James Forsyth

By-elections are notoriously hard to call. But everyone who comes back from Eastleigh says the same thing, UKIP are the party with forward momentum. This morning’s Populus poll bears that out. They are in third place with 21 per cent, with the Tories second on 28 and the Lib Dems ahead with 33. But, as the indispensable UK Polling Report points out, if you don’t reallocate some of the undecides to the party they voted for last time, UKIP are doing even better. The numbers then are UKIP 25%, Tories 26% and Lib Dems 31%. As I said in the magazine this week, UKIP are picking up support from all three parties. Things could get very interesting there if more Labour voters shift to UKIP as the best anti-coalition vote.

The United Kingdom’s triple A rating is now lost with one credit rating agency, Moody’s. This is a politically difficult moment for George Osborne. Back in February 2010, he set keeping the triple A rating as one of the key tests of a Conservative government’s economic policy. His opponents will delight in pointing out that he has failed the test he has set himself, while nervousness on the Tory benches about the coalition’s economic strategy will be heightened by this news. Economically, though, I doubt that this will have much impact. In recent weeks, Britain’s debt has been trading more like that of France, which has lost its triple A rating, than Germany, which still has it.

The good news for Nick Clegg—and the bad news for David Cameron—is that the Liberal Democrats are racing certainties to hold Eastleigh in the by-election next Thursday. As I say in the magazine this week, the Liberal Democrats' base in the constituency - they hold every ward in the seat - has given them an insuperable advantage. This victory means that Clegg will be spared the Spring conference crisis that would have followed a defeat there; for if the Lib Dems could lose Eastleigh where they are so well dug in, they could lose anywhere. Cameron, by contrast, will have to deal with an intensely restless party. The Tories' failure to take Eastleigh in these circumstances highlights just how difficult it is going to be for the Tories to take seats off the Lib Dems in 2015.

Andrew Mitchell’s piece in the FT today marks his return to normal politics post-Plebgate. Up to now, Mitchell has confined his post-resignation comments either to his old stomping ground of development or to the sequence of events that led to his premature departure from government. By contrast, today’s piece sees Mitchell getting involved in a frontline political issue, Britain’s relationship with Europe. The article is full of suggestions, joint-sittings of the UK-Polish parliament and meetings of the UK-Dutch Cabinets. But Mitchell is clearly determined to work within the framework set out by Cameron’s Europe speech. No one could say that the articles rocks the boat. But what makes it significant to my mind are two things.

The details of Labour’s mansion tax proposal remain, to put it politely, sketchy. Here’s the exchange between Andrew Neil and Sadiq Khan on the Sunday Politics on how Labour would work out which homes are worth more than two million pounds: AN: Do you rule out a re-evaluation of all properties? SK: There are a number of options to look into. AN: Do you rule out a re-evaluation?

The state owning banks is not a good thing. It is, as the annual row over bonuses at RBS demonstrates, very difficult to keep politics out of the running of the business. So, it’s encouraging news that the Treasury is moving to sell the government’s 82 percent stake as soon as possible. Today, the Mail and The Independent report that George Osborne is considering simply handing over the shares to taxpayers, who would then be able to sell them when they at a time of their choosing. As I wrote earlier this month, Osborne is very keen to avoid a row over RBS bonuses in February 2015, just three months before the general election.

At the moment, the Tories intend to head into the next election with the worst of all airport policies. They won’t have announced where the much-needed extra runway capacity in the south east will be. But neither will they be ruling out extra runways at various existing airports or an entirely new airport. The risk for the Tories is that voters under the Heathrow flight path assume that they are going to build a third runway there. Meanwhile those close to Stansted fear that it is going to be turned into a four-runway airport. Seventeen Tory MPs in the south east have now written to David Cameron protesting about the policy not to have a policy.

Those close to Ed Miliband stress that if elected, Labour will introduce a mansion tax to pay for the return of a 10p tax rate. I’m told that ‘short of publishing the manifesto two years early, we couldn’t be any clearer’. This new 10p band will apply to the first thousand pounds of income, making it a £100 a year tax cut. (Although the Cameroon think tank Policy Exchange calculates that low-paid working families would actually only be 67p a week better off under this policy.) The politics of the move, which has been in the works since Christmas, is fascinating. It is both a bold redistributive gesture and a rebuke to Gordon Brown, who scrapped the 10p rate. It also appealed to Miliband because it fits his whole critique of how politics works in this country.

The latest ICM poll for The Guardian is interesting because it highlights the weakness in both the Tory and Labour positions. The Tories are 12 points behind on 29, doing appallingly with women voters—trailing Labour 25-51, and haven’t managed to halt UKIP’s momentum. But Labour’s position is not as strong as the headline figures suggest. A plurality of voters still places the blame for the economic slowdown on Labour’s ‘unsustainable spending’. Polls in mid-term do not tell us that much. But the more bad news they bring for the Tories, the grimmer the mood on their benches will become. This is one of the things which makes Eastleigh so important for Cameron.

The news coming back from Brussels is all pretty good for David Cameron, as Isabel noted this morning. He’s not isolated and looks set to succeed in his fight to see a cut in the overall EU Budget. Admittedly, the British contribution will still go up—a result of deals Tony Blair struck at the time of enlargement. But it is still a good result, and one that will please all but the most truculent members of his parliamentary party. Even better for Cameron, is the idea that the European Parliament might veto the deal in a secret vote. Now, this idea is so absurd that it is hard to believe that it is anything other than a Brussels rumour. But if it does happen, it will sum up the kind of spendthrift, opaque, unaccountable Europe that Cameron is opposed to.

The political row over the changes to housing benefit, labelled the ‘bedroom tax’ by opponents, intensified this evening. In an open letter to the Labour leader (reproduced below), Iain Duncan Smith accuses Miliband of ‘a pathetic exercise in political point scoring and scare mongering’. In the feisty letter, Duncan Smith argues that the taxpayer is currently paying for close to a million spare rooms. He argues that taxpayers ‘should not be paying for what is effectively a benefit subsidy for empty rooms’. He also takes issue with the personal case stories that Labour are using.

At a particularly unedifying PMQs today, one Labour MP even suggested that ministers need cognitive behavioural therapy. The cause of all this rancour: the so-called ‘bedroom tax’. Now, the ‘bedroom tax’ is not actually a tax. Rather, it is a reduction in the amount of housing benefit paid to those who — according to the local authority — have spare capacity in their homes. If the Labour leadership genuinely does not grasp this distinction, then this country is in worse trouble than we thought. Ed Miliband peppered Cameron with questions about difficult cases. It was an effective debating tactic as there was little Cameron could say without knowing all the details.