Recession

Jim Pickard

To what extent was Stephen Byers exaggerating or even fantasising when he claimed that he was able to influence the process by which National Express exited a loss-making East coast rail franchise?

That is certainly the current view of Byers himself, who – perhaps after realising he had been the victim of a journalistic sting – retracted his claims. Hilariously, he has “regretted that my misleading comments might be taken seriously”.

Originally Byers, a former transport secretary (the picture is old but I love the moustache) told the fake lobbyist that he had enabled National Express to negotiate favourable terms in jettisoning the franchise without penalties.

The problem with his self-promoting claim is that the contract ended last year with the loss of £72m to the transport company, in the form of a £32m performance bond and a £40m loan which it walked away from.

Jim Pickard

Charlie Whelan has given an interview to Will Straw’s pro-Labour Left Foot Forward blog. Worth a read.

He claims the Tories are carrying out an anti-union “witch hunt”.

“What’s really frightening is firstly the Tories don’t want to resolve this dispute but also there is almost a witch-hunt of being a trade unionist. It’s not illegal to be a trade unionist. I’m proud to be a trade unionist. In fact, in countries where you don’t have trade unions you don’t have democracy. Is that what Eric Pickles is saying when he writes to the Prime Minister and demands to know which Labour MPs are trade unionists? I think it’s frightening.”

Whelan has also given an interview with the BBC (Nick Robinson) defending the link between unions and Labour. In it he admitted that Unite pay the salaries of many Labour staffers, as the Tories have pointed out.

Incidentally: In case you think Whelan’s flat cap look seems familiar, perhaps it’s modelled on this – the poacher from Withnail & I. According to my hazy memory, he refuses to hand over a bird, instead offering Withnail a live eel pulled from his underpants.

Jim Pickard

Mea culpa. I missed the most interesting angle on the Stalybridge and Hyde selection yesterday; the exclusion of James Purnell’s anointed successor, Johnny Reynolds. He is now back on the shortlist after an intervention by both Purnell and Lord Mandelson.

Mandelson’s action re-opened the shortlist. Or so Tom Watson (who is heavily involved in the selection procedure) has said in a statement to The Times, adding, curtly: “I know of no rule that allows for an appeal once the panel has decided the shortlist.” Another rejected candidate, Glyn Ford – ironically from Unite – is now also seeking an appeal.

By intervening in this seat, Mandelson may have fallen into the trap set by the Tories this week, accentuating the “them and us” stereotype of Unite and the Blairites – that they are in a permanent arm wrestle. Spectator Coffee House makes this point well this morning.

Meanwhile Patrick Wintour at the Guardian writes about fears that one consequence of Unite stacking the PPC shortlists with members could be a new power base for Ed Balls to become next Labour leader. Ladbrokes were recently offering odds of 20:1 on Balls being Brown’s successor – that seemed far too generous to me. (The odds are still 15:1).

Fink has some good insights into the relationship between Unite and Labour this morning. (“Unite has not taken Gordon Brown prisoner. It is more like the other way around.”) Charlie Whelan is not so much bringing the union agenda into the heart of Downing Street as keeping Unite on side for Brown.

Meanwhile – if you have not yet had enough – here is Brian Groom on the fascinating world of Stalybridge.

Jim Pickard

Jack Straw has just told the House of Commons that the former Labour leader has died at the age of 96.

Foot, born in 1913, was leader of the party from 1980s to 1983. Under his authority Labour reached a nadir with public support dwindling as the party shifted to the left and endured vicious internal divisions. Its manifesto in 1983 was described as the “longest suicide note in history”.

Yet Foot was widely known as a great intellectual and a man of huge personal integrity as well as an “extraordinary distinguished parliamentarian,” as the Speaker just said.

Foot was first elected to Parliament in 1945 and was an MP for nearly a half-century. He served in the Callaghan and Wilson governments as employment minister and leader of the Commons.

Here’s an interview with the former Labour leader by Euan Ferguson in the Observer in 2001: It includes a reference which captures his total commitment to social justice.

“I have just come across Norman Mailer’s account of watching Foot in the 1983 election, when the American arch-conservative admitted being moved by the passion of these words of Foot’s: ‘We are not here in this world to find elegant solutions, pregnant with initiative, or to serve the ways and modes of profitable progress. No, we are here to provide for all those who are weaker and hungrier, more battered and crippled than ourselves. That is our only certain good and great purpose on earth, and if you ask me about those insoluble economic problems that may arise if the top is deprived of their initiative, I would answer, To hell with them. The top is greedy and mean and will always find a way to take care of themselves. They always do.’

Here is a Steve Richards interview with Foot in the New Statesman, from 1999. This passage seems particularly adroit and timely – coming only a few years before the Iraq invasion.

So far, Foot has refrained from criticising the government, although in private he has a range of concerns. Mindful always of the awful time he had at the hands of internal critics when he was leader, he knows the value of loyalty. Nonetheless, in this interview, he was highly critical of the government’s defence policies in general and of its deference to the United States in particular. He opposes the bombing of Iraq, arguing that “it was not the best way to get rid of Saddam. Indeed it looks as if it could have had the opposite effect and made his position more secure”.

Jim Pickard

There will be something coming out within minutes. Things aren’t looking too good for the National Bullying Helpline.

(Still nothing on PA – Widdecombe’s staff were busy writing when I last called them).

This only leaves Mz Bratt (pictured), an electro-grime star, as a patron. I don’t have her mobile to hand to see if she’s joining the exodus.

UPDATE: Here are Widdecombe’s comments on PA, published a few minutes ago:

Ann Widdecombe said she was concerned that National Bullying Helpline founder Christine Pratt had betrayed confidences by disclosing it had received calls from Number 10 staff.

However, the Maidstone and the Weald MP delivered a rebuke to the Government as she announced her departure, saying its reaction “gives a great deal of credibility to those who say it is a bullying institution”.

“They have ganged up in the crudest possible way and wielded every last drop of theirpoisonous power in responding to these allegations,” she said.

UPDATE

Mz Bratt says she was never a patron in the first place


Jim Pickard

When it comes to an Englishman’s home it seems there are certain things you can’t say. John Healey, housing minister, found this out to his cost yesterday when he explained that – for some people – repossession was not the worst option available to them.

Cue outrage in The Sun. And more outrage in The Express. Even the Mirror, which is rarely the first to attack the government, joined in with more than a hint of outrage.

This is what Healey said:

“For some people it can be the only, and it can in fact be the best, option for them to allow their home to be repossessed. Sometimes it is impossible for people to maintain the mortgage commitments they’ve got. It may be the best thing in those circumstances.”

Do the tabloid hacks really believe that it’s better to remain in negative equity, struggling under the burden of high repayments to a lender, than to bail out and rent somewhere instead (often a cheaper option)?

Healey wasn’t saying that he didn’t care if repossessions soared. Instead he was making a statement of the obvious. This was not a Lamont moment.

If you want to get angry about repossessions, blame the banks who lent mortgages at ridiculous multiples of salary or on the basis of “self-certified” salaries which may not have existed. Or blame the FSA for letting it happen.

UPDATE

Left Foot Forward is not happy with the Express coverage of the story.

Jim Pickard

Those who erupted in shock yesterday at the news that Andrew Mackay had landed a job with Burson-Marsteller will no doubt be outraged* by my latest intel.

I’m informed reliably that Julie Kirkbride, Mackay’s wife, has been chatting to several lobbying firms in the last month or so about work post-election. I’m told she is aiming for an annual salary of about £100,000 with flexible working patterns to fit around school holidays. Not certain exactly which firms she has been talking to as yet.

At this point I should make clear that I’ve not managed to put this to Ms Kirkbride yet – no one is picking up her phone in the Commons or her constituency, although I’ve left a message. Obviously will update if she disputes the story.

As we pointed out yesterday, Mackay and Kirkbride are both leaving the Commons after the election, having together had to pay back about £60,000 of expenses.

Any move into lobbying by former Tory MPs is interesting this week because of David Cameron’s speech on Monday damning the industry and castigating the revolving doors between politics and lobbying.

Is this the same David Cameron, the former head of communications for Carlton?” one lobbyist asks me, incredulous. You can see his point. Not least given that several dozen new Tory MPs entering the Commons this summer are – if the polls are correct – former lobbyists.

* Thought I should make clear that I don’t particularly share the outrage. For me this is more a story about the flaws in Cameron’s position on the issue.

UPDATE – 24 hours later: In case you are wondering: no response from Kirkbride yet.

Jim Pickard

Labour made a huge error by rejecting the chance to obtain state funding for the party – leaving it at a “catastrophic disadvantage” in the coming general election – its former general secretary has written.

Party officials have dismissed the claims by Peter Watt, who left the Labour party under a cloud after the cash-for-honours affair*, suggesting he is now embittered and vengeful. The book, Inside Out, should indeed be read through that prism** – as Rod Liddle explains.

Yet Mr Watt, as general secretary, occupied a central position within the party hierarchy from which he had unique access to its machinations. That’s why it’s fascinating to see him blame Labour for the failure of cross-party talks to address party funding in late 2007.

Jim Pickard

It is possible to read informal minutes of Labour NEC* meetings circulated by a member with a commitment to transparency. The latest are just out, relating to a gathering of the party hierarchy in late January:

This caught my eye:

Most speakers opposed any change to the voting system.

Somewhat ironic in the light of Labour’s attempts – voted through yesterday – to secure a referendum on changes to the voting system (which would of course be scrapped by a Tory government).

Also, those looking to May 6 for the general election date will be reassured by the following:

The committee unanimously favoured holding the general and local elections on the same day.

I also quite liked this extract:

Peter Mandelson mused that a new post-crunch consensus, following the post-war consensus and the Thatcherite consensus, might see morals reintroduced to markets.

Lastly, confirming my theory that Geoff Hoon will not be deselected before the general election:

Two weeks earlier, members of the organisation committee had forcefully expressed grassroots anger at continuing outbreaks of indiscipline at senior levels and agreed that all members should be equally subject to party rules, but the NEC ended up adopting Dennis Skinner’s advice to deny the troublemakers the oxygen of publicity. We may return to them after the election. (JP: sinister or what?)

*The National Executive Commitee is the governing body of the Labour party.

Jim Pickard

There has been an enormous amount of to-ing and fro-ing in recent weeks between the three parties and the three broadcasters hosting April’s pre-election TV debates; some of which I alluded to last week.*

Philip Webster has a good piece this morning on Brown taking soundings from Joel Benenson, who advised Obama and Biden ahead of their election debates.

Jim Pickard

It was all just a dream.

You may have thought that the Tories were the party of fiscal probity. You may have thought that they were the ones who were going to get a grip on Britain’s desperate public finances. They were the ones who would prevent the loss of the UK’s AAA credit rating and keep interest rates low. Etc, etc, etc.

In fact you were imagining things. Or were you?

It was October’s Tory party conference which saw the austerity message writ large. David Cameron defended plans to make spending cuts, saying people wanted “decisive” leadership on reducing the deficit. Yet the two big announcements that month – freezing public sector pay and raising the retirement age – will not happen til 2011 and 2016.

The question has always been what about this year. How will the Tories cut public services in 2010/11 if they form the next government?

Philip Hammond prompted ridicule on Monday when he said the party had identified two cuts* worth “£1bn, £1.5bn, something like that”. The actual figure turned out to be £700m, based on IFS estimates. The Treasury’s own estimates put the figure much, much lower.

That leaves the impression that – contrary to earlier beliefs – there may only be a cigarette paper between the Labour and Tory spending plans for 2010/11.

The Tories insist that Hammond’s two examples are just that: and more policies will follow. Yet they are heavily constrained – they don’t want to look like ruthless axe-wielders just months before the general election. Thus the giant wobble.

As I wrote yesterday morning, the weak GDP figures from last week have thrown their plans into confusion.

For Labour it is an open goal: take Alistair Darling at the Treasury questions this afternoon:

“It’s important to have a firm, credible plan. What’s quite clear, especially in the last few days, that the party opposite doesn’t have a credible plan – it doesn’t even have a plan at all. It is quite obvious they are planning from one day to the next. their proposals are a complete and utter shambles.”

This week has been marked by the sound of reversing wheels as the Tories claim that they never said they would cut “deeper”…..only “faster” and “further”. Confused?

The problem is that in a Tory party where David Cameron was all things to all people, at least there was one clear and recognisable policy: they would get to grips with the deficit. Now that is in doubt.

UPDATE: Here is Philip Stephens on the “shared delusion” of the two parties.

* Scrapping tax credits for families earning over £50,000 and ending child trust funds

Jim Pickard

When David Cameron yesterday said there would be no “swingeing cuts” in the first year of a Tory government was it proof that he is in retreat over the issue?

Lord Mandelson would appear to think so: accusing Cameron of becoming “a little wobbly under pressure”.

The FT Weekend on Saturday carried the front page story that Cameron was softening his line on the need for cuts after he told an audience at Davos that this year’s public spending reductions would not be “particularly extensive”.

So what’s going on?

Last year’s GDP figures were widely seen by the media as bad news for Gordon Brown. A measly increase of 0.1 per cent for the last quarter of 2008 showed that the economy was still in the doldrums.

A more sophisticated analysis suggests that the feeble data may not be all bad for the prime minister.

a] Voters are more inclined to elect a new government if they know that economic recovery is already underway. When jobs are visibly on the line people have a habit of becoming more cautious.

b] The cuts rhetoric sounds harsh if the economic revival is in doubt. A Tory MP told me last week that the timing of the cuts would have to depend on the next few sets of GDP figures (first and second quarters of 2009). If they are sluggish – or show a fall in GDP – the cuts could be delayed or reduced, he said. This may sound like common sense but it does, as we have already seen, leave the Tories open to charges of making a volte-face.

UPDATE

Peston has a great blog on how the new Tory uncertainty could damage Britain’s ability to borrow cheaply

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Jim Pickard and Kiran Stacey, FT Westminster correspondents, share the latest news and analysis on the UK's political scene.

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Contact the Westminster blog team: Jim Pickard, Kiran Stacey, Nicholas Timmins, Elizabeth Rigby and Helen Warrell.

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The authors

Jim Pickard joined the lobby team in January 2008. He has been at the Financial Times since 1999 as a regional correspondent, assistant UK news editor and property correspondent.

Kiran Stacey is an FT political correspondent, having joined the lobby in 2011. He started at the FT as a graduate trainee in 2008, working on desks including UK companies and US equity markets before taking over the FT's Energy Source blog.

Contributors

Elizabeth Rigby, the FT's chief political correspondent, joined the lobby team in September 2010. Elizabeth has worked at the FT for more than a decade and was most recently its consumer industries editor.

Helen Warrell is the FT's UK reporter, covering home affairs, crime and policing. She joined the FT in 2008 and has spent time as a reporter in the Brussels bureau and more recently, editing the paper's Asia coverage on the world news desk.

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