Revealed: The Treasury mandarin who said losing £1bn for the taxpayer was value for money

john kingman, second Permanent secretary at The Treasury Pic Credit: worldellows.yale.edu

john kingman, second Permanent secretary at The Treasury Pic Credit: worldellows.yale.edu

CROSS POSTED FROM  BYLINE.COM WHERE SOME OF MY WHITEHALL AND WESTMINSTER SCOOPS WILL NOW APPEAR FIRST AS PART OF A NEW CROWDFUNDING DEAL TO WIDEN THE SCOPE OF THIS BLOG

There has been enormous outrage about the £1bn loss to the taxpayer caused by the sale of the first tranche of Royal Bank of Scotland shares. An article in The Guardian on August 4 reported not only expected criticism from Labour but concern from a banking analyst that the share price of RBS was too low to justify the sale.

What was only briefly mentioned was that the second most powerful mandarin in the Treasury had also given the go ahead. You might expect him to bow and scrape to the Chancellor but actually he has more powers than you might think and he needn’t have followed his instructions.

If an accounting officer believes that a government minister is about to make a decision that will lead to a big loss to the taxpayer he can refuse to approve the action.

These actions are not taken lightly – one of the most recent examples being the refusal by Richard Heaton (soon to become Permanent Secretary at MoJ) who requested one, on value for money grounds, on 26 June over extra funding for the Kids company charity. He was overruled by ministers who have now seen to have made a big mistake as recent coverage reveals.

John Kingman could have done the same thing. He would face being overruled by George Osborne but it would have caused a furore and triggered an eventual Whitehall investigation.

John Kingman Letter Instead as this letter above shows he has positively embraced the sale.

“ I am satisfied that a sale at this time would offer good value for money for the taxpayer and meets all other requirements in accordance with the principles of Managing Public Money,” he wrote to George Osborne.

Really?  Now John Kingman is one of the cleverest mandarins in Whitehall. He hates holidays, lives in Leicester Square and one former colleague describes him in these words: “His arrogance is only marginally ahead of his considerable intelligence, whereas with most ambitious men of his ilk the gap is rather larger.” A profile in 2009 by political editor George Parker in the Financial Times says it all.

He writes “If he can achieve the goal of unwinding the taxpayer’s stake ( in RBS) at a profit, his route to the top of the civil service is clear, even if some question whether he has the patience to manage such a huge, traditional organisation. “

Well at the moment he hasn’t – he has acquiesced in a £1 billion tax loss. And I am not the only one who has noticed this.

The National Audit Office, Parliament’s financial watchdog, which reports on state asset sales, confirmed to me “We are watching the situation”.

They will have to make a report on this. This will lead him to have to appear before the House of Commons public accounts committee to justify why he approved what was done.

No doubt the government would like Parliament to take its time – perhaps not report until the entire sale is over – but that won’t be until 2020.

I say the huge loss to the taxpayer should not go unchallenged for years. Bring it on now!

Distorted and Massaged: How the dole claimant figures show a divided nation

George Osborne at the Despatch Box in Parliament pic credit: video snatch from www.csmonitor

George Osborne at the Despatch Box in Parliament
pic credit: video snatch from http://www.csmonitor

George Osborne’s great claims that the UK is on the road to jobs recovery has already been attacked for producing a mass of new low paid jobs, zero rated contracts and a boom in part-time working.

A closer analysis recently provided by the House of Commons library breaking down unemployment by constituency reveals a rather different disturbing and divided picture. And it officially shows the current claimant count is being massaged by Iain Duncan Smith, the works and pensions secretary, to underestimate the number of dole claimants on benefit.

As I report in Tribune magazine the figures reveal huge differences in the claimant rate between constituencies with up to 25 times more people on the dole in the worst parliamentary seats than the best. It shows that the “recovery” is by no means universal despite the creation of hundreds of thousands of low-paid jobs.

The worst place in the United Kingdom is undoubtedly the Foyle constituency of Mark Durkan, the SDLP MP. Here there are more than 6,600 on benefit representing 13.2 per cent of the population.

The recovery has by passed Foyle – with a drop of just over 5 per cent in claimants in the last year – compared to an average drop of 30 per cent in the UK and more than 45 per cent in Epsom and Ewell, the Surrey seat of Chris Grayling, the Justice Secretary.

The best place in the UK is still fuelled by the Scottish oil boom – the West Aberdeenshire and Kincardine constituency of Liberal Democrat MP, Sir Robert Smith – with just 0.4 per cent on benefit – 221 people claiming benefit with only 30 unemployed for more than a year.

Other unemployment blackspots are Birmingham, Ladywood and Hodge Hill, all over 11 per cent and falling at a lower rate – some 20 per cent -than the national average.  There is a similar picture in Belfast North and West;Bradford East and West, Middlesbrough and Birmingham, Perry Barr.

But there are areas where unemployment claims have disappeared. Among those with benefit claims of 0.7 per cent and less are Stratford-on-Avon, Henley-on-Thames, Mid Sussex, North Dorset, Kenilworth and Southam and North East Hampshire.

But there is also a disturbing picture that has gone unnoticed because of the debacle by works and pensions secretary, Iain Duncan Smith, in launching universal credit. At  the moment it covers about 0.3 per cent of the population.

The Commons library  reveals that currently statistics are not being collected from people on universal credit to find out whether they are in work or unemployed when they claim the benefit.

As it says : “Some new jobseekers are claiming Universal Credit rather than Jobseeker’s Allowance since the commencement of the Universal Credit pathfinder on 29 April 2013. These jobseekers are not included in the claimant count. ”

“…As a result, the claimant count will understate the total number of jobseekers in the constituencies affected.
ONS (Office for National Statistics) intends to include jobseeker Universal Credit claims within the claimant count statistics “as soon as possible”.”

However the ONS website says :  “No timetable is currently available as to when this will occur.”

This affects claimants at 40 jobcentres. The worst example is the Oldham West and Royton seat of Labour MP Michael Meacher where 1240 people are on universal credit.

The number of JSA claimants in his constituency is 1530, down  51 per cent over the last year but if the figures do not include those on universal credit instead – they are bound to be an underestimate of the real number of claimants on the dole.

A similar situation exists in  Wigan, the seat of Lisa Nandy, where 1020 people are claiming Universal Credit and is recording a 46 per cent drop in the number of people claiming  JSA over a year.

Now it would be remarkable if Wigan and Oldham could post  bigger cuts in dole claimants than Epsom and Ewell in Surrey. It is obviously not true.

So I think Mr Osborne better be very careful if he starts talking up the big drop among the unemployed in the North before the next general election based on these massaged statistics. If he does he will be telling the electorate at best only a partial truth and at worst lying through his teeth.

Coulson: The £275,000 ” Red Top Shaman” who bewitched David Cameron

Andy Coulson, Cameron's Red Top Shaman

Andy Coulson, Cameron’s Red Top Shaman

I am rather surprised in the wake of Coulson’ s conviction for conspiracy over phone hacking none of the commentators have picked up the extraordinary passages about his appointment  to the Tory Party in  Matthew D’Ancona’s revealing book In It Together, The Inside Story of the Coalition Government.

In a series of purple passages he describes the determination of both George Osborne and David Cameron to woo him to become the £275k  Conservative Party’s director of communications on 9 July 2007 – so soon after he resigned from the News of the World as editor over the conviction of Clive Goodman for phone hacking.

It is quite clear from Matthew’s account that Coulson himself had reservations about taking the job – which led him to become the Downing Street press secretary by 2010 at a salary of £140,000 a year – and in hindsight might suggest he was worried about further fall out over the phone hacking scandal.

But what is more extraordinary are the purple passages about Cameron’s passion for his professional abilities.. George Osborne is portrayed as a hard-headed strategist – Matthew describes his view of Coulson as ” a street fighter who could take the battle to Labour and win in a media knife-fight.”

But Cameron comes over as besotted with Coulson. According to Matthew ” Cameron..was awestruck by his communications director, whom he privately described in lyrical language.”

” He treated Coulson as a red top shaman, a source of secret knowledge about the world of tabloids, Essex and kitchen- table politics. The phone hacking story refused to go away but Cameron was determined not to yield to those who urged him to ditch Coulson.”

Matthew later adds – and remember that this written before the trial verdict – that Cameron was determined he must follow him into Downing Street and as a result didn’t want ” to ask too many questions.”

He writes:” Coulson had the talent of the outsider, and exercised a quietly magnetic influence upon his privileged bosses, bringing Billericay to Bullingdon.”

All this makes Cameron’s badly timed apology for appointing him show Cameron up as shallow turncoat. While it may not  quite rank as an equivalent of Peter thrice denying Jesus, it says something about how a man who treats Coulson as a Messiah figure to connect with the working class and then distances himself as fast as he can when he is down and out. Particularly when it is clear from Matthew’s account that Coulson more than once offered to resign because of his Murdoch past.

Coulson has had a bad time – his trial and subsequent conviction – has led to a jury hearing about his  ” love cheat “affair with Rebekah Brooks , his bullying manner from co accused  Royal reporter Clive Goodman, and how he listened to the David Blunkett love tapes before publishing the story.

Don’t get me wrong,  I am not sorry for Coulson or his fate but I do think the Prime Minister is being let off far too lightly. Peter Oborne has already exposed flaws in his apology statement, Matthew D’Ancona,a Tory insider himself, to my mind, exposes flaws in Cameron’s own character.

 

Parliament: How an Old Etonian triumphed over an anti Establishment right winger

The election victory of Rory Stewart, over Julian Lewis  by 14 votes for the chairmanship of the Commons defence committee had all the hallmarks of  a well  orchestrated  Conservative Establishment manoeuvre. The full result is here.

It meant that one Old Etonian replaced another. James Arbuthnot, as  Tory chair of the defence committee, stood down. Rory Stewart. replaced him. It also blocked a troublesome Tory who helped humiliate Cameron by stopping  him arming the rebels in Syria, which could have let jihadists obtaining chemical weapons. 

The voting – using the single transferable vote- among the most sophisticated electorate in the country – allowed loyalist Tories two stabs at the post.

 The first choice was probably ” safe pair of hands” Keith Simpson, Mp for Broadland, but when it became clear that Lewis had garnered enough support  from Labour to overtake Simpson.they had another figure up their sleeve, Rory Stewart.

Stewart, who had military experience in Afghanistan and Iraq, has been a tutor to Princes William and Harry and is regarded as a rising star. He attended recently along with George Osborne the influential Bilderberg Group. And significantly a very busy Chancellor took time out yesterday to vote. David Cameron himself did not have time.

Lewis who has encyclopaedic knowledge of defence matters  might not be so good as  Rory as a TV presenter but he would have been trouble.It will be very interesting to see how Rory handles the chairmanship of the committee and whether he makes waves or even wants to make waves.

 One fascinating fact: We have a new chair of defence who has tabled only one question on defence to the government in the last year. He’ll have to ask a lot more now to make an impact.

 

 

 

 

Housing development where Osborne gave his speech will have separate entrances for rich and poor

davidhencke:

The true nature of Osborne’s recovery: £1.4m front door homes for the rich ( marketed overseas) and 70 back door homes for London’s poor. ( the rich will need servants to live somewhere near). See Jules Birch’s blog on the marketing and history of the development. Those living in social housing are actually BANNED from using the posh front. entrance. A new apartheid?

Originally posted on Pride's Purge:

(not satire – it’s George Osborne!)

George Osborne chose a new housing development in London yesterday to give his speech on how the economy is ‘turning the corner’.

The chancellor said the development – One Commercial Street – was “a physical reminder” of what has been happening to the economy.

Well, he’s certainly right about that.

Because the cheapest private apartments for sale at One Commercial Street start at £750,000 with penthouse suites costing millions.

And the 70 units which have been sold to a housing association  – included because of Section 106 affordable housing requirements – will be in a separate part of the building and will have a completely separate entrance round the corner and well out of sight of the exclusive entrance used by the well-heeled, mainly foreign private tenants.

Yes – Osborne’s absolutely right about One Commercial Street being a physical reminder of the economy.

A rich minority living lives…

View original 105 more words

Four Cabinet Ministers and a Tory special relationship “charity” get off lightly

Henry Kissinger- a star speaker at Atlantic Bridge's uncharitable events- picture courtesy UPI

Any political activist knows that party politics and charitable status don’t mix. And if they do and someone complains the effects can be toxic for the organisation and any leading figures involved.

The Smith Institute found this to its cost when it was torn apart by a Charity Commission investigation two years ago accusing its trustees and organisers of appearing to be too party political and too close to Gordon Brown. The damage to Labour was enormous and the Commission used its powers to hold a full inquiry and directed its trustees to reform the organisation or else.

This week it was the turn of the Tories – or did you notice it?

 Atlantic Bridge- patron Margaret Thatcher  and an advisory board composed of four prominent Tory Cabinet ministers, Liam Fox, George Osborne, William Hague and Michael Gove – was given a year to change its act- after facing exactly the same allegations as Labour. The charity which promotes the “special relationship” with the US – was found in a damning report to be little more than a promotion for Thatcherite party political beliefs and neo-Cons in the US.

But one reason why it may not have hit the headlines is that the Charity Commission was far softer on the offending Tory charity. For a start its press officer advised after they received the initial complaint from Labour activist Stephen Newton that the word investigate could not be used as they had not launched a formal investigation. Instead the phrase “engaging with the charity to address concerns” through a regulatory compliance case was used instead.

Now nine months later the report has been issued with the almost same findings against The Smith Institute. The key phrase is the finding that the charity is “promoting a policy which is closely associated with the Conservative Party.”

But instead of a six month direction the charity has been given a year to change and only then is there a threat against the charity’s trustees of further action.

But more significantly while it is clear that the charity had broken the rules for at least seven years nothing is being done about its tax free position.

These are not minor sums. This was the charity that was charging £700 a seat for VIPs and £400 a seat for ordinary mortals to hear Henry Kissinger speak at a luxury London hotel last year and see him presented with a Margaret Thatcher Medal of Freedom. The commission’s report discloses that the charity admits this event was part of a tax free fund raising drive. The donors – probably mainly higher rate taxpayers – could claim the money against their tax returns. And it is now clear that Atlantic Bridge can’t claim the same charitable status as the National Trust.

So why hasn’t this been referred to Revenue and Customs?  Why aren’t more searching questions not being asked of the advisory panel of Cabinet ministers who presided over an organisation that clearly broke charity rules?

Atlantic Bridge is not actually being repentant either. In a statement they reluctantly promised to follow the Commission’s ruling and have taken down their website for “updating”. But it expressed its  “ disappointment” at the Commission’s ruling  and refused to answer any questions about the role of their trustees or advisory panel.

 The Charity Commission is being a little too careful in handling this scandal. I wonder why.

A similar version of this blog has now appeared on the Guardian’s Comment is Free website.

Has Cameron blown it?

Cameron- what's going wrong: Picture courtesy Greenpeace

In an election that began competing with the Icelandic volcano for volatility and unpredictability, it is probably tempting fate to write any epitaph for David Cameron midway through the campaign.

 Yet what has become clear is that Dave has not “sealed the deal” with the electorate and has squandered a ten point plus lead which should have ensured that he easily formed a government on May 7, albeit with a small majority.

If he fails he faces a damning post mortem by his party but the seeds of his own potential destruction have been around before the campaign even started. They lie in the weakest links in his own shadow cabinet- George Osborne, his chancellor, and Chris Grayling, his shadow home secretary.

The  rise in Liberal Democrat support following the first debate is not so surprising when you compare the quality of the two key spokesmen backing Clegg with their Tory counterparts-Vince Cable dominates Osborne and Chris Huhne, a former leadership contender, outsmarts Grayling. The weakest link in the Liberal Democrats was until then Clegg who? Then came his first performance on our TV screens, reinforced by the second.

Osborne has been tainted ever since a Parliamentary investigation into the undeclared funding for his office during the last session (Tenth report  Standards and Privileges Committee. Conduct of Mr George Osborne HC 560) revealed that it had received some £487,000 of donors’ cash to fund his office from high fliers in the city and a scion of the Rothschild family.

What is extraordinary is that these huge sums to fund research and the access he had to brains in the City have failed to produce an economic policy to challenge Labour. Instead there seems to have been a combination of policies that would particularly benefit the donors (the big hike in the threshold for inheritance tax), a rush to introduce public spending cuts and a claim that a £6 billion jobs tax would snuff out the entire economic recovery..

The latter appeared to be holed last week when Sir Terry Leahy, the head of Tesco’s, announced he was not supporting a Tory co-ordinated call to cut the job tax – but was creating 9000 new jobs in the UK despite it. No explanation from Mr Osborne on that one.

Grayling has been effectively marginalised by Cameron during the campaign. He is symbolic of the fault line dividing the attempt by the leader to present a new “green blue” caring Tory agenda and the traditional Tory “ slash and cut taxes” backwoodsman – still the majority of old Tory voters. Expected to toe the new party line on gay tolerance, his mask slipped when he defended a Christian B&B owner turning away a gay couple.

Grayling is an Old Tory in New Conservative clothing – and the electorate are rumbling this. They don’t know where the Tory party really stands or if they are traditional Tories, what they stand for. This made the vacuous “Time for Change” slogan open to easy hijack from Nick Clegg.

Of course, Cameron might just bounce back to squeeze a minute majority by polling day, but time is now against him. Votes can be cast by post from this week so by the time the third debate takes place  it will be too late to sway millions.

The right wing press attack on the Liberal Democrats also had a fatal flaw – the majority of the new voters attracted to Clegg are the internet savvy under 35 generation.They don’t buy the papers anyway, so it would have zilch influence.

Whatever happens in this election – short of a miracle doubling of the Tory lead- Cameron has thrown away the Tories best chance for 13 years.

This blog is also on the Progress website.