Conservative party

The Vickers Review into the future of banking appears to have prevented a possible coalition row. The Tories and the Liberal Democrats have had different views on what to do about the banks, with the Lib Dems keener to break up the banks come what may and the Tories more worried about preserving the competitiveness of the City.   At the very start of the coalition there was a rather unseemly turf war between Cable and Osborne about who controlled policy on the banks, and many have expected a row to break out when he review reported. But, as we predicted on Coffee House back in February, the review has come up with a solution acceptable to both sides.

Developments aplenty on the Portuguese front — the most noteworthy being that Britain is probably in for a €4.8 billion share of the €80 billion tab. Robert Peston explains the numbers here, although it basically comes down to the lending mechanisms that will be deployed. Add up our 13.5 per cent exposure to the European Financial Stabilisation Mechanism (EFSM) with our 4.5 per cent exposure to the IMF's pot, and it comes to €4.8 billion. Or, rather, £4.2 billion. The politics of the situation are precarious for the coalition. Yet I doubt they'll be unduly troubled by Ed Balls's suggestion that "it would be better if this was sorted out by euro area countries themselves given that this is a euro area issue".

David Cameron is determined to get away from the idea of an annual Cabinet cull. He has repeatedly told friends that he doesn’t want to reshuffle the Cabinet until March 2012. But The Times, the most pro-coalition paper, today uses its leader column (£) to call on Cameron to reshuffle straight after the May elections. I suspect that Cameron will only reshuffle the Cabinet, as opposed to the junior ranks, if AV passes. But there are a few Tory junior ministers who would impress as Cabinet ministers. Greg Clark and Nick Herbert, two members of the pre-election shadow Cabinet who missed out on the Cabinet because of coalition, have both performed well as junior ministers.

Judging by today's reports, it's fear and self-loathing in Lib Dem Land. And it's not just that one of their Scottish candidates has quit the party in protest at its, ahem, "draconian policies" and "dictatorial style". No, according to this insightful article by Melissa Kite and Patrick Hennessy in the Sunday Telegraph, there are more manoeuvrings going on than that. Here are some passages from it, by way of a summary: 1) Chris Huhne, waiting in the wings. "Mr Huhne, who ran Mr Clegg close in the last Lib Dem leadership election, has told colleagues privately that he would be interested in leading his party in the future." 2) A rebrand (back to the SDP?).

When trying to understand George Osborne Budgets, you need to bear in mind the mantra that he and his team live by: in opposition you move to the centre, in government you move the centre. It is this desire to move the centre ground that lies behind Osborne’s keenness to merge income tax and national insurance. As I say in the Mail on Sunday, the thinking behind it is that if people were more aware of how much tax they really paid, they’d be more inclined to vote for low-tax parties. At the moment, National Insurance is one of the taxes people are least aware of as it is simply deducted from their pay cheque. It is no coincidence that the most unpopular taxes—council tax, inheritance tax—are the ones that voters are most aware of paying.

David Cameron’s assertion in his spring conference speech that his officials are “enemies of enterprise” has aggravated the Sir Humphreys of this world. Paul Waugh, Ben Brogan and James Kirkup all have excellent spin-offs from Sue Cameron’s account of the smouldering atmosphere at a recent meeting of permanent secretaries. And Iain Martin puts it succinctly on Twitter: ‘Duff politics attacking civil service, down the ages a lazy excuse for ministers not mastering their depts.’ Beyond Iain’s point about inept ministers, this incident also seems typical of Number 10’s frequently faulty communications strategy, which so exasperates departmental special advisors.