Liberal democrats

There’s a big coalition split coming down the road. Next month the Vickers’ review into banking reform, which is going to suggest a ring-fencing of the investment and retail arms of banks, will come out. The Liberal Democrats — led by Vince Cable — will push for the instant implementation of the report’s recommendations. The Treasury will argue that banks need to be given time to introduce these new rules. The result will be, as one senior Lib Dem source tells this morning’s FT, ‘a big fight’.   The tricky question for Cameron and Osborne is how do they win this argument when there’s a visceral desire for tough measures

Traditionally the fact that the Liberal Democrats hold their conference first and still vote on party policy at it has been regarded as a disadvantage. But this year, I suspect that these two things will be in their favour. By going first, they will get to set the terms of debate for conference season. They’ll be able to spike their coalition partners’ guns on a whole variety of post-riots issues. They can make clear that they won’t accept any changes to the human rights act or any government push to encourage marriage. Even better, they can pass motions to this effect. They also will have first crack at setting out

The future of the 50 per cent tax rate is growing issue within the coalition. Unlike most government wrangles, this one doesn’t split on partisan lines, with the yellows on one hand and the blues on the other. The debate is largely being forged by personalities. George Osborne is well entrenched; Eric Pickles weighed-in for the race last weekend, saying that he wanted people “to keep more money in their pockets”, indicating that he hopes the rate is temporary. (He went take a swipe at Vince Cable’s mansions tax, which he described as a “big mistake”.)   It’s David Willetts’ turn this weekend. The Times reports (£) that Willetts believes

Nick Clegg laughed-off the dousing of blue paint he received in Glasgow yesterday, like one of Noel Edmonds’ unwitting victims. Today, Clegg has turned into the grinning douser: drenching his coalition partners in yellow paint by saying that the European Convention on Human Rights will not be watered down. Writing in the Guardian, Clegg says that the Conservatives are right to seek operational reform of the European Court of Human Rights, but the common ground ends there. He says that “the Human Rights Act and the European convention on human rights have been instrumental” in preventing injustices from council snooping to the misuse of DNA records and that the incorporation

First came the Germans and then came the Brits. The UK Treasury has secured an agreement with authorities in Zurich to tax the assets of UK citizens held in Swiss banks to reduce on tax avoidance and stamp out evasion. The deal will follow the lines of that which Switzerland made with Germany last month. The FT has details: ‘Taxes on future income will be withheld at a rate of 48 per cent, corresponding to the top 50 per cent rate that now applies to Britain’s highest earners. A one-off levy of between 19 and 34 per cent will be applied to all Swiss accounts held by UK residents, with the

Libya has elbowed the riots off the front page. But, in the medium-term, how Cameron responds to them remains one of the big tests of his premiership. In the Evening Standard today, Tim Montgomerie vents the frustrations of those Tories who fear that Cameron is missing his chance. Tim’s complaint is that Cameron has actually done — as opposed to said — very little and that the chance to use this moment to push through a whole bunch of big, necessary changes is being missed. With every day that passes, action on — say — the Human Rights Act becomes less likely as the Liberal Democrats become more dug in.

It’s no surprise that 70 Tory MPs have formed a Eurosceptic group, as the Sunday Telegraph reveals today. They are the modernisers now. The new Tory intake are strikingly robust on all this: by and large, their idea of political balance is a picture of Thatcher on the wall and Jacques Delors on the dartboard. The impending boundary review and thinner-than-they-expected majorities mean they worry more about their constituency (and constituency associations) than the whips. But I’m told today that this rebellion isn’t quite as fierce as it may seem. One Tory backbencher tells me the Tory whips have actually encouraged this group to call for renegotiation of the UK

The news that the Crown Prosecution Service has asked Essex Police to make further inquiries into the whole allegation that Chris Huhne asked his then wife to take speeding points for him in 2003 is a political embarrassment for the Energy and Climate Change Secretary. Huhne has always denied these allegations and nothing has been proved against him but the whole process is hardly reputation enhancing. (But it is worth noting that the CPS’s decision suggests that they currently don’t think there’s enough evidence to lay charges against anyone. Equally, they haven’t thrown the whole file out). Huhne’s troubles are also causing a certain amount of coalition friction. Tories moan

Cometh the hour, cometh Nick Clegg. The Independent reports that the Deputy Prime Minister is to announce that first-time offenders convicted of looting but not given custodial sentences will be forced to do community service in the very streets that they ransacked. The government hopes to ensure that community sentences are robust, inculcating a sense of responsibility in first-time offenders and insulating them from malign criminal influences. The Probation Service already oversees similar community service programmes and will do so with this one, which Clegg is calling ‘Community Payback’. Clegg’s views also allow him to reposition the Liberal Democrats to an extent. The moisture that often characterises his rhetoric has dried

David Cameron’s convictions are best expressed in anger. Cameron exuded an air of the patrician yesterday with his righteous moral certainty. This may have made some observers squirm, but others would have seen this seething performance as the essence of leadership in crisis. Cameron is likely to sustain this tone in parliament today. He will say that there is a “sickness” in our society and set out his plan for curing the malaise. The political class has already offered the government a panoply of options to pursue, but the coalition is expected to stand by its current course of education and welfare reform; if anything, these riots confirm their necessity.

The Liberal Democrats are in something of a purple patch at the moment, dominating aspects of government policy in the media. Last weekend, Danny Alexander broke his usually modest mould to stand square behind the 50p rate, in contrast to Boris Johnson and George Osborne. The debate encapsulates the current vogue for the coalition partners to accentuate their differences. Today, enter Vince Cable pursued by a mansion tax. In an interview with the Telegraph, the Business Secretary concedes that the 50p rate is not a permanent fiscal instrument, but its removal (after 2015 when the income tax threshold has been raised to £10,000) will require a concession from the Conservatives.

Westminster, today, is all a-titter about an anecdote contained within this FT article about Steve Hilton. It is, it must be said, a good ‘un: “Mr Hilton’s crusade against employment legislation also saw him suggest that Mr Cameron just ignore European labour regulations on temporary workers, prompting an exasperated exchange with Jeremy Heywood, Downing Street’s permanent secretary. ‘Steve asked why the PM had to obey the law,’ said one Whitehall insider of a meeting in March to discuss the government’s growth strategy. ‘Jeremy had to explain that if David Cameron breaks the law he could be put in prison.'” From there on in, the article rattles through some of Hilton’s

Aside from Boris’s exhortations to George Osborne, one of the most ear-catching lines of the day has been uttered by Jeremy Hunt. “I think the relationships between politicians and the media got too cosy,” said the culture secretary on Radio 5 this morning. He’s certainly not the first to make the point, but he is one of the most prominent Conservatives to do so. The words, I suspect, were chosen to cool the heat rising from yesterday’s lists of meetings between ministers and media organisations. Hunt himself, it was revealed, has met seven times with News Corp types since the general election. Hunt’s admission also opens the prospect of a