It’s no secret that economics is far from an exact science. Some would say it isn’t a science at all. Even the intelligentsia at the top of the Bank of England failed to see the financial crash coming, despite all their charts and graphs and post-graduate degrees.
Anyone who still maintains a religious attachment to economic charts should consider this one, published in the Bank of England’s inflation report yesterday. The yellow line you see is “newspaper citations of ‘economic uncertainty’”, based on mentions of the phrase in the FT, Independent and Times. 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 Conservatives have claimed they did not mean to delete David Cameron’s pre-election speeches from the internet in a move that prompted accusations of Orwellian interference.
At present the Tory website retains an archive of speeches only going back to January 2013. Meanwhile its own transcripts of historic orations by Mr Cameron cannot be found through engines such as Google – except on other websites such as newspapers.
There was speculation on Wednesday that Mr Cameron had authorised a deliberate drive to minimise the reminders of his pro-green, pro-localism speeches from the halcyon days of opposition.
The Tory leaders has struck a more hard-headed note since taking power against a backdrop of a bleak economy and a soaring national deficit.
Other speeches he might want to forget include the 2006 promise of no more top-down 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
Bosses from eight energy suppliers and the interim chief executive of the regulator, Ofgem, are appearing before the House of Commons energy select committee amid public and political anger at recent inflation-busting price rises.
By John Aglionby, Emily Cadman and Guy Chazan
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
We get the politicians we deserve, but politicians do not always get the reputations they deserve. None has been short-changed by history more stingily than Sir John Major, the former British prime minister still invoked in some quarters – including his own Conservative party – as a synonym for haplessness and weak leadership.
Not the least of his qualities is a grown-up disinclination to fight for his good name. He could, as Margaret Thatcher did and Tony Blair still does, hover about in public life, talking up his achievements, nudging his successors this way or that. Instead, he has gone for a kind of dignified elusiveness. All we can surmise about his life now is that he puts his name to some good causes and still enjoys a Test match. Yesterday, a wowing guest turn at the parliamentary press gallery lunch restored him to the headlines for the first time in an age. Read more
What has happened? The government has promised to pay tens of billions of pounds of subsidy to the Chinese and French governments to get a new nuclear reactor off the ground at Hinkley Point in Somerset. The £16bn plant will provide 7 per cent of Britain’s electricity for six decades or longer.
Really? I thought George Osborne was a fan of free markets? You could say it’s very “free market” to encourage investment into one of Britain’s most sensitive industries from almost anywhere – including Beijing. Maybe less so to pay them a guaranteed price through to the middle of the 21st century. 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