Coalition

The long flight from Australia should give David Cameron plenty time to think about Europe, and how it just won't go away. He didn't want this battle — not now, not ever. But in the Daily Telegraph today, the first in what will be a weekly column, I lay out the battlefield that awaits him on his return. First, this bailout is not the end. A trillion Euros needs to come from somewhere, and today the Chinese are being tapped up — God knows what we'll agree to in return. But that doesn't address what is, as Mervyn King has said, a solvency issue rather than a liquidity issue. And the tighter these Eurozone countries squeeze together, the more tension we can expect.

The picture of Nicolas Sarkozy not even turning around to shake David Cameron’s hand rather neatly sums up the Prime Minister’s problems right now. The danger for him is that the 17 Eurozone countries start writing a new set of rules and riding roughshod over the interests of those countries that are outside. This would be bad enough at anytime but with the Conservative party on the warpath over Europe it is a clear and present danger to the Prime Minister. As one ally of the Prime Minister said to me today the PM’s predicament is made even harder by the fact that many of the 10 countries outside the Eurozone want to eventually join the Euro and so have no desire to stand up to the 17.

Here's an irony: last night's EU fandango was the fifth largest vote in favour of the government this year. And yet there is little about the situation that is favourable to the government this morning, as the story moves on from Tory splits to coalition ones.  It started with Michael Gove's appearance on the Today Programme earlier. The Secretary of State for Education put in a much more conciliatory performance than William Hague managed yesterday; praising the "cordiality" of the Tory rebels, and reassuring them that the Tory leadership would like to see specific powers returned from Europe "in this Parliament".

The scale of tonight’s rebellion is quite remarkable, 43 percent of Tory backbenchers have defied a three line whip—and we are only 18 months into the parliament. Indeed, if you factor in the abstentions more than half of Tory backbenchers rebelled. This should be a wake-up call to David Cameron. He needs to develop a proper policy for repatriating powers from Brussels, change his style of party management, and reform the Whips office.  This rebellion will encourage the hard-line Euro-sceptics to try again and again. They will reckon, rightly, that as the parliament goes on the number of potential rebels will grow.

David Liddington, the Europe Minister, has just told the Murnaghan Show that the moment for a referendum on the European Union is once a treaty change has been agreed. Liddington argued that then everyone would know what they were voting on. This is quite a significant shift in the government’s position. Up to now, the position has been that there would only be a referendum if yet more powers were transferred from Westminster to Brussels. Liddington appeared to be saying that a vote would follow any new treaty, even one that brought powers back. This moves the government far closer to a position of renegotiation followed by a referendum.

Sources in Number 10 tell me that the party leaderships feels it cannot support the Eustice amendment. They stress that it is not Conservative party policy. But I also detect a sense that there is no point even considering backing it as the Lib Dems would never accept renegotiation followed by a referendum being government policy. If Number 10 continues to be inflexible, it will have a sizable rebellion on its hands. Tory MPs — especially those who think they might have a reselection fight on their hands, and that’s a lot of them thanks to the boundary review — want something to take back to their constituencies.

We thought CoffeeHousers might appreciate an advanced viewing of James' political column from tomorrow's issue of The Spectator, so here it is: In the hours after the coalition was formed last May, a minister and a group of Tory MPs sat around a table in a parliamentary cafeteria discussing what it all meant. One new MP said to the minister that it was a pity that, in the course of the talks, the Tories had agreed to ‘park Europe for the next five years’. The minister, high on the Panglossian spirit of the early days of the coalition, reassured her that this was for the best. The party could devote its full attention to Europe when the economic situation was less pressing.

It isn't over. That's the abiding impression after reading Gus O'Donnell's report into the Liam Fox farrago. I mean, the outgoing Cabinet Secretary basically admits as much in the opening paragraph of the document: "more allegations about Dr Fox's conduct have arisen," it observes, "many of which will be the responsibility of others to answer, including the Electoral Commission which regulates political parties and their funding." It goes on to clarify that, "This report looks into allegations relating to potential breaches of the Ministerial Code". In other words, this investigation was specific, not far-reaching — and it shows. So what does O'Donnell actually conclude? As expected, he does kick Fox in his post-ministerial shins for breaching the Ministerial Code.

For all the attention that is being focused in Westminster on the publication of the Cabinet Secretary’s report into the links between Adam Werritty and Liam Fox tomorrow, the real story is the countdown to Cannes. It is now three weeks since George Osborne declared that the eurozone countries had three weeks to save the Euro. So far, they haven’t done anywhere near enough. There’s also little sign that this weekend’s summit will see them make much progress. The Germans are already busy playing down expectations. From a British perspective, the intriguing question is: what does the coalition do if the eurozone continues to show no sign of getting its act together?

A major new survey of public opinion on immigration, published today by the recently-established Migration Observatory, should prove troubling reading for realists inside the Conservative party. As yet, the opposition are not threatening them on the issue – Labour still find it easiest to get noticed when they are apologising for their own record – and the general thrust of the Conservative approach, that immigration has been too high and must be reduced, is clearly very popular. But they have two problems. First, hardly anyone believes the government will actually deliver on their promises. A recent YouGov poll found 78 per cent believe it unlikely they would succeed in reducing annual net migration "from the hundreds of thousands to the tens of thousands".