Darling has to be given some credit for stating what should be axiomatic “Many departments will have less money in the next few years.. [The cuts] are utterly totally non-negotiable.’ £57 billion in cuts is going to mean that “the next spending review will be the toughest we have had for 20 years”. For months now the kamikaze economics advocated by Balls and Brown has been terrifying, they seemed set on destroying the economy to advance their factional interest over the national interest.  Will Balls and Brown stick to the Mandelson-Darling line?

Peter Mandelson’s speech on Wednesday was overshadowed by events, parts of it sounded more right-wing than anything Cameron has said in years:

The 1980s saw the timely privatization of industries that were long overdue for return to the commercial sector. Industrial relations underwent a sea change. The quality of management in our best firms improved, and with it, corporate profitability.

First and foremost we need to foster a new climate for enterprise in Britain. There is no substitute for this – no substitute for the drive and ambition that it brings … it is the single most important engine of economic progress. The recovery cannot be driven by consumer debt or public spending. It will be driven by private sector investment and private enterprise.

Enterprise and reward go hand in hand. Much as it shocked many of my friends when I said I was comfortable with people making themselves “filthy rich”, in the context I was speaking I was simply stating a simple truth: that enterprise and effort should be rewarded. It sets goals to spur people and brings gains to us all … there is never a case for punitive taxation. There is never a case for rates of tax that remove the incentive to self-improvement or to build a business.

Mandelson sounded positively Thatcherite. Can you imagine Cameron delivering a speech written by Steve Hilton which sounded like that? Cameron’s opening speech of the year promised a new high-speed rail network and the creation of 100,000 apprenticeships. Dave sounded more like Gordon Brown than Maggie.

At 10.30 this morning we will have the first auction of government debt this year.  Gilts are ticking down* a little as the market awaits the outcome of the sale.  Mandelson is being wheeled out today to say that – shock, horror – the First Lord backs government policy; emphasising spending reductions, tax increases and reducing the deficit, all to reassure the bond markets.

At the same time Alastair Darling is introducing a Fiscal Responsibility Bill, to be debated  today, in the latest effort to reassure investors after Darling in 2008 scrapped rules to contain the deficit, he now repents:

“Whatever the economic circumstances, whatever the government, we need rules and objectives to govern fiscal policy… It is important we have that discipline.”

You can say that again.  Spending prolifically in the credit-boom years wasn’t prudent, it was reckless fiscal madness.  It was Brown’s delusion.  We really need to go further and introduce a balanced budget law, forcing the government to live within its means.  Today’s auction of £4 billion of gilts will cover a week of government overspending under the Brown and Balls economic plan.  The reality is we need to control spending as soon as possible. 

Creating spend / cut dividing lines is crass partisanship, not working in the national interest…

*Guido is short the market.

Guido just bid it up to £200 (it is for charidee) – clearly Mandelson’s price is too rich for Guido.

You can bid for it on eBay, and more items are listed here: www.standard.co.uk/auction.  Good luck…

A musical open letter to Peter Mandelson about the rather aggressive provisions of the Digital Economy Bill from Dan Bull.

Peter Mandelson joked…

‘If Tony and Gordon were stranded on a desert island surrounded by sharks, Tony would charm the sharks to carry him to safety. Gordon would sit there raging “Who sent the sharks?”’

Something was nagging away at Guido after his second coffee this morning; Blairites don’t tend to be delusional, they are political realists, so why try to make their champion President of Europe? Half of Europe thinks he is a neo-con, war criminal.  There is no way he would be acceptable to most European social democrats and in any event it is probably going to go to a centre-right figure in the undemocratic Buggin’s turn way Brussels works.

The high representative of the council is pencilled in for a socialist on the same basis – a sort of undemocratic consolation prize.  There is talk, denied by David Miliband, that he himself is a strong candidate for that position.  Could it be some Machiavellian / Mandelsonian plot to get him the job?  The Dark Lord’s mind is subtle in his strategies, David Miliband is the anointed heir to Blair and the person to whom the Dark Lord plans perhaps in the future to play regent.  Could they be going through this Blair for President act to boost his credentials?  There is always a tiny chance they might pull it off Blair of course…

In the almost certain event that they don’t, “alright” they will say, if Blair can’t be the figurehead, can we give the mini-Blair (who acts as his campaign manager) some kind of consolation prize?  EU foreign minister?  Oh yes, that will dovetail nicely with the day job.  It would also give Miliband a world stage full of photo-ops to provide a backdrop for his post-election leadership campaign.

Just speculatin’…

Peter Mandelson emailed Derek Draper that…

“The thing you need to understand is just how complex Gordon is. We are all complex, of course. But Gordon has developed fewer ways of masking and managing his insecurities. So of course what you say is right. The public personality of a politician is crucial (don’t I know) but you guys have to be careful that you don’t make it worse/more difficult for him to change his public personality by telling him he has got to do so and inundating him with opinions as to how he does it. He is a self-conscious person, physically and emotionally. He is not as comfortable with his own skin as, say, Tony was (is).”

The Times this morning has followed up on Guido’s story about the involvement of Sir Mark Allen, the ex-MI6 point man for Libya turned BP fixer in the release of al Megrahi.

The Times confirms that

Jack Straw was personally lobbied by BP over Britain’s prisoner transfer agreement with Libya just before he abandoned efforts to exclude the Lockerbie bomber from the deal… the Justice Secretary took two telephone calls from Sir Mark Allen, a former M16 agent, who was by then working for BP as a consultant, on October 15 and November 9, 2007.

Depite BP flatly denying last week that it had lobbied for the release of Megrahi The Times reports that a spokesman now says:

“BP did bring to the attention of the Government in late 2007 our concerns about the slow progress in concluding a PTA with Libya. Like many others we were aware that delay might have negative consequences for UK commercial interests including ratification of BP’s exploration agreement.”

What was it Mandelson said when the government was first accused of making a Prisoners-for-Oil deal? “It’s not only completely wrong to make such a suggestion it’s also quite offensive” – looks like we were not wrong, but it was morally offensive…

Guido is certain that neither compassion, the hunt for WMDs or anti-terrorism were the real motive for the release of Abdel Basset Ali Megrahi.  Money was the motive.  Big money.  The released correspondence makes it apparent that the Libyans made it clear that if Britain wanted trade contracts, including the go ahead for BP’s massive oil exploration plans, then Megrahi had to be freed. There were many players who pushed this sordid deal behind the scenes, including Lord Mandelson, but the two key insiders who helped make it happen have so far escaped close scrutiny.

Nick Butler is the Economic Adviser brought into Downing Street when Gordon became Prime Minister.  Prior to that he was a senior strategist for BP. He joined the firm in 1977 and helped to develop close links between BP and New Labour in the 1990s becoming V.P. for Policy and Strategy Development from 2002-2006. Butler is also a Labour loyalist who has been treasurer of the Fabian Society for more than 25 years. According to the Guardian, “Since the 1980s, Butler has maintained and extended his political and commercial connections like a model member of the ‘successor generation’. He is close to Mandelson”

Sir Mark Allen is a Special Adviser to BP. Before that he was the senior MI6 officer who negotiated with Seif Gaddafi to end Libya’s international isolation in 2003-04.  Allen, a noted Arabist, is a regular visitor to Tripoli on behalf of BP and another firm he advises, the Monitor Group, which has won a lucrative contract to restructure the Libyan economy. When BP’s then Chairman, Lord Browne flew to Libya to discuss oil deals, Mark Allen was on the plane with him.

Two men; one ex-BP now at the heart of government, the other  ex-MI6 and now at the heart of BP.  They oiled the wheels to release a convicted mass murderer – and now BP will make billions.  That was the deal…

They are released here for your reading.  Be careful to read between the lines…

UPDATE : Link fixed.

UPDATE II : Let Guido remind you what Lord Mandelson said when it was put to him that there was a deal done: “It’s not only completely wrong to make such a suggestion it’s also quite offensive”.

Lying and feigning queeny indignation…