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Politics live blog: Tuesday 7 February 2012

Hélène Mulholland with all of today’s politics news

12.46pm: Lord Prescott said earlier on the BBC that he wouldn’t have needed to go for a judicial review if the Met had just admitted in the first place that it had made mistakes. He recounted the way he was told there was “nothing there” when he initially asked the Met whether his phone had been hacked. He said he didn’t intend to sue for damages, he just wanted them to admit they hadn’t done their job properly. Quotes courtesy of politicshome:

He told the BBC: “They’ve even been admitting to parliamentary committees in the last year or so that they had made mistakes. They set up a second inquiry. So that is the big question – why they didn’t [admit they had made a mistake].

“And we did call for an inquiry and I’m delighted that the Leveson inquiry is now looking at the relations of the police and indeed the press – that is an important issue and I have to say I hope they’ve learnt some lessons. But if the public is to get the trust back in the press and the police, we’ve got to keep an eye on them.”

Here’s the Met statement:

The MPS is pleased to have reached an agreement in this case and accepts more should have been done by police in relation to those identified as victims and potential victims of phone hacking several years ago. It is a matter of public record that the unprecedented increase in anti-terrorist investigations resulted in the parameters of the original inquiry being tightly drawn, and officers considered the prosecution and conviction of Clive Goodman and Glen Mulcaire as a successful outcome of their investigation.

There are now more than 130 officers involved in the current phone-hacking inquiry (Weeting) and the two operations being run in conjunction with it and this in part reflects the lessons that have been learned about how police should deal with the victims of such crimes.

Today’s settlement does not entail damages being paid by the MPS and as the court has made clear, sets no precedent for the future. How the MPS treats victims goes to the very heart of what we do. It was important that this case did not result in such a wide duty being placed on police officers that it could direct them away from their core purpose of preventing and detecting crime.

12.19pm: Here’s some copy from PA on the high court case and phone hacking:

The Metropolitan police service today accepted at the high court that failure in 2006 and 2007 to warn victims and potential victims of phone hacking was unlawful.

News of the acceptance that it had “breached a legal obligation” came as two judges in London heard that a number of claimants – including former deputy prime minister Lord Prescott – had settled judicial review proceedings brought against the Met over “failures to warn victims”.

Lord Justice Gross and Mr Justice Irwin were told that the two sides had reached agreement by Hugh Tomlinson QC, representing Lord Prescott, ex-Met police deputy assistant commissioner Brian Paddick, actor Jude Law’s personal assistant Ben Jackson, MP Chris Bryant and an anonymous individual known as HJK.

Mr Tomlinson said the claimants and the Met had agreed a “declaration” – in which the Met admits it breached its duties under Article 8 of the European convention on human rights. Lord Prescott was in court for the proceedings.”

12.12pm: I should have said earlier I was going off to the morning press briefing. I’m back now.

While I was away, the breaking news has been that the Metropolitan police has accepted at the high court that failure in 2006 and 2007 to warn victims and potential victims of phone hacking was unlawful. More on this to follow.

11.27am: Should Andrew Lansley be “taken out and shot”? I mentioned earlier talk of the health secretary’s fate – and David Cameron’s – over the NHS reforms and a Downing Street source offering the opening quote to Times columnist Rachel Sylvester (see previous post).

Benedict Brogan picks up on this thread, and the suggestion that former Labour health secretary Alan Milburn could be parachuted into government via a peerage to replace Lansley. Milburn can “rest easy”, writes Brogan on his blog. He reveals that Cameron met Nick Clegg and Lansley and agreed to press on with the reform, “despite concern about the way he has handled it”. So no U-turns, no backing down.

10.57am: The public accounts committee has revealed that the Treasury was “surprised” to learn that £10.9bn of unpaid tax had been written off by HM Revenue & Customs in one year. A report by the panel of MPs into the whole of government accounts (WGA) for 2009-2010 – compiled and published for the first time last year – reports that George Osborne’s department was apparently not fully aware of the estimate until after it appeared in the accounts.

It also had “no knowledge” of whether plans were in place to cut the taxpayer’s huge £15.7bn liability for clinical negligence claims, the committee found (the Telegraph has focused on this in its coverage).

The accounts also reveal that at 31 March 2010 the government’s public service pensions liability was more than £1,132bn and the present value of its future commitments under PFI schemes was £131.5bn.

The report says that the WGA has the potential to help the government identify the “risks it needs to manage”, but it found the Treasury’s understanding of some aspects of the WGA was “poor”. “For instance the Treasury showed surprise at the estimated £10.9bn in outstanding tax and it had no knowledge of recent trends in clinical negligence claims or whether plans were in place to reduce the estimated £15.7bn cost to taxpayers of meeting these claims,” the report states. “The Treasury should use the WGA specifically to identify key risks to public funds and ensure bodies included in the WGA can demonstrate that they are addressing them effectively.”

You can see the conclusions and recommendations on this page.

The PAC chair, Margaret Hodge, said the document “currently falls short of giving a true and fair view of the UK’s financial position”.

Here’s an excerpt from a report by the Press Association:

Hodge said: “The Treasury has departed from accounting standards by leaving out of the accounts such bodies as Network Rail and the publicly-owned banks. This has led to the accounts being qualified by the Comptroller & Auditor General. We want the government to provide the necessary information so that these accounts are comprehensive and credible.”

The report highlighted massive swings in liabilities for public sector pensions and nuclear decommissioning, partly due to officials’ “inconsistent” use of discount rates when calculating the figures.

It also raised concerns about the quality of data, saying the financial information provided by academies had been “generally poor”.

“This issue is likely to become more important with the creation of new academies and other organisations that deliver local services such as free schools, foundation trusts and GP consortia,” the MPs added.

The Treasury said the WGA represented “the most ambitious public sector account prepared anywhere in the world” and that it was working hard to remove the qualifications.

“No other country has sought to fully consolidate all public sector bodies, including the local government sector, in one statement of accounts. We will build on this first publication and are working hard to remove any qualifications,” a spokesman said.

“HMRC collects almost all tax debt and write-offs are relatively low. What’s more, around 90% of those write-offs are due to insolvency where further debt pursuit is actually barred by law.”

The spokesman added that the government had for the first time published a clear assessment of PFI liabilities and launched a review which would “mean the end of PFI as we know it”.

9.54am: More on performance, this time that of the health secretary, Andrew Lansley. Rachel Sylvester in the Times (paywall), ponders over the fact that all three cabinet resignations since the coalition was formed were over personal matters, not policy or political ones. It is extraordinary, says Sylvester, that Lansley is still in position “having so monumentally mishandled the government’s NHS reforms”. David Cameron tries to resist reshuffles, but should Lansley be an exception?

As the health and social care bill prepares to undergo its report stage in the House of Lords tomorrow, Sylvester quotes “one exasperated insider” as saying that Lansley “is just a disaster” in light of his failure to win over his critics (and now even turning off some of his key supporters in the health field, as my colleague Denis Campbell reports here).

Another of Sylvester’s sources – a Downing Street source no less – chooses not to mince their words. “Andrew Lansley should be taken out and shot. He’s messed up both the communications and the substance of the policy.”

Sylvester writes:

Both Mr Cameron and George Osborne are remarkably loyal to Mr Lansley, who was their boss at the Conservative research department. But many senior figures, Lib Dem and Tory, now admit privately that it was a mistake to introduce a flagship bill on health when most of the key changes could have been implemented without primary legislation. Indeed, Nick Clegg considered calling publicly for the whole thing to be abandoned – then decided, for the sake of coalition unity, to back substantial amendments instead.

‘Health reform should have been carried out by stealth,’ says one strategist. The contrast is drawn with Michael Gove’s education reforms, which have been presented successfully as the fulfilment of Tony Blair’s schools policy rather than a complete break with the past.

Perhaps it’s too late to change direction. Maybe the government now just has to minimise the damage and move on. But this issue still has the potential to destroy the Conservatives at the next election, and they know it.

My colleague Polly Toynbee says it’s not too late for the bill to be withdrawn. The decision to implement as much as he has without waiting for the bill’s royal assent is a “flagrant flouting of parliament”, writes Toynbee. But while a U-turn would be embarrassing, failing to do so would be worse, she argues.

“Too late,” the health secretary says with grim glee, and Lansley’s alarmed party believes it’s so. Of course it’s not and the bill could be withdrawn. A U-turn would be greeted with guffaws by the opposition, but that would be less politically dangerous than the cataclysm likely to engulf the NHS shortly. Andrew George, the Lib Dem MP and member of the health select committee, puts it like this: “It will now cause havoc either way, but going ahead is even more catastrophic”.

The government has gone to the extreme remedy of the law to resist the information commissioner’s instruction that the risk register on the bill should be published. If leaks to Dr Eoin Clarke’s website prove correct, the main risk is of costs becoming unaffordable as private companies siphon off profits and GP commissioners lack the expertise to control costs. The risk for David Cameron is that this will finish him.

9.27am: Still on bonuses, John Cridland, director general of the Confederation for British Industry, appears to concur with a key element of the motion being debated in the Commons this afternoon (see previous post). The Labour motion says that “bank executive remuneration should be related to performance and that banks either directly or indirectly supported by the taxpayer must recognise that the taxpayer expects very large bonuses only to be paid to reflect genuinely exceptional performance”.

Cridland is also of the opinion that one shouldn’t get paid extra just for doing one’s job. He was on the BBC Radio 4 Today programme and said it is only the exceptional performance that should be rewarded.

He said: “I think exceptional performance can be in a charity, it can be in a local community, it can be in a school, it can be in a manufacturing company, it can be an exporter, it can be a bank. But you need to look at what is exceptional rather than what somebody’s already being paid to do.”

Rachel Reeves, shadow chief secretary to the Treasury, was on ITV Daybreak this morning arguing that bonsues should be taxed properly, and the revenue used to fund employment opportunities for the young. Quotes courtesy of Press Association.

“We want bonuses to be taxed properly and, in the last year of the Labour government, we taxed bonuses of more than £25,000 at 50%. We think if we did that again we could bring in £2bn to help pay for a fund of youth jobs.” She added: “We would like to see bonuses reined in, and bonuses should only be paid for exceptional performance – especially these huge bonuses of hundreds of thousands, or even millions of pounds.”

Reeves said the pay of people at the top of firms had increased at a far greater rate than those lower down in companies. “Over the last year what you’ve seen is the pay for directors of firms go up by 50% whilst ordinary workers aren’t seeing any pay rises at all. They are seeing prices go up for their gas, electricity, train fares, petrol, and yet their wages haven’t and it doesn’t seem right, especially when banks caused the crisis in the first place. They are getting a tax cut this year whilst everyone else is seeing their taxes rise.”

Reeves added that she would not deny ordinary workers their bonuses.
“For the average person working in a bank branch a bonus for meeting their targets – I don’t have a problem with that. But there needs to be much more transparency and that is one of things Labour are calling for today. Also, having a worker on the committees that decide the wages at the top of organisations so firms are accountable to those who work there and their shareholders.”

Reeves said she applauded David Higgins and Stephen Hester for forgoing their bonuses, adding: “It’s the right thing to do in the circumstances we face at the moment.”

9.20am: Good morning.

So the head of Network Rail, Sir David Higgins, has waived his bonus, along with five fellow senior managers. But the thorny issue of executive pay is far from over.

As my colleague Patrick Wintour writes today, while RBS chief executive Stephen Hester gave in over his eyewatering bonus last week, “a host of bankers and semi-public sector executives in the regulated industries will face the court of public opinion as their pay packages are publicised, and scrutinised” in the weeks ahead.

Labour will seize on its success on applying pressure first on Hester, then Higgins, by devoting one of its opposition day debates on excessive pay at the top. The motion is on responsibility and reform in British banks. But the shadow business secretary, Chuka Umunna, who will open the debate, is expected to widen the scope to the issue of excessive pay more generally. He will weave in the Network Rail bonus brouhaha to argue that the culture of excessive bonuses is damaging the economy and society, as well as being bad for business.

Here’s the motion in full:

Responsibility and Reform in British Banks

That this House notes with concern that the recent Bank of England’s publication Trends in Lending shows net lending to businesses has fallen in nine out of the last 12 months and by more than £10bn in the last year; further notes that a Department for Business, Innovation and Skills report published on 2 February 2012 states that the stock of lending to small and medium sized enterprises peaked in 2009 and in November 2011 declined by 6.1% compared to November 2010 whilst banks were frequently setting bonuses for their senior executives which were too large; believes that bank executive remuneration should be related to performance and that banks either directly or indirectly supported by the taxpayer must recognise that the taxpayer expects very large bonuses only to be paid to reflect genuinely exceptional performance; notes with concern that the government has not given due consideration to repeating the bankers’ bonus tax, in addition to the bank levy, to pay for 100,000 jobs for young people; calls on the government to increase transparency, accountability and responsibility in the setting of pay in the banking sector including through the immediate implementation of the Walker Review of Corporate Governance of UK Banking Industry and the placing of an employee representative on the remuneration committees of company boards; and further calls on the Government to reform the banking sector so that it better supports businesses and provides the credit they need to create jobs and growth.

It looks set to start at about 4pm.

Before that, at 2.30pm, we’ll hear Nick Clegg, the deputy prime minister, take questions from MPs.

Among the select committees hearing evidence today, are the following:

10.30am The culture, media and sport committee take evidence on library closures.

10.30am The health committee is holding an evidence session on PIP implants and the regulation of cosmetic interventions.

5pm Vince Cable, the business secretary, and William Hague, the foreign secretary, give evidence to the committees on arms export controls.

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