Kiran Stacey

Labour’s plan to keep the details of its reshuffle a secret until tomorrow went spectacularly awry on Thursday evening after journalists found out much of it anyway, and two shadow ministers said they wanted to resign publicly before it looked like they had been sacked.

Those two were John Healey, shadow health secretary and John Denham, shadow business secretary. Both have attracted criticism from within Labour. Healey was blamed for alowing the Lib Dems to look like they had led the opposition to the health bill (even though they signed off on it), while Denham has been blamed for not doing enough to win over business – although he has long said he didn’t want to stay for long.

So who else is going where?

Kiran Stacey

The justice secretary is at it again. As if he hadn’t done enough to upset his cabinet colleagues by calling into question the cat anecdote Theresa May used to attack the Human Rights Act, he’snow condemned her even more explicitly in an interview with the Nottingham Evening Post.

According to PA, Clarke told the paper:

It’s not only the judges that all get furious when the home secretary makes a parody of a court judgment, our commission who are helping us form our view on this are not going to be entertained by laughable child-like examples being given.

We have a policy and in my old-fashioned way when you serve in a government you express a collective policy of the government, you don’t go round telling everyone your personal opinion is different.

Jim Pickard

Grassroots party members are increasingly unhappy about annual conferences held in big city centres – prompting some ministers to call for a return to the traditional seaside town venue. One minister even told us that it might be time to scrap the format altogether in favour of regional events with a single one-off US-style convention before general elections.

Even watching the events on TV you can see that there are far fewer “ordinary” members at conference – they are instead swamped by suited lobbyists, hacks and other denizens of the Westminster village. “It feels more like a McKinsey corporate convention,” one Tory MP said yesterday.

I spoke to half a dozen constituency members yesterday and the mood was one of broad unhappiness.

Beverley Sullivan, a delegate from Bury said that “cost” had put off many people from coming to Tory conference.

“I have spoken to quite a few people about this, one said it had cost her £1,000 for these four days, and she was elderly, a pensioner, so it’s really difficult,” she said. “Compared to the seaside towns there is nothing to do here really if you get a free hour or so.”

Jim Pickard

No doubt there will be a mini internal inquest today within Cameron’s team over why his flagship speech included an exhortation to the general public to pay off their credit cards.

The clear implication of a prime minister asking the public to stop spending – at a time of a potential double-dip recession – was not lost on anyone today. Cameron was also under pressure from those who did not like the sight of a millionaire “lecturing them” (in the words of Ed Balls) over managing their household finances. And meanwhile GDP growth for the second quarter has been downgraded to a feeble 0.1 per cent.

This morning aides sought desperately to convince hacks that this was not what the speech meant – with no success. And now in the last few minutes there has been an urgent edit of the credit card passage.

The original phrase was “the only way out of a debt crisis is to deal with your debts. That means households – all of us – paying off the credit cards.” Now it will say “that is why households are paying off the credit cards.”

Jim Pickard

One of the dogs that didn’t bark this week was the planning row between the National Trust et al and the government. Those expecting more sound and fury over the “national planning policy framework” have been left disappointed.

There have instead been hints at reconciliation and compromise: the Times reported that the planning document will be softened;  Building magazine suggests there will be a transition period; elsewhere ministers say they do prefer brownfield to greenfield sites after all.

In a speech yesterday, planning minister Greg Clark insisted that ministers were “stewards of a matchless countryside”.

But rest assured, the government is ploughing ahead with the broad thrust of the plans. For the government there is a determination not to give way on the main policy. As one cabinet minister told us: “This is one issue which George Osborne simply will not turn back on.”

The presumption in favour of sustainable development is still at the heart of the document. For all the talk of going through the policy, line by line, holding hands with the National Trust, this will still be a

Kiran Stacey

Last week Andrew Tyrie told The Times the government’s growth strategy was not coherent or consistent. In remarkably outspoken comments, the chairman of the Treasury select committee said policies such as the Big Society or the green agenda were “at best irrelevant to the task in hand, if not downright contradictory to it”.

His reaction to George Osborne’s speech on Monday however had a very different flavour:

You can see some consistency in this speech and I think it will be widely welcomed not only by the party but by people across the country, who also need a growth strategy to help them move forward.

Was Osborne’s speech so dramatic that it completely changed Tyrie’s mind, or did his comments have more to do with this incident, caught by the BBC, when Tyrie was led briskly away by those two Number 10 heavies, Steve Hilton and Craig Oliver?

Tyrie unsurprisingly denied being “nobbled” by Number 10, but it is telling that he didn’t attend a fringe event on growth this afternoon at which he was billed to attend. In his place, rising Tory star and Osborne uber loyalist, Matthew Hancock.

Jim Pickard

One of the striking themes of the Lib Dem conference two weeks ago was the many attacks on their own Tory coalition partners. There was Chris Huhne attacking Conservatives who “slaver over tax cuts for the rich.”And Tim Farron saying his party had been “tainted” by its association with David Cameron’s party. And so on.

Now at the Tory event in Manchester there is the reverse; a mood of benevolent (if slightly patronising) friendliness is emanating from senior Conservatives towards their allies. There is the occasional dig; George Osborne pointed out that the Liberals, in the late 19th century, opposed attempts to stop people sending children up chimneys. But otherwise it is all bonhomie, and references to “Nick” and “Vince” and so on. As Michael White at the Guardian suggests; they are “killing” the Lib Dems with kindness.

One Tory cabinet minister says that it is all about being “magnanimous in victory“. He is referring not only to the AV result but also to the truth that Conservative polling remains as

Jim Pickard

A young Tory who works for David Cameron asked me on Sunday night whether I thought the prime minister was “genuine”. Up to a point, was my answer, within the usual political realities.

The example I gave was that Cameron probably believed himself when he pledged several years ago to be “green” and to commit himself to an environmental agenda. (Of course it also had the upside of helping to rebrand the Tory party).  In today’s economic climate, however, many green initiatives are being toned down or thrown out of the window in the drive for growth at almost any cost. Does that mean that the prime minister was insincere? It is a moot point.

I asked a senior cabinet minister what he thought about the Tories and their drift away from the green agenda. His view was that with the economy in the doldrums the government would not be thanked for sticking rigidly to its green promises. It was not that David

Jim Pickard

Terry Smith, chief executive of Tullett Prebon, was among those making the case this evening for bigger, deeper cuts at a fringe event. The businessman called for a Plan B: not the “Keynesian stance of Ed Balls” but something else: “Deeper cuts, or, real cuts, we haven’t really had any cuts so far.

Clearly this would not be music to the ears of the left; but then Smith estimates that Britain’s real debt (including pension liabilities, PFI commitments, bank guarantees etc) is about £3.6 trillion – or £60,000 per capita.

He warned that the biggest areas of public employment – public sector, housing and finance – were unlikely to experience growth in the near future. Cuts were inevitable: “It’s only a question of when the markets will impose them.”

His counter-intuitive theory is that banks don’t have enough capital to lend because people will not deposit money with them when interest

Kiran Stacey

Activists on board the Mavi Marmara before it was raidedAs a former diplomat, you might expect new Tory MP Richard Graham to choose his words carefully, especially because he works as the parliamentary private secretary to FCO minister Lord Howell, and definitely when talking about Israel and the Palestinians. So I was surprised to hear him talking to a fringe event on Sunday describing the Israeli government’s report into last year’s raid by its navy on the Gaza aid flotilla as a “whitewash”.

When talking about the report by the Sri Lankan ‘Lessons Learnt and Reconciliation Commission‘ into the struggle there between government forces and the Tamil Tigers, Graham said:

We know that internal government reports do not have a good track record. The Israeli report into the Gaza flotilla, for example, falls into the whitewash category.

Jim Pickard

The biggest “surprise” in the Osborne speech was his commitment to “credit easing” – developing an idea that the Tories had in opposition called the National Loans Guarantee Scheme. Here is our news story on ft.com.

This could involve billions – or 10s of billions – of pounds but will be fiscally neutral: because although the Treasury would issue gilts to raise money this would then be used to buy financial assets. These would then sit on the government’s balance sheet.

I’m told it has two elements.

1] In the short-term the government already has the option to buy corporate bonds, which would push down yields – making it easier for big companies to borrow. At present this is not necessary as bond rates are quite low. But it could be used if the eurozone crisis leads to a surge in yields in the sector.

2] Osborne wants in the medium term to develop a corporate bond market for smaller companies. At present this is only in its infancy in the UK but the US has a more developed sector. It could have the potential to lower borrowing costs (as well as being an alternative to bank loans) for relatively small companies, although perhaps not for the very smallest SMEs.

Given that bond markets require borrowers to want to raise 10s of millions of pounds – or hundreds of millions – you might need some kind of aggregation mechanism. (Or the securisation of many ‘granular’ SME loans). I’m sure this is the type of issue which will be explored by Treasury officials in more detail.

Jim Pickard

In a piece for tomorrow’s FT, I describe today’s two housing announcements – and their promise of 200,000 new homes and 400,000 new jobs – as “optimistic, verging on the far-fetched”.

But as one minister pointed out to me (as we trudged through the Manchester drizzle) the figures haven’t been given a timeline. He is right: no one has said that this will be achieved within a year or two, or even in the life of this parliament.

So what is the government doing?

  1. Firstly council house residents will be incentivised to use the existing “right-to-buy” scheme through bigger price discounts. This could generate funds to build new social housing on a one-for-one basis.The right-to-buy scheme is seen as a Thatcherite success but led to a fall in social housing stock: there is now a waiting list of about 5m individuals waiting to be housed. Right-to-buy deals have slowed to just a trickle (around 3,000 last year) partly because residents now typically pay around 90 per cent of the market price for their home. Bigger discounts should mean more more deals. Senior DCLG figures tell me that until the mid-90s the discount was around 30 per cent, which generated about 30,000 sales a year. Expect a return to that kind of


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

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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

Nicholas Timmins has been the FT's public policy editor since 1996. He was a founder member of The Independent and before that he worked for The Times. He is author of "The Five Giants: A Biography of the Welfare State".

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.

Jo Johnson was editor of the Lex column before leaving the FT at the general election after becoming Conservative MP for Orpington. He writes "The new boy" series for the Westminster blog on life as a new MP. Jo worked for the FT for 12 years, during which time his roles included South Asia bureau chief, based in New Delhi, and Paris correspondent.

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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