Good morning. A big day ahead, and particularly a big day for Labour and Ed Miliband. Both the Europe vote and the Unite business boil down to a question of leadership. Separate issues, but each in its way focuses our attention on Mr Miliband's qualities. He is now fighting for his legitimacy. He faces an internal challenge from a particular union that shows every sign of running itself as a party within a party, and must now (as his colleagues are saying) show "he won't be pushed around". But that requires decisiveness, not followship.
Today illustrates how on policy - Europe - and organisation - Falkirk/Unite - Mr Miliband has until now allowed others to call the tune. David Cameron has herded Labour towards a potentially dangerous position on the EU referendum. No wonder Ian Austin and other politically savvy types are hinting at an amendment to James Wharton's Bill that would force a vote before 2015. In the same way Unite has taken advantage of Mr Miliband's hands-off attitude to internal matters, and his reliance on union finance, to advance its interests. The result is an insurgency, a Blairite reaction, and a mess. The Tories will milk Labour's neo-Militant tendency for all its worth. Labour MPs will keep a nervous eye on Tom Watson, whose resignation letter has everyone scratching their heads: is that pledge of loyalty worth the paper it's written on? Tony Blair might say not. Lynton Crosby has been saying for months that the public perceive Mr Miliband as weak. Empty opposition benches in the Commons this morning, confusion in the face of Unite's challenge, the overarching impression Labour and Mr Miliband give this Friday is indeed of weakness. He is fighting back, but both confrontations have been forced on him. He has chosen neither the battle nor the ground. A terrible place to start.
COOKING UP A MESS FOR LABOUR
Dave will take a break from cooking burgers for Tory MPs when he votes for James Wharton's EU referendum Bill today. The Conservatives are targeting Labour's no-show for all it's worth, today launching posters trumpeting that "Only the Conservatives are voting to give you a say" on Europe. In these circumstances the CBI's declaration that a "halfway house" along Norwegian lines wouldn't work for Britain, as the FT (£) reports, can't do much to dampen the Conservative mood.
WHERE DO LABOUR GO FROM HERE?
The resignation of Tom Watson as general election co-ordinator shows how deep Labour's problems with Unite run; the word "crisis" is widely used to describe the situation in this morning's papers. Mr Watson himself described events in Falkirk as a "mess" in his resignation letter, saying he was no longer "useful" to Ed Miliband. But Mr Miliband might not have been grateful for Mr Watson's comment that "I offered my resignation on Tuesday and you asked me to reconsider." These make it much harder for Mr Miliband to say he acted decisively over the whole affair. Mr Miliband was reluctant to let Mr Watson go because his aggressive brand of politics offered Labour something that the party otherwise largely lacks. Dan Hodges, who called for Mr Watson to go on Tuesday, writes that Mr Miliband's "operation could probably do with a few more fixers and fighters, and few less academics and policy wonks."
Where do Labour go from here? Patrick Wintour writes in The Guardianthat "Miliband now faces a choice between trying to cool the potentially crippling dispute with his biggest financial backer, or instead view the crisis as the opportunity to show leadership and call for a broad recasting of the party-union relationship." His reaction before the summer recess will do much to determine his party's wider prospects in 2015. If he falters then, as Iain Martin writes, the Tories could "Kinnockise" Miliband at the next election. Perhaps the danger for the Conservatives is getting a little over-excited: attacks should be on Unite, rather than trade unions in general, to avoid alienating a pivotal group of voters, as Isabel Hardman observes.
SMOOTH FIRST WEEK FOR THE GOVERNOR
It's been a busy first week as Governor of the Bank of England for Mark Carney - though staff are told just to address him as "Mark". The FTSE yesterday reacted strongly to Mark's signal that interest rates would remain low for an extended period of time to stimulate growth, comments mirrored by ECB president Mario Draghi. As the FT (£) notes, it's been a smooth start for Mr Carney.
TRIPLE LOCK GOING NOWHERE
Mr Cameron remains committed to campaigning to keep the triple lock guarantee on pension rises in 2015, according to The Times (£), although further increases in the retirement age are not being ruled out. With Labour and the Lib Dems both considering ditching the triple lock, it's a sign that Dave intends to campaign as the protector of pensioners.
WE'RE NOT THE TALIBAN
Peter Bone has complained about the "Tory Taliban" jibe used by Angela Eagle in reference to the Alternative Queen's Speech programme. Mr Bone, whose son is serving in Afghanistan, complained about "the extremely offensive remark"; Miss Eagle has not yet issued a response.
DAVE OPENS A NEW WIND FARM
If Dave thought he had got his backbenchers back on side, yesterday's trip to Margate probably wasn't very well-advised. Nothing against the Kent seaside town, of course, but Dave's visit to open a new wind farm - “a great win for Kent” - would not have endeared him to the troops, as Michael Deacon notes.
BACK TO SCHOOL FOR WHITEHALL
The Treasury has a new money-saving device: teach maths. Ministers are concerned that there is a lack of understanding of costs across Whitehall, with some senior officials in the Treasury even not reading spreadsheets,as the FT (£) reports. The Treasury review into Whitehall's financial management will report to George Osborne by the end of the year. School might be out for summer but, for Whitehall, it's only just beginning.
TWEETS AND TWITS
Nick de Bois is typical of the Conservatives on twitter this morning. Labour had better get used to it:
@nickdebois: Historic day in HoC as private members bill for EU referendum comes to House for 2nd reading.Only Conservatives want to give you a choice
TOP COMMENT
In the Telegraph
Fraser Nelson - It is capitalism, not democracy, that the Arab world needs most
Isabel Hardman - The price of Tory union-bashing
Telegraph View - The Falkirk farrago
Best of the rest
Philip Collins in The Times (£) - Miliband must defeat Labour’s union barons
Philip Stephens in The Financial Times (£) - Coup in Cairo is a rude awakening
Mark Steel in The Independent - You’re not unemployed – you lack self-reliance
John Harris in The Guardian - Tom Watson's resignation says more than the Labour leadership ever does
THE AGENDA
Today: Vote on James Wharton's EU Referendum Bill
1000: Nigel Farage answers listeners' questions on BBC Radio 5 Live.
