Good morning. Voting is underway in Eastleigh . Polls close at 10pm, and we'll be live blogging from then until the result, expected around 2am tomorrow. The expectation is a narrow Lib Dem victory. But whatever the result, what happens next?
Two scenarios could lead to political turmoil and even the end of the Coalition: I know it's unlikely, but a Tory victory would plunge the Lib Dems into a leadership crisis that could finish Nick Clegg and put his partnership with David Cameron in doubt (though worth recalling that all Lib Dems voted for the Coalition). On that basis, Conservatives who want to end the Coalition should vote Tory. The other,more likely as we report today,has the Tories not only losing, but coming third behind Ukip. That would plunge Mr Cameron into another round of arguments about his future, and increase the chances of a move against him.David Davis' sally last night will be taken as ominous in No10. But even the most favoured outcome - a Lib Dem win with Tories second - brings dangers. Nick Clegg is steaming about the way the Rennard affair has been laid at his door. His friends suspect a Tory dirty tricks operation far worse than the personal attacks of the AV campaign. We have yet to understand the damage this business has done to Mr Clegg's relations with Dave, and to relations at the top of the Coalition more generally. I suspect it will prove to be considerable, with consequences for the work and durability of the Coalition.
CLEGG SHIFTS GROUND ON RENNARD
Whatever the result in Eastleigh , Nick Clegg is still under real pressure as allegations of the mishandling of serious sexual harassment claims mount. TheSpectatorclaims that Mr Clegg was also warned about the alleged activities of Mike Hancock after one of his constituents made a written complaint that went unanswered. As far as Lord Rennard go, not only did Mr Clegg know of the claims, he told the peer to "stop it now" as theTimes(£) puts it. The paper says that Mr Clegg warned Lord Rennard four years ago over "inappropriate" behaviour. Mr Clegg himself changed tack yesterday and admitted that sexual harassment claims had contributed to Lord Rennard's resignation, muddying the waters still further,as we report. The ensuing confusion has led to Mr Clegg being dismissed as a "weasel" by the Mail which goes on to ponder at length just what it is with Liberals and sex scandals. Predictably, the headline event on Call Clegg was also scandal related. Cathy Newman AKA Cathy from Dulwich tried to clarify Mr Clegg's remarks on the reason that Lord Rennard left office. The result, asMichael Deaconputs it, "was sort of 'yes' and 'no' at the same time. It was 'yo' or 'nes'." Glad that's clear.
FURTHER AND FASTER AND THE SAME
Some good news on GDP - the economy did grow last year,by all of 0.2pc. The upwards revision in the Q1 and Q3 figures takes the year into minor gain territory when it was previously thought to have been flat. It made little odds at PMQs where the downgrade was the topic of the day. While Ed Miliband largely failed to land a blow, something which ought to alarm the party's election strategists, Dave did commit himselfto "going further and faster" to reduce the deficit. In reality, this means staying the course - the further and faster referred to the acceleration of cuts over the course of the parliament to 2015/16, something already well advertised. All eyes now turn to the Budget. In a muted meeting with about 80 backbenchers, fewer than last year, the Chancellor was told to offer cost of living tax cuts and asked to provide some guidance on a line to take this year, after last year's effort left MPs flummoxed. Did it register? "He's notionally in listening mode," one backbencher told theFT (£), "but in practice I don't think he will do much." With Labour's economic policy in its current state of confusion, perhaps he doesn't need to. Writing for us, Peter Oborne makes the case that Ed Balls can be an asset to Labour, but not as Shadow Chancellor:
"Mr Balls is now intellectually bankrupt. When he became shadow chancellor in January 2011, he landed in the job demanding massive deficit financing in order to confront the recession...As shadow chancellor, [he] has failed to sustain this interesting case. True, Labour from time to time demands that the pace of deficit reduction should be slower, or targeted in different areas. But Mr Balls has not seriously challenged the basic Coalition strategy. There has been no great collision of ideas. As a result he has nothing interesting to say, which is probably the reason he compensates with bombastic but ultimately meaningless Commons performances."
MCBRIDE: END POLICY ON THE HOOF
The Coalition should learn from the Gordon Brown years and stop "try[ing] to announce your way from a crisis", Damian McBride told the public administration select committee yesterday. Trying to distract the press with something new risks seeing it "go off half cock", he added, giving child tax relief as an example. Aswe report, when asked by Robert Halfon whether Number 10, never knowingly undersold on apparently spur of the moment policy announcements, needed a McBride of their own, he very modestly answered, "it depends".
ANYONE ED CAN MEET...
Dave can meet, too. TheFT(£) reports that he is in Riga today meeting prime ministers from the Nordic and Baltic nations as the Nordic Future Forum gets together. He will have to be at his charming best. The Swedes are very unhappy with his referendum idea, for a start. "Without [the British], we would feel very lonely" a minister laments . "We've always looked up to the British but I'm not sure we can any more," adds an ashen faced Icelander. Poor Dave, he gets enough of that at home. From Ken Clarke, for instance, who yesterday confided toReutersthat a Brexit would be the largest blow to British influence since Suez , a "mistake of historic proportions". In cheerful vein, the former Chancellor added that "I was surprised we [have] such a firm reputation as a safe haven currency as we still have such an appalling problem with deficit and debt". He was clearly in a sunny mood.
BADGER CULL SLATED FOR SUMMER
Coming soon to a sett near you - Badger cull: the return. Following an abortive attempt by Owen Paterson to produce a pilot cull in Gloucestershire last summer - foiled by there being too many badgers, and the fact that many were pregnant - the Environment Secretary announced yesterday that a cull in that county and Somerset will go ahead this summer. To pacify badger fanciers, a "reserve" is also going to be established in Dorset . The cost of the whole scheme has been estimated at £4m, aswe report.
COUNCILS IGNORE PICKLES ON TAX
Eric Pickles isfacing a major revolt over council taxfrom town halls after a survey of 250 of the 421 councils in England by the Chartered Institute of Public Finance and Accountability discovered that 41pc intend to raise council tax this year. Average rises of 0.8pc include those from Conservative authorities such as Canterbury where taxes will rise at 1.99pc, slightly below the 2pc threshold at which a referendum would be triggered.
The bullying claims saga at the DfE drags on. Michael Gove was recalled by the education select committee yesterday to answer questions over internal allegations of bullying made by civil servants against his special advisers. One of the advisers concerned, Dominic Cummings, is also the subject of another set of claims on which Mr Gove can expect to be quizzed, this time made by Tim Loughton who believes he was briefed against, as theIndependentnotes. In her column for us,Sue Cameronnotes that Sir John Major is highly critical of SpAd culture, which he believes carries with it a lack of "real world" nous. His heirs in the present Cabinet clearly take a very different view.
LOCKED IN BY THE TREASURY
Chris Grayling is moving to prevent convicted murderers having access to publicly funded IVF treatment on the public purse while in jail, we learn in this morning'sMail. Let's see what the ECHR have to say about that, shall we? In the meantime, there's a more pressing problem for the Justice Secretary. Sharon White, director-general for public services at the Treasury, questioned whether Mr Grayling's pay-per-result approach to outsourcing care of reoffenders would be cost effective, theTimes(£) reports. Given that this was the entire rationale behind the move, a lack of Treasury support could be terminal.
ALCOHOL PRICING BLOW
Minimum alcohol unit pricing has been challenged by the Institute of Licensing , the body which would be expected to enforce the rules. Pointing to social attitudes, the Institute has written to the Government's consultation exercise to add that "problem drinkers will source alcohol no matter the price."
CAMERON A TURN-OFF FOR WITNEY
He may be their MP, but the people of Witney can no longer afford to have Dave switch on their Christmas lights.Having the Prime Minister do the honoursis "too costly" thanks to the "dangerous" crowd levels, according to the town council, which makes him sound like theBeyonceof the Cotswolds.
Question Time will be live from Eastleigh. The panel will consist of Jeremy Browne, Angela Eagle, Claire Perry, Neil Hamilton and Ken Loach.
TWEETS AND TWITS
An MP's lot can be a fascinating one:
@BrandonLewis:"Had a very interesting meeting today about Historic Counties, as opposed to ceremonial or administrative ones."
Good morning. Call Clegg should make for interesting listening today. His evident frustration at the media acting as "self-appointed detectives" (or as the Mail rephrases it: "a free press") lays bare the pressure he is under. Writing for us, Mary Riddell argues that even a by-election victory might not save him if his story doesn't stack up. Yesterday's 8pc in a ComRes poll is, she argues, "a measure of public disgust". Daniel Finkelstein uses his Times (£) column this morning to claim that, under Mr Clegg, the Lib Dems are a party that has failed to grow out of interest group politics. But even if that's true, who else is there in the party's firmament who is both willing and able to build the bridges with the Tory leadership necessary to keep the Coalition going? David Cameron has been very circumspect in his comments so far, but he too may face a grilling over his Deputy's decisions come PMQs at noon.
Most problematic for both is the fact that Mr Clegg's story appears to have more holes in it than a block of emmental. We report that Sandra Gidley, a former MP and once the party's health spokeswoman, claims she personally warned Mr Clegg in 2007 that allegations had been made about Lord Rennard. If true, the implication is that Lord Rennard's involvement with the coaching of prospective female MPs continued after the party leader was made aware of claims against him. The public image of the party can hardly have been burnished either by allegations in the Mail today that Lord Stoneham threatened one of Lord Rennard's accusers. The party looks in disarray.
VOTERS SWITCH-OFF IN EASTLEIGH AS POLL LOOMS
The citizens of Eastleigh go to the polls tomorrow, and the ante-post favorite seems to be fatigue. The Guardian reports that even a visit from Paddy Ashdown failed to excite residents who, in the words of one "can't be arsed" to open the door anymore, so bored are they with the sight of door-stepping MPs summoned from Westminster by the party machine. At least he kept the press corps entertained - Michael Deacon's account includes Lord Ashdown's claim to have "invented balloons". One thing which comes across in the Guardian article, Paul Routledge's Mirror commentary and the reports of staffers returning from Eastleigh is how well organised the Ukip campaign is on the ground. Rowena Mason writes that they have certainly led the most colourful campaign on the ground, and are, in Nigel Farage's words "coming up on the rails". The pre-election talk of a battle for third with Labour now seems academic. The question is how close to second they come.
IRAN BOMB THREAT STILL LIVE
Our publication this morning of evidence that Iran is developing a second facility with the potential to assist in the production of a nuclear bomb will raise pulses in Whitehall. While Jack Straw, writing for us yesterday, argued that Britain should not go to war over an Iranian bomb, as our leader puts it, the situation is more complicated than that:
"While nobody wants a war with Iran, or all the hellish consequences it would stir up, the consequences of Tehran getting the Bomb remain pretty hellish, too. It is not just that ruling out military action would weaken our bargaining position – it is that if Iran continues its current duplicitous conduct, it might be the only way to prevent a still greater disaster."
BLAIR "ABUSED" OVER IRAQ
And on the topic of Middle Eastern military action...Mr Tony was on Newsnight yesterday complaining that people are still "very abusive" to him over Iraq and adding that he had "given up" justifying himself over accusations which had "taken a toll" on him. But at least Iraq is "safer today", right? "No, I wouldn't say that," answered Mr Blair, "it's going to take a generation".
CABINET V OSBORNE
Dave aside, the Chancellor is looking short of allies at present. The Times(£) reports that £10bn of additional savings have been ordered for 2015-16 in the absence of welfare cuts. Eric Pickles has joined long-standing opponents Theresa May, Chris Grayling and Philip Hammond after being told to cut 7.2pc in the 2015 financial year. The Mail adds that rebel Tories and Lib Dem Cabinet members are joining forces to argue that the instead of deeper cuts in departments already hit, the ringfence on international aid, the NHS and pensioner benefits must go. The frustration cuts both ways - the FT (£) reports that George berated ministers for slow progress in implementing enterprise zones and rural broadband provision.
Away from the Cabinet table, the offers of help are becoming increasingly radical. Paul Tucker, Sir Mervyn King's understudy, spoke yesterday of introducing negative interest rates to spur the British economy. Although he was talking of the deposit rate, not the base rate, the idea of charging banks to hold reserves at the BoE hardly fits with the post-crisis desire to move banks onto a sustainable footing. We live in interesting times.
NICHOLSON FEELS THE HEAT
"Diabolical!" is the Mail's verdict on the news that the "man with no shame" has still not gone. At least one Cabinet member and several junior ministers would like to see Sir David Nicholson resign over the Mid Staffordshire scandal, we reveal. The demands for accountability follow the submission of an Early Day Motion by Charlotte Leslie, signed by ten Conservative MPs. Downing Street hardly offered Sir David a ringing endorsement - "the Prime Minister understands why there are strong feelings," a spokesman said last night. Of more pressing concern to Sir David must be the lack of budgetary control in the NHS. Figures obtained by the Mirror show that dozens of hospitals have required emergency funding totalling £543m over the last two years, with one trust requiring a £55.2m bail-out. Too big to fail, central government handouts, unaccountable chief executives - the NHS is starting to look a lot like the banking sector.
LABOUR OFFER TRIDENT BACKING
A £25bn Tory plan to renew the Trident fleet on a like-for-like basis will receive Labour backing at the next election, the Independent reports. Danny Alexander's report into alternatives to a full renewal is out in the Spring, and officially the party will keep its options open until this point, but the intervention of Lord West, a former defence minister who uses anIndependent op-ed to plead with the party to keep its options open, can be seen as indicative of the way the wind is blowing internally.
LOUGHTON TURNS ON GOVE SPAD
There continues to be no love lost between former education minister Tim Loughton and Team Gove. The Independent reports that Mr Loughton, who blames one of Mr Gove's advisers for an unattributed Spectator quote saying he was a "lazy, incompetent narcissist", has tabled a series of hostile questions aimed at forcing out Dominic Cummings, one of the Education Secretary's cl0sest SpAds. It should give Mr Cummings a break from feuding with journalists, at least...
MPS ESCAPE PENSION PAIN
The 2.4pc hike in pension contributions for those working in the public sector will be evaded by one group of assiduous public servants. MPs face only a 1.85pc increase in their pension contributions, the Sun reports. Very good of them to find that.
WALLACE TAKES ORIEL POST
Former Downing Street economics adviser Moira Wallace will become the first female provost of Oriel College, Oxford, Richard Kayreports. The former director of the Government's Social Exclusion Unit will take up her post in September.
IN THE MAGIC GARDEN
The roses are a Tony Blair legacy, the vegetables come from Sarah Brown and the play area is a David Cameron innovation. Welcome to the Number 10 garden which features in this morning's G2. A public ballot for viewing tickets opened this week. It is overlooked by the Chancellor's flat which "must have inhibited the Blair family's enjoyment when there was Brownite glowering to be done," the paper notes, rather uncharitably.
TWEETS AND TWITS
Having a 'Boris' on top hasn't done Michael Fabricant any favours:
@Mike_Fabricant: "When I 1st got into Parliament, 1 Cons MP exclaimed 'My God! Look at his hair! There letting anyone in now'. I fear he still thinks that!"
TODAY: Culture minister Ed Vaizey announcement on architecture policy.
09:00 am: British Property Federation conference, with speeches by housing minister Mark Prisk and Labour's Jack Dromey. Conference opens at 09:00, Mr Dromey speaks at 02:40 and Mr Prisk at 04:30. Deloitte, 2 New Street Square.
09:00 am: Deputy Prime Minister Nick Clegg's radio phone-in on LBC 97.3. Brought forward from Thursday.
09:00 am: Ofsted chief inspector Sir Michael Wilshaw speech to the Policy Exchange. 10 Storey's Gate, Westminster.
09:30 am: Damian McBride gives evidence to the Commons Public Administration Committee on the future of the civil service. Committee Room 16, House of Commons.
09:30 am: Justice Secretary Chris Grayling gives evidence on rehabilitation to Commons Justice Committee. Thatcher Room, Portcullis House.
09:30 am: Second estimate of Q4 GDP is published by the Office for National Statistics.
10:30 am: Mayor of London Boris Johnson visits Feltham to launch plans for free school. Reach Academy, Bridge House, Hanworth Road, Feltham.
12:00 pm: Prime Minister's Questions. House of Commons.
05:00 pm: Education Secretary Michael Gove at CentreForum event on achievement in schools. The Commonwealth Club, Northumberland Avenue.
Good morning. Things are looking grim today for Nick Clegg, the Lib Dems, and, by implication, the Coalition. The revelations about the party's handling of the complaints against Lord Rennard are getting steadily worse, putting Mr Clegg's leadership in doubt. A party that lectures others on transparency and equality seems to be short of either. Mr Clegg's tone of self pity in his Sunday statement has not done him any favours. Eastleigh now looks up for grabs. The Tories are staying quiet so as not to get in the way of a Lib Dem slump they expect to become apparent in their polling. To lose a seat that is totemic of the Lib Dem ability to win in what should be Tory heartlands would be a shattering blow to Mr Clegg. Add that to the slump in the polls identified by ComRes this morning - they are on 8pc - and you can see how the Deputy PM's position could suddenly look very precarious by the weekend. Westminster is full of rumours of manoeuvrings against him. If he were to be ejected by a panicked party, the future of the Coalition, which depends on the personal relationship between Mr Clegg and David Cameron, would be in doubt. Then there's the bigger existential question for the Lib Dems: scandals, trials, political collapse, leadership rumblings, and the prospect of a general election wipe-out: can they survive as a party?
Mr Clegg's defence is crumbling by the day. We reveal that Helen Jardine-Brown, the party's former head of fundraising, was promised a call from Mr Clegg after making allegations against Lord Rennard four years ago. It never came. Likewise, the Independent reports that one of Mr Clegg's advisers, Matthew Hannay, was present at one of the incidents. A letter sent by this paper to Jonny Oates, now Mr Clegg's chief of staff, form the basis of the Mail's detection of a "trail that leads to Clegg's door", although Mr Oates denies ever discussing them with the party leader. Lib Dem aides have clearly briefed the Guardian that Mr Clegg forced Lord Rennard to step down. But if the allegations were as nebulous as he would have us believe, then why demand his resignation? On the other hand, if there was more substance to them, why did Lord Rennard subsequently begin to appear at the party's gender balance events? As the Times (£) reports, the police are now investigating.
What of the Lib Dems? The Times (£) leader questions whether they are still a "serious political party", while Rachel Sylvester argues that the party has operated without serious scrutiny for years as it was nowhere near power. One constant across the press coverage is that the women of the party are very angry. While they are notoriously under-represented in the parliamentary party, there's now the wider question of what will happen to their votes and membership subscriptions lower down the ranks.
As much as the Lib Dems appear to have dealt with serious accusations appallingly, that shouldn't detract from the fact that it isn't just the one party which has a women problem. Writing for us, Cathy Newmancomplains that the atmosphere at Westminster is frequently "more public school than public service". The answer, she suggests, is more women MPs. That probably means more A-listing, in the short-term at least. Given the ungovernable nature of the Tory backbenches after the party's 2010 foray into this area, all parties may be unwilling to see that as a solution at all.
WORKING FOR THE CLAMP-DOWN
Dave's changed. He is interviewed in the Express today in a piece sub-titled "David Cameron vows to get tough on freeloading foreigners". His hoodie hugging days suddenly seem rather distant. The intention seems to be to drive home his message on immigrants getting access to public services and benefits. "Let's make sure ours is the toughest country, instead of the softest," he tells Patrick O'Flynn and Macer Hall. The Chris Grayling plan limiting access to legal aid on residency grounds is the flagship measure, and he also promises a review of the benefits system to limit instant access. You question whether he may be making himself something of a hostage to fortune with this - given the EU's rules on parity of treatment for citizens of other member states, shouldn't this be a renegotiation objective, not a pledge for the here and now?
Immigrants aside, the Prime Minister backs his Chancellor, stands by his aid programme and appears to move back to his original position on an in/out vote, which is that there will be one in a coalition he leads, not just a Tory majority government. Any other innovations? The Prime Minister has asked ministers to "think like Conservatives". Whatever next?
Blame it on the bankers. No, not a Labour stump speech from 2010, but the Chancellor's thoughts yesterday when pushed on the British economy. Between excessive Labour borrowing (as he told the Commons) and poor borrowing decisions by British banks (as he told the Commission on Banking Standards), the Chancellor argued he had always been fighting an uphill battle. As the FT (£) reports, George is facing a triple whammy of his own at present - a weak domestic economy and deteriorating public finances are tied to political unrest on his backbenches (Iain Dale wrote yesterday that the hounds smell blood) . This, of course, delighted Ed Balls. As Quentin Letts writes, though, he couldn't land the blow he ought to have done in yesterday's debate:
"We had all agreed was going to be a debagging for Osbo’, a spanking for Mr Haughty... Balls shot his thunderbolt – and missed. And by the end of the 65-minute session Mr Osborne was strutting and peacocking and thoroughly at home. Odd place, Parliament. It often does the very opposite of what you expect."
Having survived yesterday, the pressure may be off Mr Osborne briefly, given the negative overnight reaction of the US and Japanese markets to Italy's hung parliament. And if you want a measure of how bad things are in the eurozone - the single currency even lost ground against Sterling overnight.
EASTLEIGH: LIB DEM LIFELINE?
It isn't a great surprise to learn that the Lib Dem campaign in Eastleigh is, in the FT's (£) words, "leaning towards the local". A constituency poll conducted by Populus for Lord Ashcroft finds Mike Thornton five points ahead, taking 33% to Maria Hutchings 28%. Ukip are in third with 21%, while Labour are well adrift on 12%. As the Guardian notes, neither the Lord Rennard accusations or the triple-A downgrade appear to have moved the needle a great deal. That seems to ignore the strong Ukip polling. With each of the big three grappling with its own party management or policy issues, the "a pox on all your houses" approach clearly has some popular appeal, something the Lib Dems know only too well.
LACK OF LEADERSHIP TO BLAME FOR WEST COAST FIASCO
A report today by the Public Accounts Committee on the West Coast franchise award blames ministers for a culture in the Department of Transport which lacked "leadership and common sense", according to theFT (£). As worrying is an apparent inability to learn from previous departmental disasters like Metronet, to take advice from lawyers, or to have anybody in charge at all for a period of three months. No doubt this report will lead to awkward questions for ministers past and present in the department, but it will also be seized on by both sides of the civil service reform debate - was underfunding to blame, or was it the inability of ministers to bring in appointees with the leadership skills the natives lacked?
PEERS WATER DOWN DEFAMATION AMENDMENTS
Part of Lord Puttnam's prospectus for press reform was removed before the Defamation Bill was passed yesterday - on third reading, peers removed the part of the Bill which would require newspapers to pay exemplary damages if they had not submitted articles to an external regulator before publication. The Times (£) reports that the Bill was unopposed once the amendment had been removed without a vote. It now returns to the Commons.
TORIES TO DEMAND NICHOLSON RESIGNATION
Sir David Nicholson will come under pressure from Conservative MPs to step down in the wake of the Mid Staffs crisis, we report. Around 20 MPs have signed an early day motion tabled by Charlotte Leslie calling for "accountability" over deaths at the NHS trust.
ID FOR EU
European residents in Britain will be charged £55 for a government identity card from later this year, with immigration minister Mark Harper hinting that any EU citizen living in Britain for more than three months would be required to carry one to obtain access to public services. The Guardian reports that a mandatory registration scheme is already being planned for Bulgarian and Romanian citizens, and may now be extended.
KERRY FAILS TO OFFER FALKLANDS BACKING
With John Kerry making London his first stop as the new US secretary of state, the special essential relationship must be as strong as ever, right? Not quite. As we report, Mr Kerry failed to offer Britain any backing on the question of sovereignty over the Falkland Islands. He had nothing to add on Anglo-US relations with Kyrzakhstan, either.
Survivors of the Arctic convoys and Bomber Command's campaigns will be recognised today by defence minister Mark Francois. We report that he will announce an Arctic Star and a clasp for Bomber Command veterans. The MoD estimates that up to 250,000 veterans or heirs will be eligible for the honour.
BUYING A ROUND? DON'T FORGET ONE FOR THE TAXMAN
The Chancellor has his orders. Forget petrol duty or the income tax threshold, "a beer tax rise must be halted so Brits can still afford a pint," the Sun warns him. With the revenue from one pint in every three now headed to the Treasury's coffers, and the beer duty escalator up 42pc since 2008, an additional rise of 6p in April has the paper frothed up. Yesterday, the Sun's Page 3 girls were at the Westminster Arms launching the paper's campaign. This morning, it's the turn of the Tax Payer's Alliance, followed, no doubt, by the no less glamorousWestminster press pack. It's a tough job, but someone has to do it.
TWEETS AND TWITS
@timloughton: "Just received email inviting me 2 speed dating event in Westminster at weekend-what if I come face to face with another MP from other side?"
The police contacted the Lib Dems about the Lord Rennard allegations as the focus turned to how much Nick Clegg knew about the claims.
George Osborne and Ed Balls sparred over the loss of the AAA credit rating.
John Kerry said the US would not take sides on the Falkland Islands.
Cardinal Keith O'Brien stepped down amid allegations of inappropriate behaviour.
'It's hardly Jimmy Savile'
Breaking: Cathy Newman has just tweeted that the Metropolitan Police have contacted the Lib Dems about the Lord Rennard claims to 'ascertain if criminal activity has taken place'. More details on Channel 4 News at 7pm.
The Lib Dems appear to be holding a series of seminars in how to ensure a story doesn't go away. First we had Nick Clegg's confusing statement last nightabout 'indirect and non-specific allegations' which appeared to contradict Channel 4's account of how it researched the story (we have a list of key questions here). Clegg's claims that he only heard the allegations about Rennard's allegedly inappropriate behaviour when they were broadcast was looking a bit shaky this afternoon when the Telegraph's Robert Winnettrevealed the paper had sent Nick Clegg's aide Jonny Oates specific allegations about the Lib Dem peer in April 2010.
On the World at One, a prospective parliamentary candidate, Jasper Gerard, showed just how strong party loyalty can be when he tried to minimise the allegations as 'historic' and 'hardly Jimmy Savile'. Simon Hughes also dropped some dark hints about the timing of the broadcast, which Cathy Newman hasresponded to on her blog. But will the story affect the Lib Dems' hopes in Eastleigh? Isabel spoke to one Tory MP who said that the Lib Dems were like 'cockroaches': remarkably able to shake off both the Huhne and Rennard scandals. But James says some Lib Dems are worried that this could follow the same path as Cleggmania in the popular press.
The party has now set up an independent hotline for whistleblowers. It will be interesting to see whether other allegations surface about other 'sex pests': wenoted this morning that this is unlikely to be the only alleged incident of inappropriate behaviour. In the meantime, it might be worth re-reading this2011 piece on the priapic predators of the Westminster jungle.
Osborne's Ballsy response to AAA downgrade
George Osborne was playing historian today as he responded to Ed Balls’ urgent question on the credit rating downgrade, charting Labour’s role in the UK’s loss of the AAA rating; particularly the deficit it bequeathed the Coalition. But he was in revisionist mood when it came to his own stance. As Ed Balls repeatedly leant across the despatch box and tried to hand the Chancellor a copy of the Tory 2010 manifesto in which the party lists ‘we will safeguard Britain’s credit rating’ as the first of its eight benchmarks, George Osborne told MPs that what he had always said was important was the confidence of the markets.
Did we learn anything from the Urgent Question? Nothing about Labour's economic policy, or any change of heart from Osborne, certainly. But amidst all the jeers and ridiculously loyal questions was just one hint of what Osborne faces on his own backbenches: Philip Davies calling for 'proper tax cuts'. The Chancellor will have been heartened, though, by the overall support he received from Tory MPs. They were clearly enjoying his confident response: the Chancellor is often accused of arrogance, but the flipside of self-assurance is that it doesn't half come in handy when your back is up against the wall.
Number 10 this morning dodged questions on whether the government could expect to retain the new AA1 rating to the end of this Parliament. But as Jonathan reported this morning, the markets seem considerably less excited than Parliament.
Full results of the Italian general election expected. Exit polls make Pier Luigi Bersani of the centre-left Democratic Party the heavy favourite to become Prime Minister.
19.00: Ed Davey speaks at a Reform event on energy policy.
Some vital statistics
Latest YouGov: 11pt Labour lead (Lab 44%, Con 32%, LD 11%, Ukip 9%). Implied Labour majority of 116.
Next government chances, as implied by bookies: Lab majority 40%, Con majority 22%, Lab-LD coalition 15%, Con-LD coalition 12%, other 11%.
Government borrowing cost (10-year bond yield): 2.10% (-0.02pts).
Eastleigh by-election chances, as implied by bookies (with changes since Friday): Lib Dems 61% (-13), Con 25% (+8), Ukip 12% (+6), Lab 1% (-1), other 1% (0).
BREAKING NEWS: George Osborne is awaiting the verdict of the markets on Fiday's Moody's downgrade. Sterling traded sharply lower against both euro and dollar overnight, although it has been staging a minor recovery. A pound now buys €1.145 and $1.515. You can follow our live coverage of the money markets here.
Meanwhile, Tim Farron has been on the Today programme where he has said that he heard "no specifics" until last Wednesday. He had heard a "general rumour...but not specific complaints" prior to that. "We screwed this up as a party...my job is to find out what happened and ensure those women get justice," he added, stressing that Lord Rennard denies all allegations of wrongdoing. Speaking on BBC Radio Solent earlier, Nick Clegg said that he was "personally hurt" by accusations that he knew something and covered it up. "I've nothing to hide," he added.
LIB DEMS IN CRISIS OVER RENNARD ALLEGATIONS
Good Morning. Nick Clegg is in real trouble over his concession that he knew of "indirect and non-specific" claims of alleged impropriety by Lord Rennard in 2008 (read our report here). His statement last night raised as many questions as it answered, and Cathy Newman has fisked it thoroughly on her Channel 4 blog, pointing out the "Kafkaesque" internal dynamics of party organisation which appeared to militate against a proper investigation of the allegations. The Mail carries fresh accusations this morning. It reports that a gathering of party officials in a Peterborough hotel in 2004 was interrupted by a tearful female aide who claimed that Lord Rennard had attempted to fondle her in his room. Despite the "Peterborough incident" allegedly gaining notoriety in the party, no investigation was opened at the time. The investigation now may be a criminal one - Labour MP John Mann is writing to Scotland Yard urging the opening of a formal investigation.
The press has the knives out for all involved. The Independent's profile of Lord Rennard calls him a "Rasputin figure" who was the "commanding - and feared" man at the heart of the Lib Dem election machine. The Mail, on the other hand calls out Mr Clegg for "weasal words". Given that the Eastleigh by-election is this Thursday, you would anticipate the Lib Dem's fragile lead evaporating further, although one party activist told aTimes (£) reporter that "if Chris Huhne lying doesn't derail us, neither will Rennard". Maybe so, but as Gaby Hinsliff writes in the Guardian, for Nick Clegg, it's what you don't know that can hurt you:
"Politics has long had a culture of deniability, whereby leaders' offices are carefully shielded from the dirtier aspects of the business on the grounds that what they don't know they can't be asked about: it would be naive to think that will ever die. But as this affair is now proving, what you don't know – or only half-knew – can still get you into trouble if you really should have known."
Embarrassing, but not fatal seems to be the gist of Fleet Street's reaction to Friday night's Moody's downgrade. The timing helped George - the evening before a weekend with parliament on a short recess in any case meaning its Westminster impact was muted. The FT's leader describes the debacle as a "self-inflicted embarrassment", echoing the Mail's Alex Brummer whose line is that the Chancellor has been "hoist by his own petard...but this is no disaster". Certainly the choice of ratings agency opinions as a barometer to success always made Mr Osborne something of a hostage to fortune, but as Tim Montgomerie points out in the Times(£), not only is the Chancellor going nowhere, but he's not for shifting on strategy either. In fact, as Jeremy Warner argues writing for us, it may even firm his mind further to stay the course:
"In a sense, loss of the triple-A only further underlines just how little room the Chancellor has in next month's Budget for any easing of the broad outline of fiscal consolidation."
CABINET AT WAR ON CUTS
As if George didn't have enough on his plate, the Cabinet is becoming increasingly unruly when it comes to spending cuts. The Mirror reports that Theresa May is leading a group which includes Philip Hammond and Chris Grayling in resisting further cuts to departments which have already borne the brunt. The self-styled National Union of Ministers (first referenced in James Forsyth's Sunday Mail piece) have the support of Vince, who is already publicly calling for an end to the axe work. Mrs May, in particular, has been spending a lot of time talking to backbenchers recently. If she's willing to take on the Chancellor, she must suspect the support is there.
TORIES LOSE LORD ASHCROFT OVER GAY MARRIAGE
Michael Ashcroft's decision to stop funding the Tories is a major blow. As the Mail reports, his problem with the party is that of many on its traditional wing - "Lord Ashcroft is still a Tory but, he wonders, is Cameron?" The peer has donated £10m to the party but was ignored by the leadership over gay marriage and the appointment of Lynton Crosby. There's no cash for influence in the modern Tories, that's for sure.
The Tory civil war has also claimed a victim closer to home for Dave. The chairwoman of his local Conservative branch in Chipping Norton has resigned over the issue. Cicely Maunder has quit as have a number of the executive committee, a move which echoes the losses sustained by dozens of constituency associations in England, as Dave is frequently reminded by his backbenchers. CCHQ is proud of the party's rapidly improving digital platform, but the Tory "ground game" is in disarray given the number of desertions. Like Lord Ashcroft, they wonder whether the party is as conservative as they are, a point taken up by Roger Scruton in the most recent edition of Prospect:
"What the 'modernisation wing' of the Tory party is hoping for—a new kind of conservatism which conserves nothing, changes everything, and is guided by the very same rhetoric of equality and human rights that shapes the left-liberal agenda. If that is where we are, then conservatism is dead."
BORIS CALLS EASTLEIGH
And the winner will be...not Labour. Despite Ken Clarke's pessimism, the Mayor of London is highly complimentary about Maria Hutchings in his column for us, noting that he would rather her than "some utterly Janus-faced and hypocritical Lib Dem". He adds that "Labour’s failure to make an impact is a biting comment on Ed Miliband, and his vacuous prospectus for the people of this country." It's a reasonable point. The implied odds of a Labour victory sit at around 0.8pc taking the bookmakers at face value, with Mike Smithson reporting that the Tories are hardening with the Lib Dems slipping. Both the poll calling Eastleigh for the Lib Dems and that for the Conservatives put Ed M's troops nowhere. If ever Labour were going to make an in-road in the South, it should have been here. They haven't, and that should worry them.
HARMAN: DAVE SHOULD "MAN UP"
Today sees the Defamation Act undergo its third reading in the Lords. With Labour wrecking amendments still in play, a last minute deal over a Royal Charter looks likely to be the only circumstance under which the Commons will see it back for a third time. Harriet Harman said on Marr yesterday that a deal was still possible but that Dave needed to "man up" and make its provisions tougher.
THE RUSH FOR DLA
One additional person is claiming disability living allowance every 10 minutes, the Sun reports, up 4,000 a month from the same period last year. From April, the DLA will be scrapped in favour of PIP - the personal independence plan - which is anticipated to be much more exacting in its disability testing. A cynic might think the two facts related.
SOMEONE STILL LOVES STERLING
The money markets don't want to be caught holding Sterling at present, but at least it still has some fans north of the border. The FT (£) reports that a discussion paper published in early March by British ministers would endorse the use of Sterling by an independent Scotland, but would also enforce a deficit cap, policed by the Bank of England. Drawing the SNP into a fight over the conditionality of continuing to use Sterling is part of the Whitehall plan to bury them in detail - and Holyrood is unlikely to accept the conditions without comment. After all, you'd never find the Westminster government playing fast and loose with deficit targets.
GO WEST, RICH MAN
Over Offa's Dyke, the Independent reports that Wales may gain tax variation powers similar to those enjoyed by Scotland, raising the prospect of an influx of English employees seeking tax breaks. The leader of the Welsh Conservatives, Andrew Davies is expected to announce tomorrow that he would use the power to cut taxes at the 40pc rate,targeting the squeezed middle. Of course, the move may backfire. The Cardiff government is a coalition between Labour and Plaid Cymru, and like markets, taxes may go up as well as down.
DAVE INVITES ROMANIA FOR A BREW
Given the hysteria rapidly developing on both sides - British fears of a migrant flood, the Romanian ambassador envisaging roaming gangs of racist hoodlums hunting down his countrymen - Victor Ponta, the Romanian premier has made a game effort to calm tensions with an op-ed in this morning's Times (£). There will be no invasion, Romanians prefer Latin nations, the country is doing well with its fiscal adjustment, and Prince Charles likes it there, he argues. Well that's alright then. Panic over.
RIDE AWAY WITH THE PLEBGATE BIKE
Want the opportunity to own a piece of contemporary British political history? The bike made famous by plebgate is going under the hammer in a charity auction, the Times (£) reports. Since starring in Andrew Mitchell's contretemps with police officers at the entrance to Downing Street, Mr Mitchell's bike has been targeted by theives and tourists wanting a photo with it.
TWEETS AND TWITS
Tom Harris takes a swipe at Nicks:
@TomHarrisMP: "Clegg to claim he only found out 'a few hours ago' that he is, in fact, in coalition with the Tories."
TODAY: Defamation Bill third reading. The Defamation Bill, which has been amended to contain measures aimed at implementing Lord Justice Leveson's recommendations, will have its third reading vote in the House of Lords.
09:30 am: British Bankers' Association (BBA) releases its latest high street banking report.
03:45 pm: Chancellor George Osborne to give evidence to the Parliamentary Commission on Banking Standards.
06:00 pm: Launch of report When Maternity Doesn't Matter: dispersing pregnant women seeking asylum. The report is published by Maternity Action and the Refugee Council. The launch is hosted by Sarah Teather MP, Richard Fuller MP and Fiona Mactaggart MP. Macmillan room, Portcullis House.