Mehdi’s Morning Memo: Osborne The Bank Basher

The ten things you need to know on Monday 4 February 2013…


Having cut corporation tax and the top rate of income tax, dropped the bank bonus tax, opposed a financial transactions tax and repeatedly refused to countenance a break-up of the big banks, George Osborne, it seems, is now trying to re-invent himself as a bit of a bank basher – from the FT’s splash:

“The chancellor will today warn banks they will be broken up unless they comply fully with rules to make the financial system safer – a threat that will provoke fury among some in the City of London.

“George Osborne has bowed to pressure, agreeing that the proposed ringfence around core retail activities, aimed at protecting the taxpayer from bank collapses, needs to be “electrified” with draconian sanctions. The Labour party claimed Mr Osborne had been forced into ‘a partial climbdown’, arguing that the chancellor and Vince Cable, business secretary, had not wanted to leave hanging over banks the threat of full separation of investment banking from high-street operations.

“… In a speech on the future of banking today, Mr Osborne will say: ‘My message to the banks is clear: if a bank flouts the rules, the regulator and the Treasury will have the power to break it up altogether – full separation, not just a ringfence.'”

For once, I’m with Gideon. Talk, however, is cheap. Let’s see what actually happens…


There’s a fair bit of pressure being applied to anti-gay-marriage Tory MPs by their party’s high command ahead of tomorrow’s ‘free’ vote on the Marriage (Same Sex Couples) Bill.

“Tory gay marriage rebels told: you’re out of touch” – that’s the splash headline on the front of today’s Times. The paper reports:

“The Prime Minister will speak out in favour of equal marriage in an effort to win over at least half his MPs before a landmark vote tomorrow evening. However, his personal intervention risks deepening Tory divisions over an issue that Mr Cameron was warned yesterday could cost him the next election. Last night Tory waverers were under mounting pressure to spare the Prime Minister the embarrassment of being deserted by more than 150 of his parliamentary party.

“Michael Fabricant, a Tory vice-chairman, said he was ‘disturbed’ to hear of ministerial aides warning backbenchers that their careers would be dented if they failed to support the Government even though Mr Cameron has given his troops a free vote. Another MP said undecided ministers were being pressed to back the Prime Minister.”

But there’s pressure being applied on those MPs from other directions, too – the Telegraph splashes on news that

“In his first official day as leader of the Church of England, the Rt Rev Justin Welby is expected to say that marriage should remain ‘between a man and a woman’.”

The PM versus the Archbishop of Canterbury. Who says Old Etonians all think alike?

On a side note, David Burrowes, one of the Tory ‘rebels’, has written a piece for HuffPost UK which is worth a read; he argues that this is “the first time in living memory that an issue raising such fundamental matters of moral, legal and constitutional significance has been pushed through by a government without an electoral mandate”.


If you had any doubt that the Afghan war and, in particular, Britain’s presence in Helmand province, has been a disaster, listen to the latest opinions from ‘our ally’, Hamid Karzai, the president of Afghanistan.

From the Guardian:

“The Afghan president, Hamid Karzai, has questioned whether western troops were ‘fighting in the wrong place’ during their decade-long mission in Afghanistan, saying security was better in southern Helmand province before the arrival of British forces.

“… ‘They feel fulfilled with regard to the objective of fighting terrorism and weakening al-Qaida, or they feel that they were fighting in the wrong place in the first place, so they should discontinue doing that and leave,’ Karzai said in an interview ahead of trilateral talks with David Cameron and the Pakistani president, Asif Ali Zardari.”

Meanwhile, the Times reports that “David Cameron has set himself the ambitious target of brokering a deal between Afghanistan and Pakistan to facilitate peace talks with the Taleban”.


Another ‘Plebgate’ scoop from Channel 4’s DIspatches – reported by the Financial Times:

“Andrew Mitchell, the former Conservative chief whip who resigned last year after his “plebgate” row with police officers, will talk about his frustration with Downing Street’s treatment of the scandal and argue that he was “stitched up”, in a television interview due to be broadcast tonight.

“… The row embarrassed the Tories, and Mr Mitchell resigned in the autumn when he felt he had lost the support of party colleagues. ‘I could tell I was being stitched up but I didn’t know how it was being done or where it was coming from,’ he will say in a Dispatches interview tonight.”


Ed Miliband has repeatedly said that New Labour is the past. Tell that to, er, New Labour. The former home secretary, Alan Johnson, a card-carrying New Labour Blairite who briefly served as shadow chancellor under Ed M, has offered some ‘advice’ to the Labour leader in an interview with (the Blairite) Progress magazine.

From the Guardian:

“Ed Miliband needs to start setting out policies this year and has little option but to accept the spending levels set out by the coalition for 2015, Labour’s Alan Johnson has said.

“… Asked whether Labour should commit to sticking to the government’s spending limits for the first two years if elected — as it did in 1997 — Johnson said it was ‘difficult to think what else you can do’.

“‘We can’t get away from the fact that the fiscal deficit has got to come down,’ he said.

“‘Now is a dangerous time. We can’t get away with saying we are thinking about policy. That’s perfectly acceptable for the first three years, but now we have got to start unveiling some policy and what Ed’s going to need to do is to meet the expectations he himself has created.'”

Yesterday, Tony Blair, speaking on BBC1’s Andrew Marr programme, said Labour would “later in this year… start to unveil its policies”.

The clock is ticking, Ed…


Watch this video of a puppy dancing, trying to get attention…


The Telegraph reports:

“Chris Huhne, the former Energy Secretary, and his ex-wife will go on trial today over claims that she took speeding points for him nearly a decade ago.

“The Liberal Democrat MP and his former wife, Vicky Pryce, are accused of perverting the course of justice over a speeding offence dating from 2003.

“Mr Huhne resigned from the Cabinet last year after the Crown Prosecution Service announced that he had been charged over an allegation that he persuaded Miss Pryce to take his penalty points so he could avoid prosecution.”


From the Telegraph:

“Votes in Labour seats will be worth much more than votes in Tory seats because the Liberal Democrats rejected new Commons boundaries, the Conservatives have claimed.

“Labour and Lib Dem MPs last week voted to reject Conservative plans to redraw Commons boundaries and cut the House of Commons by 50 seats.

“Without those changes, votes in some seats will be worth half as much as those in others by the next election, according to research by the Tories. They say that the reforms would have stopped the current Commons map favouring Labour so much because sizes of constituencies would have been standardised.”

Oh boo-hoo. Here’s a tip for the Tories: if you’re so worried about the (undoubted) unfairness and disproportionality of our antiquated voting system, why not campaign for full proportional representation? Where seats in parliament reflect votes in the country?


Another PR victory for the Met – from the Guardian:

“Britain’s largest police force stole the identities of an estimated 80 dead children and issued fake passports in their names for use by undercover police officers.

“The Metropolitan police secretly authorised the practice for covert officers infiltrating protest groups without consulting or informing the children’s parents.”

“… Two undercover officers have provided a detailed account of how they and others used the identities of dead children. One, who adopted the fake persona of Pete Black while undercover in anti-racist groups, said he felt he was ‘stomping on the grave’ of the four-year-old boy whose identity he used.


Remember how we’ve run out of money? How the government can’t afford to fund SureStart centres or disability benefits? Not quite (via the Mirror):

“The cost of decommissioning Sellafield nuclear reprocessing plant has hit £67.5billion and is still rising, MPs have warned.

“The Commons Public Accounts Committee said the authority dealing with our radioactive legacy had not been able to show if it gave value for money.

“Around £1.6billion a year is spent on the site, due to close in 2018.”


From the Times:

“Today, a former US diplomat to some of the world’s less glamorous berths provides the answer: do not expect to get the Court of St James’s if you raised less than $650,000 for the Obama campaign, and in this competitive year of ten big donors for every top position, it could take $2.3 million.

“Dennis Jett, who started his foreign career in Argentina in 1973, and served in Liberia during the civil war and Mozambique during a refugee crisis, teamed up with an economist to establish the probability of big political donors landing in fine world capitals.

“Their computer model concludes that the greater the campaign donation, the more likely a posting will be in Western Europe rather than those countries seen as ‘obscure, dangerous, poor or of low interest to tourists’.”

I guess that means Matthew Barzun (the ambassador to Sweden, who raised more than $2m for Obama) has a better chance of getting the London gig than Anna Wintour (he editor of American Vogue, who raised a mere $500,000 for Obama’s campaign).


From yesterday’s Sunday Times/YouGov poll:

Labour 41
Conservatives 34
Lib Dems 12
Ukip 8

That would give Labour a majority of 86.


‏@Freeman_George Fitting that this week sees a new Archbishop and new Bank Governor. Never have we needed spiritual, moral and financial leadership so much.

@tobyhelm incredibly @toryeducation still listed as official @Conservatives site despite Gove’s lot running it as a propaganda tool in breach of codes

@Mike_Fabricant Why is it when I tweet about Gay Marriage I get loads of replies, but no-one is interested when I tweet about my (4g) Dongle? Boo hooh.


Maria Miller, writing in the Times, says: “The State should not stop two people who love each other, gay or straight, getting married.”

David Blanchflower, writing in the Independent, says: “Here’s a way to end our slump: give away money.”

Geoffrey Wheatcroft, writing in the Guardian, says: “The Andrew Mitchell affair revealed our prejudices, and showed the police to be untrustworthy.”

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