As the world's Great and (theoretically) Good assemble in uttermoist
luxury in Davos to sort out our economic future - if any - there is
a eerie silence from the commentators as they make their way (first
and Business Class of course) to the Swiss Alps.
But the Tories have uncovered a carefully hidden fact that civil
servants appear to have pulled a £4.5bn smart one in boosting their
own pensions just at the moment that the rest of us are being
severely squeezed. That's spitting in our faces.
The car plan appears to be considered a thoroughly damp squib as is
reflected in the comments.
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TELEGRAPH 28.1.09
Civil servants' £4.5 billion pension boost
Civil servants have clocked up £4.5 billion of extra pension
entitlements in the past year, the Conservatives have revealed.
By Rosa Prince, Political Correspondent
The figures, buried in obscure Government accounting documents, show
that pension pots for civil servants are nearly 30 per cent higher
than they were 12 months ago. It works out as £7,900 for each
Whitehall mandarin.
Total liabilities for the civil service pension scheme, which has
more than half a million members, now stand at £119 billion, the
equivalent of £4,700 for every household in the country.
The scheme is unfunded - meaning that the liabilities will ultimately
have to be met by the taxpayer.
Philip Hammond, shadow chief secretary to the Treasury, who obtained
the figures, said: "These huge unfunded public sector pension costs
are storing up yet more problems for the future at a time when
Britain is already facing a £1 trillion debt mountain.
"We urgently need more transparency in accounting for public sector
pensions, so taxpayers understand the true costs and civil servants
can see just how valuable their retirement benefits are."
Most civil servants benefit from generous final salary pension
schemes, which the majority of private sector employees are not
eligible for.
Those who joined before July 2007 can also retire at the age of 60 -
unlike most of those working for private firms, where the standard
retirement age is 65.
==========
2. Lord Mandelson is playing catch-up with crisis in the car industry
When Lord Mandelson's car rescue package was unveiled, we were left
contemplating a dam
Telegraph View
Lord Mandelson, the Business Secretary, has laboured long and hard
over his "rescue" plan for the car industry - it should have been
announced before Christmas. Yet when he finally unveiled it in the
House of Lords yesterday, we were left contemplating a rather
inconsequential damp squib.
The £2.3 billion support programme comprises a £1.3 billion loan
facility from the European Investment Bank (first announced last
September) and a further £1 billion in loan guarantees (which the
Tories have been calling for since November). In addition, yet
another "review" has been set up into opening lines of credit to the
financing arms of car companies.
Lord Mandelson was anxious to stress that this is "no bail-out" and
the UK car industry is "not a lame duck". He is right on both counts.
This half-hearted measure (which suggests disagreement within
government) is unlikely to make much of an impact on an industry
suffering more than most from the recession. Car sales in December
fell off the cliff - they were down by half over the same period the
previous year. And this is an industry that matters. It employs close
to a million workers, directly or indirectly, while three-quarters of
its output is exported. As one of the last major remnants of
manufacturing industry, its skills base is important to the overall
health of the economy. Yet the measures announced yesterday were, as
Ken Clarke, the Shadow Business Secretary, observed, "behind the
curve". They might have made an impact last autumn but now the
Government is, not for the first time in this recession, playing
catch-up. It is not displaying the fleetness of foot essential to
dealing with such a fast-moving economic crisis.
And taking Lord Mandelson at his word, why does an industry that is
not a lame duck need taxpayers' pounds at all? The big Japanese
manufacturers whose investment in this country has proved a brilliant
success have already acted to reduce output through shutdowns, shift
suspensions and a limited number of redundancies. As for Jaguar Land
Rover, which has led the calls for state help, it is owned by the
Indian conglomerate Tata, which has an extremely healthy balance
sheet (enough to allow it to announce last month that it is
sponsoring the Ferrari Formula One team). As Lord Mandelson
acknowledged, this is an industry that needs to "reinvent" itself by
producing greener and cheaper cars, particularly for developing
markets in Latin America and Asia. The recession will force the pace
of such changes. It may prove painful but in the long term it should
leave the industry in a healthier state. Yesterday's low-key
announcement seems to recognise that reality.
===========================
CONSERVATIVE HOME Blog 27.1.09
Ken Clarke responds to car industry statement at the Despatch Box
Jonathan Isaby
Below [pic] is a sight many of us didn't think we'd be seeing: Ken
Clarke responding to a government statement from the Opposition
Despatch Box this afternoon as shadow business secretary. Alan Duncan
is clearly enjoying the performance given by his successor.
Mr Clarke described it a "consitutional outrage" that due to Lord
Mandelson's being a member of the House of Lords it was their
Lordships who heard the statement first and the Commons had to make
do with having it re-read by Business and Enterprise Minister, Ian
Pearson.
The new shadow business secretary suggested that the Government
package announced today was "pretty small beer", wondering whether,
for the first time, the Treasury had actually won an argument with a
government department which wanted money and not produced a bail-out
because it couldn't be afforded.
He accused the Government of having dithered on how to respond and
mocked the new trade minister, Lord Davies, for the fact that one of
his first decisions in government had been to set up a task force.
Altogether, a solid first outing for the big beast from Rushcliffe.
===========================
POLITICS HOME 27/28.1 09
COMMENTS
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BBC News at 17:49 | 27/01/2009
Mandelson dismisses Clarke criticism of car aid package as "bluster"
Lord Mandelson, Business Secretary
Lord Mandelson rejected Conservative suggestions that the
government's support measures for the car industry were small beer.
"I don't think Ken Clarke is in any position to lecture people about
beer," he said. "If he was as big with ideas and policy as he was
with bluster it would be possible to take his ideas more seriously."
On the package of measures announced by the Government today, Lord
Mandelson stressed the aim of the measures was to enable the supply
of greener cars in the future.
"We have already put in place an announcement a couple of weeks ago,
Geoff Hoon announced a major set of incentives to stimulate consumer
demand for low carbon cars.
"What I want to make sure as Business Secretary is that we're not
only stimulating demand in coming years for low carbon vehicles but
we are also producing and supplying cars to meet that demand," he said.
He added: "With this industry baring the brunt of the downturn to
date, I thought there was a considerable risk of large and
irreversible loss to the capacity to produce these cars in the future
which is why I intervened today."
18:09 Sky News
Lord Mandelson later reiterated his reasons for the intervention in
the car industry and rejected suggestions he had acted too late.
"As I said before, I was nervous that the risk was growing of an
irreversible loss of capacity in the car industry. These measures are
to ensure the capacity is there in the upturn... We're putting in
place a bridge for the future of the car industry," he said.
He added: "It's not the first thing that we've done - our fiscal
stimulus for the banks and our loan guarantee scheme have helped
companies in the supply chain. We've not been sitting on our hands
doing nothing."
Asked if this would be the end of assistance to the car industry, he
said: "If the car companies want more guarantees then they've got to
come to us with proposals - but we've got to make sure we're
investing in the future, not in past products."
19:12 Channel Four News
LordMandelson later spoke of how he "wanted to keep open a bridge to
the future", and that the money available for the car industry would
arrive quickly.
He said: "If we weren't putting the money in from the European bank,
then it would go elsewhere within the EU, we are making this
guarantee loan available to support UK industry.
He denied that this scheme was too slow and stated: "I don't where
you are getting six months from now - if our companies have already
applied and they match the criteria the money will arrive, we
putting in the guarantee so the funds can be unlocked quickly.
"We want to keep open a bridge to the future."
Lord Mandelson said he believed that: " The car sector has been hit
more deeply than any other sector in our economy and the risk was it
would suffer in its capacity and production, therefore derailing its
future function.
He confirmed: "The funds available will be able to meet the needs of
many firms."
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Channel Four News at 19:20 | 27/01/2009
Woodley: "We need an economic blood transfusion, not injection"
Tony Woodley, Unite General Secretary
Mr. Woodley welcomed the latest car industry guarantee scheme, but
felt it didn't go far enough, calling for a "blood transfusion, not
just an injection" to the industry.
He questioned the time it would take for the money to reach the car
firms: "After Land Rover and Vauxhall takes their shares, this leaves
in relative terms a very small amount of money".
He said: "I think it is a welcome move, but not a blood transfusion
that our industry needs, but the injection we need will take months
and years to come through."
Mr. Woodley continued: "It is certainly not enough. We need at least
£5billion to get our credit markets following - short time workers
need extra help so we can use them again.
He gave examples of the French Government which put £6billion into
their car industry and Canadian Government who put in £3billion for
General Motors to stay within Canada.
Mr. Woodley dismissed claims that the car industry was a lame duck
industry, "we will live to fight another day, but we need the
financial support now to go on".
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