Labour won the Oldham East and Saddleworth by-election late on Thursday night in a blow to the coalition government in its first electoral test, reports the FT. Debbie Abrahams, the Labour candidate, said voters had “sent a message” to the ruling Liberal Democrat and Conservative coalition opposing their “broken promises and unfair cuts”. Labour took 42 per cent of the vote, the Lib Dems got 32 per cent and the Conservatives gained just 13 per cent, half their level in May’s election, as their supporters voted tactically for their coalition partners.
Liam Fox, the defence secretary, has launched a big assault on the Treasury’s attempt to slash his department’s budget, warning that “draconian” cuts to military spending cannot be implemented without “grave consequences” for the Conservative party and the government, reports the FT. In a head-on attack on chancellor George Osborne’s call for cuts of up 20 per cent in the Ministry of Defence budget, Mr Fox has told David Cameron that he refuses to back any substantial reduction in funding for the armed forces. In a private letter to the prime minister, written on Monday night, Mr Fox said the Tories risked “destroying much of the reputation and capital” they had built up on defence if they implemented the cuts demanded by the Treasury.
David Cameron’s speech on Monday was a softening-up exercise for the real pain to come, the FT comments. More detail will come on Tuesday from George Osborne, chancellor of the exchequer. The new coalition government has made the first step on a long road to build a national consensus behind cuts in public expenditure. Separately, former UK chancellor Alistair Darling denied claims by Cameron that the Treasury had fiddled official forecasts to conceal the bleak economic outlook.
Got a spare 10 minutes? Some technical expertise? Experience in handling large volumes of data?
Then you might be able to get some use from the just-released UK Coins data. That’s the Combined On-line Information System, used by the Treasury to collect financial data from the public sector. Read more
JP Morgan analysts Carla Antunes da Silva and Amit Goel have been looking at Britain’s part-nationalised banks, Lloyds and RBS. Their investment advice to the British government: “Sell.” Read more
Proposals for banking reform announced by the UK’s new coalition government appear to take a far more measured approach than expected to the task of reshaping Britain’s bloated banking sector, says the FT. Both the Conservatives and Liberal Democrats have softened their stance on key issues including the imposition of a levy on the banking industry, and whether the big banks should be broken up. While the coalition agreement paves the way for a new bank tax, the lack of detail suggests a final proposal will take into account international debate on the ideal form for any such levy.
Here’s something of a surprise:
David Cameron was facing the prospect of a constitutional stand-off with Gordon Brown on Friday morning over who would get the keys to Number 10 as a hung parliament in the UK appeared inevitable, the FT reported. The Conservative party leader insisted that Labour had “lost its mandate to govern” as the Tories made big gains in the general election and comfortably overtook Labour as the largest party in the House of Commons. But Mr Cameron faced an agonising wait before learning whether he would need to rely on other parties to support a Conservative administration.
From an email doing the rounds in the City of London on Thursday morning:
Or, how one paraphrased quote is making lots of trouble.
Here’s the offending remark: Read more
David Cameron emerged from last night’s showdown television debate as the clear election frontrunner, after Gordon Brown failed to grasp his last big chance to claw his way back into contention, reports the FT. Instant polls concluded that the Conservative leader won the third and final leaders’ debate with Nick Clegg, Lib Dem leader, coming second in most polls; Mr Brown trailed in third place.
George Osborne, the prospective Tory chancellor, has failed to win over the City’s top bankers, with the vast majority of senior financial services executives preferring the incumbent, Alistair Darling, an FT survey says. The FT poll of more than two dozen senior bankers revealed deep misgivings about Mr Osborne amid an election campaign that has seen all three main parties attacking big City bonuses.
Punters on the pound and gilts really don’t seem to mind too much that the Liberal Democrat party are leading many polls right now, noted FT Alphaville on Thursday. What’s going on? Read more
David Cameron’s efficiency chief has told him to cut the public payroll by up to £2bn within a year of the general election, a saving that could lead to the loss of up to 40,000 jobs across the public sector. In an interview with the FT, Sir Peter Gershon, the former government adviser who has provided the blueprint for the Conservative leader’s efficiency plans, disclosed for the first time how the party’s proposed £12bn savings should be achieved.
David Cameron’s move to put his £5.6bn plan to cut Labour’s proposed “jobs tax” at the centre of his election campaign was boosted on Wednesday by a new wave of business support, the FT reports. But the Conservative leader’s plan met its first challenge from the City when Gerry Grimstone, chairman of insurer Standard Life and an adviser to the Treasury on efficiency, said any proposal to find new savings that would fund the Tory cuts was “just not credible”.
Gordon Brown finally launched the general election campaign on Tuesday, with Labour facing an uphill battle to retain a swathe of key marginal seats which have been hard hit by the economic downturn, the FT said. An analysis by the FT of 50 marginal constituencies David Cameron’s Tories must win to secure a majority found that the jobless rate in the seats has jumped from below the national average in 2005 to above it today. See also FT Alphaville on minority risk in the UK elections.
David Cameron has signalled his confidence of winning the general election expected to be called next week, issuing a clear rallying call to Conservatives shaken by opinion polls pointing to a hung parliament. “This is going to be the first time in 23 years that the Conservative party goes into a general election with a seven to 10-point lead. We’ve come a long way,” the Tory leader said in an interview with the FT.
Succumbing to the “temptation” of a further fiscal stimulus will backfire, George Osborne warns on Monday, as he stakes out the political battlelines for next week’s pre-election Budget. Writing in the Financial Times, the shadow chancellor joins forces with a leading US economist to argue that delaying action on reducing the deficit will “darken consumer confidence” and put the long-term recovery at risk.
After Thursday’s wobble, the UK gilt market has sort of regained its composure.
Click to enlarge (Snapshot taken at 10.10am London time): Read more
The electoral commission has published its latest list of donors to UK political parties. We’ve had a quick trawl through it, here at FT Alphaville.
Unsurprisingly, the headline numbers show the conservatives continuing to do well. In the first quarter, their fundraising efforts have trounced those of the other two mainstream political parties — in spite, even, of the fact that one of their principal ongoing donors, Lord Ashcroft, hasn’t donated anything this quarter. In terms of donations, year to date, here’s how things stand: Read more