Payday loans..

Breaking News: George Osborne has been speaking on the Today programme about the Financial Conduct Authority's plans to cap charges by payday loan companies: interest rates but also arrangement fees, penalty fees and rollovers.

Mr Osborne said: "People who believe in the free market like myself want that free market to be properly regulated...We need to make sure we fix all parts of the banking and financial system, and payday lending is part of it...We are stepping in where government needs to step in to create the rules of the market."

Labour's chief campaigner on the issue, Stella Creasy, earlier told Today: "What we're seeing today is a recognition that the case is overwhelming for capping the cost of credit." Mr Osborne also praised Ms Creasy's work, while blaming Labour for not doing anything on the issue during their 13 years in power.

Good morning. What do we do about the Romanians and Bulgarians who will supposedly head here once the restrictions are lifted in January? That's the question David Cameron and his chums are grappling with. The Prime Minister wants to double the three month minimum time in the UK required before new arrivals can claim welfare (not quadruple it as the Sunday Times suggested yesterday apparently) but the Lib Dems aren't keen and so there's a split in the Coalition. The Guardian says Nick Clegg will resist the change. Alistair Carmichael on Marr yesterday said they had not been 'persuaded' by the argument, which would include suspending child benefit payments to the children of migrant workers who are not in the UK. Interestingly though the Lib Dem anxiety is not the restriction itself but the risk that it might put the UK at odds with EU law, which bars discrimination between citizens of the EU. No10 hopes to set out its stall this week to show it is doing something to address the concern that the UK is about to see an influx of migrants from the two countries.

But is that concern justified? It's tempting to ask whether Mr Cameron is even asking the right question. We carry a fascinating interview with the Bulgarian ambassador today. Konstantin Dimitrov says the number of Bulgarians who come to the UK each year - about 8-10,000 - will not change when the restrictions are lifted. Why? Because the restrictions have never worked, and never mattered. In effect, there have been no restrictions. He claims that not a single work permit application has been rejected by the Home Office since the restrictions were introduced on Bulgaria's accession to the EU in 2007. When we put this to the Home Office yesterday they shuffled their feet and said they had no figures for the number of unsuccessful applications. Keith Vaz promptly stepped forward and promised his Home Affairs Select Cte would investigate. What Mr Dimitrov seems to be saying, and the Home Office is not denying, is that we have deluded ourselves in thinking that a system exists to keep out migrants from Romania and Bulgaria. The restrictions do no such thing. Which suggests that far more of them have been coming here since 2007, and the overall number will not shift significantly after January 1st. Which should make us even more sceptical about the postures being adopted by Downing Street this week, or the ability of politicians to prevent the movement of European peoples that Britain has legally signed up to. As Dominic Grieve pointed out in my interview with him on Saturday, the EU is above all a legal construct, and like it or not we are party to the rules that back Mr Dimitrov's other claim, namely that Bulgarians (and Romanians for that matter) are not immigrants: like the rest of us they are citizens of the EU, and free to come here. As with so much else about Europe, it is a truth that Mr Cameron dares not speak.

LABOUR MAYHEM

There's a smattering of headlines to worry Labour doing the rounds this morning. There's a new development in the Falkirk affair, with Karie Murphy's son Ryan Cullen reportedly signed up to vote in Falkirk - even though he was not a resident of the town; Mr Cullen was enrolled using the addresses of two rental properties in Falkirk but the Mail reports that the owners of the properties have no record of him ever living there. Moving onto the Rev Flowers affair, Ed Balls’s constituency buildings are among those that have benefited from cheap loans from the Co-op Bank; Labour Party Properties Ltd, which is wholly owned by the Labour Party, used its portfolio to secure cheap finance from the Co-op Bank. And the fallout could have repercussions for the next election: The Times reports that "Labour MPs bankrolled by the Co-operative Group have been put on notice that they will have their funding slashed by up to a third partly as a consequence of the Paul Flowers scandal." Ed Miliband is counter-attacking, accusing the Conservatives of a smear campaign and saying that David Cameron had "hit a new low by trying to use the gross errors of one man, Paul Flowers, to impugn the integrity of the entire Labour movement". The Mail isn't won over, saying that "Mr Miliband just looks too scared to face his own party’s moral shortcomings."

IDS v CIVIL SERVICE, PT 37

The latest round of the civil service rows takes place today, with Francis Maude calling on civil servants to "take responsibility" when things go wrong. Mr Maude tells the FT that Iain Duncan Smith had been let down by the civil service over the implementation of the universal credit scheme: "There were a lot of failures in DWP and it isn’t good that it took a review ­commissioned . . . by the secretary of state to disclose what was going on." But Sir Jeremy Heywood evidently doesn't agree. Sir Jeremy complained to the PM about the "concerted political briefing campaign" against Robert Devereux over the universal credit programme, Oliver Wright writes. Mr Devereux's treatment caused "a lot over anger" according to a Government source, who says that "for God’s sake Duncan Smith was the minister in charge and it was his one big project. If he didn’t know things were going wrong then he clearly wasn’t doing his job properly either."

HS2 CAMPAIGN STEPS UP

The Government will release the HS2 hybrid bill today. Patrick McLoughlin has remade the case in a Telegraph article, attacking the "doubters and defeatists" and those opposed to "the principle rather than the design". The transport secretary warned that "Our children won’t thank us for failing to provide them with the opportunity to get a job, make a living, build a home, by choosing not to invest in their future when we had the chance." But, although Labour increasingly seems to be getting into line, the fight won't be easy: the Government expects 20-25,000 objections to the first stage of the route, according to the FT.

DESERT ISLAND ED

Ed Miliband enjoyed some light relief with his appearance on Desert Island Discs, although he still awkwardly admitted that his relationship with David remained in the "healing" stage. It was easy to be cynical about his choices, but Michael Deacon wasn't: "At the start of the programme, Kirsty Young asked whether these really were his own choices; had a spin doctor picked them for him? "It’s absolutely my list!" cried the Labour leader. I believe him. A spin doctor would have come up with something better." Quentin Letts is rather less sympathetic: "Ethnic minority anthem — tick. Patriotic hymn — tick. A love song to make female voters go ‘ah’ — tick. Was there maybe something a little calculating about Ed Miliband’s Desert Island Discs?" Here's the list in full:

1. South African national anthem (Nkosi Sikelel' iAfrika)
2. Hubert Parry - Jerusalem
3. Paul Robeson - Ballad of Joe Hill
4. A-ha - Take On Me
5. Neil Diamond - Sweet Caroline
6. Robbie Williams - Angels
7. Josh Ritter - Change of Time
8. Edith Piaf - Je Ne Regrette Rien

TONY AND RUPERT FALL OUT

Tony and Cherie Blair are angry and confused about rumours that Tony had an affair with Rupert Murdoch’s ex-wife Wendi Deng, which he denies. The Mirror reports that the relationship between Mr Murdoch and Mr Blair is "over, finished", and their political closeness is a thing of the past - but sources say that Mr Blair is baffled by the rumours.

EXTRA HOLIDAYS FOR MPS

MPs will get an extra year of holiday in 2014 because of the Scottish independence referendum. MPs will sit for 145 days in 2014.

The Morning Briefing email is edited by Tim Wigmore. Follow Tim on Twitter

TWEETS AND TWITS

It's a very good morning for Stella Creasy:

@Jo_Milligan: Phenomenal achievement @stellacreasy - lots for others to learn about making change happen from your campaigning over last 3 years.

BEST COMMENT

In the Telegraph  

Boris Johnson - A divorce from Scotland would be stupid, wretched and painful

Jeff Randall - Help to Buy is nothing but an election ploy

Benedict Brogan - Dominic Grieve knew what he was saying and was right to say it
Telegraph View - A pragmatic deal – but caution is advisable

Best of the rest

Matt Ridley in The Times - Let immigrants in. Then send them home

Quentin Letts in the Daily Mail leader - Castaway Ed and the most hilariously right-on Desert Island Discs ever 

Wolfgang Munchau in The FT - Europe will struggle even to disintegrate

Steve Richards in The Guardian - Politics is too valuable to be paid for by union barons, fat cats or Methodist ministers. It should be state funded

THE AGENDA

1045 LONDON: Anti-HS2 campaigners rally at Westminster. Lobby of Parliament as HS2 Hybrid Bill gets first reading. Old Palace Yard, Westminster

1000 LONDON: Launch of independent report on policing in England and Wales commissioned by Labour. Lord Stevens to present report. Ed Miliband and Yvette Cooper take part in Q&A. RSA, 8 John Adam Street

1515 LONDON: Public Accounts Committee hearing on Government suppliers. Witnesses: Stephen Kelly, Cabinet Officer chief operating officer, Bill Crowthers, Cabinet Officer chief procurement officer, Les Mosco, MoD commercial director, Vincent Godfrey, MoJ commercial director and Richard Douglas, DH director general of Finance and the NHS. Room 15, Palace of Westminster