A coalition divorce? Probably just another tiff

MORNING BRIEFING – By Benedict Brogan (Daily Telegraph).

Good morning. The Times (£) report that Dave’s aides are discussing the possibility of the Lib Dems leaving coalition before 2015. The favoured option is an “amicable divorce” whereby the Lib Dems support next year’s budget before returning to opposition for the last six to ten months of the Parliament. There will be curiosity about the sourcing: is it a Lib Dem operation to rattle the Tories? Or are the Tories feeling emboldened and frustrated enough to start muttering threats. It’s worth recalling that the Coalition relies for its existence, above all things, on the personal relationship between David Cameron and Nick Clegg. The evidence remains that they both remain committed to the idea. Certainly, until very recently Tories closest to Dave expected the Coalition to last until the day the election is called, even if political distancing starts well before then.

I reckon the Times story is more mischief than likely, but put it alongside the spending review tensions the FT (£) reports, and there’s every reason to worry that what looks stable now could quickly get messy. The Coalition has suffered a series of shocks which have – until now – been absorbed by the dampeners of Dave and Nick’s equanimity. The Europe row is of a different order altogether. The Lib Dems in the centre, I am told, are fizzing over the way Mr Cameron has allowed a referendum vote this Parliament, when the Coalition deal was that there wouldn’t be one.

Mr Clegg’s complaint is largely political – he hates the idea of being seen by voters opposing giving them a say. But there is also a principled point: when is a deal not a deal? To which his Tory critics might say – boundaries. Or child care. Note though how Mr Cameron is making nice with Nick on child care: it suggests the PM can see the strain cause by the EU issue, and is trying to compensate. Again, it’s how Mr Cameron and Mr Clegg choose to play it that will decide the longevity of the Coalition.

TOO MUCH BANGING ON?

Chance always plays an important role in politics. And so it may prove with yesterday’s Private Members’ Bill ballot. James Wharton, born nine years after the last European referendum, will use his slot to push for a vote on British membership by 2017. As we report, George Osborne says it will have “the full support of the Conservative Party, David Cameron and myself”.

For the Tories it’s not quite clear what sort of luck this amounts to. With the Lib Dems opposed to giving the Bill any government time and Labour also trying to obfuscate to prevent a parliamentary vote, the Conservatives are marked out as the one unambiguously pro-referendum party. Yet, while the public shares its views on Europe, they risk banging on about Europe in an empty room.

As one MP put it: “we’re at risk of not being seen to talk about the things that matter because we’re just talking about Europe”. That was Mr Wharton on Wednesday.

There is also the risk that, even as Vince Cable says that Dave is “in the right place” on Europe, the public see only opportunism. As The Times (£) reports, only 17 pc think he feels strongly about his European strategy; 64 pc think that he is motivated by tactics.

Meanwhile, Peter Mandelson writes for us on the risks for Dave of being seen to follow his backbenchers. “Labour in the Eighties paid the price for indulging its own hard Left for too long before Neil Kinnock, realising that his party’s future was threatened, fought back against them and won. Similarly, the Republicans allowed the Tea Party to grow in influence, with fatal electoral consequences.”

BRITAIN’S BLACK HOLE

George Osborne is facing a cool £9 billion budget shortfall, with the National Union of Ministers having so far identified only £2.5 billion of the net £11 billion planned budget cuts, according to the FT (£). One said that the “low-hanging fruit” in savings had now all gone, but there are Whitehall murmurs of “black ops” at the Treasury to be deployed against reluctant cutters.Philip Hammond and Owen Paterson, they’re coming for you.

GOVE PLAYS IT STRAIGHT

Michael Gove knew his Sir Keith Joseph Memorial Lecture would be scanned for any subtext of blood lust, especially after Nick Clegg’s comments that “he knows a thing or two about leadership ambitions”. But, as we report, it was a speech which marked him out as a government loyalist. Opponents of countryside planning laws were criticised as impediments to social mobility; the city was defended as a source of “wealth and opportunity for our nation”.

SUPPORT FOR STAY-AT-HOME PARENTS

As reported in the Mail, Dave is planning to make life easier for stay-at-home parents, addressing his problem of being seen as speaking only for metropolitan mothers, with support for marriage in the tax system mooted. Plans to increase the number of children a childminder can look after could also be diluted following Lib Dem opposition.

 

LETS BE CIVIL ABOUT MARRIAGE

Under Tory MP Tim Loughton’s amendment to the gay marriage Bill that we report, all couples could be allowed to choose whether to enter a civil or traditional marriage. But the Guardian reports that the government will reject the amendment, commit to passing the Bill in its current form and instead agree to a review of civil partnerships five years after gay marriage legislation is passed.

REMEMBER SCOTLAND?

With all the talk of Britain leaving the EU, Scotland’s future has been left on the back burner. But Canada’s former PM, Jean Chrétien (who led his country through two independence referenda) yesterday argued that Scottish independence should only be granted if a “clear majority” of the people supported it, as the FT reports. It’s a reminder that not only Europe is a fragile union.

POOR OLD NIGE, STUCK IN A PUB

Nigel Farage found himself locked in a pub yesterday – not normally a problem. As we report, after he was barracked as racist by hard-Left Scottish independence campaigners, Farage had to enter an Edinburgh pub for his own safety before a vehicle wisted him away from the scene. And this came as The Times (£) revealed that Ukip has been appealing for donations and admitted “we have got to improve our policy production”. Nige won’t drink to that.

TWEETS AND TWITS

Margot James wants British companies to get out more:

@margotjamesmp: Recession in Eurozone now 18 months old, even Germany at zero growth, all the more reason for Britain’s exporters to get out beyond Europe

TOP COMMENT

 

In the Telegraph

Fraser Nelson – The truth is, we can’t afford a shiny new transport system like HS2

 

Peter Mandelson – Cameron must not cave in to the Ukip threat

 

Isabel Hardman – Why are so many MPs making fools of themselves?

 

Telegraph View – The state should help families, not judge them

Best of the rest

Philip Collins in The Times (£) – History is more than one thing after another

 

Philip Stephens in the FT (£) – Britain is hurtling to the exit from Europe

 

Simon Jenkins in The Guardian – Now we know HS2’s a fiasco. But can George Osborne admit it?

 

John Rentoul in The Independent – Cameron’s position has the support of most voters – but then so did Major’s

Tories strike at UKIP ‘clowns’.

MORNING BRIEFING – By Benedict Brogan (Daily Telegraph).

Good morning. The Tory counter-insurgency against Ukip reaches full throttle in this morning’s papers. Firstly, there’s the intervention of Ken Clarke, who appeared yesterday cheerfully franking his leader’s “fruitcakes, nutters and closet racists” comments before adding that they were “indigant, angry people” led by “a collection of clowns”. The intervention (like the accompanying outfit)wasn’t entirely successful – the Sun tells him to “wind your (polo) neck in” – but it caps a weekend in which the Tory team have demonstrated a willingness to play rough. Elsewhere this morning there’s a Times (£) story about a £120bn black hole in Ukip’s spending projections, and an Independent one about internal infighting by email. Nigel Farage was the only leader talking up his side prior to the local elections. Now opponents, particularly those in the blue corner, will hope that thought that Ukip is not an entirely serious party will return to voters on the eve of the ballot.

CCHQ has been driven to distraction by what it complains is media indulgence of Ukip. Tory high command hates the way Nigel Farage is given an easy ride in the papers. At least that’s how they see it. They have been urging us to scrutinise Ukip more closely. And it is not unusual to hear Tories deploy the obvious argument: if you vote Ukip, you get Labour. A vote for Nigel Farage, Team Dave reminds anyone who will listen, takes a vote away from the Tories – and increases the likelihood of Ed Miliband entering Downing Street. In other words, stop messing around, it isn’t a game. The onslaught against Ukip, that began with a coordinated round of stories in the Saturdays detailing the unpleasant views of some of its candidates and continued yesterday with Cabinet criticisms, should be seen in that context. CCHQ reckons it’s time to play hardball. With just days to go to polling, the tactic has some merit and might turn some voters away. But it doesn’t address the deeper problem, namely what is it about mainstream politics that is driving voters towards Mr Farage? Boris thinks he has the answer. Mr Farage, he explains in his column for us, is not Mr Miliband:

“Rather than bashing Ukip, I reckon Tories should be comforted by their rise – because the real story is surely that these voters are not turning to the one party that is meant to be providing the official opposition. The rise of Ukip confirms a) that a Tory approach is broadly popular and b) that in the middle of a parliament, after long years of recession, and with growth more or less flat, the Labour Party is going precisely nowhere.”

That’s as maybe, and as Trevor Kavanagh points out, the emergence of “the Kippers” as a political force may in fact threaten the Lib Dems in their role as “an irresponsible party of protest with nothing to say”. But serious or not, they are an obstacle that Number 10 is yet to find a clear path around. With his 35pc strategy, Ed Miliband doesn’t need the votes of the protest party on his flank. Under 40/40, Dave most certainly does. Ukip can expect a lot more attention from the Downing Street heavy artillery in the coming years.

UNIVERSALLY CHALLENGED

In a solitary job centre in Ashton-under-Lyme today, the IDS welfare revolution finally begins to take public form. Universal Credit makes its public debut at a time of particularly rancorous debate on benefits within the Coalition. The Guardian reports that George Osborne is expected to include caps on the total housing benefit bill and on tax credits in the 2015-16 spending round for which ministers submit bids on Tuesday. In the meantime, there’s an almighty shambles developing over pensioner benefits. IDS has appealed to wealthier pensioners to hand back bus passes, winter fuel payments and TV licences, as the Mail reports, and has set up a hotline to expedite the process. As he told us on Sunday, though, it’s an aspiration not a policy, one which Nick Clegg says “makes no sense”. Simultaneously, Vince Cable has decided that now is the time to argue for compulsory means testing, a position IDS is bound by his party to oppose, despite its popularity with his own backbenchers. Clear as mud, no?

BY-PASSING THE RING OF STEEL

Cutting defence jobs is bad politics at the best of times, and at the worst of times it hardly endears Dave to his backbenchers. That’s a problem given that the hatchet men of the Treasury have been sharpening their axes ahead of the forthcoming spending review. Fortunately, there’s a cunning plan a foot, as we report. Payments made by the MoD to the departments of Health and Education would be cut, shifting the spending onto the books of the protected departments. The numbers involved are significant – around £500m could be saved to help the MoD deal with their contribution to the £11.5bn of cuts the Treasury wants, with at least £200m coming from health and £120m from education. It isn’t technically an end to the ring fence, but both departments will have to do more with less, and that means, to the delight of Tory MPs no doubt, that only one department’s spend would have been truly ring-fenced over the life of the Parliament…the much loved international aid budget.

LORDS A LEAP-OF-FAITH-ING

Two interventions from the upper chamber in today’s Telegraph, both significant. Firstly there’s Lord Wakeham’s letter on Leveson in which he argues that the newspaper industry’s proposals for a Royal Charter should be given “equal consideration” alongside the Government’s plans. The former Cabinet minister and PCC head makes the reasonable point that the press can hardly be in defiance of Parliament when “no votes have taken place on the Charter in the House of Lords. So it is quite impossible to work out what the will of Parliament on the proposed Charter is.”

Then, there’s Lord Carlile, who writes an op-ed for us in which he explains that his background as the independent reviewer of counter-terrorism legislation has led him to disagree with his party leader Nick over the nexcessity for a “snooper’s charter”. He writes that the measure is essential for public safety: “the Government’s proposals to modernise the law relating to communications data – put simply, the details of who communicated with whom, when, and for how long – are a proportionate response to a fundamental problem that simply will not go away.”

INDUSTRIOUS DAVE TAKES TO TWITTER

Those under the impression that life in Number 10 is an extended jolly with lashings and lashings of Fruit Ninja could not be more wrong, Dave told the Sunday Times (£). In fact, “I’ve never worked so hard in my life,” he confided, equating himself to a “caged animal” who was “frequently in the car on the phone to the Israeli prime minister, telling the kids in the back to shut up”. Fortunately, the Prime Minister added that he was still able to devote some time to Spotify each week, his “guilty pleasure”. Luckily, as the Guardian reports, his team still have time for Twitter. The new social media strategy apparently includes handing out “Twitter exclusives” to journalists in a bid to secure goodwill, and more attentive management of the news-cycle. Craig Oliver is keen, and Dave’s inner sanctum wish to turn the Tory Tweeters into a “muscular force at the next election. Explaining the new found enthusiasm for the medium, a Number 10 source tells the paper that “Twitter used to be seen as tool for the egocentric and verbally incontinent,” but fortunately that was no longer the case. Sounds like a load of Ed Balls to me.

THE SYRIAN STRAIN

Anyone doubting the long-term damage done by the dodgy dossier and the 45 minute claim to the credibility of British intelligence should consider our story this morning that senior MPs are calling for hard evidence of chemical weapons use in Syria. Reports that the nerve agent sarin had been identified in tests was called “ambivalent” by Sir Menzies Campbell, and in need of “more corroboration” by Richard Ottaway. Meanwhile Dave has been told by Sir David Richards that even a limited ground intervention would lead to “all-out war”. Over to you, Dave.

SCHOOL REUNION CHAFES DR WOLLASTON

Jesse Norman made a spirited attempt in Saturday’s Times (£) to argue that the reason for the volume of Old Etonians in the corridors of power was the schools singular devotion to “public service”. As we report, Sarah Wollaston caught up with the article yesterday and wasn’t best pleased. “Words fail me…I’m not asked for policy advice, but just in case…there are other schools [and] some of them even admit women.” Meanwhile, Adam Afriye took to ConservativeHome to note the appointment of two other alumnus of Dave’s alma matter, Jesse N and Jo-Jo, “jobs for the boys”. Jobs for the Old Boys, I think you’ll find.

CHARITABLE CYCLE

Roll-up, roll-up for your chance to purchase a piece of modern British political history. The infamous pleb-gate bike is on sale on Ebay. As the Independent reports, proceeds from the auction will go to Nyumbani UK, a charity assisting HIV and AIDS victims in Kenya. As of 6am, eight bidders had pushed the price up to £1,020, and any guilt riddled politicos can clear their consciences here.

PM A HAS BEE-N

He’s not the life patron of the Oxford Beekeepers’ Association, he’s just a very forgetful Prime Minister. As we report, the association’s current president John Craven, has written to Numer 10 to remind Dave that he stepped down after five years in the role. There’s a sting in the tale, though (sorry) – “I would like it is he showed more interest,” Mr Craven harrumphed, ahead of today’s Bruissels vote on the use of neonicotinoids.

WESTMINSTER AT ONE

Finally, the World at One is having a party leader week. Martha Kearney will be interviewing Ed Mil today, Nick tomorrow, and Dave on Wednesday.

TWEETS AND TWITS

Entering into the spirit of the inaugural international Ed Balls Day, a certain Ed Balls MP:

@edballsmp: Ok, ok.. Because it would be rude not to..! RT @edballsmp: Ed Balls

TOP COMMENT

In the Telegraph

Boris Johnson – Keep calm, everyone – now is not the time to do a Nicholas Cage

Alex Carlile – It’s not a snoopers’ charter, it’s a life-saver

Roger Bootle – The popcorn effect strikes us all, even if you can’t see it

Telegraph View – The Blue Peter model of deficit reduction

Best of the rest

Tim Montgomerie in The Times (£) – Team Cameron must put a tiger in his tank

Trevor Kavanagh in The Sun – ‘The Kippers’ joke is now on the Tories

Leo McKinstry in the Daily Express – Immigration: the British public is close to despair

Melanie Phillips in the Daily Mail – What kind of society treats smacking as a war crime – while teaching children to watch porn?

THE AGENDA

Today: Universal Credit goes live at first pilot area. Ashton-under-Lyne in Tameside will be the first JobCentre to take applications.

09:00 am: Business Secretary Vince Cable takes part in debate on manufacturing at launch of Making at Home, Owning Abroad report. RSA, 8 John Adam Street.

10:10 am: Ed Miliband walkabout and speech. The Labour leader will set out a programme of ideas to turn Britain’s economy around. Queens Gardens, Ironmarket, Newcastle-under-Lyme.

12:00 pm: Publication of a report into financial mismanagement at Croydon Primary Care Trust. This is a joint health overview and scrutiny committee (JHOSC) for six south-west London councils. London Councils, 59 Southwark Street.

12:00 pm: Publication of a report on Operation Pallial, the independent investigation into recent allegations of historic abuse in the care system in North Wales. North Wales Police HQ, Colwyn Bay.

01:00 pm: Post office strike. Workers in hundreds of Crown Post Offices will stage a third strike, for half a day from 1pm, in a row over jobs, pay and closures.

David Miliband’s departure – a ‘cosmic sulk’ or the end of New labour?

MORNING BRIEFING – By Benedict Brogan (Daily Telegraph).

Good morning. He couldn’t resist one parting shot. David Miliband’s resignation interview contained the nugget that he still considered his brother to be “a long climb” away from Number 10. Having clearly decided, in the light of generally positive media coverage, that he should resign more often, Mili D also refused to rule out a comeback insisting that he would not seek American citizenship. As Michael Deacon writes, North London took the news badly – “outside his Georgian terraced house in London’s Primrose Hill, a day-long vigil for the People’s Miliband was held by hundreds of distraught fans, each clutching a tear-stained banana” – but has British public life lost an intellectual colossus or a “greedy failure in a cosmic sulk”? Peter Oborne has no doubts:

“During his short, undistinguished career, Mr Miliband has done grave damage to British politics. He is part of the new governing elite which is sucking the heart out of our representative democracy while enriching itself in the process. He may be mourned in the BBC and in north London, but the rest of us are entitled to form a more realistic view. David Miliband has belittled our politics and he will not be missed.”

There is some speculation that Mr Miliband’s jump stateside could lead to a role in a Hilary Clinton run White House, given the regard with which he is held in her circle. “What price David Miliband in a senior role in the White House and Ed Miliband in No 10?” asks the Mail. “Stranger things have happened in politics. But none that come quickly to mind.” In Britain, however, life goes on. The Guardian reports that the Labour association in South Shields is keen on a local candidate next time, although a donkey in a red rosette ought to be able to defend his 11,109 (30.4pc) strong majority. With that in mind, the real question come polling day might be whether Ukip can continue to make headway in the north, as well as in lapsed Tory heartland seats.

And what for Labour? Reading the runes, a number of commentators including the Sun‘s Trevor Kavanagh call the end of the New Labour project, arguing that under Ed, “it has been left to pro-Blair outriders such as [Telegraph] blogger Dan Hodges to argue for a coherent Labour policy on spending and borrowing”. But as Philip Collins in the Times (£) notes, this resignation was not a gesture of political despair so much as it was about fratricide and the frustration of watching Ed having a “good scandal” over phone hacking and cementing his leadership. It may be a personal tragedy, but Mili D’s departure is hardly an ideological earthquake for the Labour paty.

HOUSEKEEPING

The Morning Briefing is taking the weekend off. Back Tuesday. Happy Easter to all subscribers.
TREASURY CALLS FOR POST-2015 SPENDING BLITZ
If you’re starting to lose track of the belt-tightening due post-2015, I don’t blame you. A private letter to ministers from Danny Alexander last night suggests that for the Treasury to achieve its Budget savings target of £11.5bn in 2015/16, a chop of up to 10pc for every non-ringfenced department will be required, we report. While the exact distribution of the cuts will not be settled until June, they will fall on departmental resource budgets, not on the welfare system. The Independent reports that the 10pc reduction will apply to every non-protected department other than defence, which will only need to cut 5pc.
Sounds like a case for the National Union of Ministers? Steady. As the Guardian explains, the 10pc figure is there simply to give the Government “options”, and a cut of that size in every targeted budget would save £3bn more than is planned. What stays and what goes will not be known until the publication of the spending review for 2015/16, and as Vince Cable has made known, that is very much a temporary document holding place until the next government is decided. As the Chancellor kept insisting in the Budget, Britain may be open to business, but with an outlook this cloudy, who would want to invest?

BUDDY, CAN YOU SPARE ME A DUCK HOUSE?

An MP’s lot has not been a happy one since the expenses scandal, certainly according to Karl McCartney. As we report, the MP for Lincoln told World at One that he had been forced to max out his credit cards, drain his loan facility at the bank and borrow money from his parents because of the intransigence of the Commons expenses body Ipsa. Mr McCartney claimed that he was owed £25,000 by August 2010 after being returned in May. He claims to have been told that this is because when the “senior management team at Ipsa…go to the pub on a Friday night and meet with their friends, their friends tell them that they should screw MPs into the ground.” All sounds very bitter to me.

OVER EXPENSIVE, OVER PROTECTED AND OVER HERE

Theresa May’s recent rise to prominence as an action woman received a setback yesterday. The decision of the High Court to back the November decision of the Special Immigration Appeals Commission to prevent his deportation came despite the acknowledgement that the UK regarded him as “a danger to national security”. A rigid interpretation of human rights rulings in favour of Qatada is bound to re-0pen the Tory debate on scrapping the measures. But at the moment, it’s difficult to see how Mrs May can win given judicial intransigence. As the Mail puts it, “it is Qatada holding all the aces in a game Mrs May – and this country – really cannot afford to lose.”

RESIDENTS OF THE WORLD, UNITE!

Worried about the forthcoming spare-room subsidy ending / bedroom tax beginning? Well Frank Field has a cunning plan: knock down the walls and brick up the windows, as the landlords did in the Nine Years’ War to avoid the Window Tax. His rallying cry in the Independent comes with stern criticism of the “grossly unfair” reduction in housing benefit for under-occupancy. A glance at history might tell the protesters anticipated at demonstrations tomorrow not to be too hopeful – the universally despised window tax lasted a mere 156 years before its repeal.

THE BIG THAW

No, not the weather, but council tax bills. As we report, households are having to pay the largest increase in council tax for three years after 39pc of local authorities rejected Eric Pickles’ offer to provide funding for a rate freeze. The average bill in England will increase by 0.8pc this year, and London council tax will fall by 0.2pc. Pity the residents of Breckland in Norfolk, though. Their council tax is up 7.6pc.

EU’RE GETTING GREEDY

How’s that European austerity thing going, then? According to the BBC, the Government is battling EU demands for a further £9.5bn in member state contributions to cover its expenses this year. The UK’s share would amount to slightly over £1bn. Mind you, Eurocrats argue that they are not being unreasonable – if Britain’s domestic overspend was only £9.5bn a year, we’d think we’d done very well.

BANKING ON IT TURNING OUT RIGHT

The Bank of England’s demand yesterday that British lenders stockpile an additional £25bn in reserves did not spook the market – the figure had been expected to be larger. It won’t help get lending going again, however, and as such it conflicts directly with the Chancellor’s courageous attempt to provide liquidity to sub-prime borrowers in his recent Budget. As the Mail reports, it has certainly made Vince Cable very grumpy. “The idea that banks should be forced to raise new capital during a period of recession is an erroneous one,” he said, adding that ‘the FPC exercise will prolong the time it takes for the British economy to recover by further depressing already weak lending [to small and medium-sized businesses]. “

SAM CAM IN SYRIA

The Prime Minister’s wife has visited Syrian refugees in Lebanon on a trip with the charity Save the Children aiming to boost awareness of the plight of those in the camps. “It’s so shocking, it’s difficult to take it in. You just can’t imagine why that would happen,” she added. The tales she will have heard will stay with her for a very long time, as I wrote when I returned from a similar trip earlier this month.

TWEETS AND TWITS

Two different takes on recess. First from Kerry McCarthy:

@KerryMP: Just leaving Commons office after a triple-birthday lunch with current & former researchers then 6 hour blitz on emails. #recessnotholiday”

Then from Tom Harris:

@TomHarrisMP: “Ah, that sweet, lethal (and oddly sexy) combination of @carolynharris, Rioja and karaoke. Easter recess has begun!”

TOP COMMENT

In the Telegraph

Peter Oborne – David Miliband a colossus? He’s a greedy failure in a cosmic sulk

Sue Cameron – A high price for getting ministers out of a hole

Laura Perrins – Stay-at-home mothers deserve some respect

Telegraph view – Ministers shouldn’t play happy families

Best of the Rest

Philip Collins in The Times (£) – Don’t bury New Labour along with Miliband

Steve Richards in The Independent – David Miliband’s dignified exit does everyone a favour – including him

Trevor Kavanagh in The Sun – New Labour bunch have split for good

Chris Giles in the FT (£) – How to ‘plog’ the hole in our awful public finances

THE AGENDA

Today: Energy Secretary Ed Davey, Business Secretary Vince Cable and Scotland Secretary Michael Moore to publish the oil and gas sector strategy.

09:00 am: Nick Clegg call-in on LBC 97.3.

12:00 pm: BBC strike. Journalists and technicians at the BBC stage a 12-hour strike in disputes over job cuts and workload.

Cyprus storm clouds blight post-budget outlook

MORNING BRIEFING – By Benedict Brogan (Daily Telegraph).

Good morning. Forget for now the claims and counter-claims swirling around the Westminster Village following Wednesday’s Budget – the crisis in Cyprus looks like becoming the political event of the year. The EU’s handling of the Cypriots is making their adventures in Greece look like textbook diplomacy. Following the botched raid on deposit accounts and week long bank holiday, there is now a Plan B on the table which would protect savers with less than €100,000 on deposit. It would also refinance the two main banks, which are on the verge of collapse, but inflict a loss of 40pc on those with more, as we report. Whether they manage it in time (the ECB will withdraw emergency funding on Monday if there’s no viable rescue package) remains to be seen. The country has been downgraded to CCC by Standard and Poor’s, classifying it as at risk of default, and as the Mail reports, two thirds of islanders now want to leave the EU. Astonishingly, the Mail adds that Cypriot leaders were refusing to take phone calls from the ECB yesterday, and were instead focusing exclusively on negotiations with the Russian government. Those talks seem to have collapsed overnight, and the Cypriot finance minister has now left Moscow and flown home. Whether Cyprus leaves the eurozone or depositors take the hair-cut, the contagion risk is now severe. If this is the summer of Europe’s discontent, a projected growth rate of 0.6pc here is going to start looking rosy. Follow all of the day’s developments on our live blog here.

Back in Blighty, Labour have settled on their attack line. The Chancellor’s support for the housing market could be seen as a subsidy allowing the relatively well off to buy second homes, they argue. As we report, the Treasury have specifically excluded those attempting to purchase using a buy-to-let mortgage, but they have not excluded second home purchases absolutely. The Coalition response has been confused. The Chancellor appeared to concede the ground on television yesterday. Mark Prisk, the housing minister, then denied Labour’s claims, before clarifying that he was, in fact, discussing a completely different scheme. It shouldn’t be beyond the wit of man to devise a legal structure which would prevent government subsidy of property barons, but until the Treasury publish the document, both sides seem to be shooting in the dark.

A better line for Labour might be the one which has led the Sun to the headline “Chancer of the Exchequer”. One of the points increasingly obvious whenever the Coalition announce a cut is that much of the austerity programme is coming after the 2015 election. An IFS analysis yesterday suggested that the impact of these cuts arriving at once would be sufficient to necessitate tax rises of £9bn, or 2p on the basic rate of income tax, after the next election. As the Guardian reports, deficit reduction in this parliament has been so poor that there is now talk in the City of a further downgrade to the UK’s credit rating this weekend. Damningly, the Sun’s YouGov poll has “neither” as the winner on 34pc when respondents were asked whether the Coalition or Labour would deal with the deficit best. Only 14pc thought they would be better off following the Budget. Given that lack of faith, it is no wonder that we ask in our leader today “where are the political leaders Britain needs?” Philip Collins in the Times (£) believes that it is time the Chancellor concedes that he cannot wear two hats well and concentrates on what he is good at – strategy, not budgeting. However, as Fraser Nelson argues for us, maybe it is the Bank of England, not the Treasury, which will determine whether we sink or swim:

“Osborne’s ‘monetary activism’ is arguably a greater gamble than anything Nigel Lawson attempted in the Eighties, since so few people can say with any confidence how quantitative easing will end – or whether Mark Carney will be so enthusiastic about all this when he finally arrives. It is certainly unfair, however, to accuse Osborne of being risk-averse, just because his Budgets are dull. The backgammon ace is simply playing two games.”

PAYWALL UK

Nick Clegg and Vince Cable are at one another’s throats over the Deputy Prime Minister’s immigration announcement this morning. Speaking at 9:50 at Gray’s Inn, Nick will set out a plan to require “cash bonds” of up to £1,000 from immigrants coming to Britian for work or study from high-risk countries. These will only be repaid once the immigrant leaves the country.

Leaving aside the fact that the amount of money involved is not likely to be large enough either to deter illegal immigration nor to cover the cost of finding them if they do disappear, the scheme has provoked one of the Coalition’s sternest critics to fight back. Step forward, er, Vince Cable. In an interview with The House magazine reported in the Guardian, Mr Cable claims that the target of reducing immigration was dishonest and that could cause “enormous damage” to the economy. Moreover, a reduction in net immigration into the tens of thousands “isn’t government policy, it is Conservative policy.” Try telling your leader that, Vince.

CALL CLEGG AND COMPLAIN

When being scolded by the Business Secretary, the Deputy Prime Minister makes himself available for members of the public to abuse. Yesterday’s intervention on LBC’s Call Clegg came from stay at home mother Laura Perrins, a former barrister who objected that the Government’s prioritisation of childcare benefits for working mothers gave the impression they felt her role was “worthless”. The Mail has reproduced the exchange in full. “You probably feel what I do is a worthless job,” Mrs Perrins told Nick. If that’s what every stay at home mother thinks of the Coalition, it is going to do nothing for Dave’s women problem.

BOLES V THE COUNTRYSIDE

Nick Boles, the planning minister, has told developers that he is ready to campaign against countryside groups to ensure a building boom. A recording of the meeting obtained by us includes the disclosure that the Government is poised to axe the planning permission requirement for many developments. He later told an audience of property professionals in Mayfair that “Our simple view is that the fundamental idea of the planning system is that property owners should be able to do some things if they want to without asking anyone.” It may be a simple view, it will also be wildly unpopular in the Tory shires. And we know how much Dave would dislike upsetting the party base…

ECONOMIST REJECTS PRESS REGULATION

The Economist has become the latest magazine to reject the new media watchdog which it says “raises the spectre of state regulation”. As the Mail reports, the magazine also attacked the “sloppy” Leveson Report, adding that “we believe society gains more from a free press than it loses from the tabloids’ occasional abuse of defenceless people.”

SCOTLAND’S DATE WITH DESTINY

The 18th of September 2014 will be seen as “the day Scotland took a decisive step forward” according to Alex Salmond. In 545 days time, the Scottish electorate (plus some school children) will go to the polls to answer the question “should Scotland become an independent country?” As the Guardian reports, the “no” campaign looks like the winner this far out. It may be that the 18th of September 2014 is a day when Scotland just stands still.

GAS RESERVES RUNNING LOW

There’s a cold snap coming with snow hitting all part of the country other than the South-West, which will get floods instead. A reassuring time to learn that Britain is just days away from gas running out. There are only two days’ worth left in reserve and there is talk of limiting supply to large commercial customers, as the Times (£) reports, a disaster from a GDP perspective.

CLARKE OPPOSED THATCHER OVER FALKLANDS

In fighting Argentina to win back the Falkland Islands, Britain should “blow up a few ships but nothing more”, Ken Clarke warned Margaret Thatcher as part of a group of junior ministers whose views were summarised by the then chief whip Michael Jopling. As we report, the release of previously classified papers also includes gems like “we are making a big mistake. It will make Suez look like common sense,” from Ian Gilmour, and “[my constituents] want blood” from Peter Mills. The Tories divided? Plus ça change

TWEETS AND TWITS

Gavin Shuker with a fairly plausible excuse for a Friday night:

@gavinshuker: Gearing up for a pub crawl with a difference tomorrow. Visiting five local pubs to discuss what we can do to halt decline in the sector.

TOP COMMENT

In the Telegraph

Fraser Nelson – Our fortunes rest on the Bank’s great money-printing machine

Con Coughlin – If it’s peace he wants, Obama is far too late

Alex Morton – Home truths about houses

Telegraph View – Where are the political leaders Britain needs?

Best of the Rest

Philip Collins in The Times (£) – Osborne should stick with what he does best

Martin Wolf in the FT (£) – Use of housing to refloat the economy is dangerous

Leo McKinstry in the Daily Express – The Chancellor is beginning to heal our sick economy

Mary Dejevsky in The Independent – The Chancellor’s missed chance to cure Britain’s housing obsession

THE AGENDA

Today: Justice Minister Helen Grant to publish strategic priorities for female offenders.

Welsh Labour Spring Conference. The Welsh Labour party holds its annual Spring Conference – this time in Llandudno. Keynote speakers over the weekend are Peter Hain, First Minister Carwyn Jones and Ed Miliband. The Promenade, Llandudno,

09:50 am: Deputy Prime Minister Nick Clegg speech on immigration. Bingham Room, The Honourable Society of Gray’s Inn, North Square.

10:00 am: Publication of Margaret Thatcher’s personal and political papers from 1982. The Churchill Archives Centre at Cambridge University will be publishing Margaret Thatcher’s papers from 1982 on March 22. They are dominated by correspondence about the Falklands. Churchill Archives Centre, Churchill College, Cambridge, CB3 0DS.

04:00 pm: Lord Chancellor Chris Grayling visit to youth crime project. Ealing Magistrates’ Court, The Court House, Green Man Lane, Ealing.

Cable will consider Labour’s mansion motion

MORNING BRIEFING – By Benedict Brogan (Daily Telegraph).

BREAKING NEWS: Vince Cable has told the Today Programme that he would consider backing tomorrow’s Labour motion on a mansion tax. “If it is a real commitment I would certainly welcome that. Nick Clegg and I are very strong supporters of a mansion tax [but] we will have a look at what the opposition motion says,” he explained.

Earlier, Mr Cable dismissed the suggestion that his plan for greater infrastructure spending would push up the deficit – “the servicing costs are not an issue because the rates of interest are so low”. He also described the ring fencing of budgets as “unbalanced…as a long-term approach it isn’t very sensible.”

MAY MAKES A MOVE

Good morning. MayDay is edging closer after Saturday’s speech. As James Chapman points out in the Mail, the address set out a platform for power well beyond the scope of the Home Office. She flirted with Michael Gove on the front bench, suggesting that free schools ought to be allowed to operate for a profit, and prominent exponents of Plan A+ on the backbench, like George Freeman whose work on introducing principles of private enterprise in the public sector received a nod. The comments suggest that Mrs May is eyeing up Mr Gove as a running mate. She wouldn’t be the only one. Gaby Hinsliff suggests that Boris has exactly the same idea. Tim Montgomerie, who found the speech “almost Heseltinian” in its advocation of state interventionism, argues in the Times (£) that a lack of personal warmth will prevent Mrs May from winning the leadership, adding that she’s a boring dinner companion. That may be so, but neither of those qualities held back Mrs Thatcher. The Tories like their iron ladies.

This morning, however, it’s the turn of a ghost of leadership elections past. Dr Liam Fox will give a speech at the IFT at 9:30 in which he calls for an end to ring fencing for the NHS, schools and the aid budget. The Times (£) reports that Dr Fox will also call for capital gains tax to be cut to zero on a temporary basis to provide an economic stimulus. Few Tory MPs have been as energetic in their bids to build grass roots support through constituency association visits in the last two years. The Sunday Telegraph put the number of Tory leadership bids in ferment at 25 yesterday. It would be a surprise if Dr Fox’s name did not crop up somewhere on that list.

In the short-term, though, Dr Fox’s remarks simply serve to highlight the growing gulf between the leadership and the backbenches. Sarah Wollaston, who had warned in a deleted tweet reported in the Guardian that the Prime Minister was “running out of time”, writes for us that Dave’s inner circle is “far too posh, male and white”. It all sounds ominous, but is it that bad? Well, the parliamentary party seem resigned to defeat. Gaby Hinsliff reports that some have resorted to private polling (it’s grim), while for others, it has all become a question of academic interest – “I’m starting to wonder if this could be as bad as 1997 again.” The Number 10 machine has hardly become a watch-word for political savvy, but it may need recourse to the dark arts if Dave is to stay in the saddle until the next election. Damian McBride, no stranger to abortive leadership bids, had some timely advice at the weekend:

“Perhaps the hardest question of all is if, despite all your efforts, you are still pushed towards the crisis point – where the media have decided one more bad day, resignation or letter will kill you – how do you save yourself? The only answer is to negotiate, perhaps not with the plotters directly, but with influential Cabinet ministers or party figures, asking them what it will take to reach a deal.”

LIB DEMS HUNT FOR TORY MARGINALS

The Ukip surge (an Opinium put them on 17pc at the weekend, although Mike Smithson is sceptical of its value) offers the Lib Dems an opportunity to target 25 marginal Tory seats, the Independent reports. While the party expects to lose seats where it competes in a head-to-head with Labour, Tim Farron believes that with Ukip splitting the vote on the Right, a number of Tory marginals, particularly in the South-West, could be up for grabs. George Eustice (Camborne and Redruth), Oliver Letwin (West Dorset) and Zac Goldsmith (Richmond) are all reportedly in the crosshairs.

Of course, another consequence of Ukip’s rise is that the Lib Dems are no longer the party of protest. That’s fine, Nick Clegg told the Spring Conference yesterday. While the Tories veer to the Right like (over-laboured political analogy alert) a “broken shopping trolley”, the Lib Dems are “centrist”, he insisted. As the Guardian reports, he not also slapped down Plan V saying “we will not flinch from the deficit”, as well as refusing to countenance a British withdrawal from European human rights treaties. It wasn’t all “Clegg-nam style” in Brighton, Jo Shaw used her podium speech to resign her party membership over secret courts, but a weekend which could have given rise to some serious blood-letting has seen the party emerge looking surprisingly self-assured and relatively unified. Tories take note.

IDS BASHES THE ARCHBISHOP

There may need to be emergency legislation pushed through Parliament to prevent thousands of claims for compensation after IDS’s workfare scheme was struck down on a technicality last month. That won’t please the Archbishop of Canterbury, who made his first major public policy intervention at the weekend, attacking welfare cuts as a dereliction of duty to the “vulnerable and in need”. In retaliation, IDS has doled out what the Sun calls a “Bish slap” this morning, defending his work as “moral and fair”.

LABOUR LAUNCHES SMALL BUSINESS PUSH

It’s Market day for Labour as both Ed and Chuka Umunna pitch up at Brixton Maket to trail the recommendations in the party’s Small Business Taskforce report, published later this week. The main departure with the immediate past is a change of emphasis on regulation. Mr Umunna will say:

“We need a new approach to regulation which demands better quality, as well as reducing the quantity of regulation… Badly drawn up and overly complex regulation impacts disproportionately on smaller firms without armies of employees. We should give firms of all sizes the maximum flexibility on how they meet regulatory demands.”

AID THE WORLD

After she opens trading at the LSE today, Justine Greening will give a speech at 8:30 on how the British aid budget stimulates economic growth around the world (“just not at home,” the critics will growl). Britain’s stance on aid, which Dr Liam Fox will attack in his speech at the IFS beginning an hour later, has also won the backing of 27 FTSE chief executives who have written to the FT (£) calling the 0.7pc of GDP target “a smart inves tment”.

MAUDE PUSHES FOR NICHOLSON EXIT

Nick de Bois has become the latest MP to argue publicly for the resignation of Sir David Nicholson. On ConservativeHome he argues that NHS reform can only arise “by both replacing Sir David Nicholson and with No. 10 seizing the moment to provide fresh political leadership.” His views are shared by Francis Maude who believes that Sir David has mismanaged the NHS budget when it comes to IT projects, according to the Mail. Sir David will be quizzed on these projects – and on his personal expenses bill – by the Public Accounts Committee which is expected to summon him this week.

PATERSON TACKLES BRUSSELS BUREAUCRATS OVER FRANKENSTEIN FOOD

GM crops should be sold in Europe, the Environment Secretary will argue in a speech which has the backing of George Osborne, the Mail reports. Given entrenched German and French opposition, Mr Paterson’s best option is to argue for each nation setting its own rules where “Frankenstein food” is concerned. Given how well the cross-border labelling arrangements have shaped up over the horse meat crisis, that won’t be a hard case to make…

CAMERON LOSING FORCES TRUST

The values of loyalty and service which define the armed forces are in danger of being eroded by the Government’s tendency to “substitute [troops’] courage for inadequate funding”, a report written for the UK National Defence Association has found. We report that with troop levels at their lowest since the 1920’s, no aircraft carrier for most of this decade, tank units shortly to be stripped of tanks and the Chancellor pushing for a further £10bn of cuts in 2015/16, morale is low. But then, if you want first-rate equipment provided by the British taxpayer, you have to join the Syrian militia.

HUHNE SENTENCING

Chris Huhne and ex-wife Vicky Pryce will both be sentenced today following the latter’s conviction on a charge of perverting the course of justice at the weekend. A tale of our times or simply a personal tragedy? The latter, according to Paddy Ashdown. The Times (£) reports that he told the Lib Dem conference that “I feel sorry for Chris but he has got himself into this position.”

THE (SCANTILY CLAD) ENEMY WITHIN

The “ordinary worker” dressed as a nurse on the Lib Dem website is in fact a former by-election opponent, the Mirror reveals. Wonderbra model Louise Cole won 91 votes for the Miss Great Britain Party at the 2008 Henley by-election.

THE AGENDA

Paddy Ashdown is the main guest on The Agenda this evening. The programme will air on ITV at 10:35pm.

TWEETS AND TWITS

The Women of the World festival doesn’t go quite to plan for Diane Abbott:

HackneyAbbott: Mass hysteria in Queen Elizabeth Hall @southbankcentre People have spotted a mouse. Screaming women probably panicked it. #WOW2013

TOP COMMENT

In the Telegraph

Peter Oborne – The Queen’s leadership is special

Boris Johnson – Justice us put to the sword by Moscow’s greed and corruption

Roger Bootle – Our economic strategy is heading in the Japanese direction

Telegraph View – High taxes and spending are moral issues, too

Best of the rest

Tim Montgomerie in The Times (£) – Theresa May-nia won’t become contagious

Gaby Hinsliff in The Guardian – The knives are out for Dave – so he’s probably safe for now

Trevor Kavanagh in The Sun – Ed dreams of win…don’t let him in

Melanie Phillips in the Daily Mail – You don’t beat poverty by trapping families on welfare benefits, Archbishop

THE AGENDA

TODAY: Falkland Islands referendum opens. The result is expected 1am on Tuesday GMT.

07:50 am: International Development Secretary Justine Greening speech on how the UK aid budget will boost economic growth across the world. Market open ceremony from 07:50 followed by speech at 08:30. London Stock Exchange, 10 Paternoster Square.

09:30 am: Liam Fox speech on the economy to Institute of Economic Affairs. Institute of Economic Affairs, 2 Lord North Street.

10:30 am: Government’s Abu Qatada appeal. Three Court of Appeal judges will hear Home Secretary Theresa May’s challenge against the decision to allow radical preacher Abu Qatada to stay in the UK. The Royal Courts of Justice, The Strand.

10:30 am: Launch of report on modern slavery in Britain with Labour MP Frank Field. The National Liberal Club, One Whitehall Place.

11:30 am: Taoiseach Enda Kenny in London visit. Business event Mansion House, City of London 11.30am; Address British Irish Chamber of Commerce Lunch, Savoy Place 1:00pm; Address London School of Economics 3:00pm; Meet David Cameron 5:00pm.

03:15 pm: The Queen, accompanied by the Duke of Edinburgh, to attend the Commonwealth Day Observance at Westminster Abbey and Commonwealth Reception at Marlborough House.

04:10 pm: The Transport Committee holds first oral evidence session on access to transport for people with disabilities.

The crumbling Coalition is being torn apart by the post-Budget Public Spending Review

For some time now, the Conservatives have been Europe’s undisputed leaders in regicide. Once the party’s MPs are fed up with a leader, they can now depose one and enstool another over a wet weekend. A plot normally starts to brew in the bars and urinals of the House of Commons, and a critical number of mutineers is required – 46 this time – to mount a challenge. Rebels believe they are now about half a dozen names away from a coup. “It might happen as early as the summer,” one MP told me this week. “It’s too early, in my opinion. But I’m not sure they can be stopped. They hate David Cameron too much.”

More….

Vicky Pryce trial: Hunger for revenge leaves Chris Huhne and ex-wife facing jail over speeding points scam

Both are likely to be jailed after Pryce was convicted yesterday of perverting the course of justice following Huhne’s guilty plea to the same offence, giving them plenty of time to reflect on the destructive power of hatred.

Pryce’s hunger for revenge after her husband left her for another woman was supposed to bring his career crashing down by exposing a speeding points scam, while leaving her to bask in his comeuppance.

Instead, her determination to “nail” the former energy secretary, as well as his attempts to cheat justice, created a whirlwind of toxic allegations that sucked in all those close to them, including their children whose loathing of Huhne was exposed painfully to public view day after day in court.

It has also emerged that Vince Cable, the Business Secretary, and Miriam Clegg, the wife of the Deputy Prime Minister, have been dragged into the affair because of what they did or did not know about Huhne’s wrongdoing, while Constance Briscoe, one of the country’s first female black judges, could herself be tried over allegations that she lied to police about her part in exposing Huhne’s crime.

More….