Westminster blog

Westminster and Holyrood have been at loggerheads over various aspects of the referendum on Scottish independence. The things they disagree on are:

1. The date. The coalition wants the Scottish government to hold the referendum as soon as possible, possibly next year. Alex Salmond wants longer to organise it (and, say Westminster politicians, time to build his case), and has suggested 2014, the 700th anniversary of the Battle of Bannockburn.
2. The question. The coalition wants there to be a simple “yes” or “no” question to independence. The SNP is holding the door open to a third option – “devolution max”, granting full financial autonomy – which might gather more support and make eventual independence seem inevitable.
3. Who can vote. Alex Salmond wants 16-18 year olds to vote (an age group among whom support for independence is high). The Westminster government does not.

Now it seems as if the prime minister is preparing for defeat on the first of those points. Speaking at a reception at the Scotland Office, Cameron reportedly said he was “not fussed” over the timing but wanted a “simple, fair, decisive and legal question”.

This is not what Michael Moore, the Scotland Secretary, has being saying at all. But if these words are to be believed – and Number 10 was not denying them this morning – it appears the PM has taken away one of Moore’s key bargaining chips ahead of the next round of talks with Alex Salmond.

Unsurprisingly the SNP is delighted. Bruce Crawford, a Scottish minister, told the BBC he was “delighted” by Cameron’s words, adding:

The terms and the timing of the referendum are matters to be decided in Scotland – not imposed by Westminster – and we are now proceeding with our referendum consultation being independently analysed.

With Kent county council pulling out £3m from Santander UK, questions are now being asked about whether others should worry about the Spanish-owned bank. We report this morning that Havering council has also removed Santander from its approved list – while Westminster city council took £10m out of the bank 18 months ago.

The concerns revolve around the parent company, Santander, amid nervousness about the vulnerability of the Spanish economy. One senior MP told us yesterday that the news reminded him somewhat of the early days of Northern Rock, even though the two situations are very different.

Yet the first point to make is that Havering, Westminster and Kent were all caught out by the collapse of the Icelandic banks; they were among those English councils with relatively large deposits there. Therefore they are no doubt super-cautious now, perhaps when they may not need to be.

The second is that Santander operates uses a subsidiary model, meaning that the UK operation is ringfenced with its own capital and day-to-day financing. UK regulators would have the power to block any excessive transfer of dividends, capital or liquidity back to Spain.

My colleague Patrick Jenkins, our banking editor, notes that Standard & Poor’s recently gave Santander UK a higher credit rating than its parent company: “In our view its financial prospects are linked to the UK environment in which it operates, rather than the fortunes of the wider group.”

It was business questions today and the main focus was on the current battle of words between business groups and the government. But there was also an interesting moment when Vince Cable played down the potential benefits of credit easing.

“Nobody ever argued that the credit easing scheme would solve the problem of small business lending. We argued that it would cheapen the cost, and that will happen. All the major banks are now engaged in arranging packages to enable those lower costs to be passed through. I think the hon. Gentleman will be pleasantly surprised by the take-up within a few months.”

 This may come as some surprise  to those who remember how George Osborne described  credit easing when it was first announced in October last year.  It seems that Cable is acknowledging the awkward truth that the measure, while easing interest rates paid on existing loans, has not led to a boom in new lending. That will be a disappointment to those who took Osborne’s words at face value last autumn:

“Everyone knows Britain’s small firms are struggling to get credit and banks are weak. So as part of my determination to get the economy moving I have set the Treasury to work on ways to inject money directly into parts of the economy that need it such as small businesses. It’s known as credit easing. It’s another form of monetary activism. It’s similar to the National Loan Guarantee Scheme we talked about in opposition.It could help prevent another credit crunch; provide a real boost to British business;  and over time help solve that age old problem in Britain: not enough long term investment in small business and enterprise.”

The FT lets rip today with an editorial calling for the prime minister to “get a grip on his team“.

It describes the NHS reform bill as “flawed and unnecessary“; says that Jeremy Hunt has failed to give a “satisfactory explanation” over apparent breaches of the ministerial code; his administration is “aloof and exclusive“; his choice of personnel were flawed (Andy Coulson and Peter Cruddas); he has “flip-flopped” on military procurement. et cetera.

This week marks a sorry second anniversary for the UK’s coalition government. After heavy losses in local elections, and in spite of a stage-managed reconfirmation of their vows in the key electoral battleground of Essex, the two governing parties are fretful and divided.

All governments hit a rough patch sooner or later. In her first term, Margaret Thatcher suffered a much heavier drubbing at the local elections than the coalition experienced last week. Given the UK’s anaemic growth over the past year, it is surprising that the stumble did not come sooner.

But the loss of public goodwill is particularly felt in a coalition that was initially buoyed by an unexpected outburst of popular enthusiasm for cross-party government. Adversity has now begun to reveal underlying cracks in the administration. If these are not repaired, they could threaten the integrity of the whole venture….

For the rest of the editorial it’s on ft.com here.

Ed Miliband has not always struck home against the coalition, even when the goal has seemed rather wide. In the Commons this afternoon, however, the opposition leader demonstrated that Labour’s critique of the government is getting ever firmer.

The wind is behind Miliband, of course: an economy that has sunk back into double-dip recession, rising unemployment, an superfluous shake-up of the NHS, clear splits between the Lib Dems and Tories on several fronts, including Lords reform.

But the Labour leader has tied this to his theme of a government where ministers are “working for their friends” to ever more effective deployment – even if you consider his use of the phrase “cronies” to be more suitable for a 6^th form debating society.

“The heart of this problem is that the government stands up for the wrong people” is the damaging message. Labour is now repeatedly talking about rail fares, energy bills and bank charges – and criticising the overpaid bosses of such companies. And the high cost of living is unlikely to fade as a theme in the coming months.

Miliband’s job is made much easier by the Budget, in particular its cut in the 50p rate of income tax. Labour believes this was an open goal, a clearcut symbol of the

This is not a complete guide to everything the coalition will do in 2012/13; many of the government’s actions do not need fresh laws. But here is the full list of all the legislation that ministers plan to enact in the coming Parliamentary calendar. Ministers will also reaffirm their plan to spend 0.7 per cent of GDP on aid by 2013, although there is no bill to legislate this commitment.

Enterprise and Regulatory Reform Bill:

- repealing unnecesary legislation and limiting state inspections of companies

- setting up a Green Investment Bank

- reforming competition law

- give extra powers to shareholders to influence executive pay

- overhaul employment tribunals

Banking Reform Bill:

- implementation of some of the Vickers report to ringfence retail and investment

Proposals to create a system of shared parental leave have been bogged down in wrangling between ministers over a radical plan to grant a £5,500 “baby bonus” to parents on the birth of the child.

The plan was put forward by Oliver Letwin and would replace statutory maternity pay; the idea is that it would increase individual choice and remove a bureaucratic cost from employers. But it has not yet been implemented because of fears that it could end up costing more; given that many mothers don’t take their full 39 weeks of paid leave.

The full story is here on ft.com. It comes as the government presses ahead in today’s Queen’s Speech with plans for flexible parental leave – despite these having not yet been finalised.

Other family-friendly measures in the legislative programme for next year include helping children with special educational needs, fast-tracking the adoption of ethnic minority children and speeding up care proceedings.