quandary. He had been hoping to save several billions with the move, as well as winning the support of a public that is increasingly hostile to people who are claimants.

Another option remains on the table, however, is to allow benefits to rise, but not by as much as they would normally do if the link with inflation is kept. New analysis from the Institute of Public Policy Research suggests there could still be a fair amount of savings to be gained, for example, by increasing them by just 1 per cent.

The IPPR has produced a table of savings from possible options open to the chancellor: Read more

Kiran Stacey

Michael Moore began his speech in storm-battered Brighton this morning with a joke:

In an ever-changing world, it’s reassuring to know that Brighton conference remains the same. Fabulous weather, delegates compliant with the leadership line…

Except it didn’t work, because this year the delegates actually have been compliant with the leadership line, even voting en masse in favour of the coalition’s economic policy. As one observer remarked to me: “It’s like they are in a trance-like state.” Read more

Kiran Stacey

The Lib Dem conference, which starts on Saturday, could be an awkward affair for the party leadership. It is the first conference when Nick Clegg has been faced with members of his own parliamentary party calling for his resignation, and the second successive one where the party has been languishing in the polls.

The agenda for the conference shows the party leadership willing to give the faithful some red meat in the form of Tory-bashing motions. There is a motion insisting on national pay bargaining, one recommitting the party to Lords reform and one resisting any attempts to expand Heathrow.

But the biggest problem could come during the debate on the economy, when an amendment will be discussed calling for the government to rip up its fiscal mandate and take immediate measures to stimulate the economy. Read more

Kiran Stacey

Nick CleggNick Clegg took many by surprise this morning by appearing in the Guardian calling for an emergency, temporary tax on wealth to help pay down the deficit. Why make the call publicly, when he’s a senior member of the government that decides whether this happens or not? And why now, so far away from Budget time?

The obvious answer is that this is not a thought-through policy proposal, but merely a bit of positioning to cheer the troops ahead of next month’s party conference. It will not happen, say many (including the BBC’s Nick Robinson), so there is no need to worry about what Clegg actually means.

But, that analysis ignores a couple of things. Read more

Kiran Stacey

Nick Clegg on the campaign trailLib Dem strategists are fond of telling reporters their assumptions about a Lib Dem collapse at the 2015 election are wrong. The theory goes that there are many more LD-Tory marginals than there are LD-Labour ones, and in those seats, Tory voters will be happy to back a Lib Dem to keep out Labour.

Lib Dem HQ hopes that by going into coalition and signing up to the stringent departmental spending cuts they will combine their traditional strength in local campaigning with a new level of trust to be a party of national government.

The argument is questionable: will Tory voters really back then Lib Dems, especially as the two parties go into the election playing up their differences to appeal to their core voters? And won’t lots of left-wing voters cross over to Labour, even if they know it means letting in the Tories, since many view the Lib Dem as just as bad as their Tory counterparts? Read more

Kiran Stacey

George Osborne

George Osborne

This morning’s papers are not going to make comfortable reading for George Osborne (not the first time we’ve said that recently…).

The Guardian has splashed on a story in the New Statesman that several of the 20 economists who signed a letter in 2010 backing the Osborne deficit reduction strategy had now changed their minds. The story was picked up in other papers too.

But of greater political significance is the piece I wrote in this morning’s FT about how the first fissures are starting to show in the joint coalition commitment to Plan A. Three Lib Dem MPs went on the record to say they wanted the chancellor to be more flexible with his   spending plans, and allow the deficit reduction targets to slide in order to pay for a short-term stimulus. Read more

Kiran Stacey

 

Sir John Vickers

Sir John Vickers

I revealed in this morning’s FT that Nick Clegg and Vince Cable want to reopen talks on how to put the Vickers recommendations on banking reform into law.

When the commission led by Sir John Vickers first set out its proposals, the government accepted most of them – most significantly that banks’ retail operations should be ringfenced from their investment banking side.

But the banks won two crucial victories in their attempts to water down these proposals. The first was that the government scrapped the Vickers recommendation that ringfenced banks should have stricter standards on how much equity they had to issue compared with their assets. The second was that ministers allowed for interest-rate and currency swaps to be sold from within the ringfenced arms of banks, putting them in the same category as ordinary loans and making them cheaper and easier to sell. Read more

Kiran Stacey

Nick CleggNick Clegg yesterday exacted the price his ministers and advisers had long warned would be paid for the Tories scuppering Lord reform: the Lib Dem leader in turn killed off the boundary changes, which are important to his coalition partners’ chances of a 2015 majority.

Most Westminster watchers saw it for what it was: a piece of tit-for-tat politics that was not particularly edifying, but probably important for the Lib Dems to show they were willing to use their muscle to get what they want.

Clegg attempted to appeal to principle when giving his rationale for the move yesterday. He said:

Lords reform and boundaries are two, separate parliamentary bills but they are both part of a package of overall political reform. Delivering one but not the other would create an imbalance – not just in the Coalition Agreement, but also in our political system.

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