Good morning. The confrontation between Tory backbenchers and David Cameron over immigration is coming to a head. Andrew Lansley announced yesterday that the Immigration Bill will be put through its final Commons stages next Thursday in an attempt to get it through before it runs out of Parliamentary time. Ministers want to avoid a vote on the poison pill amendment sponsored by Nigel Mills and backed by around 70 MPs, which would extend the bar on Romanian and Bulgarian migrants to 2019. The Government believes the amendment is illegal because it would place the UK in breach of its binding EU treaty obligations; its backers say it's not illegal if Parliament says it's legal. The Bill has been repeatedly postponed while Ministers try to work out what to do. The plan is to bring forward amendments that would be tough enough to appease enough rebels to dilute the rebellion and ensure - assuming Lib Dem support, never certain - that the Bill gets through. Theresa May has offered a couple which commit her to producing reports on any sign of 'excessive' future migration, while the backbencher Stephen Phillips has tabled one which would require the Migration Advisory Committee to assess the impact of Romanian and Bulgarian migration. Meanwhile the Whips are leaning heavily on the 70 signatories of the Mills amendment to try to peel away as many as possible.
The Home Office launched a briefing operation yesterday on its strategy which hasn't gone down well in No10. There are a number of issues in play here. The obvious one is the tortured question of Parliamentary sovereignty. The rebels say this is the moment to reassert the primacy of the Commons in making British law. The Government and its lawyers say, in terms, thst it's too late, it was given away years ago when successive governments signed the UK up to the European project. We are a nation of laws and, however galling some may find it, we cannot conceivably knowingly break it. The rebels say Bulgaria ignored its accession obkigation by extending a ban on foreign ownership of land, to which ministers reply that just because the continentals play fast and loose doesn't mean we should. This one has no easy resolution.
Then there is the state of Dave's 'tens of thousands' pledge. At the moment net migration is running at around 180,000 a year. If Mrs May's amendments are accepted then the moment they come into effect she will be asked daily by her colleagues if the current level is excessive and will she report on it? If she says it isn't, it will be the final admission that Dave's promise has failed. Rebels say this will cause mayhem for Tories on the doorstep in 2015 (I'm not so sure - voters to whom this matters can't get any crosser). If she says it is, she will then have to explain what she proposes to do about it. MPs are increasingly blaming her for the policy's failure.
Finally, there's the state of relations between the PM and his backbenchers. Mr Mills is assiduous but no one believes he is running this by himself. Some suspect that the 30 or so irreconcilables who want to damage Dave at any cost are at work. Based on the conversations I had in Portcullis House yesterday, the rebels will only push the Mills amendment to a vote if they can be sure of having enough support to make a splash - 40? 50 votes? Which is why the Whips are working hard, and will quietly steer MPs towards the Phillips amendment as an acceptable compromise. They have one other weapon: the Bill does a number of useful things, not least restricting the right of judicial review in immigration appeals. Will the rebels really want to see it fall? The mood among backbenchers seems more positive, helped by improving economic prospects. The Bernard Jenkin '95' stunt angered many. But No10 - and Mrs May - still have work to do.
DAVE LAUNCHES WAGES OFFENSIVE
David Cameron thinks he has the answer to the cost of living crisis: Downing Street has released data showing that, from April 2012 to 2013, gross pay rose by higher than CPI inflation for all but the top 10 per cent of earners. This is proof that, as Dave says, there's a "recovery for all"though, as ever, there's a complication - changes to benefits. But the Tories should be heartened that, as IFS Director Paul Johnson told Today: "If the recovery continues as expected, people will start to see their incomes rising by 2015." The Sun says "Happy pays are here again".In our leader we say that "It is the Tories who should gain most from this week of encouraging numbers. Education, the economy and welfare are areas where Conservative policy has largely dominated the Coalition, with notable instances of Lib Dem resistance to change."
WHAT'S GOING ON WITH INTEREST RATES?
Six months into his new job, and Mark Carney has announced his first U-turn. Mr Carney has signalled an end to forward-guidance - the policy of linking interest rates to the unemployment rate - because the British economy is now "in a different place", as the FT reports. That means that interest rates will not rise "immediately", as the Governor of the Bank of England will explain in a speech today. In an interview with Newsnight (watch it here), Mr Carney also said that the decision about interest rates was "really about overall conditions in the whole labour market", and he did not want to focus on just one indicator.
GANGING UP ON ED
Ed Miliband must feel rather ganged up on this morning: the Labour leader is being attacked for all angles, with the underlying charge that he is a populist happy to endanger British industries if it helps him get elected. That's a common strand running through the criticism by the CBI, who accuse him of demonising business in the Mail; and, perhaps more damagingly, his own adviser Sir John Armitt warns Mr Miliband that interfering in markets could make the economy a "darn site worse". Similarly, the Guardian reports on Treasury sources briefing that Margaret Hodge's antics in the public accounts committee are deterring foreign companies from coming to Britain: "Companies looking at Britain are being put off the idea of moving their headquarters here because they fear the level of public exposure for behaving perfectly legally," the source said.
George Osborne spies an opportunity to make a virtue of his more constructive attitude to business: he told a CBI breakfast that business should "stop apologising" and win back public trust. The challenge for the Tories is painting Mr Miliband as anti-business without the public thinking that they slavishly represent the interests of business.
Esther McVey is being touted as the next Conservative Party chairman,according to Ephraim Hardcastle. "She ticks all Dave’s boxes – she’s an attractive woman with a regional accent, she’s able and popular", a party source telles Ephraim. "But here’s the best bit: appointing Esther chairman would put the nose of Theresa May out of joint." Grant Shapps won't be thrilled to learn his position is under threat, with Lynton Crosby said to be unimpressed by him.
NO MINISTER WE CAN'T LEAVE THE EU
Is the Establishment working to prevent Britain leaving the EU? The Indy's story that senior civil servants are preparing to play a "critical role" setting out the economic risks of Britain voting to leave rather suggests so. The Indy reports that "A senior government source said on Thursday that the view of the Treasury’s Permanent Secretary, Sir Nicholas Macpherson, was that any vote to leave the EU would have unwelcome economic consequences for the UK and this would be reflected in any official assessment." Tory Eurosceptics will be fuming.
Nigel Farage popped up yesterday to disown his party's entire 2010 manifesto, and say that all Ukip's policies are under review. Challenged on the Daily Politics over a manifesto pledge proposing a compulsory dress code for taxi drivers, Mr Farage said: "Do we? News to me." Mr Farage resigned as party leader in 2009 and there are whispers that he could once again step down after this year's European elections, and focus on winning a seat in Westminster.
INDEPENDENT SCOTS TO STAY BRITISH
An interesting nugget in the independence debate from the Herald Scotland: the UK Government has conceded that Scots will be able to remain British citizens if they vote for independence. Their children would also be Scots, but the subsequent generation would not: British citizens outside the UK cannot pass on their citizenship more than one generation.
The Tories have selected their candidate for the Wythenshawe and Sale East by-election. Reverend Daniel Critchlow, a 26-year-old who is married and has a two-month-old daughter, does not have an easy job. The Conservatives won 25.6 per cent in the seat in 2010; anything over 15 per cent would be a relative triumph.
TWEETS AND TWITS
@Freeman_George: Delighted to be invited by PM to become a UK Trade Envoy. Announcemnt at #Davos this morning. Grt honour+opprtny to promote UK+E Region SMEs
In the Telegraph
Jeremy Warner - Davos 2014: There’s only one way to close the wealth gap
Tom Harris - Parliament's pulse has faded and died
Telegraph View - Real signs of success on issues that matter - education and jobs
Best of the rest
Philip Collins in The Times - Ed’s 100-year-old recipe won’t work today
Steve Richards in The Times - Left and Right are both wrong about Iain Duncan Smith
Andreas Whittam Smith in The Spectator - The plight of Syria's refugees transcends party politics. What’s worrying is that Nigel Farage realised that before our Prime Minister
Philip Stephens in The Financial Times - Britain and France are in the same boat
David Cameron at Davos. He will give speech Friday at 9.30am UK time and take part in development panel with Bono at 12.15pm.
Trading update: Royal Mail.
10.30am Nigel Evans plea hearing. Plea and case management hearing for Nigel Evans MP accused of various sexual offences against seven men. Preston Crown Court.