Good morning. The Day of Reckoning, says the Mirror's headline, alongside a piece from Ed Miliband setting up his speech today on banks, the economy and the cost of living. His efforts have been dented by George Osborne's announcement on the minimum wage last night - the Chancellor supports a 69p rise in the minimum wage to £7 an hour - which secured the coverage this morning. I'm not the only one to have picked up on the politics of the Chancellor's move - and its risks. Once again he has stolen Labour's thunder by adapting its policies, calculating that it increases Tory chances in 2015 (you can read my take on my blog here). "Now Osborne wages war….to spite Mili" says the Sun. The Tories intend to harry Labour and its leader at every opportunity, in particular on the economy. They don't want to cede their advantage, and are nervous of Mr Miliband's capacity for identifying populist issues and putting himself on the side of voters frustrated by the Government's seeming failure to make their lives better. The economy is going the right way for the Government, and as the Mail delights in pointing out Mr Miliband will concede that wages will finally overtake prices this year. "Osborne puts Labour on the spot" says the Times. Its leader welcomes an increase: "A small increase in the minimum wage will pay for itself and there is no better welfare policy than better pay."
So now, over to the Labour leader. He has to find a way of rebuffing Mr Osborne's tactic of out-Labouring Labour in search of blue collar, anti-toff votes. He would say he's the real deal so you'd think that should be straightforward. But he must also convince with his prescriptions, today on banking. To judge from the initial briefing (the FT has a useful summary), he may expose himself to accusations that he is playing fast and loose with ailing banks by injecting uncertainty into their future, undermining their share price and therefore their chances of being sold back into private hands. Chuka Umunna has accepted on Today that in the short term there may well be a "a hit on the share price". Mr Miliband in reply might say that he's not in charge and is entitled to set out what he would do in office. There's an interesting perspective on Labour's populism from Fraser Nelson, who reckons that "The EU may end up being the only thing to remind Ed Miliband that British companies are not his to play with."
As a PS, what about Boris? Where does Mr Osborne's lunge leave the Mayor's campaign for the living wage? Bet they're pleased in City Hall.
HAGUE DEFENDS THE UNION
William Hague has just been speaking about the Scotland referendum on the Today programme: "We make much more impact on the world because we are the United Kingdom." The Foreign Secretary said that Scotland's EU membership negotiation would be of "uncertain length and outcome" and said that the Yes campaign "want to have debates about debates" rather than debate the issue. Mr Hague will launch the latest Scotland Analysis paper at 9:30 this morning.
While Lord Rennard has been cleared, the difficulty for the Lib Dems continues: one alleged victim yesterday said that she had been harassed by him, and told Nick Clegg to "man up" and block his return. Susan Gaszczak, a Lib Dem parliamentary candidate, warned that working alongside him would be "extremely difficult" and demanded an apology. Lord Rennard is still supported by the majority of Lib Dem peers in the Lords, which creates a further political complication for Mr Clegg. TheDeputy Prime Minister has not read a 100-page report into the Lord Rennard sex allegations and is regarded by its author, Alistair Webster QC, as a "passenger in the process". As we say, "It is not merely Mr Clegg who emerges badly. This episode casts a revealing light on the nature of the Lib Dems’ organisation. An admirable commitment to internal democracy became distorted into a system whereby powerful men could use the party’s machinery to do as they wished."
ED v THE UNIONS
Ed Miliband wants to reform the voting for Labour leadership elections, by scrapping the electoral college and replacing it with a 'one member, one vote' system - radically reducing the influence of both trade unions and MPs in choosing a leader. It won't be easy: GMB general secretary Paul Kenny has said the talks have broken down, though Labour says they're continuing. Perhaps the real question is: has Mr Miliband left all this until too late in the electoral cycle? And what does that say about his leadership?
ANOTHER IT COCK-UP
Philip Hammond's reputation rests on steely competence, but escalating IT costs and a botched computer system (sounds familiar?) is putting that under threat. Mr Hammond told MPs on Tuesday that £4.5 million was needed to pay for a replacement computer system to handle army recruitment, well under the original £10 million budget. But The Times suggests that the picture is rather less flatting, and Ministry of Defence's options are either to spend an extra £43 million on trying to rescue the system, or to switch to another at an additional cost of £47.7 million: "There’s ‘more than meets the eye’ to his figures," said Tory MP John Baron.
DAVE STICKS UP FOR FREE PRESS
The Prime Minister may not always appreciate it, but, after the farce of Francois Hollande's press conference, Dave used a Westminster Correspondents’ Dinner to call the British press the "linchpin of democracy" and praise it for being "rowdy and tenacious". And Dave didn't miss a chance to attack his deputy either: "I keep reading in the newspapers that Nick Clegg is going to spend 2014 differentiating himself from me. The privileged Old Etonian who went to Oxford. Him from the ‘mean streets’ of Westminster and Cambridge. Good luck with that one Nick".
CYCLING ON THE PAVEMENT?
Here's an eccentric idea - the sort that many felt we'd seen the last of with Steve Hilton's departure. Transport minister Robert Goodwill wantspolice to stop penalising cyclists for moving off the road and onto pavements at congested junctions after complaints £50 fines are being handed out too readily. Is this a vote winner?
TWEETS AND TWITS
Greg Hands is stirring:
@GregHands: And nothing from @edballsmp on Twitter all week. No comments on banking. No comments on Minimum Wage. Nothing. Something is up.....
In the Telegraph
Jeremy Warner - It's no good just whipping the bankers
Con Coughlin - If we’re not talking to Assad, we should be
Telegraph View - Britain's freedom depends on military strength
Best of the rest
Ben Macintyre in The Times - We can’t escape our bloody role in Sikh history
Philip Collins in The Times - We should keep our noses out. This is private
Polly Toynbee in The Guardian - Ed Miliband's pitch is radical – but his party is stuck in 1997
Philip Stephens in The Financial Times - Nothing can dent bankers' divine right
North of England Education Conference. Schools Minister David Laws is on at 9am. Burton Street, Nottingham Conference Centre.
Nick Clegg and Justice Secretary Chris Grayling announcement on youth justice.
Retail sales figures for December are published by the Office for National Statistics.
9.30am Foreign Secretary to launch latest Scotland Analysis paper as part of the referendum campaign. William Hague to be joined by Chief Secretary to the Treasury Danny Alexander for the launch of the EU & international issues document.
11am **Ed Miliband speech on the economy**. Senate House, Malet Street, London.