Fraser Nelson

A showdown with the EU may come sooner than we expect. The European Commission has today threatened to sue David Cameron’s government unless it starts letting EU citizens come here to claim benefits. Until now, any EU citizen could live here, but if they couldn’t find work, they were not entitled to claim benefits. This was widely accepted. Today, the EU has issued a statement saying: ‘Under UK law, certain social security benefits - namely Child Benefit, Child Tax Credit, State Pension Credit, Income-based Allowance for Jobseekers, Income-based Employment and Support Allowance - are only granted to persons with a "right to reside" in the UK. Other EU nationals have to fulfil additional conditions in order to pass a so-called 'right to reside' test.

You can see what Ed Miliband was trying to do. As his party isn’t trusted on the economy (his number one problem) he had to say how much he admires business. But, then again, his party is bankrolled by unions who dislike capitalists. So, Ed Miliband draws a dividing line: the ‘predator’ companies (bad) and companies like Rolls Royce, for example, and presumably small businesses (good). Here is the new narrative of his leadership: Miliband vs Predator, coming to a cinema near you. But just like Cameron’s ‘runaway dads’, the concept of a predator company is easier to talk about in the abstract than in real life. Just what is a bad company?

Finally, a good idea from the Labour conference. In his speech tomorrow, Ed Miliband will say he'd give workers priority over the jobless for social housing. This is the dividing line he was reluctant to draw when asked to by Andrew Marr on Sunday. It's a clever move, and one that recognises the resentment felt by the strivers against the welfare dependent. He will say: "The hard truth is that we still have a system where reward for work is not high enough, where benefits are too easy to come by for those who abuse the system." So councils dolling out housing should not only take need into account, but whether applicants "are working, whether they look after the property and are good neighbours." I can't see why IDS would oppose this, and perhaps consensus can be reached.

There are still rumours in Westminster that David Cameron will cut taxes to stimulate the economy, but the speech he gave to the Canadian parliament on Thursday rather scotches this idea. Here’s what jumped out at me 1) No Obama-style deficit-financed tax cuts, please, we’re British. "The economic situation is much more dangerous and the solution for most countries can not be simply to borrow more. Because if the government doesn’t have the room to borrow more in order to cut taxes or increase spending, people and markets start worrying about whether a government can actually pay back its debt. And when this happens confidence ebbs away and interest rates will rise, hitting people with mortgages, and hitting companies that want to borrow to invest.

There is a strange pre-Lehman feeling in the air right now: the idea that something awful is going to happen, but no one knows what or when. This is laden with political ramifications. The problem for the Tories last time was not that George Osborne had been caught aboard HMS Deripaska. The greater problem was that a crash had arrived and the Shadow Chancellor had nothing to say. Brown, at least, seemed to have an agenda, and the Tory poll lead was reduced to one vulnerable point. I admire Osborne, but he can do far better in making the case for the government’s economic strategy. If there is a second crash, he’ll need all his skills to convey confidence – to sound as if he knows what he’s talking about.

Today's Lib Dem attack on their coalition partners comes from Chris Huhne, who rails against a "Tea Party tendency" in Conservatives sceptical of the European Union. His premise is that those who are hostile to the EU are a minority. It's worth digging a little deeper here, because the opposite is true. If you believe that Britain has benefited from EU membership, you're in a smallish minority – 35 per cent to be precise. Huhne seems genuinely unaware of the depth of feeling out there. CoffeeHousers may be familiar with opinion polls commissioned by eurosceptic groups. But – as we say in the leading article of this week's Spectator – the European Commission can hardly be accused of an anti-EU bias.

A new rule seems to have been adopted at Lib Dem conference: don’t mention Academies. The coalition’s greatest single success story – something David Laws and Michael Gove agreed on before the election – is being airbrushed out. A favourable reference to Academies taking on kids from deprived backgrounds was proposed for a conference motion, but has been excised by the delegates. Lib Dem activists are heavily drawn from the ranks of local authority councilors, many of whom hate the way that schools have been given the power to break free from council control. Confronting them was a key part of Nick Clegg’s modernization programme. It seems that this has been aborted.

That was a great wee speech by Nick Clegg. “We have only five ministers in the Cabinet,” he said. “Well, six if you include Ken Clarke.” His mission was quite tough: to go meet the membership of a party that had just lost half of its popular support, was spanked in an AV referendum, seen its troops massacred in English councils and seen its support in Scotland shrink to staff members and blood relatives – all simply because Clegg joined the Tories in government. But he made the case brilliantly. The BBC estimates that the Lib Dems have implemented three quarters of their manifesto he said, more than the Tories. “Not bad for a party with just 8 per cent of the seats.” He handled criticisms of him rather well.