Top story: Auditor says PFI is 40% dearer for taxpayers
Hello again. I’m Martin Farrer and this is the Guardian’s morning briefing.
Whitehall’s spending watchdog has lobbed a grenade into the debate about Carillion and PFI projects with a report saying the taxpayer will have to pay out £200bn to fund contracts over the next 25 years. As the government struggles to contain the fallout from Carillion’s spectacular collapse, the National Audit Office says today that it could find little evidence of financial benefits from the public money invested in more than 700 existing public-private projects. Auditors found that the projects could be 40% more expensive than would have been the case if taxpayer funds had been used. The report also says that the government has a £35m stake in one of Carillion’s major projects – an investment now at risk.
Trade unions, meanwhile, have criticised as “flimsy” government assurances that companies using Carillion’s private sector workforce will continue to be paid. And our economics editor, Larry Elliott, looks at some lessons to be learned from the Carillion scandal, concluding that it was a delusion to think that PFI could deliver world-class public services on the cheap.
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Cooler outlook – Research published in the journal Nature says that the Earth’s surface will almost certainly not warm up 4-5C by 2100, voiding worst-case UN climate change predictions. The study uses a revised calculation of how greenhouse gases drive up the planet’s temperature and reduces the range of possible end-of-century outcomes by more than half. However, the research team, led by Peter Cox, a professor at the University of Exeter, warned that the findings should not take the pressure off efforts to reduce emissions. A separate study reports that Europe’s stock of microwave ovens are responsible for the same carbon output as 7m cars.
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Lost leader – International confidence in US leadership has slumped since Donald Trump moved into the White House, with America now less trusted than China in the global approval ratings. A Gallup poll of opinion in 134 countries showed a record collapse in approval for US leadership, falling from 48% under Obama to 30% after a year of Trump. It is the lowest figure recorded since Gallup began the poll series a decade ago and follows Trump’s “America first” foreign policy which has prioritised American interests ahead of international cohesion. Germany is now seen as a global leader by more people (41% ), with China in second place on 31%.
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Calais call – Britain will pay £44m to pay for new security measures in Calais under a deal agreed with the French government to prevent the growth of another refugee camp in the Channel port town. The extra cash will pay for fencing, CCTV and the relocation of migrants elsewhere in France. Theresa May is expected to announce the extra funding today at a summit with Emmanuel Macron at Sandhurst military academy, when the French president will also announce the loan of the Bayeux Tapestry to Britain. To help you get in the mood for that, our art critic Jonathan Jones has written an appreciation of the “majestic” work, while columnist Martin Kettle argues that the loan is one in the eye for Brexiters.
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Anger issues – Donald Trump’s relations with the media hit another new low last night when the US president used to Twitter to announce his Fake News Awards. The “winners” ranged from minor errors by journalists on social media to news reports that later invited corrections as Trump lashed out angrily, especially at reporting of his campaign’s alleged links to Russia. The awards drew a sharp response from his own party, however, with Republican senator Jeff Flake likening him to Josef Stalin.
Trump’s anger is the focus of an opinion piece by Tony Schwartz, the man who helped him write his famous book, The Art of the Deal, 30 years ago. Schwartz says Trump was always driven by fear of failure but age has hardened his personality and he is now “significantly angrier: more reactive, deceitful, distracted, vindictive, impulsive and, above all, self-absorbed”.
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Feeling supersonic? – If you were thinking that gin had suddenly become a lot trendier, then you’re right. Official figures show there are now 315 distilleries in Britain, which is more than double the number five years ago. Data collected by HM Revenue & Customs reveal that 50 opened last year alone. Experts believe that locally made “artisan” gins championed by hipsters are behind the explosion in its new-found popularity rather than international brands. However, the current trend for gin parties, gin menus and even a Ginstitute hotel seems a far cry from the kind of artisanal flavour that led to the drink being dubbed “mother’s ruin” in the 18th century.
Lunchtime read: We do like to be beside the seaside ...
The photographer, Christopher Thomond, visited Blackpool beach throughout 2017 and has compiled a stunning picture essay full of wonderful photographs. We meet local fishermen, donkey owners, dog walkers and metal detectorists, as well as some of the thousands of visitors who flock to the famous attraction from all over Britain (“the sand’s better for sandcastles”, says one) – and also from around the world. Amid images spanning winter, spring, summer and autumn, Laura Barton considers the town’s enduring appeal. “They come for a day, they stay for a week, for a time this town becomes theirs. And the sky too gives itself up to the season, full now of airshows, sunsets, the scent of chip fat and doughnuts.” Treat yourself to a read.
Sport
Antonio Conte had cause to celebrate Willy Caballero’s fine save and a perfect quintet of penalties in the shootout that decided Chelsea’s anarchic FA Cup tie with Norwich, but he was still a man on the edge long after the final whistle. A major British family investor, the first to be named by the businesswoman Amanda Staveley as a financial backer of her £250m bid to buy Newcastle United, has said they are not now planning to invest in the club. At the Australian Open, Johanna Konta was on the receiving end of an upset as the American world No123, Bernarda Pera, belied her ranking to leave Britain with just one player left in the tournament – Kyle Edmund. And amid all the noise over grunting at Melbourne Park, what can science tell us about the controversial practice?
Business
Cryptocurrencies have all the hallmarks of a classic speculative bubble, according to experts at Capital Economics. Although bitcoin rebounded 18% today after heavy losses earlier in the week, the Capital team says the currency has no intrinsic value and still has a long way to fall.
Talking of possible bubbles, news that the Dow Jones closed last night above 26,000 points for the first time sent Asian shares ever higher in overnight trade. The FTSE100 is set to edge higher by 0.15% when it opens this morning. The pound is buying $1.382 and €1.133.
The papers
The FT leads with news of big falls in revenues for Goldman Sachs which are leading to calls for a shake-up in the company. The i goes with “Pensions shock for high earners” and says changes in rules may see those earning more than £150,0000 a year having to pay more tax.
The Times splashes with news that taxpayers are spending billions more on schools and hospitals funded by private finance deals “with little evidence of any benefit” according to a government watchdog. The Guardian also leads on a variation of this story saying taxpayers will hand over £200bn in PFI contracts over the next 25 years.
The Mail has the screaming headline “Le Stitch-up!” and says Britain has agreed to pay £45m more to France to stop migrants “sneaking across” the channel. The Telegraph also splashes on the deal - but says it’s £44m.
The Mirror meanwhile highlights four footballers who were coached by disgraced Barry Bennell who have since taken their own lives. Lastly, the Sun highlights the plight of a former SAS soldier who has been left homeless and penniless. “Who dares binned” is the headline.
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