James Forsyth

With UKIP regularly challenging the Liberal Democrats for third place in the polls, the party is now beginning to be treated with the seriousness it deserves. In an interview on the Sunday Politics, Nigel Farage made his usual, spiky case for leaving the European Union. Farage argued that he wants a free-trade deal with the rest of the EU and that the other countries would agree because ‘they need us more than we need them’. Even if Farage is right on the numbers, there’s a major doubt if the rest of Europe would be inclined to cut a deal in the wake of a British exit: a country leaving and then prospering outside would be very damaging to the European project.

David Cameron spent yesterday campaigning for Conservative Police and Crime Commissioner candidates in Bedfordshire and Leicestershire. The visits, though, received scant national attention: the only coverage I’ve spotted so far is on page 33 of The Times. Talk to ministers and they maintain that the Police and Crime Commissioner elections are more visible out in the country than they are in London, where there’s no contest. They argue that the capital-centric nature of the media explains why the press keep writing the elections off as a damp squib. There is, I suspect, some truth to this charge. But an average turnout of only 20 percent would still not be impressive.

There’s no such thing as a safe seat in a by-election as Bradford West demonstrated. But it would still be a major shock if Labour lost Rotherham, a seat they’ve held since 1933. But the three by-elections coming up after Corby—Middlesborough, Croydon North and, now, Rotherham—will test how much Labour has learnt from the Bradford West experience. In all three seats, Labour has a large majority and no obvious challenger. Respect are already trying to repeat their by-election success, selecting Lee Jasper—the former Ken Livingstone adviser and chair of the London Race and Criminal Justice Consortium—in Croydon North. Respect have already declared that he’ll be 'targeting' black voters.

‘I thought it would hurt more than it did’ one loyalist minister remarked after last night’s government defeat on the EU budget. The fact that the vote isn’t going to bring the government down or bind its hands is what is consoling Cameron loyalists. They are also pointing out that the Eurosceptic vote split with Jacob Rees-Mogg, Priti Patel and Andrea Leadsom staying on the government side this time. But what should worry Number 10 about this rebellion is its flash mob nature. As Isabel pointed out last night, there wasn’t — unlike with the Lords revolt or the EU referendum vote — months of planning put into this one. Instead, it was a rebellion that flared up as soon as the amendment went down — gaining 24 supporters in the first 24 hours.

The government has just suffered an embarrassing defeat on the EU budget. The rebel amendment, which called for a cut rather than the real terms freeze David Cameron is proposing, passed by 307 votes to 294. There are, I think, three significant consequences of tonight’s vote. First, it has been yet another reminder that David Cameron can barely control his party when it comes to Europe. We’re waiting for the precise number of Tory rebels tonight but it seems like about 50 MPs defied the whips. This means that if Labour is prepared to join with the Tory rebels, it can overturn the coalition’s majority.

Cutting the EU budget is a very good idea. Much of it is spent inefficiently and its priorities are all wrong, 40 percent of it goes on agriculture. Given that a cut would also be popular with voters, why doesn’t David Cameron propose one? The reason is that there’s virtually no chance of getting agreement to it. If there’s no agreement, the EU will move to annual budgets decided by qualified majority voting—stripping Britain of its veto. But Labour’s tactical positioning in calling for an EU budget cut has been, as Isabel said earlier, extremely clever. It has left Cameron defending a complicated position which puts him on the wrong side of public opinion and many of his own MPs.

Since leaving the Cabinet, Liam Fox has acted as a cross between a scout and an out-rider for various of his former Conservative Cabinet colleagues. In a speech in Oslo tomorrow, he’ll argue that the only way to deal with the Euro crisis is for all of those countries who cannot realistically cope with the demands of the single currency to leave in one go. Otherwise, he argues the markets will simply pick the weaker countries off one by one. Fox is certainly right that if Greece left, or was forced out, of the single currency, Spain and Italy would then find themselves under intense—and, probably intolerable—market pressure. But I suspect that the Eurozone lacks the political and economic awareness to make the kind of clean break that Fox is proposing.

In The Spectator this week, Charles Moore argued that David Cameron — despite his oft-stated desire to renegotiate the terms of Britain’s EU membership — doesn’t actually have a European policy. Charles’ criticisms have clearly stung. For in his Telegraph column, he outlines what post-2015, the Conservatives would seek in any renegotiation: “In essence, the scheme is to turn the EU into two concentric rings. The inner ring shares the euro and undergoes political union. The outer ring avoids both these things and has a looser, trading membership grounded in national parliamentary sovereignty. You could say that this split already exists, in fact if not in theory, but the difference is that, in the emerging model, the EU would be legally reconstituted.

The EU budget negotiation, now a month away, promises to be David Cameron’s next big European test. The Prime Minister has repeatedly declared that he wants to see the EU budget frozen at 2011 levels and that he’s prepared to use the need for unanimity to achieve that. The Economist this week has a very useful scene-setter for the budget talks. It sketches the contours thus: ‘Countries are coalescing around loose (yet often divided) groups. There are the 'friends of cohesion': the net recipients of regional spending, such as Poland, Hungary and the Baltic states. And there are the 'friends of better spending': the net contributors, such as Germany, France, Britain and several northern European states.

A large part of the Tory message at the next election will be ‘don’t let Labour ruin the economy again’. One of the things that will help the Tories make this a topic of the campaign is Ed Balls’s constant desire to defend the record of the last Labour government. As Jonathan noted earlier, when Andrew Neil pointed out that Labour was — contrary to Balls’s earlier denials — running a structural deficit in 2007, Balls got into a long-winded attempt to justify both that and his denial of this point last year.