Coalition

Jim Pickard

Drivers on the M6The coalition’s mid-term “mid-term” parliamentary programme – which is hogging the headlines today – may seem rather thin compared with the original coalition agreement of 2010, which ran into hundreds of pledges.

What’s striking is today’s PR stunt (sorry, renewal of political vows) also includes one or two areas where an agreement is by no means pinned down between the Tories and Lib Dems.

One of these is the attempt by George Osborne and others to inject billions of pounds into the road network, preferably by a privatisation of the motorways and trunk roadsRead 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"]

 Read more

Jim Pickard

When Whitehall wants to put out new information without mass coverage the technique is quite simple: ministries publish the data without any press release or calls to journalists.

And so it was a few weeks ago when Decc, the energy department, published figures predicting where Britain’s future energy supplies would come from.

At a stroke of a pen, officials quadrupled their predictions for unabated gas from 8GW to 28GW; in layman’s terms, about 8 new power stations to around 28.

As such, tomorrow’s announcement by George Osborne about a new dash for gas will not come as a surprise to the industry. Ministers have been open about the need for a vast increase in gas, in part to replace the ageing nuclear reactors and coal-fired power stations coming to the end of their life.

Here are the Decc statistics: Firstly, Annex I of this spreadsheet shows you the 2012 forecasts for new energy capacity in its different forms. You can see the much lower estimate for new gas in the same spreadsheet for 2011, also in Annex I.

The stats show how Decc still does not believe that new nuclear will be truly transformative – in size terms – by 2030. The department expects nuclear to provide only a relatively modest amount of new capacity (at 9.9 GW). (Interesting to note cost problems at EDF’s site in northern France, announced yesterday.)

Tomorrow’s gas strategy statement is politically important and was insisted on by the Treasury as a way to reassure potentially nervous investors in the industry. But it does not Read more

Jim Pickard

It is always dangerous for a senior churchman to stray into political matters, just as it is risky for politicians to stray into religion. (Thus the firm advice from Alastair Campbell to Tony Blair that he shouldn’t ‘do God’.)

And the criticism of the coalition by the Archbishop of Canterbury, Rowan Williams, has already prompted a backlash from senior cabinet ministers. Dr Williams has signalled his displeasure with the cuts programme before but this intervention (most notably November) in the New Statesman, is the most passionate and extensive – arguing that “nobody voted for” the coalition’s policies. He also dismissed the Big Society idea as “painfully stale“. It is the most outspoken attack on the government by the church since Robert Runcie criticised Margaret Thatcher in the mid-1980s. Read more

Jim Pickard

Liam Fox’s concerns about setting legal targets for increasing overseas aid spending – which were aired in a leaked letter yesterday – are widely shared on the Conservative benches. Many MPs believe the plan is unaffordable at a time of public spending cuts. And plenty are happy to speak out about their concerns.

Philip Davies, an executive member of the backbench 1922 committee, challenged David Cameron on the issue last week. Davies told us: Read more

Jim Pickard

When Nick Clegg called for paid internships last week there was an ironic twist as it emerged that the coalition had just cut funding for that purpose.

Now, as Cameron makes his most rightwing speech on immigration to date, it is worth pointing out the flaw in his vow to make incomers speak the Queen’s English.

As the Guardian points out today, the coalition is making deep cuts to the state programme for teaching immigrants the language.

From the autumn these lessons will only be free for immigrants on jobseeker’s allowance Read more

Jim Pickard

Here is a link to the full ft.com story if you are interested. But the key points of this morning’s report by the Institute of Fiscal Studies – on the impact of IDS’s universal credit – is:

Jim Pickard

We reported yesterday that David Cameron had joined Nick Clegg in warning of new action against banks which did not show bonus restraint.

David Cameron warned banks on Friday that they faced higher taxes if they continued to pay “unjustified” bonuses, adding to a growing political and regulatory pressure on the City before the industry’s bonus season early next year.The prime minister, speaking after a European Union summit in Brussels, said that the public found such payments “galling”, adding: “Every decision the banks make like that makes it more difficult to keep a tax regime that they might favour.” Read more

Jim Pickard

Eric Pickles has claimed that councils can make huge savings – enough to counteract the impact of imminent cuts – by administrative changes such as cutting pay and merging departments.

Indeed there are numerous examples of council waste or extravagent spending. BBC London is reporting today that Newham Council (now laying off dozens of staff) spent £111m on buying and refurbishing its head office. Read more

Jim Pickard

New Labour was very fond of appointing business figures to ceremonial jobs as a way to convince the world that they understood enterprise.

It was also a cunning device to create diversionary “good news” when events were not going to plan. The trend reached its surreal peak when Gordon Brown appointed Alan Sugar as Lord Sugar and made him enterprise tsar – on the day that the beleaguered Labour prime minister was almost toppled by an uprising of his own ministers.

In the post-CSR environment, David Cameron and his team are determined to foster a climate of upbeat events and news stories to shift the focus off the deepest cuts for a generation. This may explain why the prime minister was planning to unveil a new wave of “trade ambassadors” next week to co-incide with a trip to the Far East. This news management has alas been spoiled this evening by FT columnist Mark Kleinman (also business editor of Sky) who reveals on his blog* that Richard Lambert, the outgoing director-general of the CBI, is one of them. Read more

Jim Pickard

When George Oborne addressed the cabinet this morning his message was the usual one about trying to make the cuts as fair as possible and to “fall on the broadest shoulders”. The chancellor admitted that this was an “anxious time for some in the public sector” who could now lose their jobs.

Lord Adonis meanwhile claims in this morning’s FT that “Whitehall is stunned and morale risks plummeting” as the cuts reality dawns. This chimes with what I’m told by several civil servants who read this blog.

Many departments are already going through a redundancy process – instigated in June – even before the new £83bn wave of cuts which will see an estimated half a million public sector jobs go.

I am told of one leaving party for BIS staff, held in a local pub, which attracted three or four hundred attendees. The atmosphere was utterly morose. Meanwhile some civil servants are receiving letters giving them only a week to decide whether or not they want to leave. As for those who are quitting, there are rumours that they may not be paid their redundancy payments until the end of November – a six week gap. “It feels really chaotic,” one tells me. Yet this is only a foretaste of the cuts to come. Read more

Jim Pickard

Vince Cable has laid down the gauntlet against his own coalition government today as he stepped up his criticism of immigration policy.

Vince was talking during a Q&A after a setpiece speech. He said the cap was “doing great damage” and cited a British company that needed 500 specialists – half of which needed to come from outside the EU – but had geen given a quota of just 30. Read more