UK News

The reform that breaks the camel’s back?

Trade union leaders have been warning for some time now that it would be pensions reform — not pay freezes or job cuts — that could prove the trigger for widespread public sector strikes this year.

Now activists, eager to punish the Conservative-Liberal Democrat coalition government, have all the ammunition they need in the Hutton pension review.

Few can argue that pensions do not need to be reformed. People in Britain are living longer, making it more expensive for the government and taxpayer to fund pension payments.

And private sector workers have long grumbled that the public sector has it too good when it comes to retirement.

Hutton’s recommendation to remove the final salary scheme was expected and hardly surprising.

But its consequences could be huge.

If the government adopts the suggestions of this former Labour minister, do not expect the unions to take it lying down.

from Matt Falloon:

It’s snow joke

Snow or no snow, these GDP figures are a nightmare for the Conservative-Liberal Democrat coalition government and throw up the risk of a self-fulfilling spiral of gloom.

When the shock 0.5 percent drop in economic output at the end of 2010 hits television screens on Tuesday night as families sit down to dinner, already-cautious consumers will feel more than a winter chill.

These numbers are likely to knock confidence just when the government needs businesses and households to step up to the plate.

Will businesses unleash investment and take on hoards of new staff now, or will they wait for signs of improvement?

Will families, facing a hike in VAT sales tax and high inflation, flash the credit card on big purchases or tighten their belts and hope for cheaper prices in the future?

If either of those scenarios play out over the next few months, Britain's economy faces a real risk of stagnating or worse -- and that doesn't even start to take into account the spending cuts waiting in the wings this year.

Even without the snow, the economy still ground to a halt in the last three months of 2010.

Oldham could be shape of things to come

As voters drifted towards polling stations on a damp winter’s night in Oldham East and Saddleworth, it was hard to find anyone bursting with good things to say about Britain’s Conservative-Liberal Democrat coalition government.

Even some Lib Dems, who came so close to beating Labour in this marginal seat in May, seemed to be voting out of a sense of duty rather than conviction, hoping to limit the shame of defeat to a Labour party still struggling to assert itself in opposition.

“I did vote for them, but I’m not happy with them,” said 59-year-old Lib Dem supporter Lorraine Marner.

The Lib Dems are in danger of losing their way — and perhaps chunks of their core support — in government.

Party aides insist it is better to be involved in making policy than not, in spite of the inevitable compromises, but the risk is that the Lib Dems emerge from the coalition in 2015 as the fall guys, shielding the larger Conservatives from the fall-out of five years of austerity.

There is also the possibility that sustained pressure on the Lib Dems might destabilise the coalition.

This may hurt a little

Britons are being prepared for the hardest of hard times. Prime Minister David Cameron has warned the public that they will feel the impact of deficit-cutting decisions for years and maybe even decades. Cameron justifies the pain by saying that doing nothing about debt would be disastrous and that Britain will come out of the other side as a stronger country.

His finance minister George Osborne and LibDem sidekick Danny Alexander were setting out plans on Tuesday for how to conduct this year’s spending review, with  unions, the public and the private sector asked to contribute ideas.

Former Canadian finance minister Paul Martin told Reuters that the key to his country’s 1990s deficit cuts was being honest with people about what was to go.

The problem Cameron and his coalition may face is that spending cuts seem justified — as long as it’s someone else’s benefits or perks that are being pruned.

Where would you swing the axe to help cut the budget deficit?

Reality intrudes on new British political order

Britain’s new political order was on display in the House of Commons on Tuesday when Lib Dem leader Nick Clegg squeezed  happily between Prime Minister David Cameron and Foreign Secretary William Hague  on the government front bench.

The house was packed and in an excited, start-of-term mood. Everything was going swimmingly, with former Conservative minister Peter Lilley cracking jokes as he gaves what is typically a light-hearted response to the Queen’s Speech.

Lilley played around with the apt description of the Lib Dems, settling for allies as he mused that partners might imply an inappropriate degree of intimacy.

Lilley told the house it was his wedding anniversary and was greeted by cheers. But when he turned to themore serious  issue of coalitions, he made  it clear that he regarded the current arrangement very much as a marriage of convenience.

He said he would not support changes to the voting system that makes hung parliaments the norm and would campaign vociferously against a switch to the Alternative Vote system when a referendum is held. For the Lib Dems such a change is the bare minimum.

The tensions between Conservatives and their new Lib Dem friends are bubbling below the bonhomie.

New politics? Looks like more of the same to me

When I interviewed David Cameron earlier this year after an event at Thomson Reuters in which he, George Osborne and Ken Clarke delivered their views on the economy under a “Vote For Change” banner, I suggested that watching three white, middle-aged men talking about what was good for Britain didn’t feel much like change to me. Cameron jokingly replied that Clarke, 69, would be flattered to be described as middle-aged.

The Conservative leader then shifted in his seat, sat up straight and talked seriously about all the hard work his party was doing to field more female and ethnic minority candidates. His new Deputy Prime Minister, Liberal Democrat leader Nick Clegg, talks repeatedly of a “new politics” and how this time politicians will do things differently.

True, we have a coalition for the first time since the Second World War — but, after that, the handful of ministers who will be running government don’t represent much of a change. Of the 16 senior cabinet positions Cameron announced on Wednesday, there are just two women — one of whom is also the only one non-white cabinet member.

And, true, one of the top cabinet jobs — Home Secretary (interior minister) — has gone to a woman but, as someone joked to me yesterday, the fact that’s she’s also minister for women and equality looks like a typing mistake. Her real title, they suggested, should actually have been ‘Home Secretary, and token minister of women and equality.’ Theresa May, the new Home Secretary, will struggle to shake off suggestions that she got the job not on merit but rather because Cameron and Clegg didn’t have a lot of senior female politicians to choose from.

In the parliamentary parties, I count 42 Conservative women MPs (14 percent of the total). The Lib Dems fare even worse: I count just six female MPs, little over 10 percent.

Tackling our debt mountain has got to be the new government’s first and top priority, but unless something urgent is done to improve diversity in senior political jobs — as is slowly being done in business — then all the talk of new politics will end up being nothing but wrapping for old government.

from The Great Debate UK:

Cameron tasked with changing Brits’ expectations

-- Mark Kobayashi-Hillary is the author of several books, including ‘Who Moved my Job?’ and ‘Global Services: Moving to a Level Playing Field’. The opinions expressed are his own --

After thirteen years, it’s all over. The New Labour project is dead. Or is it? Tony Blair brought British politics to the centre-ground and ensured that a single party could support free-market economic policies as well as social justice.

And that’s what most people want today, a government that can help the citizen without hindering the economy through the dogma of dated ideology. The old notion of socialists waging war on small-government-right-wingers feels somehow quaint. Clearly Tony Blair knew that David Cameron would be his successor in the New Labour project, but nobody told Gordon Brown.

Now the back room deals have been done between the Conservatives and Liberal Democrats, and the cabinet post announcements are being released from Downing Street, the real work has to begin. I don’t just mean the public sector cuts. Any new government would have to cope with the deficit, though many in Labour are probably grateful that it’s the Tories who are going to be seen slashing public services.

I mean that we need to change the attitude of a generation that has only known affluence, constant growth, and easy borrowing secured against property that has only ever increased in value. British people are going to have to spend within their means, no matter how unfashionable that might seem in a society obsessed with the latest dress or jewellery worn by Cheryl Cole.

The boom of the eighties led to a mighty recession, yet memories of that time feel mild compared to recent events. Many high street banks in the UK remain in public hands and when they are returned to the private sector will they ever really be private again, or will they continue to operate safe in the knowledge that the government safety net will always be there to stop their fall? It seems that banking may have changed forever.

And don’t forget that much of the nineties now resembles a dream. A popular American president, the emergence of a popular British leader, the growth of the Internet, and constant economic growth that had apparently led to the death of the boom and bust cycle. The dot com crash felt like a blip to most property owners.

How long can the negotiations go on?

It should have been all over now. But no, we’re on day five and no one really seems to know which way things are going to go.

All over Westminster, people are looking tired. Journalists, politicians, aides and most of all the 24-hour news anchors.

You only had to watch Sky News’ Adam Boulton going at it with former Blair spin doctor Alistair Campbell live on air on Monday night too see that tempers are clearly getting frayed.

So how much longer? Nick Clegg says soon but nothing seems imminent. The LibDems are still talking with Labour. They may talk more with the Conservatives too.

“It’s too early,” said one Conservative source. “It”s finely balanced,” said a Labour one.

In the meantime, huge numbers of reporters are staking out Portcullis House, the new adjunct to the Palace of Westminster.

But it’s slim pickings. David Cameron walks through. So does George Osborne. But for now they’re just waiting too.

The big rescue package has bought the politicians some time

They promised us market meltdown if there was a hung parliament. That was the Conservative pitch before the election.

That isn’t quite what happened. The pound did fall a bit, so did gilts and stocks but most losses were made up by the end of the first day after the result became known, which had been widely expected.

Attention, anyway, had moved elsewhere. There was already mayhem in global markets when British voters were going to the polls on Thursday. One hedge fund manager described it as seven or eight out of 10 when compared with the peak of the crisis.

Things were getting even more hairy on Friday and over the weekend it became clear that the European authorities would have to act to prevent the problem in Greece and they duly did, leading to stocks and the euro rallying as risk appetite  returned.

The $1 trillion global emergency rescue package has calmed things for now and the UK story may have moved to Page 4 from  the front page for global markets.

Talks are still going on between the Conservatives and the Liberal Democrats over possible power-sharing but so far no end remains in sight.

Both sides keep saying they are making progress but at the moment there is precious little detail and in reality all options remain wide open.

from The Great Debate UK:

The Disunited Kingdom

- Paul Henderson Scott has written numerous books on Scottish history, literature and affairs, including ‘A 20th Century Life’ and its sequel, ‘The New Scotland’. He has been Rector of Dundee University, President of the Saltire Society and of Scottish PEN and a Vice-President of the Scottish National Party. The opinions expressed are his own -

The recent election has revealed more clearly than before the profound divide between Scottish and English opinion. The Conservatives have 297 seats in England but only one in Scotland (plus eight in Wales). As Joyce McMillan said in The Scotsman, “Our pattern of voting increasingly marks us out as a nation apart”.

Both of the two major Scottish papers had headlines like: “The Disunited Kingdom”. Much of the English press, or at least their Scottish editions, drew the same conclusion. "The Daily Mail" said that Britain is now "a nation of two tribes”. Magnus Linklater in "The Times" said that, “England and Scotland may share a boundary, but this weekend there is little common ground between them”.

If the Conservatives form the next British Government they have no moral right to legislate for Scotland where they have only one parliamentary seat.

One might well ask how could there be such a wide divergence between two countries which have been in a Union under the same government for 300 years? Before the Union of 1707 Scotland and England had profoundly different histories. For centuries they had very little contact except across a battlefield.

Scotland was very much part of the rest of Europe, allied to France and in close contact with many other countries in trade and cultural exchange. It evolved a distinctive and rich cultural and intellectual tradition. Even after 1707 Scotland retained control over its own education system, the law, the church and local government which had much more influence on national character and opinion than the distant Parliament in London.

In the 19th century the British Empire reconciled many Scots to the Union because of its consequences for the Scottish economy and the opportunities which it gave for administrative employment in its territories. Most of the steam ships and the locomotives for the whole empire were built in Scotland.