Tuesday, 3 July 2012

Morning briefing..

BREAKING: George Osborne has just been on the Today programme.

On Diamond’s resignation: “I think it’s the right decision for Barclays and the economy... I hope it’s the first steps to a more responsible banking system”

On whether he or David Cameron asked him to resign: “Obviously we had conversations with Barclays, but it was ultimately it was a matter for [Barclays’]board”

Osborne wouldn’t directly say whether Diamond had set the standard for other banks involved in misdeeds, but he did say it was the first step in changing the culture of banking in the UK. He said Agius and Diamond may well stand in the dock on the issue since they are looking at giving the regulators prosecuting powers.

Osborne says he thinks there was a deal between Gordon Brown and others that allowed bankers to do whatever they liked in exchange for bringing in money for politicians to spend on public services.

He said there was no need for a Leveson style independent inquiry because the Vickers report served that function.


Bob Diamond’s resignation leads the news today. Yesterday he said he couldn’t let external pressure on Barclays reach a level that risks damaging the franchise. Clearly that level has been reached. He will still be attending Wednesday’s hearing by the Treasury select committee, though, at which the FT   reports that Bob Diamond is threatening to reveal potentially embarrassing details about Barclays’ dealings with regulators if he comes under fire.

David Cameron tried to be decisive yesterday with his quick-fix parliamentary inquiry, but he's getting a lot of stick for it. The calls for a Leveson for banks have not died down, and Labour is planning to force a vote on a judge-led inquiry today. The Mail  in particular uses a full drop leader to give the Prime Minister yet another kicking.

Our leader  warns against Ed Miliband’s suggestion, saying that it will turn into a show trial. Instead, it supports David Cameron’s position with “a focus not so much on past misdeeds, as on what the two men [Diamond and Agius] can teach us for the future.”

Quite how you get a group of lay parliamentarians, however distinguished, to find their way through the complexities of modern markets is not clear. Luckily for Dave, Labour is getting it in the neck too. The Times  point out that Gordon Brown, Ed Balls and Shriti Vadera will be called to give evidence on their stewardship, or lack of it. And James Chapman in the Mail  has got hold of an awkward 2008 report prepared by Baroness Vadera with UBS with the unfortunate title ‘Reducing Libor’. The paper was reportedly circulated among officials, which doesn't prove anything but at the very least underscores why at the height of the crisis Libor was a hot topic.

On Newsnight last night, Allegra Stratton reported on a letter that has been sent to the Treasury Select Committee (TSC) by someone anonymous who describes themselves as a "senior FSA employee”. They allege they overheard a discussion about the email exchanges between Paul Tucker, the Deputy Governor of the Bank of England, and Bob Diamond regarding rate setting.The TSC meets today to consider this.

In the Times today, David Davis takes a firm line on the regulators, saying: “It is plaintive nonsense for regulators to whinge that they ‘don’t have the powers’”. He argues that the FSA should have reported these crimes to the police or the Serious Fraud Office.

Jeremy Warner says locking up the bankers found guilty of this wrongdoing is the only way to deal with abuse like this. And  Damian Reece says “Diamond's time to leave may have come”, because “to change a culture, you have to change the people.”


Ed Miliband’s accusation that Dave is doing the “hokey-cokey” on an EU referendum seems to have stuck. The FT has used it in its headline today. But more worryingly for No 10 is the sidebar the paper has included on business groups’ nervous reactions to the idea.

The Mail focuses on senior ministers’ fury at Dave’s handling of the issue, using the headline “New Tory revolt on EU threatens Cameron”. The Times says that Dave is appealing for time, but that Iain Duncan Smith and Owen Patterson have put him under pressure after his initial 'being in the EU is vital' outburst on Friday. Will they be reassured after his 80-minute appearance in the Commons yesterday? I'm not convinced, especially given the hostile questions he had from various PPSs. We are still no clearer about quite what he means.

Gideon Rachman says there is a case for renegotiation, but that launching one now when we have no idea where the EU is going to end up is madness.


Meanwhile, Dave will take an axe to the army this week.   We’ve splashed on Brig David Paterson’s leaked letter to the Chief of the General Staff, Gen Sir Peter Wall, that reveals that five infantry battalions and a third of the Royal Artillery and Royal Logistic Corps will be cut. He says he is “bitterly disappointed” and warns “If challenged or scrutinised by, for example, the media, it cannot be presented as the best or most sensible military option.”

The Sun has given a double-page spread to the numbers facing the chop.

Last week, Rachel Sylvester reported that Dave was suppose to announce this in May, but No 10 and the Treasury dragged their feet. They must have known an almighty fight was coming. And here it goes...

It will be interesting to see how Dave’s backbenchers react. The Tories have always prided themselves on being the party of the Army. Will they bite their tongues? Or will this give those 100 rebellious Conservative MPs - kicking back at Lords reform and calling for an EU referendum - more to complain about?


And finally, a great spot by John Rentoul: George Osborne, facing off Ed Balls in the Commons yesterday:

“Did he express any concern about the LIBOR rate? When he was in the Cabinet and Gordon Brown, the Right hon. Member for wherever it is, was Prime Minister, was he concerned about the LIBOR rate and Barclays? We shall find out in due course.”

The Right hon Member for wherever it is? Perhaps George was just smarting at the YouGov poll which ranked him lowest in popularity among all recent Chancellors...


Labour MP Helen Goodman ‏bears a grudge:

“@HelenGoodmanMP: Never forget #MarcusAgius leaving me with the tab for a very costly taxi 25 years ago. Leopards, spots etc”


Latest YouGov/The Sun results: Conservatives 34%, Labour 44%, Lib Dems 8%, UKIP 8%

Overall government approval rating: -38


In The Telegraph

Jeremy Warner: Barclays libor scandal: lock 'em up - it's the only way of dealing with abuse like this

Mary Riddell: Ed Miliband’s moral crusade must bring an end to the rule of lucre

Philip Johnston: Europe: There’s only one question: 'Are we in or out?

Leader: Bank regulation must be simple and tough

Best of the rest

Alex Brummer in the Mail: Can't we trust even the Bank of England? 

Gideon Rachman in the Financial Times: Blackmail cannot be UK’s Europe policy 

Polly Toynbee in the Guardian: This lost generation will cost us more than the cuts save 

Rachel Sylvester in the Times: ‘No jerks’ applies to Britain, not just Barclays 


Today: The Education Select Committee publishes its report on “The administration of examinations for 15 to 19-year-olds in England”

Today: Caroline Spelman attends a roundtable on food waste

Today: Bob Kerslake and Francis Maude speak at Civil Service Live. Olympia National Hall, London

8.15am: Justine Greening and Boris Johnson speak of Olympics travel plans for Londoners. Freshfields, 65 Fleet Street

8.45am: MPs attend Scottish Independence Seminar. Speakers include the former First Minister Henry Mcleish; Danny Alexander; Shadow Scottish Secretary Margaret Curran; Former Scottish Enterprise Minister Jim Mather;  Fraser Nelson; Jon Craig; Holyrood Magazine editor Mandy Rhodes. One Birdcage Walk, Westminster, London

9.30am: The Bank of England publishes its lending to individuals figures for May

10am: The Institute for Fiscal Studies launches a report on the NHS and social care funding. 12 Great George Street

11am: Children’s Minister Tim Loughton announces urgent reforms to protect children in residential care homes from sexual exploitation.

2.30pm: Justice Questions

10.15am: Energy and Climate Change Minister Gregory Barker appears before the Energy and Climate Change Select Committee to discuss "The road to UNFCCC COP 18 and beyond". Room 16, Palace of Westminster

10.30am: Ed Vaizey MP appears before the Culture, Media and Sport Select Committee to discuss broadband delivery in the UK. Room 8, Palace of Westminster

12pm: Ken Clarke appears before the Home Affairs Select Committee to discuss drugs. Grimond Room, Portcullis House

4pm: David Cameron appears before the Liaison Committee. Wilson Room, Portcullis House

6pm: Francis Maude launches a Policy Exchange report, which says the government could save up to £33 billion a year by using public data more effectively. Clutha House, 10 Storey's Gate, London