“If this is robust action on bank bonuses, my name’s Bob Diamond”

George Osborne’s efforts to end the war on bankers are crumbling asVince Cable, the business secretary, said he was still determined to end “unjustified and outrageous” salaries in the sector and his Liberal Democrat ally Lord Oakeshott left his party’s frontbench after damning the government’s attempts to curb bonuses. Oakeshott, who was not in the government but spoke for the junior coalition partner on Treasury matters in the Lords, stood down shortly after he criticised officials working on the government’s deal with the bankers and said: “If this is robust action on bank bonuses, my name’s Bob Diamond.” Danny Alexander, the Lib Dem chief secretary to the Treasury, said Oakeshott had stood down by mutual consent. Osborne hailed his deal as the moment to move beyond retribution to economic recovery. – the Guardian

Lib Dem Councillors questions cuts

More than 90 prominent Liberal Democrat councillors, including the leaders of 18 local authorities, have criticised the scale and pace of government cuts. In a letter to the Times, they say cuts will have “an undoubted impact on all front-line council services, including care services to the vulnerable”. They also accuse ministers of “denigrating” councils in the media. Lib Dem Communities Minister Andrew Stunell urged his party members not to “fall out” over “pointless debate”. The signatories, who include the leaders of Newcastle, Milton Keynes and Hull city councils, say they are facing the bulk of the cuts to their budgets in the coming financial year – giving them little time “to spread the cost of reorganisation and downsizing”. – BBC

The LibDem council leaders say that the decision to both apply the deepest cuts to local government settlements and front-loading these makes it impossible for councils to cut costs in a way which protects services for the most vulnerable, and will inevitably increase costs through making more redundancies necessary. While the letter endorses the need to reduce the deficit and the broad principle of the Big Society, it makes the cogent critique that the damage to local services will be unnecessarily deep as a result of the political choices to cut deepest and fastest of all in local government, which rules out opportunities to make administrative savings in a cost-effective way. – Next Left

Hacking investigation reopens

The reopened police investigation into phone hacking by News of the World journalists has identified a number of new potential victims, including Lord Prescott, the former deputy prime minister, the Guardian has learned. Just a fortnight after reopening their inquiry, in the wake of an 18-month campaign by the Guardian, police said a re-examination of the evidence they had held for years, but failed to fully investigate, combined with new evidence from the Sunday tabloid, had thrown up an “important and immediate new line of inquiry”. The new investigation, they said, had already established “reasonable evidence” that up to 20 people, mainly prominent public figures, were targeted by the paper. The development represents Scotland Yard finally beginning to take the lid off the phone-hacking scandal. – the Guardian Read the rest of this entry »

Conservative party funding links to the City

Half of the Conservative Party’s funds last year came from the City of London, a Bureau for Investigative Journalism study has found. The proportion of the City’s contributions to the party has doubled to 50.7% from 25% when Mr Cameron became the party’s leader in 2005. The findings have led to claims that David Cameron’s party is excessively influenced by bankers. George Osborne’s announcement of an extra £800m bank levy this year would appear to combat the criticism, but critics claim the Chancellor’s decision was politically motivated with Shadow Chancellor Ed Balls labelling it a “damp squib”. – PoliticsHome

The transformation of Tory funding under David Cameron has been highlighted by new research which shows the City of London dominated donations in the runup to last year’s general election. Michael Spencer, the city financier and chief executive of the internet stockbroker ICAP who was appointed by Cameron as Tory treasurer, masterminded an aggressive charm offensive which saw funding from the financial services sector soar. It rose from £2.7m in 2005 to £11.4m last year, according to new research from the Bureau of Investigative Journalism, a non-profit organisation based at City University in London. While in part this can be attributed to Cameron’s greater popularity than his predecessor, Michael Howard, the amount coming from the City has more than doubled in percentage terms, and now accounts for more than half the Tories’ funding. It rose from 24.7% of donations in 2005 to 50.8% in 2010. – the Guardian

Osborne vs. Balls

Ed Balls and George Osborne went head-to-head across the despatch box at Treasury Questions for the first time today. The new shadow chancellor quizzed Mr Osborne over the poor growth figures and the government’s lack of a Plan B, with the chancellor hitting back by calling Mr Balls a “deficit denier”. Mr Balls questioned why the snow was to blame for the poor economic figures, while in the US, which had also been hit by the weather: “…the pace of US economic growth increased, consumer confidence was high, and unemployment fell to a two-year low. Could the chancellor tell the House, is there something different about snow in Britain, or is there a better explanation as to why the American economy grew and Britain’s economy did not?” – Left Foot Forward

In parliament, Balls lambasted Osborne for making the announcement about the levy at breakfast time, rather than in next month’s budget, describing it as a “mini budget”. He also said that even without the increased bank levy, Osborne had cut tax for banks this year because he had not reintroduced Labour’s bank bonus tax and was also cutting corporation tax. Osborne, however, was adamant that banks would pay more tax under the coalition than they would have done under Labour and insisted that he would not sign an agreement with the banks until he thought he had a “good” deal. Meanwhile, the government and the banks are continuing talks over an agreement on bankers’ bonuses and lending. An agreement on the so-called Project Merlin is to be announced within the “next week”, Treasury officials said. – the Guardian

Eric Illsley resigns

Eric Illsley, the first MP to be convicted over the expenses scandal, has resigned. Labour is planning to trigger a by-election in his Barnsley Central seat on March 3. Illsley is due to be sentenced on Thursday after admitting dishonestly claiming £14,000 of expenses on January 11. He could theoretically have stayed on as a MP with a jail term of less than 12 months.  However, following heavy pressure, Illsley expressed “deep regret” over his actions and said he would resign before the court decided his fate. – the Telegraph

Last month, Illsley became the first sitting MP to be convicted of expenses fraud after pleading guilty to three charges of false accounting. At the time, Labour leader Ed Miliband said Illsley should “do the right thing” and resign as an MP. “I don’t think he can be a credible voice for his constituents having pleaded guilty to such a serious offence,” he added. Illsley had been suspended from the Labour Party following the allegations and sat as an independent after being re-elected in last May’s general election. – Sky