Good morning. Team Dave won't be thrilled by the way talk of a split between the Prime Minister and George Osborne has crept into the news. It's only p16 of The Times, and hinted elsewhere, but that will be enough to worry both sides. Certainly it was enough for Mr Cameron to lavish praise on their relationship when he spoke in China yesterday. One of the minor miracles of the Tory effort under his leadership has been his seamless relationship with the Chancellor. Attempts to suggest otherwise have foundered, and it has never become a source of speculation. Commentators have on occasion raised the prospect. Fraser Nelson sketched out the divide between them a few weeks ago, but the idea has never caught fire as a news story.
Yesterday Mr Cameron was asked about reports that he and Mr Osborne disagreed about the pace of tax cuts and his emphasis on delivering a married couples' tax allowance. "I have a very, very strong relationship with the Chancellor," he said. "We work together hand in glove. I just simply don't understand how government could have functioned when the relationship between Blair and Brown got as bad as it did. It's only when you are Prime Minister that you see how impossible it must have been. It's an extremely good relationship, we work very, very closely together. It's one of the strengths of the government. Our relationship is as good as it's ever been." Mr Cameron and Mr Osborne have made it their priority to avoid the Blair/Brown warfare. That bit however is relatively easy, as Mr Osborne does not nurture Mr Brown's near pathological desire for the top job. But it is true that they do not always agree on policy issues: the Chancellor for example thinks the married couples' tax allowance is a turkey of an idea, both politically and economically. Mr Cameron is also said to be more eager to secure tax cuts than his Chancellor, a suggestion that doesn't quite stack up given what I know of how keen Mr Osborne is offer giveaways. It is true though that it is Mr Cameron who has stood firm against wealth taxes: he vetoed a Lib Dem mansion tax after the Chancellor offered to trade it for scrapping the 50p rate outright. This morning's news that Mr Osborne is to freeze business rates suggests he too is looking for ways to cut the tax burden. In fact, the nature of the dispute is neither here nor there. What matters politically is that their disagreement, however collegiate, is being talked about by those in their circles, and that is seeping out. In my column this week I discussed how the Tories are fretful and pessimistic about the future. That mood of desperation is spreading. It will trouble Tory high command to see even a vague hint that it has reached the very top.
READ MY LIPS: NO NEW TAX CUTS
The slow leaking of the Autumn Statement continues. But there isn't going to be any flagship tax cut, at least for the middle-classes: the PM has ruled out any help for them until the end of the decade. Mr Cameron said that the tax cuts beloved of Tories such as the Free Enterprise Groupwould have to wait until the deficit was "dealt with" and public finances were in surplus. Dave explained that while he was "a low-tax Tory", he was "also a fiscal conservative. I believe the first duty of government is to safeguard our economy, and the economy isn’t safeguarded properly until you deal with your deficit." Failing tax cuts, Allister Heath says that "Osborne should announce a moratorium on any further tax hikes until the election. The Tories have spent too long apologising; they must now seize the moral high ground on tax and spending."
The tax break for married couples will be confirmed by the Chancellor tomorrow, even if it's much less than many Conservatives would like.The Chancellor also seems to have been paying some attention to our campaign on business rates (though less than we would like - with money still so tight, there's a bit of a theme here), and will announce a cap on the increase in business rates to 2pc next year, instead of being linked to inflation, at a cost of about £300 million. Mr Osborne will also announce the extension of a scheme that gives small firms relief from rates liability. Infrastructure spending will also be prioritised - the Government will unveil its infrastructure spending plan until 2030, which will include an extra £66 billion to take total spending to £375 billion on 646 projects. Spending will be boosted by the Government selling its 40pc stake in Eurostar. Employers will no longer have to pay National Insurance for workers under 21 as part of plans to tackle youth unemployment. Million Jobs director Lottie Dexter described herself as "over the moon" at the news. And - perhaps most popular of all - the Government will stop incentivising onshore windfarms, and will give more to offshore wind power. Danny Alexander defended the shift as "a rebalancing".
BETTER APART FROM ALISTAIR?
Few doubted the wisdom of Alistair Darling leading the "Better Together" campaign. But now there are the first signs of dissent: senior Tories have labelled Mr Darling "comatose", according to the FT, amid concerns that he's not doing enough to challenge Alex Salmond. A Downing Street source described Mr Darling as a "dreary figurehead" for the campaign. Of course, there is no shortage of Conservative MPs who won't mind, and would rather like Scotland to become independent. But No 10 denies the reports, describing them as "completely untrue.....100% not the case."
UKIP RISING - BUT AT WHOSE EXPENSE?
The latest constituency polls from Ukip donor Alan Bown are released today. They show Ukip virtually tied with the Conservatives in two Tory target seats - Ukip is on 22pc in Great Grimbsy and the Conservatives on 20pc; in Dudley North Ukip is on 23pc and the Tories 25pc. The result is that Labour, which narrowly clinged onto the seats in 2010, has a lead of at least 18 pc in both seats. The message seems simple - that Ukip's surge is splitting the Right and helping Labour. But actually that seems a tad simplistic: 70 pc of Ukip voters say they did not vote Conservative in 2010. Mr Bown said: "Whatever the Conservative Party may think about these seats being high up on their target list, their hopes of winning these seats in 2015 look like little better than a pipe-dream, based on this polling."
MISSION ACCOMPLISHED IN CHINA?
Things have been pretty quiet as Dave wraps up his visit to China. Doubtless he's not too chuffed by The Global Times' editorial: "The Cameron administration should acknowledge that the UK is not a big power in the eyes of the Chinese... It is just an old European country apt for travel and study." But the Prime Minister isn't letting the press ruin his time: he insists that the trip has "delivered almost £6 billion worth of deals" which could result in 1500 new jobs in Britain. Mr Cameron has also asked the Chinese premier Li Keqiang to agree to a formal dialogue on cyber-security, which he described as an "issue of mutual concern". Expect further dealings with China, despite the criticism this invites, to be a feature of the rest of this Government.
BORIS DEFENDS HIMSELF - BADLY
A week after Boris's inequality speech, and it's still all over the papers. He hardly helped himself by fluffing an IQ test on his Ask Boris radio show, admittedly. Meanwhile, Tristram Hunt accused Mr Johnson of an "unpleasant whiff of eugenics" in the Commons; on the day of the PISA results, Labour would have been rather grateful for Boris's comments.Daniel Finkelstein says that Boris didn't express himself perfectly, but he "was quite right that greed can be a spur to useful activity. Yet that is not a feature of all economic systems, it is a particular advantage of capitalism." John Kay writes that when the Mayor says, "somewhat optimistically, that "this time, the Gordon Gekkos of the world are conspicuous not for their greed as for what they give and do for the rest of the population", he correctly identifies the moral issue at the heart of London’s role as a financial centre." The reaction suggests that Boris's enemies will seize any opportunity to knock him off his stride: it goes with the territory of being the man who would be King.
SILENCING HATE SPEECH
The Government will introduce new civil powers, based partly on ASBOs, to silence hate speech. The law will tighten definitions of extremism, including on the internet, and the Mail reports it could be used "to bar people from preaching messages of terror and hate, associating with named individuals thought vulnerable to radicalisation, and from entering specific venues, such as mosques or community halls."
ADONIS' CHINA WARNING
Andrew Adonis has warned that Chinese investment in HS2 may pose dangers. Lord Adonis said that Britain must treat Chinese interest "very cautiously given their safety record." He also revealed that during a visit to China in 2009 officials had expressed a similar interest in helping to build HS2, but that he had declined to make any agreement.
TORY WOMEN NOT WINNING
Dave's "women problem" is nothing new. But it might be even worse than feared. So far, three of the 49 Tory women elected in 2010 have quit or announced that they'll stand down in 2015, and up to another six could follow them. And the picture isn't any better looking to the future: five safe seats that have recently selected candidates all plumped for men. Three constituencies with sitting Tory MPs will nominate their candidates before the end of the week - Wealden chooses on Thursday and Northampton South and South East Cambridge choose on Saturday. One disgruntled MP tells The Times: "There’s a lot of patronage in politics... Why is a guy like George Eustice a minister? Because he was a special adviser to Cameron."
TWITTER NOT ABOVE THE LAW
Dominic Grieve is attempting to bring Twitter and Facebook under control by the law: social media users will be warned about the dangers of prejudicing high profile cases, the Attorney General has said. Mr Grieve will send out court advisory notes which were in the past reserved for the mainstream media in an attempt to try and bring contempt laws up to date with the social media age.
TWEETS AND TWITS
Chris Heaton-Harris is getting ready for Panto season:
@chhcalling: Just been to "Snow White" panto auditions. My best friends are playing Doc, Sleepy, Grumpy, Bashful, Sneezy and Dopey. This makes me Happy.
In the Telegraph
In the Telegraph
Alex Morton - Why we need a freeze on business rates
Allister Heath - George Osborne must never forget he is the guardian of our taxes, not their rightful owner
Telegraph View - Aspiration is the key to getting education right
Best of the rest
Alice Thomson in The Times - The increasingly confident, powerful Mr Clegg
Daniel Finkelstein in The Times - Capitalism turns greed into prosperity
John Kay in The FT - London’s mayor is half right on envy, greed and inequality
Julian Huppert in The Guardian - We should look at the content of the Snowden files – not the messenger
David Cameron in China.
9.30am Commons Justice Committee hearing on crime reduction policies with Justice Secretary Chris Grayling. Grimond Room, Portcullis House.
10.30am Lords Constitution Committee takes evidence on implications of coalition government. Committee Room 1, House of Lords.
12pm DPMQs: Nick Clegg vs Harriet Harman.
5.50pm Transport minister Robert Goodwill before House of Commons Transport Committee. Grimond Room, Portcullis House.