Fraser Nelson

Harriet Harman, now 3-1 favourite to be the next Labour leader, has a cunning plan to shaft the Tories. For some time now, she has been badgering Brown to outlaw MPs having second jobs. As I disclose in my News of the World column today, the PM is now warming to it because he thinks Cameron would not support it, thus allowing him to draw another of his beloved dividing lines. It would also exploit Cameron's own sensitivities about the number of his shadow cabinet with second jobs. And, of course, underline her class war credentials to Labour's selectorate. There is, however, only one problem. By the time it would be made law, Labour will most likely be months away from opposition.

I’ve noticed that Gordon Brown has stopped bragging about how this recession is not as bad as 1990s. And with good reason. It’s far worse – and not just because unemployment and repossessions are rising more quickly. It’s summed up in a graph – and CoffeeHousers who are into this sort of thing may find it useful. It’s from CitiGroup, which warns that even the below picture for the current downturn is optimistic. Citi is now forecasting a 3.3% contraction of the economy this year – last month it was forecasting a 2.5% drop. It says in the note “Apologies for the frequent updates, but the economy is in freefall”. So is Britain well placed to handle the downturn?, I hand over to Michael Saunders from Citi when discussing the 3.

Many of you expect Gordon Brown to lie so much that it’s not worth reading a rebuttal of his half-truths, exaggerations and Brownies. Me, I’m addicted. And fascinated. He’s a very clever guy, whose excuses and fake narratives are carefully constructed. He’s also deeply unoriginal, so whatever new excuses he cooks up we can expect to hear repeated for the foreseeable future. How can explain away sterling’s plunge? The absence of any sign of economic recovery – and implicit suggestion that his stimulus has been an abject failure? And how can he explain his ten years as Chancellor? On the radio this morning Evan Davis started his interview with Gordon Brown by a warning that he wouldn’t take his waffling avoidance techniques.

Britain is now as likely to go bust as RBS - this is the official verdict of the markets. At the bottom of this post is Bloomberg's Graph of the Day, which shows how Britain's dodgiest bank and Europe's dodgiest government now have the same "credit default swap" rating - the yardstick the markets use to guage whether something's about to go bust. No wonder, you may say, given that RBS is state-owned. But my point is that this has major implications for our ability to borrow - and borrowing is what both Cameron and Brown will be relying on to pay the bills. Spain lost its AAA rating yesterday, and the markets think Britain may be next. This would increase the cost of borrowing, our taxes, our mortgages - the works.

Ken Clarke walked back into the chamber to cheers as if he’d just won a by-election, itself an indication of how little we’ve seen from the man who took an MP's salary for the last 11 years but has seldom been seen around the House. It was his first time, ever, on an opposition front bench and he looked around at the view. Together with Cameron, he flanked Osborne. Clarke hasn’t worked out yet that his job is to make facial expressions of support when Osborne speaks, and to feign disdain at Darling. It’ll take a while to relearn the techniques of active politics. Osborne was on good form. How much of our money is Darling spending? We need to know. “They didn’t have a clue what they were buying, and didn’t bother to find out,” he said.

So it's official - Ken Clarke is back in a reshuffle to be announced tomorrow, replacing Alan Duncan as Shadow Business Secretary. Clarke promised to behave over a lunch with Cameron and Osborne yesterday. He apparently told them he does not accept the party line on Lisbon or the EPP, but will shut up about it and not try to change the party line. No moves in the top jobs (i.e. Hague and Gove staying put, as are Fox and Grayling), yet I hear there may be extensive reshuffling in the lower ranks. My initial take: 1. Cameron is taking a large gamble. Clarke has said precisely what he thought pretty much since 1994, and hasn't held back from sounding off over Europe when he felt like it.

If the Tories really didn’t want a third runway at Heathrow they should have called for one. That would have stopped Gordon Brown. He is only going ahead because he thinks it will draw a dividing line between the supposedly pro-business Labour and naïve tree-hugging Tories. And I confess that I started out being in favour of it, so fatuous were the environmental arguments against it. Farting cows produce more greenhouse gas than aircraft (or cars), as does rice production – and do we see Greenpeace activists campaigning outside Aberdeen Angus steakhouses or Chinese restaurants’? But the debacle over Terminal Five brought home to me a more important point. Britain needs and deserves a flagship airport, yet Heathrow is a national disgrace.

Another good day for Gordon Brown – not because anyone watching PMQs from the gallery would have been inspired (not even Lord Mandelson) but because he has so much to be guilty about and brushed a lot of it off. The highlight of this PMQs was about how the two party leaders use the recession as weapon, both testing the strength of their positions. Cameron started by asking if Brown was wrong to predict an end to boom and bust. As Brown is programmed never to admit error, this question will always leave him looking evasive. He responded, rather oddly, by listing countries he claims are not copying the Tory policy. “No one except him is proposing to cut public spending at this time.” A lie, of course, the Tories propose to increase it.

Now that Brown has copied the Tory proposal to underwrite bank loans, what's the real picture on interest rates? Since the UK debt crisis started, the Bank of England base rates have become woefully detached from the rates charged to real people. This is powerfully summarised by three graphs from Citi, which I reprint here.. Over last year, BoE base rates fell by three points. Only half of this fall was “passed on” by fixed-rate and variable mortgages, while the cost of borrowing money actually rose for overdrafts, credit cards and personal loans. As the graph shows: The most misery will be felt by those who have unsecured personal loans – ie, the poorest.