Fraser Nelson

Has somebody stolen the Tory Party? A stranger walking around here would have no idea that its their conference. The word "Conservative" or "Tory" is nowhere to be seen. Just a slogan, "Together in the national interest" – a form of words that Cameron has repeatedly used to describe the coalition. As I say in my News of the World column today, Cameron will this week perform the impossible – to de-Tory the Tory conference and make them love it. There is plenty Tory red meat being served: welfare reform, school reform. It wouldn't susprise me if an announcement on keeping Trident is made this week. So the activists are happy. They also know that there is less than three weeks to the spending review and the battle that accompanies it, so they are in loyalty mode.

What's at the heart of the row over defence funding? George Osborne hinted at it today when he told the Telegraph that “frankly, of all the budgets I have seen, the defence budget was the one that was the most chaotic, the most disorganised, the most overcommitted”. The problem is that during the Labour years, various accounting scams were deployed to shunt costs further into the future - but this was not matched by resources. So they would, for example, delay an order by two years. There would be a price to pay for this delay, but it would be a cost that came after the election so Labour didn't mind. (One must remember that HM Treasury behaved disgracefully under Brown's instructions, concealing debt and adopting a 'scorched earth' strategy).

I had expected Ed Miliband to do pretty well in the polls. He's unknown, and voters haven't had a chance to dislike him yet. That's not an insult – familiarity breeds contempt in politics, and the public are normally quite quick to give a new guy the benefit of the doubt. Witness the Clegg bubble. But tomorrow's Guardian shows precious little sign of a conference bounce. The two parties were level before the conferences – a remarkable achievment for a leaderless party. The Tories took three years to do the same. It was one of many reasons that inspired our cover story last week, "Labour leaps forward". The illustration, by Morten Morland, was a horse without a rider. What might Labour achieve with a jockey?

David Miliband's logic is difficult to fault. If he stayed, he would be treated as the torch bearer for those disgruntled Labour members who feel they were robbed. Without him, such people have no one to turn to. New Labour will now dissolve. 'Progress' - supposedly for the next generation of Blairites - held their meeting in a Manchester venue named the Comedy Store and that says it all. Game over: as Neil Kinnock put it last night "I've got my party back".   No matter how loyal he would be, David Miliband could not but be seen as a focal point for the (many) Labour MPs who hate all that. Sure, it is a bit odd his saying on Monday "the fightback starts here" and on Wednesday "well, good luck with it guys - I'm offski". But it's better than the alternative.

David Miliband is a tease. The speech he just gave was one of his best: it was self-deprecating, had gravitas, humour, and he spoke down to the Tories, telling William Hague what statesmanship was about. A monstrous conceit, CoffeeHousers may argue, but a Labour leader needs a bit of that; to make out that he's the real leader-in-waiting, up against lightweights. There was his trademark little bit of grit in the speech: he praised the troops, the Afghan mission and criticised Cameron for reducing British diplomacy to trade missions (Con Coughlin made the same point in a Spectator cover piece recently). My point: that this was a measurably better speech than the one his little brother made on Saturday. And I'll bet it's better than the speech Red Ed will make tomorrow.

I knew that David Miliband had lost the moment I saw him walk in the room, smiling like Michael Portillo on election night 1997. And when I saw Ed Balls look of pure murder: his enemy had won. Time to destroy. We saw a tension in this result: the MPs and members leaned towards David, who had a tough message on the deficit, who defended the Iraq war, who basically had an agenda for government. Whereas Ed Miliband's agenda is for opposition: he'll be marching alongside the unions the day before Osborne's spending review. As I say in the News of the World tomorrow, Ed will ooze left wing morals and righteous anger and that will work well in opposition. But as Michael Foot found in 1983, it means you strike the country as being not quite serious about government.

What are we to make of the fact that No.10 gave the thumbs-up to Vince Cable’s bizarre anti-capitalist rhetoric today? “Capitalism takes no prisoners and it kills competition where it can,” he fumed – and you can argue that, technically, he is paraphrasing Adam Smith. But he has been in politics long enough to know what signal his speech sent out (and the reaction it would trigger). Mood music counts for a lot in politics, and in business. And the mood music from this government sounds like a bunch of politicians happy to tax the bejesus out of the high-paid - regarding them as ATM machines to be raided, rather than wealth creators to be welcomed. It's time to ask what harm all this posturing is doing.

Nick Clegg is making life horribly difficult for those of us on the right who spent the last few things portraying him as a figure of fun. He is now delivering the best speeches of anyone in the Cabinet, characterised by a quiet sense of urgency and direction. He’s in the business of making the case for cuts. He spoke to a party that spent much of the last decade attacking Labour from the left. For those delegates, it was a little bit of political S&M. It must have hurt - but they liked it. “We haven’t changed our liberal values,” he said - and then went on justifying Conservative policies in a classic liberal context. And he did it so much better than many Tories have been able to.