Good morning. How does Nick Clegg get out of this one? The headlines are terrible, in particular those on the front of the Mail and the Times, which have gone for the Lib Dem leader. 'Sex pest storm: Clegg in crisis' says the Mail; 'Clegg engulfed in crisis over Rennard sex case', says the Times. The coverage is hardly better elsewhere. 'Sex claims peer tries to smear his victims' says the Telegraph. There is little politics around this morning, so the story dominates. The Lib Dems are evidently in chaos, hampered by their own internal democratic processes. Mr Clegg has aligned himself with the women accusing Lord Rennard and those sections of the grassroots which want the party to address bad behaviour at Westminster. Against him is an array of party fixers and power-brokers who have rallied to the former chief executive. At least one of his alleged victims is threatening legal action against him. In turn he has released his 2000 word defence in which he claims to be a victim himself who contemplated self-harm. The detail, though, which has grabbed attention is his claim that he has done research into his accusers and has uncovered what Lord Carlile has told him is 'devastating' evidence about one of them. We've spoken to one of them who has told us she fears he may be threatening to release private information about her. She says she is contemplating going public about it to 'spike his guns'. Can it get any nastier?
The consequences for the Lib Dems are ominous. There is no obvious way out. In the public imagination, to the extent that it notices, what it hears is Lib Dems, peers, sex. The polls suggest the party is now stuck in fourth place behind Ukip, and is struggling to stay out of single figures. Mr Clegg has tried to be noted by launching periodic attacks on David Cameron on the Tories. His strategy seems to be an intensified attempt at differentiation, as a way of reminding voters that he and the Lib Dems exist and are making a difference by tempering the excesses of the Tories in Coalition. The voters appear not to be noticing though. Certainly they aren't giving Mr Clegg any political credit for his work in government. As I set out in my column today, Team Dave has concluded that the Lib Dems are finished. They want to be able to ignore them between now and the election, and focus their efforts on an onslaught against Labour. 'The Lib Dems are nowhere, they are insignificant, finished. We can just ignore them,' one senior figure told me. This year marks the 20th anniversary of George Osborne joining CCO as the junior officer on the Lib Dem attack desk. As he contemplates the papers this morning, and the polls, he may be tempted to conclude that his life's work is complete. As ever, it's hard to argue with Matt:
CAN UKIP GIVE LABOUR A SWEAT IN THE NORTH?
Nigel Farage has popped up again with another comment that will keep Ukip in the headlines. Mr Farage told an audience in the City that women who have children are "worth less" to employers in the financial sector than men and that "In many, many cases, women make different choices in life to the ones that men make simply for biological reasons." While this may create a bit of a storm, all eyes now will gravitate towards the Wythenshawe and Sale East by-election, which is scheduled for February 13. It is a safe Labour seat - Paul Goggins won with 18,000 votes and a majority of 7,500 at the last election - but the question being asked is: how well can Ukip do? Despite winning only 3.4 per cent of the vote in 2010, they can be backed at odds as short as 4-1 to win, and Labour MPs including John Healey have warned that the threat is a serious one.
Tim Wigmore reports from Doncaster, where Labour's three MPs - including Ed Miliband - lost 40,000 votes between 1992 and 2010, to explain why Ukip is such a threat to Labour in the North; even in his own back yard, they think Mr Miliband went to Eton and, with the Coalition parties very unpopular in the urban North, Ukip could be poised to pounce. In case you missed it, Nigel Farage recently told me how he was targeting the North, arguing that "There are some Labour-held marginals in this country where only Ukip has a chance of beating them, not the Tories."
Labour announced their big policy on welfare but, much like their announcements on banking reform last Friday, it all fell rather flat. Rachel Reeves outlined plans to give those who have worked for more than five years a £120 unemployment bonus as a reward for their contributions to the system. Whitehall sources accused Miss Reeves of economic illiteracy, saying the plans amounted to an "unfunded spending commitment" that would "end up punishing vulnerable groups"; Dan Hodges thinks that Labour should just shut up about welfare. Janan Ganesh says that Ed Miliband's case for competition seems to stop at the boundaries of the state.
The failure of these Labour policies to gain traction is partly a result of the booming economy - just today comes the news that the IMF is expected to upgrade Britain's growth forecast to 2.4 per cent this year. Yet it's also a result, as I argue in my column, of the Conservatives' success in closing down areas where Labour may have an electoral advantage. As I write, "Mr Osborne wants to fight Labour on the economy, welfare and education – not energy prices, the minimum wage or pensioner entitlements. To him, the short-term pain and embarrassment that come from changing tack or backing down are worth it, if they deny Labour an advantage."
WHY ARE TORY WOMEN DESERTING DAVE?
Bad news for Dave: they'll be talking about his "women problem" again. Jessica Lee, a Commons aide to Dominic Grieve, is stepping down as an MP- becoming the fourth female Tory from the 2010 intake to leave Parliament. Ms Lee cited her "personal circumstances and responsibilities". Here's the nub. Her seat, Erewash, has a majority of 2,500 - so without the incumbency factor, the Conservatives should now be regarded as odds-against to hold onto the seat, which is one of Labour's main targets. Does the number of premature retirements points to failures in party management from the PM?
BLAIR ARRESTED - FOR A MOMENT
This would not have been on Mr Tony's agenda when he went out for a dinner at Tramshed in east London. A barman, Twiggy Garcia, tried to put the former PM under citizen's arrest, putting his hand on Mr Tony's shoulder and saying "Mr Blair, this is a citizen's arrest for a crime against peace, namely your decision to launch an unprovoked war against Iraq." A debate between the two followed, though Mr Tony tried to change the subject, before one of his sons went to get security. Mr Garcia then left the restaurant.
NO EU FLAGS HERE, WE'RE BRITISH
We are free from the EU - rejoice! Well, not quite. But Eric Pickles had a spring in his step in the Commons yesterday as he announced that EU regulations that obliged Government departments to fly the European flag have been renegotiated, and governments can now hang a small emblem bearing the ring of golden stars inside the building instead: "This burdensome law to fly the EU flag has now gone. This small step shows our nation can and should claim powers back from Brussels."
TWEETS AND TWITS
Nigel Farage replies to UkipWeather's warning that "Tonight for the first time, just about half past ten. For the first time in history it's gonna start rainin' men":
@Nigel_Farage: I shall tell the girls in the press office. They'll be delighted.
In the Telegraph
Benedict Brogan - George Osborne’s Whack-a-Mole tactic is denying Labour any advantage
Joan Bakewell - Lord Rennard scandal: It was 'just what men did’ in my day – but that's not the case now
Tim Wigmore - Why Labour should be terrified of Ukip
Telegraph View - The Lib Dems really are a sorry lot
Best of the rest
Janan Ganesh in The Financial Times - Miliband’s mysterious aversion to public sector reform
Rachel Sylvester in The Times - Rennard won’t budge. The world moves on
Katharine Sacks-Jones in The Guardian - Can Rachel Reeves change the way we talk about benefits?
Steve Richards in The Independent - Nick Clegg can’t sack Lord Rennard, and Lord Rennard can’t apologise. It’s just another day of lose-lose politics
9.30am Commons Public Administration Committee takes evidence on crime statistics. Witnesses include the chair of the UK Statistics Authority, Sir Andrew Dilnot, and Home Office Minister Norman Baker. Committee Room 15, House of Commons.
9.30am Council of Mortgage Lenders (CML) releases its gross mortgage lending figures for November.
9.30am Power company bosses give evidence to Commons Energy Committee on power cuts during recent bad weather.
10am Commons Treasury Committee takes evidence on Project Verde - the planned sale of more than 600 Lloyds bank branches. Witnesses include Lord Levene of Portsoken, the former chairman of NBNK Investments. Thatcher Room, Portcullis House.
2.30pm NHS England medical director Sir Bruce Keogh gives evidence to the Commons Health Committee on emergency care. Committee Room 15, House of Commons.
6pm Douglas Alexander speech on British Foreign Policy in the 21st Century. Royal Institute of International Affairs, Chatham House, 10 St James's Square London